From its urbane opening line – “Wealth is not without its advantages...” – John Kenneth Galbraith’s bestselling assault on some of America’s most treasured economic myths survives as the apotheosis of an impressive public intellectual’s restatement of classic liberalism: provocative, humane and entertaining, a book that shaped the American mind from the 50s and 60s to the fall of the Berlin Wall.

As well as tackling economic shibboleths, Galbraith also coined some striking and influential concepts of his own. “The conventional wisdom”, the title of his opening chapter, for instance, has now passed into the language. At first, this book was intended to be a study of poverty entitled Why the Poor Are Poor, until Galbraith’s wife suggested the more upbeat The Affluent Society. Certainly, some of its entertaining iconoclasm derives from that first draft. In the end, however, it expressed a marriage of British theory, especially Keynesianism, with American industrial experience, making a mid-Atlantic bestseller for the postwar world.

As a society becomes increasingly affluent, wants are increasingly created by the process by which they are satisfied John Kenneth Galbraith

Before reaching its central message, the first half of The Affluent Society is devoted to demonstrating how classical economic theory, from Adam Smith to Malthus to David Ricardo, projects a grim view of human prospects, casting an air of pessimism over the socioeconomic study of the human condition. This Galbraith is at pains to dispel. He is a witty and engaging optimist for whom GDP is “the accepted measure not only of economic but of larger social achievement”.

The idea that the production of goods and services should be the measure of civilised success plainly bears the influence of its time, but he also disputed the idea that increased material production is the only indicator of economic wellbeing. Through his book, Galbraith, a Canadian who became an important figure in American life, especially as a favoured confidant of President John F Kennedy, first began to emerge as an unofficial spokesman for a more progressive American materialism during the 60s, an era in which capitalism and the cold war became inextricably interwoven. As a disciple of Keynes, he argued that the US should invest dynamically in roads, schools and hospitals.

Galbraith, the inveterate populariser, is never less than quotable: “The study of money, above all other fields in economics,” he once wrote, “is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.”

Galbraith became a favoured confidant of President John F Kennedy. Photograph: CBS Photo Archive/Getty Images

In this spirit, the second half of The Affluent Society assaults some deeply held economic myths. What is the meaning of productivity if many of the goods we produce are simply artificial needs promoted by the advertising media of mass society? “As a society becomes increasingly affluent,” writes Galbraith, “wants are increasingly created by the process by which they are satisfied.” In addition to this Dependence Effect, why ignore waste and extravagance in the private sector while simultaneously speaking of government expenditure “squandered” on public works?

Galbraith is not just an articulate and contrarian cheerleader for a superior kind of American consumerism. He is also, quite presciently, keen to strike a note of warning about inflation. But in the end, he is contemptuous of a society in which “the bland lead the bland”. His main project is to break “the thralldom of a myth – that the production of goods is the central problem of our lives”.

The affluent society is not without flaws. But it is well worth saving from its own adverse or destructive tendencies John Kenneth Galbraith

To emphasise this, Galbraith is resoundingly provocative. “In the world of minor lunacy, the behaviour of both the utterly rational and the totally insane seems equally odd. The notion that ours is a world in which production is of supreme importance is an old one. So is the corresponding behaviour. The discovery that production is no longer of such urgency involves a major wrench in our attitudes. What was sound economic behaviour before cannot be sound economic behaviour now.”

One consequence of this analysis is, for Galbraith, “the central economic goal of our society – to eliminate toil as a required economic institution. This,” he goes on, “is not a utopian vision. We are already well on the way.” Once, he says, there was always “a leisure class”. This has been replaced by a new class, in other words by the kind of people who might read a book such as The Affluent Society: bureaucrats, engineers, doctors, teachers, designers, academics, journalists and advertising executives. For this new class, economic theories shaped by the harsh conditions of mass poverty have no relevance, being ill-suited to the realities of a much richer age.

With the perspective of hindsight, much of Galbraith reads like a long footnote to the great American claim that the true goal of a free society should be “life, liberty and the pursuit of happiness”. In 1979, almost a generation after he first completed this essay in economic optimism, Galbraith ventilated a few second thoughts: “Let us put elimination of poverty on the social and political agenda. And let us protect our affluence from those who, in the name of defending it, would leave the planet only with its ashes. The affluent society is not without its flaws. But it is well worth saving from its own adverse or destructive tendencies.”

At the end of his life, speaking on US television, he articulated a fundamental liberal pragmatism: “Where the market works, I’m for that. Where the government is necessary, I’m for that. I’m deeply suspicious of somebody who says, ‘I’m in favour of privatisation’, or, ‘I’m deeply in favour of public ownership.’ I’m in favour of whatever works in the particular case.”

A Signature Sentence

“Wealth is not without its advantages and the case to the contrary, although it has often been made, has never proved widely persuasive.”

Three to Compare

JK Galbraith: The Great Crash 1929 (1955)

JK Galbraith: The New Industrial State (1967)

Vance Packard: The Hidden Persuaders (1957)

The Affluent Society is published by Penguin (£10.99). Click here to buy a copy for £9.01