#24 -"Americans Squander Their Incomes on Themselves While Public Needs Are Neglected"





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#24 – "Americans Squander Their Incomes on Themselves While Public Needs Are Neglected " 

(Editor’s Note: The late Rev. Edmund A. Opitz, author of Religion and Capitalism: Allies, Not Enemies and other works, served on the senior staff of the Foundation for Economic Education for many years. This essay first appeared in the 1962 edition of Clichés of Socialism at a time when the fallacy it addresses was more widely proclaimed than it is today. John Kenneth Galbraith’s influential 1958 book, The Affluent Society, largely discredited in subsequent decades, was often and favorably cited in the early 1960s. Today, with government consuming considerably more of total income than it did half a century ago, and wasting much of it, it’s not so easy to argue that the public sector is being starved. That doesn’t stop progressives, however, from frequently claiming in various ways that government deserves even more.)

Our society is affluent, we are told—but only affluent in the private sector, alas! The public sector—meaning the political structure on which our society spends a third of its energy to maintain—starves. Mr. and Mrs. America bounce along in their fancy, expensive cars over bumpy highways—the best road their government can build with the limited resources permitted it. They queue up to pay scalper’s prices for tickets to ball games with nary a thought that this indulgence contributes to the non-building of a political housing project in an already overcrowded city. That evening they dine at a ritzy restaurant, and government, as a result, lacks the means to supply water for a dam it has just constructed in a drought area. Americans, in short, go in big for private indulgence at the very time when the State needs their money.

Those who advance this or similar lines of criticism are perfectly correct on one point: If there is to be an increase in political spending, there must be a consequent decrease in private spending; some people must do without. The well-being of individual persons in any society varies inversely with the money at the disposal of the political class. All money spent by the governing group is taken from private citizens—who otherwise would spend it quite differently on goods of their choice. The state lives on taxes (or what it borrows now and pays back with taxes later), and taxes are a charge against the economically productive part of society.

The Opulent State, fancied by progressives who criticize the Affluent Society, cannot exist except as a result of massive interference with free choice. To establish it, a society of freely choosing individuals must yield to a society in which the lives of the many are collectively planned and controlled by the few.

The state, in our Affluent Society, already deprives us of one-third and more of our substance (in both direct and indirect taxes and the costs of regulation and compliance it imposes). Not enough! say the critics. How much then? Fifty percent? A hundred? Enough, at any rate, so that no life shall go unplanned if they can help it. This is the ancient error of authoritarianism. The planning-inclined intellectual, from time immemorial, has dreamed up ethical and esthetic standards for the rest of mankind—only to have them ignored. His efforts to persuade people to embrace them meet with scant success. The masses are too ignorant to know what is good for them, so why not impose the right ideas on them by direct political action? The state is too weak and poor? Well, make it strong and rich, he urges, and so it is done. But the state acts from political and power motives and often devours even the intellectuals who argued on its behalf.

Every society devises some public means of protecting its peaceful citizens against the violent actions of others, but this is too limiting a role for government to satisfy the critics of the so-called Affluent Society. The massive state interference they advocate is designed, they say, to protect the people from the consequences of their own folly, and the way to do this is to pass anti-folly laws to prevent wrong choices.

There are degrees of wisdom, true, and some people are downright foolish. They spend their money at the races when the roof needs repair, or they install costly television services when they’re still making payments on their boat. In a free society, however, this is their right, just as it is their right to say or print foolish or unpopular things. This is part of what it means to be free! The exercise of freedom invariably results in some choices that are unwise or wrong (Hey, is it any different in government?). But, by living with the consequences of his foolish choices a man learns to choose more wisely next time. Trial and error first; then, if he is free, trial and success later. But because no man is competent to manage another, persistent error and failure are built-in features of the Opulent State.

Edmund A. Opitz



  • If the political class gets more to spend, that means that private individuals have exactly that much less to spend according to their own choices.
  • Authoritarianism always argues for more of what belongs to others; authoritarians never believe they have enough as long as anybody gets to make his own choices rather than having the State make those choices for him.
  • Freedom means spending your own money the way you choose, even if you sometimes choose foolishly. And there’s nothing about government that ensures that the people in it who spend other people’s money will spend it more wisely than would those who earned it in the first place.
  • For further information, see:

“An Open Letter to Statists Everywhere” by Lawrence W. Reed: http://tinyurl.com/n5o75rf

“John Kenneth Galbraith: A Criticism and an Appreciation” by David R. Henderson: http://tinyurl.com/lywnhj9

“Private Affluence and Public Poverty” from First National City Bank, 1960: http://tinyurl.com/k7syyej

“Other People’s Business” by Sheldon Richman: http://tinyurl.com/l2xyflu

“Don’t Expect Much from Politics” by Lawrence W. Reed: http://tinyurl.com/mdnsg8c

Further Reading