Tuesday, August 14, 2012

The Affluent Society Takes A (Short) Vacation

The Austere Life

An article ("The Withering of the Affluent Society") in The Wilson Quarterly by Robert J. Samuelson says that we can no longer expect to live under the secular faith of "The Affluent Society," a term made popular in the late 1950s by John Kenneth Galbraith, a Harvard economist. As the argument goes: The money is just not there, as much of the U.S.'s national wealth will go toward securing the needs of an aging population:
For millions of younger Americans—say, those 40 and under—living better than their parents is a pipe dream. They won’t. The threat to their hopes does not arise from an impending collapse of technological gains of the sort epitomized by the creations of Fulton, Ford, and Gates. These advances will almost certainly continue, and per capita income—the average for all Americans and a conventional indicator of living standards—will climb. Statistically, American progress will resume. The Great Recession will be a bump, not a dead end.
The trouble is that many of these gains will bypass the young. The increases that might have fattened their paychecks will be siphoned off to satisfy other groups and other needs. Today’s young workers will have to finance Social Security and Medicare for a rapidly growing cohort of older Americans. Through higher premiums for employer-provided health insurance, they will subsidize care for others. Through higher taxes and fees, they will pay to repair aging infrastructure (roads, bridges, water systems) and to support squeezed public services, from schools to police.
To "live better than our parents" has been taken as the sign that American capitalism is working well and individuals are being richly rewarded for their efforts. The prevailing idea has been that economic growth is both good and necessary, hence western nations' preoccupation with GDP. It has become an article of faith; yet, like many ideas—whether religious or secular—they must bear scrutiny under changing facts on the ground.

Toward that end, Mr. Samuelson's article is well-grounded and factual; he's evidently trying to dampen expectations, suggesting a more austere future for future generations. The picture is less hopeful, some would say bleak. The larger problem is the loss of jobs, many millions outsourced out of existence; not surprisingly, unemployment remains stubbornly high. 

Of course, like all such predictions, it falls under the rule that it is hard to predict the future: you can rely only on known facts.The situation, as they say, is fluid. The U.S. might discover or create a technology that alters the world's way of thinking or operating—like a new energy source, building a better mousetrap—and America will again create the necessary jobs for the young to finance their affluent lifestyle.

You can read the rest of the article at [The Wilson Quarterly]

2 comments:

  1. Economies zigzag. The biggest problem facing us is not economic but political--the increasing fanaticism of radical Islam and its leftist supporters. They are motivated by anti-Zionism, the most powerful political force on earth.

    ReplyDelete
  2. Perhaps so, but radical Islam and its consequences have no direct effect on the millions of Americans looking for work.

    ReplyDelete

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