Economics, Library, Literature

The Vested Interest in Output

The following is an excerpt from The Affluent Society (1958)  by John Kenneth Galbraith

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THE NOTION of a vested interest has an engaging flexibility in our social usage. In ordinary intercourse, it is an improper advantage enjoyed by a political minority to which the speaker does not himself belong. When the speaker himself enjoys it, it ceases to be a vested interest and becomes a hard-won reward. When a vested interest is enjoyed not by a minority but a majority, it is a human right. These conceptual pitfalls notwithstanding, the time has come for a survey of the vested interests in our present attitudes toward production. Who is most dependent on the present illusion? Who will be most affected when, under the onslaught of ideas, circumstances and time itself, these matters come to appear in a clearer light? As a general makes a reconnaissance of the opposing forces, the author should know who is dug in against him.

“Who is most dependent on the present illusion? Who will be most affected when, under the onslaught of ideas, circumstances and time itself, these matters come to appear in a clearer light?”

John Kenneth Galbraith, The Affluent Society

Without question, the individual with the greatest stake in the present economic goals is the businessman—more precisely, perhaps, the important business executive. If production is of preoccupying importance, he, as the man with the traditional and established right to the title of producer, will be the dominant figure in the social constellation. Society will accord him prestige appropriate to the role he plays; what may well be less important, he will be able, without difficulty or criticism, to command an income that is related to his prestige. As production has increasingly monopolized our economic attitudes, the business executive has grown in esteem. So long as inequality was a matter of serious concern, the tycoon had, at best, an ambiguous position. He performed a function of obvious urgency. But he was also regularly accused of taking far too much for his services. As concern for inequality has declined, this reaction has disappeared. The businessman is no longer subject to a serious challenge of any sort. Although in his hierarchical role in the large corporation he has, perhaps, been more successful than most in eliminating economic insecurity, both personal and institutional, he has even managed to retain a certain cachet as a risk-taker, a man who lives dangerously. No one questions the superior position of the businessman in American society. But no one should doubt that it depends on the continuing preoccupation with production.

The case of water under conditions of plenty and shortage has been mentioned before. Many years ago, the City of New York suffered from a potentially troublesome water shortage. Clouds were watched anxiously and seeded in the hope that they might yield their burden. With fanfare, a program of water conservation was launched. The washing of automobiles, dripping of faucets, sluicing of streets and cooling of air were all prohibited. Presiding over the considerable publicity which these results required was the New York City water commissioner, Mr. Stephen J. Carney. For the time, he was the most 102 important man in the metropolis. His name was on everyone’s tongue. Mr. Carney was a public figure. Then the rains came, and the reservoirs filled. Carney was forgotten. One day he was quietly dropped. No one noticed.

Nothing better can be said of any individual than that he knows production. But the prestige of the producer is only the prestige of production. Should production ever come to be taken for granted, so, in some measure, will the producer.

John Kenneth Galbraith, The Affluent Society (1958)

The title of producer in our society seems securely honorific. The head of a distillery, a casino or a dog track is a producer. He is not a basic producer which is better, but a producer nonetheless. As such, he enjoys a position in the community as one of its supports or pillars and the sources of its wealth that is not necessarily enjoyed by the high school principal or the parish priest. It is as a producer that the President of General Electric calls on the President of the United States. It is thought good, on the whole, for a department of the government to be in the hands of a production man. Nothing better can be said of any individual than that he knows production. But the prestige of the producer is only the prestige of production. Should production ever come to be taken for granted, so, in some measure, will the producer. Mr. Carney is a warning.

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About Chris O'Colla

Chris O’Colla is an economics enthusiast and generally swell dude (self-assessed). Chris studied various things at universities and acquired his MBA at great expense (debt). Realizing that that fatalist attitudes and poor decision-making in regards to money often stem from a lack of economic understanding, Chris decided to share his learnings, opinions and experiences in the hopes of educating people about the logistics of the Money Economy. Chris enjoys herbal teas and winged armchairs, usually alongside literature by economists Milton Friedman, Friedrich Hayek, and John Kenneth Galbraith.

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