Economy - The Good Society

The title of the book I choose to talk about is "The Good Society. The Humane Agenda". The author of the book is John Kenneth Galbraith, nominee for the Nobel Prize in Economics in 2003. The book was published in 1996, at the Houghton Mifflin Company, Boston, New York. It is an essay based on the affirmation "It is the achievable, not the perfect, that is here identified and described."

The purpose of the book is to tell what is right, but is very important that the separation between what we can accomplish and what would be perfect.

"Any useful identification of the good society must take into consideration structure and the human characteristics that are fixed, immutable. They make the difference between the Utopian and the achievable, between the agreeably irrelevant and the ultimately possible." An impediment in the path of changes that could be made to improve the society is the personal interest of the privileged members of that society.

Today's society is no longer divided between capital and work; it is divided between the rich, those who have all the privileges, and the poor, mostly without political voice. This makes the competition unequal, because the rich have money and influence, and they vote, while the poor, although many more, they do not vote. For example, history influenced the external policy of the United States after the collapse of URSS.

The economy's role in a good society is essential. The first demand of a good society is a strong and stable economy. "In the good society no one can be left outside without income; be assigned to starvation, hopelessness, untreated illness or like deprivation."

"The good society does not seek equality of economic return; that is neither a realizable nor a socially desirable goal. There are those for whom income and wealth and their public manifestation or private contemplation are the ultimate goal and satisfaction; there are others for whom they are not." The economic system must assure the price stability, or at least the growth of income in the same time with the growth of the prices.

The war is the most unforgivable human tragedy, especially now, given the nuclear arming; it is extremely necessary for the state to have a pacifist attitude.

The tendency to a cyclical evolution of the economic system must be accepted. It is also necessary to find solutions to pass the recessions. An important factor is the stabilization of the global demand. The components of the global demand are consumption, investments and governmental spending. The fiscal policy consists in the lowering of tax so that the population could spend more; therefore, the expenditures in consumption grow, and the global demand grows.

The monetary policy consists in the change of the interest rate made by the Central Bank. A smaller interest rate will encourage people to get credits in order to invest or consume; therefore, the global demand grows. The budgetary policy consists in growing governmental spending for the infrastructure, not the consumption; the acceptance of the budgetary deficit. A good society must be able to prevent the crises, recessions or stagnation.

Inflation - the author shows that inflation is an inevitable phenomenon considering the continuous economic growth.

A. W. Phillips identified the relationship between inflation and unemployment. "The choice between unemployment and inflation cannot be avoided; it must be faced. The good society cannot relegate some parts of its population to idleness, social distress and economic deprivation in order to achieve price stability. As necessary, the lesser evil of price increases must be accepted." Now, the governments consider that price stability is more important than a low unemployment rate. The financial community also is interested more in a low inflation rate than a low unemployment rate. A good and achievable society cannot hope for absolute price stability and full employment. It can, nevertheless, try to reduce the conflict between them to a bare minimum.

The Important Role of Education - shows exactly the very important role that education has in the creating of a better society. The expenditures in education must be seen as investments in human resources; education contributes to the economy's progress. It is impossible to completely eliminate the social structure, but we should be allowed to evolve, evolution that might be accomplished trough education and culture. Every child should have access to a good education.

Here are the main ideas presented in the book; even if not perfect, our society needs to try to reach a certain stability, to ensure all there is to ensure for humans.