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http://jcs.sagepub.com/ Journal of Classical Sociology http://jcs.sagepub.com/content/3/1/47 The online version of this article can be found at: DOI: 10.1177/1468795X03003001694 2003 3: 47 Journal of Classical Sociology Barry Smart An Economic Turn: Galbraith and Classical Sociology Published by: http://www.sagepublications.com can be found at: Journal of Classical Sociology Additional services and information for http://jcs.sagepub.com/cgi/alerts Email Alerts: http://jcs.sagepub.com/subscriptions Subscriptions: http://www.sagepub.com/journalsReprints.nav Reprints: http://www.sagepub.com/journalsPermissions.nav Permissions: http://jcs.sagepub.com/content/3/1/47.refs.html Citations: What is This? - Mar 1, 2003 Version of Record >> at University of the Philippines on May 25, 2014 jcs.sagepub.com Downloaded from at University of the Philippines on May 25, 2014 jcs.sagepub.com Downloaded from

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2003 3: 47Journal of Classical SociologyBarry Smart

An Economic Turn: Galbraith and Classical Sociology  

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An Economic TurnGalbraith and Classical Sociology

BARRY SMART University of Portsmouth

ABSTRACT While the late 19th-century analytic context in which classical soci-ology emerged was constituted in substantial part by a discourse of politicaleconomy, the subsequent development of the discipline has been characterized bya growing analytic distance between sociology and economics. With increasingspecialization in the field of knowledge in the course of the 20th century therewas a neglect of social institutions in orthodox economic analysis and a parallelrelative neglect of economic phenomena within sociological analysis. The lattercondition has been exacerbated by the ‘cultural turn’ in social thought that tookplace towards the close of the century, ironically a period marked by the growingprominence of economic matters in social and political life. This paper presents anargument for a return to the analytic concern with economic life that lies at theheart of classical sociology, for an ‘economic turn’ in contemporary sociologicalthought. This is achieved through a discussion of the work of J.K. Galbraith oneconomics and the transformation of capitalism; private affluence and publicprovision; and the consequences of a culture of contentment, work that suggestsan affinity with the analytic preoccupations of the classical sociologists. The paperdemonstrates the sociological relevance of the social and institutional analyses ofJ.K. Galbraith.

KEYWORDS capitalism, cultural turn, economics, fiscal sociology, Galbraith

Introduction: On Sociology and EconomicsThe early analytic development of sociology took place through a process ofdifferentiation of sociological analysis from a range of other forms of moral andsocial science and involved a critical engagement with political economy inparticular (Bierstedt, 1979; Delanty, 2000). The late 19th-century historical

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context in which sociology emerged was substantially shaped by the growingimpact on social life of a developing industrial capitalist mode of production andthe increasing differentiation of economic and social structures.

The issue of the relationship between economy and society has beenacknowledged to be particularly prominent in the works of those figures who areroutinely regarded as part of the core of ‘classical sociology’, notably Karl Marx,Max Weber, Georg Simmel and Emile Durkheim (Smelser and Swedberg, 1994).For these thinkers, the articulation of economic and social processes is analyticallycentral. One important early legacy of this aspect of the development of sociologywas the constitution of a distinctive ‘tradition of economic sociology’ (Martinelliand Smelser, 1990). This tradition of inquiry has been identified as a part ofeconomics, a part of sociology, and finally as lying somewhere between the two(Zafirovski, 1999). But it has become a relatively neglected tradition, oneconsigned to the margins of sociology (Beckert and Swedberg, 2001).

As the moral and social sciences developed in the course of the late 19thand early 20th centuries, ‘the epistemological field became fragmented’ (Foucault,1973: 346). Specialization increased in the course of the 20th century, withanalysts in different fields becoming increasingly isolated from one another andrelatively little attention being devoted to the relationship between distinctivefields of inquiry. Knowledge was increasingly ‘carved up into a host of detailedstudies that [had] no link with one another’ (Durkheim, 1984: 294). It is in thiscontext that sociology’s intellectual credentials and field of study were consti-tuted, in substantial part in relation to, and in the shadow of, the territorial claimsof an existing, more established discipline of economics.

During the 1930s the American sociologist Talcott Parsons (1935a,1935b) proposed a clear division of labour between sociology and economics. Hisintervention served to legitimate the neo-classical economic neglect of social andinstitutional dimensions and effectively rendered the boundary between the twofields of study impermeable. As Joseph Schumpeter (1954a) was moved toobserve, the two disciplines drifted apart to such an extent that it appeared theyknew little and cared even less about what each other was doing. The analyticdistance between sociology and economics has become a matter of increasingconcern. Analysts have noted how within economics there has been a lack of‘interest in the analysis of social institutions while sociology [has] conceded thestudy of socio-economic phenomena to economics’ (Grundmann and Stehr,2001: 273). This condition has been exacerbated by the cultural turn in sociologyand the continuing marginalization of institutional analysis in moderneconomics.1

It is increasingly evident that we ‘live in a highly economized culture’(Sayer, 1999: 53), a culture in which economic forms of life and an associatedeconomic logic are prominent, if not paramount. Given the growing ‘prominenceof economic matters in everyday life and mainstream politics’ (Ray and Sayer,1999: 3), an analytic readjustment within the field of sociology is overdue. An

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analytic reorientation is required that redresses the relative neglect of economythat has followed the ‘cultural turn’ in contemporary sociological inquiry (Rayand Sayer, 1999).

