Docility through debt

In The New Industrial State John Kenneth Galbraith has a concise explanation for the rise of corporate power and the concurrent rise of consumerist values in America that has to do with savings. His theory is that individual savings can make no meaningful contribution to capital formation. Rather, “the individual serves the industrial system not by supplying it with savings and the resulting capital; he serves it by consuming its products. On no other matter religious, political or moral, is he so elaborately and skillfully and expensively instructed.” Hence, our educational system gears us toward using products, and measuring ourselves in accordance to their promises of the joys of possession. (This is a full-scale reversal of the values presumably inculcated as industrialism was developing, the Protestant work ethic Weber argued was a source of capitalism’s expansion. What you do recedes from importance, what you own becomes the main criterion. Frugality appears as a anti-social illness, etc.) And at the same time, corporations maintain control over the meaningful sums of savings, guaranteeing they can control how it is invested (this is where the “subversive proxies” idea runs aground).

What’s interesting about this idea is that it presumes that corporations actively discourage individuals from savings, in stark contrast to hollow conservative rhetoric about increasing the domestic personal savings rate and building an “ownership society.” By ownership society, they don’t really intend on creating a nation of small-time capitalists actively managing their tiny portfolios and voting their proxies with careful deliberation. They mean instead that we’ll all own digital TVs and new cars and overmortgaged plots of land that we’ll be forced to give up when we can’t make the payments and we no longer have recourse to bankruptcy, thanks to the new bankruptcy bill. The animating principle is to assure docility through easy credit and easy access to consumer goods, which funnels capital in the form of profits to major corporations while guaranteeing that individuals have no meaningful stock of capital of their own. Individuals can not sway the way capital is employed in their society, particularly if the government controls less of it via taxation. Corporations can deploy capital with no restraints to maximize profits with no consideration for public welfare and continue their ongoing struggle against labor, broken down ever more so into Marx’s “reserve army of the unemployed.”

The consumer goods raise the “standard of living” by giving people all the material things they want and by allowing them to live under the constant stress of digging themselves out of the hole they are encouraged by ads, peer pressure, etc. to sink themselves in. Always remember, the patriotic response to 9/11 was to continue shopping. This is the reason.

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