Re: ECON: The Affluent Society (was Dyson ) (long)

James Rogers (
Sat, 06 Feb 1999 17:18:58 -0800

At 01:42 AM 1/22/99 -0000, Damien R. Sullivan wrote:
>A large theme of Galbraith's which I did not go into was the significance of
>advertising. However, he is not one of those who thinks that advertising by
>itself warps society and makes the market model irrelevant, that it's a
>puissant form of mind control. Rather, the fact that ads work at all (at
>least for demand creation; market share competition is a different matter)
>indicates that most people have, literally, more money than they know what to
>do with. The hungry, homeless, and ambitious (whether for a mansion or an
>early retirement) have no need to be told what they want.

This would seem to indicate a lack of creativity on the part of most people more than anything else.

However, with respect to the poor, I have frequently seen poor people spending their very limited resources on things that are clearly not necessary. Escapism seems to be an easy sell to many poor people. And the poor people who don't get caught up in that cycle do not stay poor for long.

>(And not to say that there aren't more useful things we think they could be
>doing with their money. But _they_ don't know what to do with it, so
>persuasion by repeated suggestion works.)

I'll agree with that.

>He does think that once this process of demand creation starts then
>market analysis moves to shaky ground, when production is satisfying the
>production has created, but I don't go there now.
>(Minimum income societies)
>> received its instantiation surplus from the latter. Governments and
>> politicians almost never demonstrate the discipline required to amass huge
>> surpluses of cash, particularly over a span of decades. Such government
>> amassments are almost always plundered long before maturity.
>I note that Alaska seems to be trying: putting oil money into a trust fund
>whose dividends go to the citizens of the state. The dividend's about $1000
>dollars, so we're not talking good survival money yet, but I'd think the fund
>big enough to be tempting. I suppose the real test will be when the oil runs
>out: raise taxes, or plunder the fund? They'll have to modify the
>as far as I know, so the people should get some chance to choose.

The State of Alaska is a very special case. Alaska has so much money, they couldn't possibly spend it, even if they wanted to (and they do try). Most state funded facilities in Alaska are outstanding. The school systems always have enough money to do pretty much whatever they want and many of the government buildings are lavish. The Alaskan government will pay for college at any university in the United States (yep, college is free).

Unfortunately, Alaska has serious social problems. Fetal Alcohol Syndrome is the norm. Most teenage girls have at least one child before (if) graduating high school. In some communities, HIV infection rates exceed 70% of the population. Much of the population makes in excess of $100,000 annually, yet by all appearances, most live a lower-middle class life (they waste *inordinate* amounts of money on absolutely nothing).

As for the oil money running out, it won't be anytime soon. Alaska's largest oil fields (among the largest in the world) have not even been tapped yet, since the Feds have kept them locked up for many years. Fortunately, many of their politicians have a fair amount of foresight. Last time I was up there the government was planning on installing a fiber optic telecom backbone throughout the state in the hopes that cheap, state-of-the-art broadband network access would attract new business. In many cases it appears that the State of Alaska has pretty much given up on much of its local population ever amounting to much.

>And I think Norway's done a decent job of using its oil money for high social
>investment. Better than the gulf states.

I think the gulf states have cultural issues that have prevented them from doing this.

>As you say, the examples are few. And small. (Also cold. I keep wondering
>about that.)

There is a correlation between cold climates and small populations. The small population aspect is important, since a large population would make it too expensive to consider.

>But you seem to be saying that there have been a lot more attempts/instances
>than I knew of. Can you give more examples?

I don't have a large number of examples. I do know that many Indians tribes in the US have attempted this, but most fail eventually due to greed. There have also been some intentional communities set up on this basis, but I don't know of any that were a resounding success.

>> increased through intelligent investment. I do not think the entire world
>> could do this without crumbling into the classic socialism that we love to
>> hate; the secret to this model is that individuals external to the society
>> effectively foot the bill for your free lunch.
>How so? By buying the oil? By providing growth your small country's
>investments can skim?

In my experience, the majority of individuals who live in minimum income societies stop working if the majority of their needs are met by the minimum income. As you mentioned above, most people do not really know what to do with money beyond purchasing their basic needs anyway. The problem with this is that it makes those individuals net consumers. Investment income is generated by other people using your assets to generate income (i.e. working) for you. I think it is therefore pretty obvious that at least part of the population needs to be a net producer. Everyone can't be a freeloader.

-James Rogers