An analytic concern with economic processes, with the broad issue of therelationship between economy and society, as well as a vision of how social andeconomic life might be reconstituted, is a recognized feature of classical sociology.The question of the articulation of economy and society is at the centre ofthe work of those classical analysts like Marx, Simmel, Weber and Durkheimwho engaged critically with the discourse of political economy and contributed tothe development of sociological inquiry. A comparable analytic concern with thearticulation of economy and society and the social consequences of existing andpotential developments is also present in the institutional analyses of a morecontemporary figure, the social economist J.K. Galbraith. Galbraith’s works arenot conventionally regarded as relevant to the sociological tradition. But in so faras the sociological canon is a ‘field for debate and analysis’ (Turner and O’Neill,2001: 6), then a consideration of their sociological relevance is warranted.Moreover, to the extent that Galbraith’s analyses focus on the articulation ofeconomic, cultural, social and political conditions and are informed by a concernwith contemporary society, rather than preoccupied with exposition of a margin-alist economic perspective on human conduct, a consideration of their sociologicalrelevance seems overdue.

In this paper I begin by briefly recalling the significance economic mattersand disciplinary affinities beyond sociology assume in the works of the core classicalsociological figures. Then I turn to the heart of the matter and consider analyticthemes and concerns in the work of J.K. Galbraith that suggest a close affinitywith the preoccupations of the classical sociologists.

Classical Sociology, Political Economy andEconomic LifeThe writings of figures accorded prominence within the discourse of classicalsociology, in particular such key thinkers as Karl Marx, Georg Simmel, EmileDurkheim and Max Weber, reveal analytic orientations and commitments rangingacross a number of disciplines and substantive concerns. In turn each of thethinkers engaged critically with classical political economy and its analytic assump-tions. These included the individualistic interest-maximizing and calculatingcharacter of human nature (homo oeconomicus) and the effectiveness of the free-market as the form of organization of economic and social life through which theself-interested actions of individuals would spontaneously produce social order.

These thinkers had a common primary concern with achieving an under-standing of the distinctive features of an emerging form of life, modernity. Theywere particularly concerned with the impact of capitalist economic conditions onthe organization and experience of forms of social and cultural life.

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Marx and Capitalist Economic Life

Marx’s primary intellectual affinity is with economics, although, as has beenacknowledged, there is much of sociological relevance in his writings (Bottomore,1979). The bulk of his work is concerned with critically analysing the structureand dynamic of modern capitalism, and the social consequences that flow fromthe ‘[c]onstant revolutionizing of production, uninterrupted disturbance of allsocial conditions [and] everlasting uncertainty and agitation’ (Marx and Engels,1968: 83) unleashed by it. In his work there are profound passages onthe development of the capitalist mode of production, especially in relation to theimpact of commodity production, the increasing importance of science andtechnology as forces of production, and the social impact of automation (Marx,1973: 704–6). In addition there are controversial observations on the subject ofcapitalism’s probable development and possible fate.

A distillation of many, if not all, of the key sociologically relevant themes inMarx’s work may be found in the short text co-authored with Friedrich Engelsunder the title The Communist Manifesto (1968), to which I have already made anoblique reference. In a discussion of this historic text, Joseph Schumpetercomments that the ‘economic sociology of the Manifesto . . . is far more importantthan its economics proper’ (1949: 204). A comparable evaluation may be made ofthe works of Galbraith to be considered below.

Notwithstanding the cultural turn in social theory, Marx’s broad criticalanalytical legacy is still acknowledged in contemporary social theory, as demon-strated by Lash and Urry’s (1994) wide-ranging analysis of the transformation ofmodern industrial capitalism in the latter part of the 20th century. Marx’s criticalreflections on modernity and his analysis of the process of capital circulationcontinue to inform understandings of the transformations associated with con-temporary capitalism (Derrida, 1994).

Simmel and the Modern Money Economy

In the respective writings of Simmel, Durkheim and Weber, the question ofsociology – its subject matter, method and relationship to cognate fieldsof investigation – is explicitly addressed. Simmel had a number of fields ofintellectual interest and it has been argued that it was philosophy that constitutedhis primary task, sociology representing merely a ‘subsidiary discipline’ (Frisby,1984: 25). Notwithstanding the fact that Simmel regarded himself primarily as aphilosopher, his sociological writings on social differentiation and the develop-ment of forms of individuality and his reflections on modern culture have led tohim being accorded the status of a key sociologist.

However, it is The Philosophy of Money, which attempts to determine theimpact of money and the modern money economy on social and cultural life, that

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has been identified as Simmel’s most systematic analysis, a work that, untilrecently, has been relatively neglected within sociology (Frisby, 1990: xxix). Withthe belated (re)generation of sociological interest in our ‘highly economizedculture’ (Sayer, 1999: 53) has come an increasingly wide recognition of the valueof Simmel’s writings on the modern money economy and commodity culture forachieving an understanding of social life under conditions of capitalist modernity(Frisby, 1990, 1997; Turner, 1999).

