"Crypto Servants" and Socialism

By William R. Doerner

ECONOMICS AND THE PUBLIC PURPOSE

by JOHN KENNETH GALBRAITH

334 pages. Houghton Mifflin. $10.

John Kenneth Galbraith has become that rarest of social critics--a reformer whose new ideas are cheerfully anticipated even by people whose worldly holdings may be swept away if his programs are put into practice. In part that is because Galbraith has managed to write with wit and style about the 'dismal science ' of economics. As the eternal gadfly of American capitalism, he has also played a considerable role in popularizing once radical economic theory The Affluent Society (1958) predicted an age of private wealth and public impoverishment in the U.S. (a bit more extreme, on both counts, than what so far has actually occurred). In The New Industrial State (1967), Galbraith introduced readers to "technostructure," the wonderful folks who run the few dozen or so biggest U.S. corporations and also, he says, have more or less managed to shape the economy to their own purposes.

According to the author, Economics and the Public Purpose is the "last in line" of the series, the one intended to "put it all together " The book is a slow and often taxing read. But at a time when the old economic rules "are not working quite the way they used to"--a breathtaking understatement offered some time ago by Federal Reserve Chairman Arthur Burns--it is probably a necessary read as well.

Market System. For example, Galbraith persuasively argues that the currently critical problem of inflation no longer yields to traditional weapons like tax increases and tight credit. Reason:

such measures primarily affect the "market system," the collection of small retailers and individually practicing physicians, owners of car-repair shops and artists, pornographers et al., who, in a competitive system, are supposed to set prices according to what the market will bear Yet inflation, Galbraith says, is not caused by the market system, but by the far more powerful "planning system"--the big corporations that have gained near-total long-range control over their products' supplies, production, innovations, a manipulatable demand level, financing--and thus prices. In order to slow inflation caused by the planning system, Galbraith argues, Government imposed wage-price controls are "inescapable."

Much more than that is inescapable, if Galbraith's view of the public purpose is to be fulfilled. Unless the U.S. chooses to suffer "considerable social disorder and, on occasion, lethal damage to health and well-being," says Galbraith, the country must adopt a "new socialism." Socialism, because the private-enterprise system is no longer capable of supporting certain industries. New, because those industries are not the banks and high-technology monopolies that traditional socialists have thirsted to take over in the name of the state, but rather the housing, health and other public-purpose segments of the economy that are stunted for want of adequate care and planning. "The new socialism," explains Galbraith, "searches not for the positions of power in the economy but for the positions of weakness."

Stable Prices. Moreover, as Galbraith envisions things, these neglected but essential industries would be "socialized" in a fairly gentle way--something like the system that has governed U.S.

agriculture for the past 40 years. The obvious abuses that have evolved under that system are of less concern to Galbraith than its two main advantages: a high rate of technological growth and (until recently) stable prices. Thus the Government, far more than it does at present, would subsidize the price of, say, new homes, and systematically encourage the development of the whole housing industry.

Galbraith admits that Congress seems in something less than a dither to pass the requisite measures for a "new" socialism. Yet many encumbrances on so-called free enterprise --wage-price controls, environmental restrictions, safety regulations, etc.--seemed likely prospects until recently Galbraith points out: "Circumstance forces the action that theory deplores."

Perhaps. Galbraith is undoubtedly right in holding that the halfhearted, eleventh-hour attempts at socialism in the U.S., such as the federal rescue of the collapsing Penn Central railroad, produce worse results than unabashed governmental takeovers of some industries in other developed nations. And few will argue with the goal of somehow finding a way to provide the healthcare industry and other undernourished parts of U.S. society with advantages enjoyed by big corporations. Yet socialism, new or otherwise, is not an encouraging word to most Americans, and the achievements of "mixed" economies --part free, part socialized--in such advanced countries as Japan and England have been very mixed indeed.

Despite its obvious doctrinaire intention, Public Purpose has plenty to say about issues right out of any morning's newspaper. The book has a fascinating chapter, for example, on "the concept of the household" that is bound to become an instant classic in Women's Lib anthologies. Consumption, while basically fun, says Galbraith, also involves a lot of work: maintenance of house, appliances and automobiles; food preparation; and "participation in competitive social display " Current economic truths presume that these duties fall to women, who are thus in a "crypto-servant" class. "Menially employed servants were available only to a minority of the pre-industrial population," Galbraith straight-faces. "The servant-wife is available, democratically, to almost the entire present male population." Unless women comply with their "convenient social virtue," the author goes on, "the possibility of increasing consumption would be sharply circumscribed." Sisters, unite--you have only your convenient virtue to lose, and the pleasures of paid labor to win!

-- William R. Doerner

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