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Medal of Freedom?

Mises Daily: Wednesday, August 16, 2000 by

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John Kenneth Galbraith This is a pretty good measure of how far we have come in America in our understanding of freedom from that of the founders: Bill Clinton awareded the "Medal of Freedom" to John Kenneth Galbraith on August 9, 2000, despite the fact that Galbraith has been a stalwart champion of the very opposite idea of freedom from that laid out by those founders.

Galbraith, a professor emeritus at the department of economics at Harvard University, although a fine writer and charming human being-- so much so that William F. Buckley, Jr., has been his long time friend despite their political differences--has been a socialist for nearly all of his career. He has been a relentless critic of capitalism and the market system, based on his essentially elitist and paternalistic idea of what governments must do for the people they serve. This was to make them all abide by tenets of "fairness" or, at least, his socialist version of that ideal.

Galbraith, though an avowed statist--not of the Marxist-Leninist but more of the democratic socialist variety--has been one of the most fervent bashers of the "rich" in contemporary American culture. While not an explicit Marxist, he accepted the Marxian idea that capitalists create nothing and take a great deal that they should not be allowed to have. In his most popular book, The Affluent Society, he laid out a case for a powerful welfare state. He has written in some of the most prestigious publications of our society, including The New York Review of Books, The New York Times, American Prospect, Dissent, The Nation and so on.

One of his most well known and widely studied legacies was created from a section of his book dealing with advertising. Galbraith asserted that advertising is a device by which business creates desires in consumers which must be acted on and thus produce what he called "the dependency effect." In other words, consumers become dependent on corporations because the latter create desires in them for the goods and services they offer for sale. By this means, corporations become wealthy, make huge profits, while resources are taken away from far more important projects, you guessed it, those the government wants to provide for us. The public sector is diminished and the private sector unfairly benefits.

This famous section of The Affluent Society is reprinted in nearly all business ethics readers serving as text books for business school students across the world. Far fewer of these volumes offer the decisive rebuttal to Galbraith's position, penned by the great economists, the late F. A. Hayek. Hayek noted that Galbraith's claim is true but not just for business and advertisers but also of all human creative endeavors.

The difference is that unlike Galbraith, Hayek did not believe that the desires that people might cultivate for what is presented to them must be acted on. Instead, we have the freedom to choose whether to try to fulfill our desires, however they might be created. Advertising appeals to us but cannot make us do anything. It is a promotional project by which producers call out to us hoping we would consider what they have to offer and to purchase it. But there is no guarantee at all that we will act as the advertisers wishes we would.

In what sense does Galbraith deserve a medal of freedom? Only in the sense that a certain conception of freedom does underlie his thinking. This is what is called "positive" freedom. It means a condition whereby people are provided by government, and at the expense of other people, with what they could use to advance their lot. Such provisions would "free" them to move forward.

The freedom of the American founders is quite different, mainly backed by a different idea of human nature. It is that people in communities require first and foremost not to be thwarted in their efforts to make headway in life.

Others may not be conscripted into involuntary servitude to provide them with what they might need because if they are not thwarted by them, they will be able to do this on their own. Not equally rapidly, not to the same extent, perhaps, but if they only apply themselves, they will flourish without coercing others.

Galbraith has never championed this kind of "negative" freedom. So his views are alien to the American political tradition. It is not surprising, then, that he receives the medal of freedom from President Bill Clinton, someone who has done nothing at all to further freedom in this truly American sense.

To Galbraith's minor credit, however, he did, a few years ago, finally admit that capitalism is a far better economic system than socialism. He did this only in the wake of the collapse of the Soviet Empire. And even then with great reservations and regret.

He was asked, in an interview published in Alitalia's October 1996 "in flight" magazine: "You spoke of the failure of socialism. Do you see this as a total failure, a counterproductive alternative?" He replies this way: "I'd make a distinction here. What failed was the entrepreneurial state, but it had some beneficial effect. I do not believe that there are any radical alternatives, but there are correctives. The only alternative socialism, that is the alternative to the market economy, has failed. The market system is here to stay."

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Tibor R. Machan teaches business ethics at Chapman University and is an adjunct scholar of the Ludwig von Mises Institute in Auburn, Alabama. Send him MAIL.