Simmel’s study of money constitutes an analysis of one of the mostimportant institutions of the modern economy. Although in the Preface to thestudy Simmel comments: ‘Not a single line of these investigations is meant to bea statement about economics’ (1990: 54), there is a great deal in his work thatenhances our understanding of economic phenomena. Simmel presents a philo-sophical study that acknowledges the multi-faceted character of phenomena, theircomplex preconditions in ‘non-economic concepts and facts’, and indeedtheir consequences for ‘non-economic values and relationships’ (1990: 55).Money serves as a convenient topic or means for exploring the relations that existbetween ‘economic affairs’ and the more profound orders of human existence andhistory – ‘ultimate values and things of importance in all that is human’ (1990:55).

What emerges from Simmel’s work is confirmation that it is necessaryto retain the explanatory value of an analytic approach that reveals the extent towhich economic life shapes and influences culture; but that it is also necessaryto recognize that economic structures and practices emerge from and are boundup with cultural preconditions and values. In short, while it is necessary ‘toconstruct a new storey beneath historical materialism’, it is important to remem-ber that in the analysis of economic, cultural and social forms of life the ‘practiceof cognition . . . must develop in infinite reciprocity’ (1990: 56).

Durkheim and the Social Conditioning of Economic Life

In his attempt to establish a distinctive place for sociology, Durkheim drawsdistinctions between psychology and sociology, acknowledges an affinity betweensociology and anthropology, and in addition draws a critical contrast between thecompeting claims of classical economics and an emerging sociological science. Heis particularly critical of the way in which the abstractions of economics distortreality: ‘Classical economics fashioned a world that does not exist . . . a world inisolation, everywhere uniform, in which the clash of purely individual forceswould be resolved according to ineluctable economic laws’ (1982: 197). Thegeneral propositions of economics fail to take account of conditions of time andplace, ‘hence therefore of all social conditions’ (1982: 205). In turn, economics iscriticized for employing a notion of man in general ruled by self-interest – ‘the sadportrait of an isolated egoist’ (1978: 49). The reality of economic activity for

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Durkheim is that it is shaped by the characteristics of the particular society inwhich it is located, for example by the policies and reforms implemented by aparticular state. The theoretical consequence is that, rather than an abstracteconomy grounded in ‘a priori suppositions’, observation of national economy isargued to be the focus of analysis.

In the course of his criticism of economics for its analytic preoccupationwith ‘the construction of a more or less desirable ideal’ and observational neglectof the complexity of real life, Durkheim (1978: 49) makes reference to thedifficulties that derive from divisions between the various social sciences. Heargues that, contrary to the opinion expressed by economists, ‘moral, legal,economic and political phenomena’ do not ‘unfold along parallel lines withoutintersecting’ (1978: 51). Social phenomena such as these are closely related, andin consequence it is not appropriate to study them separately. An approach thatrecognizes what Durkheim calls the ‘relatedness’ and Simmel describes as the‘multi-faceted’ character of social life has the potential to be able to avoidformulations ‘totally inadequate to the objects of study’ (Bourdieu et al., 1999:181 n. 1). In turn, such an approach is better placed to deal effectively with thecomplexity of social phenomena and to increase understanding of the ‘economicand social determinants of the innumerable attacks on the freedom of individualsand their legitimate aspirations to happiness and self-fulfilment’ (Bourdieu et al.,1999: 629). This has constituted the promise of sociology from its inception, thepotential it contains to illuminate the complex contradictions intrinsic to social lifeand the social causes of individual experiences.

A number of the critical observations on aspects of late 19th- and early20th-century life provided by Durkheim continue to inform the experiences of alater generation of modern subjects encountering the complex consequences ofcontinuing far-reaching processes of economic transformation. Durkheim is crit-ical of the notion that economic initiatives and interests should be free ofregulation. In a discussion of the consequences associated with the growth of themarket economy and the unregulated expression of economic interests, he drawsattention to the undermining of moral discipline and public morality. He arguesthat ‘economic functions are not their own justification; they are only a means toan end; they constitute one of the organs of social life’ (1957: 16). For Durkheim,the value of a particular form of economic activity is questionable if a disturbanceof peaceful mutual relations, social disorganization and perpetual discontent withour lot is the inevitable price to be paid. Economic activity represents merely ameans, the end of which, in his (1957) view, is to bring about a ‘harmoniouscommunity’.

In contrast to forms of economic analysis that endorse the idea and realityof a self-regulating market economy, Durkheim (1982) affirms the idea of ascience of economics that recognizes the existence of society and concerns itselfwith the ways in which societal interests receive economic expression. It is in

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relation to precisely this sociologically informed sense of economics that Gal-braith’s institutional analyses of social and economic processes can be located.

Weber on Economy, Culture and Society

The relation between sociology and economics has been identified as the mostcomplex and problematic of disciplinary differentiations (Giddens, 1987: 40), andperhaps nowhere is this more acutely evident and better exemplified than in thewritings and intellectual status of Max Weber. Weber is widely accorded the statusof being a key figure in the establishment of the discipline of sociology for hiscontribution to both sociological methodology and the substantive analysis ofmodern forms of life. Yet he conceived of himself first and foremost as aneconomist, as is evident from several of his texts, including the opening remarksin his 1918 Munich University lecture (Weber, 1970: 129; see also Hennis,1988).

