More Work Or More Free Time - 2

 Here is the second chapter of my new book More Work Or More Free Time: The Crucial Political Issue No One Is Talking About. The book is available at https://www.amazon.com/dp/1941667406

Chapter 2: 

From Scarcity to Surplus

In the course of the twentieth century, the United States and the other developed nations moved from scarcity economies to surplus economies. We still have not thought through the implications of this profound change. 

Earlier human history was the story of economic scarcity. Though a small minority was rich, the overwhelming majority lived at a subsistence level, and economies devoted most of their effort to producing basic food, clothing, and shelter. 

In nineteenth century America, the great majority still lived at a near-subsistence level, though industrialization was increasing the amount the nation produced. In cities, many workers lived in tenements where there was little sunlight and only one shared toilet per floor—or shared outhouses in the back. In the countryside, many farmers lived in sod houses or log cabins. Even in the late nineteenth century, when wages had begun to go up, average income for all Americans was what we now consider the poverty level; even if all income had been distributed equally, everyone would still have lived in what we now call poverty.3 And America was relatively prosperous: Europeans immigrated to America in search of economic opportunity. 

In the course of the twentieth century, production increased to the point where we moved from scarcity to surplus. In addition to food, clothing, and shelter, most working people can afford cars, appliances, entertainment, high school education, routine health care—things that most of us take for granted today but that were far beyond the reach of working people in Dickens’ England or of working people throughout history.

Postwar Affluence

During the 1930s, many said that the Great Depression occurred because there was not enough demand to absorb everything that the economy could produce. Technology created more wealth, but it also created the problem of technological unemployment as machines did the work that people used to do. 

The government dealt with this problem by stimulating the economy to create jobs. The word “boondoggle” was invented to describe programs that the government funded to make work for the unemployed though they did not produce anything useful. 

During the postwar years, there were fears that the economy would fall back into depression because of lack of demand. Everyone agreed that we needed to promote consumption to stimulate the economy.
The Gross National Product (GNP), which has since been replaced by the Gross Domestic Product (GDP), became the measure of national well-being.4 The economist Simon Kuznets first calculated the GNP in 1934, and he warned against using these numbers as a measurement of well-being. Yet, during the postwar period, growth of the GNP became the main measure of economic success, and today’s politicians all want to promote rapid economic growth.

During the postwar decades, prosperity was widespread. Median income grew about as rapidly as the GNP, which means the middle class was getting a fair share of increased prosperity. The nation felt optimistic and affluent, but there were also social critics at the time who wrote best-selling books pointing out the problems with our unparalleled material prosperity. 

John Kenneth Galbraith published his book The Affluent Society in 1958, and it was at the top of the best-seller list for six months. He wrote that economic theory was invented in scarcity economies, when more production was needed to satisfy people’s wants, but in our affluent economy, corporations create the wants that their products satisfy, for example through advertising, marketing and easy consumer credit. (He did not put enough emphasis on government creating wants through programs like freeway construction to encourage automobile use.) For example, Galbraith said, “Few people at the beginning of the nineteenth century needed an adman to tell them what they wanted,” because most people spent their incomes on food, clothing and shelter that they needed to survive; if economic problems forced them to consume less, people suffered real hardships. But in the affluent economy, if there is a recession, people who defer their purchases of new cars or refrigerators for a year of two do not suffer in any significant way. The ones who suffer are the workers who lose their jobs producing cars or refrigerators and who have trouble surviving without any income. So, Galbraith said, in scarcity economies, people worked because they needed the products, but in an affluent economy, people must consume more products in order to create more work.5

Of course, this same attitude persists today. President Biden named his early proposal to spend $2 trillion on infrastructure “The American Jobs Plan,”6 because he knows that Americans care less about the infrastructure itself than about jobs building the infrastructure.
Shortly after Galbraith published The Affluent Society, William H. Whyte, who was famous for writing The Organization Man, invented the term “suburban sprawl”7 to describe the extreme suburbanization that was destroying farmland and open space around all of America’s cities. Jane Jacobs wrote that automobiles were eroding cities, as traffic engineers demolished vast amounts of housing to clear the rights of way for new urban freeways, blighting older neighborhoods to let more people drive in from the new suburbs.8 

These criticisms had practical political effects. In the 1950s, New York’s master builder, Robert Moses, proposed building a road through Washington Square Park in Greenwich Village, and neighborhood residents stopped him. In 1961, San Francisco stopped a massive plan to build freeways throughout the city, and there were similar “freeway rebellions” in many other cities in the 1960s and 1970s. Though the freeways were mainstays of postwar economic growth, there were many people who thought they made their neighborhoods worse places to live. 

There were even some important politicians who criticized the cult of the Gross National Product. During his presidential campaign, Robert Kennedy give a speech on March 18, 1967 (not long before his assassination) saying:

Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product … counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwoods and the loss of our natural wonder in chaotic sprawl. ... Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.9

Unfinished Business

At that time, it seemed possible that American progressives would develop a new politics that would deal with the profound shift from a scarcity economy to a surplus economy—politics that would let us make good human use of our prosperity rather than devoting ourselves to the Gross National Product. 

But as it turned out, progressives focused on social issues rather than on these economic issues during the late twentieth century. They make immensely valuable strides in promoting equality for excluded social groups. In the 1950s, there was de jure racial segregation in the south and de facto racial segregation throughout the country. If women had jobs at all, they were expected to be nurses or secretaries, subordinate to men who were doctors or lawyers. Gays had to stay in the closet to protect themselves from losing their jobs or worse: Alan Turing, the brilliant mathematician who developed the theory behind computer science and who helped us win the war by breaking the Germans’ code, was prosecuted and convicted of “gross indecency” in 1952 because he was a homosexual, he accepted chemical castration as an alternative to prison, and he committed suicide two years later.

We certainly owe progressives of the late twentieth century a debt of gratitude for fighting against this sort of bigotry and cruelty, but they were wrong to let these social issues distract them from economic issues. As they promoted equality for excluded social groups, economic inequality kept getting worse. In the 1960s, economic inequality in the United States was about average for the developed nations, but now the United States has the worst inequality of any developed nation.10
Because we ignored economic issues in favor of social issues, we failed to create the new politics needed to deal with the surplus economy—and as inequality increased, we even lost the economic gains that we had won earlier in the century. Almost all the benefits of growth since the 1970s have gone to the top 10%, while median income has stagnated. Average Americans today no longer feel as affluent as they did during the 1960s—even though the nation as a whole is more than three times as wealthy now as it was in the “affluent society” of 1960.11

Things have become so bad that progressives have started to focus on economic issues again. Bernie Sanders’ presidential campaigns of 2016 and 2020 concentrated on economic inequality, with the goal of taxing the very rich and using the money to help the poor and the middle class. But today’s progressives are trying to recover the ground that they lost during the late twentieth century as inequality increased, and they are not focusing on the deeper long-term issue of how to make good human use of a surplus economy. 

This issue has become overridingly important because it is essential to long-term efforts to deal with global warming and other ecological challenges that will become increasingly urgent during this century. We would have done well to shift to the Dutch model during the postwar decades, because it would have given us more satisfying lives. But now, we urgently need to shift to the Dutch model to counter the ecological crises that will occur if we keep pursuing the highest possible GDP rather than the highest possible level of well-being.