What a world

At the end of his own century, the veteran economist J K Galbraith sums up the state of the planet. Some inhabitants are gloriously free from toil. Others starve

Guardian

Tuesday June 29, 1999

I was born and reared on a farm in Canada. To this day I never awaken in the morning without a sense of satisfaction that I will not have to spend the next hours in that monotonous toil. One of the achievements of the century has been the general escape from what Marx, with some exaggeration, called the idiocy of rural life.

We have seen a wonderful lengthening of the years of health and enjoyment of life. We have also now the much celebrated technological supplements to human intelligence, including the computer world. This, in some aspects, is serviceable and good, in others contrived and diversionary.

More important, there has been an escape from the worst feature of modern existence - hard, tedious, boring toil. This has not yet been eliminated, but one of the greatest accomplishments of the century has been the reduction in the proportion of people so engaged.

The word "work" is our most misleading social term. It designates the occupation of those who would be very unhappy without it. And we use the same word for hard, repetitive, even physically painful toil. No word in the English language stretches over such different conditions. There is the further perverse fact that those who most enjoy what is called work are those who are best paid. And they are also allowed the most leisure.

Over the sixty years I have been teaching at Harvard, I have often, while crossing Harvard Yard, been stopped by one of my colleagues with the question, "Aren't you working a bit too hard?" Leisure is essential for the affluent and also for those of us for whom work is pleasant, mentally rewarding. For those who must truly toil, however, leisure is an escape from social virtue. Nonetheless, here too there has been progress. In the century past many have graduated from the miseries to the enjoyments of work.

In the fortunate countries there has been an enormous increase in the production of goods and services, the wherewithal of life. The measure of the increase, the annual rise in Gross Domestic Product, has become the prime indicator of all human progress.

But this summer thousands of visitors will descend on Florence in Italy. By all modern standards, in its greatest days past it was a city of small, even insignificant income. William Shakespeare was of a country with a very low Gross Domestic Product. Paris in the years of the Impressionists was appreciably less affluent than now. So, also, was the world that gave us Charles Darwin, and no one since has so challenged embodied belief.

Success as measured by economic output bears no close relationship to human achievement. The most ardent artistic effort is now devoted not to the arts but to promoting the sale of goods and services. And so also most of our scientific effort. Darwin's successors now concentrate heavily on getting new products for the market.

If the history of the arts and of science gives us pause as to the measures of present achievement, there are also problems within economies as well. The most serious is the ancient and unsolved problem of instability - of the enduring sequence of boom and bust. The speculative crash, now called a correction, has been a basic feature of the system. In the US we are now having another exercise in speculative optimism following the partial reversal last year. We have far more people selling derivatives, index funds and mutual funds (as we call them) than there is intelligence for the task.

When you hear it being said that we've entered a new era of permanent prosperity with prices of financial instruments reflecting that happy fact, you should take cover. This has been the standard justification of speculative excess for several centuries. Let us not assume that the age of slump, recession, depression is past.

I come to two pieces of the unfinished business of the century and millennium that have high visibility and urgency. The first is the very large number of the very poor even in the richest of countries and notably in the US. Once the impoverished were scattered over the countryside in our case, especially in the rural south. Now everywhere they are in the great cities, melding in with the larger urban mass. In the fortunate lands, poverty, urban poverty, is the most evident and painful of the economic and social legacies from the centuries past.

The answer or part of the answer is rather clear: everybody should be guaranteed a decent basic income. A rich country such as the US can well afford to keep everybody out of poverty. Some, it will be said, will seize upon the income and won't work. So it is now with more limited welfare, as it is called. Let us accept some resort to leisure by the poor as well as by the rich.

We have a bizarre problem in the distribution of income - a heavy concentration in the very top income brackets, much less to those below. There is now a stirring discussion of inequality; I would like to see it intensified. When it is said, as it is, that we should protect the income of the rich, reduce taxes in order to encourage effort, I have an answer. Perhaps we should have a higher marginal rate of taxation to stimulate effort to maintain after tax income. This is not widely applauded.

As we look at the achievements of the century just past, we must all pay tribute to the end of colonialism. Too often, however, the end of colonial rule has also meant the end of effective government. Particularly in Africa, colonialism frequently gave way to corrupt government or no government at all. Nothing so ensures hardship, poverty and suffering as the absence of a responsible, effective, honest polity. Once this was the result from the earlier escape from colonialism in Latin America. So now in much of Africa and in lesser measure in Asia.

In a humane world order we must have a mechanism to suspend sovereignty when this is necessary to protect against human suffering and disaster. Let there be government by the UN to bring about an effective and humane independence. Economic aid is important, but without honest, competent government, it is of little consequence. We have here one of the major unfinished tasks of the century .

My emphasis, you will have observed, is on the UN. I believe it should have had the dominant role in the recent tragedy in the Balkans. I am also far from enthusiastic about air power as used there. There was nothing to be said for the Serbian rule of Kosovo. But neither for the basically indiscriminate nature of bombing - of men, women, children and, one should add, foreign embassies.

There is one more piece of unfinished business. It is our position on the edge of a total end to civilised existence on the planet, perhaps of life itself. Available are the nuclear weapons which could do precisely this. And there is a strong commitment to keeping and protecting these weapons even though we fully realise the threat. As long as we accept them in the nuclear countries, we are limited in our ability to persuade others to a policy of sanity and survival. When India and Pakistan last year exploded nuclear weaponry, we in the US reacted adversely. They had the natural answer: "What about you?"

Thus the greatest unfinished business of the century now ending is the need to eliminate this weaponry. It need only to fall into the hands of mentally vulnerable politicians to bring a nuclear exchange which, to repeat, could be the end of all civilised existence and, quite possibly, of all existence.

JK Galbraith, who is 90, gave this lecture last night in London on receiving an honorary doctorate from LSE