As to some extent is the case with the other thinkers discussed earlier, theintellectual configuration from which Weber’s analytical practice emerged is oneinformed by moral philosophy, political science and political economy. Reflectingon this intellectual configuration, as well as the perspective and purpose ofWeber’s work, Hennis questions Weber’s sociological credentials. He arguesthat Weber ‘nearly always referred to sociology in a distancing fashion. . . .Wherever he accepted the term for his own work he sought, by using specifyingadjectives (verstehend, “interpretive”) not only to isolate it, but actually tosingularize it’ (Hennis, 1987: 28). For good measure, Hennis adds that whilethere is a sociology in Weber’s work, it is restricted to ‘subjectively understandablephenomena’, and the concepts and categories constructed are employed to makea contribution to ‘social economics’ (1987: 28–9).

Hennis adds that it is not possible to understand Weber’s work from theperspective of sociology. In contrast to the intellectual division of labour currentbetween the social sciences, his work is located within an unfractured tradition inwhich economics is both a human science and a political science.2 Following theline of the German Historical School and the work of Karl Knies in particular,Weber’s work contributes to the development of economics as a science of man, amoral and political science. It is in this historical context that his work belongs andthe development of his sociological writings is to be located.

While Weber held that the economic sphere was a core feature of modernsocial life, he argued that the development of modern societies could not beaccounted for through a consideration of economic factors alone; to the contrary,other inter-related social and cultural processes had to be taken into account. Thispoint of view is exemplified by his (1976) study of the development of modernWestern capitalism. The development of forms of modern capitalist economicactivity in the West are argued to have been closely connected with a particularcultural ethos, associated rationalizations of social conduct and the constitution of

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a ‘new kind of individuality’ (Sayer, 1991: 119). If emphasis is placed by Weber onthe significance and impact of forms of rationalization on the development ofmodern forms of social life, it is worth recalling that capitalism is identified by himas ‘the most fateful force in . . . modern life’ (1976: 17).

To explain the particular features of Western rationalism, Weber remarkedthat it was necessary to take account of both the ‘fundamental importance of theeconomic factor’ and the processes through which ‘the ability and disposition ofmen to adopt certain types of practical rational conduct’ (1976: 26) were formed.He traced the formation of a disciplined, systematically rational conduct of life tothe idea of a calling and a devotion to labour associated with the religiousdoctrines of ascetic Protestantism. What had been a matter of choice for thePuritan became an inescapable feature of everyday life for subsequent generationsof modern secular subjects for whom there has been no option but to accom-modate to the modern economic order.

By the early 20th century, the notion of a dutiful performance of one’scalling in accordance with the ‘highest spiritual and cultural values’ was increas-ingly out of step with the reality of a fast-developing modern capitalist economiclife. The pursuit of wealth had been ‘stripped of its religious and ethical meaning. . . to become associated with purely mundane passions’ (Weber, 1976: 182). Acentury later the differences are even starker. Ideas of duty and calling now appearmarginal within modern ‘affluent’ consumer-orientated societies. Society nolonger has much of a need for mass industrial labour and increasingly individualsare shaped not so much by the requirements of work but ‘first and foremost bythe duty to play the role of the consumer’ (Bauman, 1998a: 80). The influence ofmaterial goods over people’s lives has grown exponentially and increasingly it isnot restless, continuous work that is of value, but ceaseless, seductive consump-tion. The notion of work as a vocation has become the preserve of a privileged few(Bauman, 1998b).

The context in which the issue of the relationship between economy,culture and society is now being addressed is in a number of important respectsdifferent from the era of the classical sociologists. Economic life, cultural formsand practices, and social institutions and relationships have continued to betransformed by the unremitting development of modernity. Moreover, whereas atthe beginning of the 20th century, sociology was merely an emerging field ofstudy, it has subsequently established a secure place for itself as an academicdiscipline. However, the process of increasing differentiation of knowledge has ledto a neglect of social institutions by economics and a parallel relative neglect ofsocio-economic phenomena and analyses within sociology (Ray and Sayer, 1999).It is in this context that I am arguing the social and economic institutionalanalyses of J.K. Galbraith warrant sociological consideration, for their focus on therelationship between processes of economic, cultural and social transformationand impact on everyday life expresses and develops the concerns of the classicalsociologists.

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Situating Galbraith: Beyond ConventionalWisdom

The writings of Marx, Simmel and Weber, figures whose principal disciplinaryaffinities can be argued to lie beyond sociology, are recognized to containsignificant analyses of direct sociological relevance. A comparable claim can bemade in respect of the writings of Galbraith, whose major works include studies ofcomplex processes of transformation to which modern social life has beensubject.

