"Private affluence and public squalor" is perhaps the most famous phrase culled from James K Galbraith's seminal book, The Affluent Society. It's a long time since I read it and can't remember whether Galbraith was describing the situation as it already existed in 1958when the book was first published, or whether he was simply making a prediction if economics and politics were to continue of their established course. As a prediction, we can see observe its accuracy in spades when we compare, say, Grenfell Tower and the gated enclaves of such as Sutton Dittton.
A friend who keeps a backlog of newspaper cuttings has just passed on to me a review of a later book by Galbraith, The Economics of Innocent Fraud, published in 2004. The reviewer is Howard Davies, sometime director of the employers' organisation, the CBI, so no raving leftie, (nor a raving Liberal). I haven't read the book but these are extracts from the review, which I assume are a fair reflection.
- Davies reminds us of Galbraith's long held theme that major corporations are run by their management, largely for their [the management's] own benefit and without effective public control or oversight. (Remains a fair description of Carillion et al).
- The collapse of Enron [2001 ]and the related and unrelated stories of corporate fraud, unbridled greed and negligent auditing have given much support to [this] Galbraith thesis. (Now add Carillion, especially re negligent auditing)
- The phrase "the market system" [is] a meaningless construct coined primarily to avoid use of the term "capitalism", widely seen as a weak brand in the political market. .(An illuminating point of which I hadn't thought, but then, I'm not Galbraith)
- Galbraith complains of the blurring of the line between the public and private sectors and believes that much of the US's Treasury and Department of Defense have been under corporate control for some years. Davies suspect that much the same is true of the UK, especially in relation to defence.procurement.
- Galbraith deplores the explosion of senior executive pay (and so say all of us) since these executives achieve their positions not by entrepreneurial skill but through success in climbing bureaucratic greasy poles.
More recently these two paragraphs for an article by Jonathan Freedland in last Saturday's Guardian confirm all that this blog has been banging on about for the past seven years:
....David Cameron and George Osborne won and held power [from 2010]chiefly be declaring Labour unfit for government becasue the deficit had increased on their watch. It was the Tories' success in searing this argument into the public consciousness - "Labour crashed the car"; "a country must live within its means";"if we don't balance the books Britain will be the next Greece"- that cleared the ground for austerity.
That policy was as economically illiterate as it was morally unsustainable, insisting that the best way to breath life into an economy gasping for air was to strangle it tighter. It failed to understand the basic, if counterintuitative, Keynesian truth that it's in the tough times that you need to spend to kisckstart the economy - in the sound expectation that restored growth will bring in the revenues to pay back the money you've borrowed.
Opposition parties, and, it would be nice to think, the Tory government as well, should be getting their teeth into educating the public about the true state of economic affairs and publicising plans to put things right. Sadly 90% of political effort goes into the details of self-harming Brexit. and the dysfunctional economic system staggers on to the benefit of an undeserving few rather than the rest of us, deserving or otherwise. f