Early on in The Affluent Society, conventional wisdom” (the hallmark concept drawn from Galbraith’s The Affluent Society determines that, in order to understand the economic and social life of contemporary times, one must have a “clear view of the relation between events and the ideas which interpret them” (6). He further aligns this with a contention between concepts of which actually exist (or can be determined to not exist) and which are considered acceptable or agreeable (6). A main through-line consistent in the text, Galbraith effectively clarifies the view of the relationship between events and ideas that interpret them through an examination of the misunderstanding which “) perpetrates in determining the nature of this relationship. In the eighth chapter of the text, “Economic Security,” Galbraith exposes this misunderstanding through a close analysis of the persistent misunderstanding of the “problem of economic security” (81), further revealing that, rather than completely misinterpreting the relations between events and ideas, conventional wisdom has miscast the roles that events and ideas play within the relationship itself.
As the chapter begins, Galbraith notes that within the “model of competitive society…insecurity was inherent,” going on to mark that the insecurity caused by “unpredictable changes in fortune were both inevitable and useful” (81). Its inevitability came from its part in the system’s capacity to “accommodate itself to change” and its utility from its ability to drive the best and most efficient service out of men (81). However, Galbraith also notes that these seemingly valuable aspects of insecurity were hardly regarded as inherently indispensable by individuals but as an abstract idea. The issue at hand is that, although insecurity seems desirable within a theoretical model of society, when actually faced, those subject to insecurity will at some point attempt to relieve the sense of instability which it inherently produces; and, as Galbraith concludes in the opening of the text, “as with individuals so too with nations” (1). In fact, according to Galbraith, society-at-large has been largely been successful at eliminating insecurity. However, it has “survived more or less intact in the ideological underpinning of the conventional wisdom” and, as such, continues to influence economic thought and practice. (82-83).
Economic insecurity’s elimination was intensely incited by the behavior of corporations, at least during the period wherein the conventional wisdom followed the competitive model of society. Corporations and the businessmen running them reacted to the great insecurities of competitive capitalism (i.e. competition and the free-flow of market prices) by attempting to ensure full control of supply and price within each respective corporate body (83). However, focusing the majority of their attentions on price, corporations misunderstood their efforts to reduce risk as a “maximization of profits” rather than as a “minimization of risks” (83). How did this misunderstanding come about?
What Galbraith seems to get at is that society-at-large tends to react in particular ways to particular events, generating particular interpretive ideas regarding said events. However, at some point in the historical trajectory of a given event and its subsequent effects, a change occurs in events: essentially, the trajectory reaches a conclusion, an end-point—opening up a space for a new trajectory. Yet, the ideas generated by society-shifting events persist beyond this point, as a result of the general degeneration of a particular event’s influence on a society divorced from the intensity of the initial experience of that event: which is to say that, once ideas are generated to interpret an event, they are used to generate action—action designed to cope with the effects of that event, eventually ameliorating society from said effects.
Juxtaposing this interpretation of Galbraith’s general claim about the nature of economic and social life with the chapter “Economic Security,” one can see that, in the case of the , society-at-large responded quite actively to the period’s extreme economic insecurity: corporations sought to control prices an supply through self-saving measures, the government began unemployment and social security benefits, microeconomic as well as macroeconomic measures were utilized throughout the period to ensure economic security and stability (84-87). As has been stated above, however, conventional wisdom saw many of these measures as profit-increasing rather than insecurity-reducing actions. Conventional wisdom, at this point in contemporary history, was firmly in the mold of a competitive society, wherein depressions were seen as inevitable and useful. However, this was a mold generated for an explanation of a society in far different economical and socio-historical circumstances than the society of the Depression Era: standards of living increased, the life of the average man no longer teetered so close to the verge of death. The stringent demarcations of wealth and possibility were no longer so clear.
At some point, society shifted from accepting the competitive model of society as the fact of life to accepting a need for economic security as society’s preeminent pursuit in life. Yet again society shifted during the Great Depression from a belief that depressions were inevitable and useful, an idea incompatible with the catastrophic event of this depression—marking an end in the competitive model’s dominance in describing society—to a “widespread belief that depressions could be at least partially prevented” (87): which is to say that economic security could be reached and maintained. As Galbraith himself states, “One cannot stress too strongly…that if economic security is to be considered finished business…depression and inflation must be prevented” (92). However, as is made apparent once the relationship between events and the ideas meant to interpret them is made clear, the cycle does not end here. Galbraith goes on in the chapter to expose the problems of this new conventional wisdom or “eventful idea.” As more depressions occur and are dealt with and surpassed, the general intensity of their influence on society will lessen; thus, there will grow an ever-elongating disconnect between the ideas of conventional wisdom and the actual effects of events in contemporary society (91-93), leading to yet another shift in societal thought. What seems most notable about Galbraith’s concept of this pattern in society is that its products (i.e. the ideas meant to interpret events) are used by man in a seemingly reverse-fashion than how it actually is generated.
Galbraith seems to believe that events lead to ideas, which lead to action, while human beings take action as generated by ideas, which come out of events. It would seem to work out fine, since, in this dissection, man seems to respond to events through action, which is supported by ideas interpreting the event. However, as has been stated previously, the event loses its vitality in relation to ideas and actions, which come as a result of that event but far more indirectly than the period’s initial responses. At this moment, actions are taken with the guidance of ideas, which no longer apply to the event they are meant to interpret. It would seem to follow that these new ideas actually express the movement of society in between events. However, without a notable event to make apparent the disconnect between new ideas and past events, society’s confusion remains, paving the way for yet another catastrophic societal event, perpetuating this paradoxical pattern of societal behavior.