In a discussion of the relationships between knowledge statements, Fou-cault (1977) cautioned that familiar distinctions between divisions, groupings andclassifications should be questioned, not simply accepted. In particular, thefamiliar attribution of discursive unity to the oeuvre of an author ‘must besuspended’, for, far from being a given, ‘unity’ is the result of an interpretativeoperation (1977: 23–4). The works of J.K. Galbraith are conventionallyconsidered to constitute a unity and to lie within the discourse of economics,but, as Galbraith notes, it is the task of the analyst to call into question ‘continuityin social thought’ and to challenge conventional wisdom (1963: 26–7). There iswithout doubt an appreciation in Galbraith’s work that a number of import-ant questions that need to be addressed lie ‘beyond the reach of economics’(1969: 407; see also 408–9) as it has been conventionally constituted. It is inrespect of questions that have been at best marginal to conventional economicdiscourse, but interestingly central to sociology, that several of Galbraith’s (1963,1969, 1975, 1993, 1996) major works can be considered to constitute aresponse.

Galbraith is an unconventional figure who has rejected economic ortho-doxy, one whose work is often ‘viewed with suspicion’ within the field ofeconomics (Keaney, 2001: 1). Within the discipline of sociology it is barely viewedat all. In consequence the potential sociological relevance of his work has rarelybeen acknowledged.3 This is surprising given the level of sociological interest inthe advent of a ‘consumer society’, the relationship between production andconsumption, the seemingly insoluble problem of reconciling the pursuit ofprivate interest with an appropriate level of public service provision, the trans-formation of industrial society, and in possible alternative forms of social organiza-tion. Each of these inter-related themes is not only present within Galbraith’swork, but is addressed in a manner that has an affinity with the analytic interest ofthe classical sociological figures in the emergence and development of industrialcapitalist society and its consequences for social and cultural life.

To begin to open up the issue of the potential relevance of Galbraith’swork for sociology, consideration will be given to his analysis of the transforma-tion of ‘economic society’ through a brief discussion of the following three inter-related themes in his work:

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• economics and industrial capitalism;• private affluence and public provision; • the consequences of a culture of contentment.

Economics and the Transformation of IndustrialCapitalismIn Galbraith’s studies there are two fundamental analytic objectives. The first is toprovide a critical analysis of conventional understandings of social and economiclife and associated vested interests that have informed policy decisions andconduct in relation to the economy. The second is to offer an analysis ofsignificant changes in the form of economic life, including those responsible forcreating unprecedented levels of personal material well-being in Western Europeand America, and to consider the consequences for social and cultural life.

Criticism of conventional economic wisdom, of economic orthodoxy, is aconsistent theme in Galbraith’s work. Economic discourse is argued to beburdened by ideas formed in a world of ‘grim scarcity’ and constrained by vestedinterests. Attempts within the discourse of economics to account for the economicrealities of a world of wealth and affluence are deemed to be problematic, to betoo deeply rooted in the past. Galbraith suggests that there has been a long-standing problem of ‘uncorrected obsolescence’ (1963: 15), and that in the realmof economic ideas familiarity tends to be the ‘touchstone of acceptability’ (1963:18). Economics is burdened with ideas derived from an earlier economic era,when firms were considered to be ‘subordinate to the instruction of the market’(1975: 24) and market and consumer were deemed to be sovereign. Operatingunder the assumption that the choice of the consumer ‘continued to control all’,the discipline of economics ‘slipped imperceptibly into its role as the cloak overcorporate power’ (1975: 24). The critical attention drawn by Galbraith to the‘instrumental function of economics’, that is, the ways in which it ‘serves notthe understanding or improvement of the economic system but the goals of thosewho have power in the system’ (1975: 23), invites comparison with other forms ofcritical analysis.4

A prominent theme running through Galbraith’s work is the dominance ofa neo-classical model of economics that promotes the idea of management of theeconomy through the market. Criticism of the consequences of the predominanceof the capitalist market system and the doctrine of ‘laissez-faire’ is a consistentfeature of his work. Galbraith demonstrates how, from the early 19th centurythrough to the late 20th century, economics has accommodated its ‘view ofeconomic process, instruction therein and recommended public action to speci-fic economic and political interest’ (1993: 78). In analyses of the processes oftransformation to which modern social and economic life has been subject,Galbraith (1969, 1975) has highlighted the issue of the relationship between themarket system and what he describes as ‘the planning system’. He argues that by

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placing all the emphasis on ‘the framework of the market’, economists haveeffectively concealed the working of the planning system and have disguised ‘thepower that . . . it wields’ (1975: 342). Galbraith shows that with economicdevelopment, the growth of the large corporation and the increased significanceof co-ordination and planning, power has passed ‘from consumer to producer’(1975: 342; see also 1993: 133–5). But neo-classical economics has continued topromote the idea that consumers exercise control through the market, ‘leavingthose who are exposed to its instruction with the impression . . . that interferencewith private business decision is unnecessary and abnormal’ (1975: 114) – until,that is, the wake-up call inadvertently issued by Enron, Xerox and Worldcom.

Reflecting on the key changes to which ‘economic society’ has beensubject during the course of the 20th century, Galbraith identifies the impact ofscience and technology on production, the growth in influence of both largecorporations and the state, and a moderation of the business cycle. In addition, henotes three other changes, namely innovations in advertising and consumerdemand management, a decline in membership of trade unions and an expansionin higher education enrolment. The argument is that the ‘imperatives of technol-ogy and organization’ are determining the shape of ‘economic society’ (1969: 18)and that economic goals are exercising an increasing monopoly over the lives ofpeople.

