Karl Marx (1818–1883), John Rawls (1921–2002), and John Kenneth Galbraith (1908–2006)

The Cash Nexus, the Difference Principle, and the Dependence Effect

There is a line of thought from Marx, Rawls, and Galbraith that underlines the continuity of the key theme of Marx’s early writings on alienation. Marx’s concept of fetish commodity is an examination of the impersonal relationship between employers and employed embodied in their cash nexus in which the employee has only his labor power to offer to the capitalist boss. That spells out an object/object relationship. With Rawls, there is an emphasis on those who are the least advantaged, a concept that can cover groups of people such as workers, students, the underemployed, women, the handicapped, and so forth. Goods and services are to be fairly redistributed from the universal principle of consensus in which the rich agree to their resources being taxed to allow life to be livable for those who cannot make a living because of structural and functional defects in the capitalist system. That idea was the basis of affirmative action programs, of which Rawls was an outstanding proponent. Of course, that scenario is only an ideal. Empirically, the rich fight any tax on the basis of the inalienable right to property. Hence, the disadvantaged will always be alienated from the system. President Obama does promise changes, in which he appears to be willing to attack the rich who have plundered the country since the Reagan administration.

Galbraith offers a new way of looking at the poor with his analysis of the Dependence Effect. In essence, he claims production creates false needs because of the advertising industry. Americans buy things they do not really need, unselfconsciously. That keeps the economy on an even financial keel in encouraging habituated spending, but undermines public morality by consuming commodities, such as cigarettes and alcohol (usually cross-addicted), that are inherently toxic. There is little stimulus to eat wholesome foods. The American obesity epidemic demonstrates the dependence effect too well in that Americans mindlessly consume whatever bad foods are laid before them because advertising appeals to psychological needs and cravings that make people feel good about themselves simply by the act of purchasing and hence give an opaque sense of empowerment. What is provided has been done cheaply, although to the overall detriment of the national interest:e an unhealthy population requires medical remediation in the future that could have been avoided had people been made more aware of how advertising manipulates them so readily, particularly the poor who do not have access to health care services, educational facilities, and the money required to for lifestyles that are better for health and longevity. Distorted information undermines exercise of free choice. The dependence effect appeals to a time preference that has no future in that false needs condition consumers to buy on impulse and immediately. Those who are least advantaged will succumb to this syndrome in a way that perpetuates negative lifestyles intergenerationally in the name of liberty.

In The Affluent Society, these topics are undertaken for critical review. In particular, Galbraith makes two points. The public sector, in particular education, suffers with advertising going for the private sector. Advertising targets the consumer. The public sector has only a few advocates in public intellectuals, of whom Galbraith is one of the last great ones. Because consumers are psychologically egoistical, the advertising cadres find it easier to promote items like fancy cars and mansions over new schoos and modernization of the transportation infrastructure, among a host of reforms on the platform of President Obama. In the end, Galbraith favors human capital in the form of education and more education. The greatest natural resource of a nation is its qualified and talented people occupying positions appropriate to their level of skills and intelligence. Basically Galbraith believes in reform through ardent public advocacy; he is in the forefront of a Mandarin class that talks on behalf of the poor. Economists like Milton Friedman and Paul Krugman say he is paternalistic. His paternalism undercuts the sovereignty of the consumer, who is not as gullible as Galbraith portrays. The truth is really somewhere in the muddle between these contending philosophies of political economy (really the science of morals of national collectivities).

The way to break this cycle of poverty is to provide fair access to the ample resources of education, although there is free public school education, the better education offered by the elite universities by and large is closed to the various minority groups. Even if admitted through affirmative action, poverty will tend to press high numbers of disadvantaged students to abandon their studies because they cannot afford to maintain their physical well-being over time. Lack of money is the principal reason for high dropout rate among the disadvantaged, not moral viciousnessnor intellectual deficits.

Galbraith, a great Harvard professor, did have a sense of humor as evidenced by this quotation:

"Under capitalism, man exploits man. Under communism, it’s the opposite."