Galbraith emphasizes the dominant role in the economy of a ‘few hundredtechnically dynamic, massively capitalized and highly organized corporations’(1969: 21), and identifies the factors that have led to a ‘planning system’ andforms of state involvement. Economic production increasingly involves thedeployment of sophisticated technology, substantial research and developmentcosts, high capital investment, and long lead-times before benefits are realized inproduction. In circumstances such as these, large corporations seek to reduceuncertainty wherever possible through planning, that is, ‘minimizing or gettingrid of market influences’ (1969: 36), and by drawing on the support of the state.In a variety of areas, including the defence industry, space exploration anddevelopments in transport and nuclear energy,

. . . the state guarantees a price sufficient, with a suitable margin, to covercosts. And it undertakes to buy what is produced or to compensate fully inthe case of contract cancellation. Thus, effectively, it suspends the marketwith all associated uncertainty.

(1969: 41)

With the increasing prominence of scientific and technological innovationand growth in size of the modern business corporation, Galbraith notes that theclassical entrepreneur has been displaced in significance by the emergence of ‘acollective and imperfectly defined’ (1969: 80) management entity that constitutes

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the collective intelligence of the organization. This new organizational con-stituency, termed the ‘technostructure’ by Galbraith (1975: 98), includes a varietyof occupational groups whose common denominator is that they are knowledge-and information-processing workers.5 The technostructure has a monopoly overthe knowledge required in the increasingly frequent and complex decision-makingprocesses that routinely occur in large corporations, and Galbraith argues that ascorporations have grown in size, the power and influence of the technostructurehas increased. Large corporations have the capacity to shape, if not determine,significant aspects of contemporary social life. As Galbraith observes, they areable

not only to fix prices and costs but to influence consumers, . . . and . . . theattitudes of the community and the state. . . . They are not confined by themarket. They transcend the market, use the market as an instrument andare the chariot to which society, if not chained, is at least attached. Thatthe modern corporation deploys such power the neo-classical model, ofcourse, denies. That it is the reality we here see.

(1975: 107)

In so far as neo-classical economics continues to assume that businesses aresubordinate to the market and that the consumer is sovereign, the reality ofcorporate life is occluded.

Economic reality has undoubtedly been transformed since the late 1970s.However, notwithstanding the development of a post-Fordist, more flexible andglobally extensive form of capital accumulation, Galbraith’s analysis of economicsociety retains considerable relevance. The pursuit of flexibility through econ-omic downsizing and reorganization has not led to the demise of the techno-structure ‘but rather to its metamorphosis’ (Keaney, 2001: 84). Corporate-statenetworks endure and the state continues to play a significant role in economic lifeby fostering appropriate developmental strategies for business and acting as lenderof last resort (Castells, 1996; Harvey, 1989). No less important is the role thestate has played in the development of the information technology revolution byunderwriting research and development costs and by providing guaranteedmarkets for products.6 However, as Galbraith anticipated, it is the ‘size, politicalclout and lack of transparency’ of global corporations actively ‘reorganizing theworld economy’ that is continuing to cause most concern (Klein, 2001: 340;Monbiot, 2001).

Private Affluence and Public ProvisionIn his analysis of the development of a wealthier, more affluent society, Galbraith(1963) emphasizes the paramount position occupied by economic production

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and, as a necessary corollary, the vital importance of effective consumer demand.He shows how consumer demand is continually conditioned, indeed has to be, fordecisions about the purchase of goods and services are too important to be left tounconditioned consumer choice. If economic growth is to remain the paramountgoal, consumers must never reach a point where they may feel they have acquireda sufficiency of goods. Contrary to conventional economic wisdom, the consumeris not sovereign, the flow of influence is not unidirectional from consumer tomarket to producer. Rather, demand is provoked and managed through market-ing, advertising and branding. In short, consumption, as Marx (1973) recognizedin the mid-19th century, is a function of production and has to be continuallycultivated and shaped. As Galbraith remarks, the ‘urge to consume is fathered bythe value system which emphasizes the ability of society to produce’ (1963: 133).But within that value system all forms of production are not considered equiva-lent. Whereas privately produced production is valued, in contrast the productionof public goods and services is regarded as a ‘burden’ to be borne by privateproduction through the imposition of taxation (Galbraith, 1963: 116, 218).

The contrast in social attitudes towards private goods and public services isa theme to which Galbraith (1963, 1969, 1975, 1998) has continually returned.The general reticence to question what gets produced in affluent societies, areticence shared by conventional economics, is criticized by him. The existence ofa profusion of some things alongside a dearth of others follows a fault line ‘whichdivides privately produced and marketed goods and services from publiclyrendered services’ (1963: 206). It is the wealth of privately produced goodsand services that is largely responsible for the critical condition of the publicservices. The social imbalance between the stock and flow of private and pub-lic goods and services is recognized to ‘have grown steadily worse’ (1985: xxii).The contrast of ‘opulence’ and ‘squalor’ uncovered in Galbraith’s initial study ofthe relationship between the private and public sectors in an affluent society hassubsequently been compounded by the growth of a culture of contentment(Galbraith, 1993).

The Consequences of ContentmentWithin affluent societies there is a substantial proportion of the electorate, if not amajority, who view favourably any political constituency promising not to disturbtheir immediate comfort and contentment. The primary objective of the sociallyand economically fortunate is to protect their present condition. The primarythreat to this condition of contentment arises, Galbraith argues, when ‘govern-ment and the seemingly less deserving intrude or threaten to intrude their needsor demands. This is especially so if such action suggests higher taxes’ (1993: 17).Galbraith’s analysis of the culture of contentment brings into sharp relief thelimits within which the ‘tax state’ (Schumpeter, 1954b) operates, and clarifies

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the context within which a ‘new overriding commitment to laissez faire and themarket’ (Galbraith, 1993: 62) has developed.

Taxation is not only resisted by the relatively affluent, it is argued thatbeyond a modest level it acts as a disincentive to wealth creation and therebythreatens to damage the economic prospects of the community as a whole.Galbraith remarks that the assumption seems to be that while the wealthy needthe incentive of substantial additional income, ‘the poor are deserving of theirpoverty’ (1993: 145), and in so far as this is a widely held view, economies inpublic provision appear to be warranted. In short, indifference towards the poorappears to be a corollary of affluence. And in so far as the poor are considered tobe ‘architects of their own fate’ (1993: 97), the contented majority are ableto continue enjoying their private wealth undisturbed by any feelings of guiltabout the public squalor to which the less fortunate are consigned.

The ways in which a culture of contentment receives political expressionare outlined by Galbraith in the following terms. The pursuit of personal wealthand individual material well-being is accorded social esteem and value, if notreverence. In contrast, poverty is viewed with relative indifference, and is per-ceived to be a consequence of a lack of responsibility on the part of the poor, whoare viewed with disdain, if not contempt. Private organizations are deemed to beefficient and dynamic, while the state and public organizations are criticized forbeing ‘bureaucratic’, a synonym for inefficiency, incompetence, impersonality andremoteness. Given the above and the fact that there is an asymmetry at the heartof the public services – ‘The fortunate pay, the less fortunate receive’ (1993: 46)– it is no surprise to find that the state, public sector and taxation are viewed as aburden by the contented and self-approving majority. Such a politics of content-ment effectively reduces the scope for taking difficult, potentially unpopular,yet necessary long-term measures, for it leads to emphasis being placed onthe electoral benefits of ‘short-run economic policies of contentment’(1993: 157).

Towards the conclusion of his discussion, Galbraith comments that the‘present age of contentment will come to an end only when and if the adversedevelopments that it fosters challenge the sense of comfortable well-being’ (1993:156–7). The possible developments identified by Galbraith include ‘economicdisaster’, ‘military action . . . associated with international misadventure’, and‘eruption of an angry underclass’ (1993: 157). In the period of time that haselapsed since Galbraith speculated on the possible ‘reckoning’ awaiting theAmerican economy and polity, much has happened. Social and economic life hasbecome increasingly insecure (Beck, 2000). America has become a ‘dividedsociety in which an anxious majority is wedged between an underclass that has nohope and an overclass that denies any civic obligations’ (Gray, 1999: 111; see alsoCastells, 1998: 130). An erosion of confidence in corporate America has led to themiddle classes ‘rediscovering the condition of assetless economic insecurity’ (Gray,1999: 111). Factor in the events of 11 September 2001 and the possibility that

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the ‘War on Terror’ will be a war without a clearly defined end, and the culture ofcontentment already seems to have been displaced by one of anxiety.

Concluding Remarks: Galbraith, Fiscal Sociologyand the Market SocietyWriting in an earlier period of social, economic and political uncertainty followingthe events of the First World War, Joseph Schumpeter (1954b [1918]) sought todesignate a special field of inquiry that he described as ‘fiscal sociology’. By thelatter, he intended study of the public finances, which he described as ‘one ofthe best starting points for an investigation of society’, for gaining an insightinto the ‘spirit of a people, its cultural level [and] its social structure’ (1954b: 7),as well as its potential development. Within sociology there have been fewattempts to cultivate the field Schumpeter identified (Bell, 1976, is a rareexample). However, throughout the work of Galbraith there is a continual criticalengagement with the issue of the public finances as well as analysis of a range ofimportant closely related sociologically relevant themes and issues. To that extentit can be argued that there is a ‘fiscal sociology’ in his work.

An ‘economic turn’ has become a feature of recent social thought associologists have rediscovered their public purpose as social critics to take issuewith neo-liberalism and the cultivation of a market society (Beckert and Swed-berg, 2001; Bourdieu, 1998; O’Neill, 1998; Philo and Miller, 2001; Slater andTonkiss, 2001). The development of a critical analytic interest in the articulationof economy and society and the impact of capitalist market forces on social liferepresents a return to a set of concerns that are central to the works of the classicalsociologists. The classical sociologists sought to make sense of the ‘great trans-formation’ (Polanyi, 1968) that led to the development of modern industrialcapitalist forms of social life and critically analysed the consequences. Our task iscomparable, namely to make sense of current wide-ranging processes of social andeconomic transformation, including the regeneration of the market system and itssocial and cultural consequences. To that end it is necessary to counter the‘conventional wisdom’ of neo-liberal discourse – what Bourdieu (1998) hastermed the ‘dominant discourse’ – and conduct an analysis of the ‘market society’,including its major flaws. On both counts Galbraith’s work provides analyticresources of direct sociological relevance.

One of the distinctive features of sociology has been openness to ideas,approaches and analyses that derive from other disciplinary fields, providing, thatis, that they enhance understanding of social processes and practices. The analysesof the classical figures demonstrate that sociological relevance is not confinedto the works of those analysts who explicitly define themselves as sociologists.Given the transformation of ‘economic society’ is at the forefront of Galbraith’swork, his writings merit greater sociological consideration than they have receivedto date.

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Notes

1. The limitations of modern economics follow from its neglect of institutions and preoccupationwith ‘theoretically oriented mathematical models’ (Davern and Eitzen, 1995: 79; see also Bell,1990; Solow, 1990).

2. As Weber remarks in his 1895 Freiburg inaugural lecture on ‘The National State and EconomicPolicy’, economics as a ‘human science . . . investigates above all else the quality of the humanbeings who are brought up in those economic and social conditions of existence’ (1989: 197). Asa ‘political science’ it is to be regarded as a ‘servant . . . of the lasting power-political interests ofthe nation’ (1989: 198). The significance of this lecture for making sense of Weber’s project isrecognized by Hennis (1987, 1988), for whom the political economy of the German HistoricalSchool constitutes a continuing significant influence in the development of Weber’s work,including the later works designated as Weber’s ‘sociology’. In a comparable manner, Barbaletremarks that the inaugural lecture is ‘an absolutely necessary key to the proper appreciation ofWeber’s subsequent work’ (2001: 148), but in contrast to Hennis his argument is that thecontinuities revealed are ‘entirely sociological’ (2001: 149).

3. Notable exceptions are to be found in the respective works of T.H. Marshall (1963), JeanBaudrillard (1998 [1970]), Daniel Bell (1976), Zygmunt Bauman (1991, 1993, 1998b) and JohnO’Neill (1972). Marshall considers the impact of the values associated with the ‘affluent society’,including the stimulation of consumption, on the welfare state in Britain. Baudrillard brieflyassesses Galbraith’s analysis of affluence and its consequences and takes issue with his conceptionof needs. Bell briefly acknowledges the significance of Galbraith’s analysis of the affluent societyand his identification of a relationship between rising levels of personal consumption andincreasing public squalor. Bauman briefly notes the significance of Galbraith’s contribution to ourunderstanding of the conditions that have led to erosion of the welfare state, in particular theemergence of a ‘contented majority’ in Western democratic polities. Perhaps the most explicitrecognition of the sociological value of Galbraith’s work is to be found in John O’Neill’s criticalanalysis of the growing privatization of public space, corporate socialization of individuals intoconsumers, and equation of freedom with consumer behaviour.

4. For example, there are parallels with the critical analysis of economic thinking and of the role ofideas, ‘ideology critique’, provided by Karl Marx. There are also similarities with a later critiqueprovided by Foucault of the way in which ‘a regime of truth’, linked with ‘systems of power whichproduce and sustain it’, was a ‘condition of the formation and development of capitalism’ (1980:133).

5. There are a number of similarities between Galbraith’s analysis of the transformations to whichindustrial capitalism has been subject with the systematic application of science and technologicalinnovation and Daniel Bell’s (1973) ideas on the emergence of a post-industrial society. IndeedGalbraith’s notion of a ‘technostructure’, that is, individuals of ‘diverse technical knowledge . . .which modern industrial technology and planning require’ (1969: 67), and the associatedidentification of a large scientific and educational estate (1969: 286) anticipate key features of thepost-industrial society thesis.

6. Galbraith’s identification of the strategic economic role of the state receives support from Harvey,who identifies the scale of American defence expenditure as ‘fundamental to whatever economicgrowth . . . [occurred] in world capitalism in the 1980s’ (1989: 170). Further support is providedby Castells, who documents the contribution of military and defence-related expenditure onresearch and development programmes to a series of fundamental breakthroughs ranging from

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‘1940s computers to optoelectronics and artificial intelligence technologies of the 1980s . . . [tothe more recent] design and initial funding of the Internet’ (1996: 59).

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Barry Smart is Professor of Sociology at the University of Portsmouth. He is the author of a numberbooks, including Economy, Culture and Society: A Sociological Critique of Neo-Liberalism (in press),Handbook of Social Theory (2001, co-editor with George Ritzer), Facing Modernity (1999), ResistingMcDonaldization (1999), Michel Foucault: Critical Assessments I (1994) and Michel Foucault: CriticalAssessments II (1995), Postmodernity (1993) and Modern Conditions, Postmodern Controversies(1992).

Address: School of Social, Historical and Literary Studies, University of Portsmouth, Milldam, BurnabyRoad, Portsmouth, PO1 3AS, UK. [email: [email protected]]

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