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John Kenneth Galbraith
Full name John Kenneth Galbraith
Born October 15, 1908
Iona Station, Ontario, Canada
Died April 29, 2006 (aged 97)
Cambridge, Massachusetts, United States
Era 20th century economists
(Institutional economics)
Region Western economists
School Institutional economics
Main interests Economics, Political economy
Notable ideas Keynesian economics, institutional economics

John Kenneth "Ken" Galbraith, OC (October 15, 1908 – April 29, 2006) was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism and progressivism. His books on economic topics were bestsellers from the 1950s through the 1970s and he filled the role of public intellectual in this period on matters of economics.

Galbraith was a prolific author who produced four dozen books and over a thousand articles on various subjects. Among his most famous works was a popular trilogy on economics, American Capitalism (1952), The Affluent Society (1958), and The New Industrial State (1967). He taught at Harvard University for many years. Galbraith was active in politics, serving in the administrations of Franklin D. Roosevelt, Harry S. Truman, John F. Kennedy and Lyndon B. Johnson; and among other roles served as United States Ambassador to India under Kennedy.

He was one of the few honorees who received the Presidential Medal of Freedom twice. He received one in 1946 from President Truman and another in 2000 from President Bill Clinton.[1] He was also awarded the Order of Canada in 1997[2] and, in 2001, the Padma Vibhushan, India's second highest civilian award, for his contributions to strengthening ties between India and the United States.[3]

Contents

Life

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Early life and teaching

Galbraith was born to Canadians of Scottish descent, Archibald "Archie" Galbraith and Sarah Catherine Kendall, in Iona Station, Ontario, Canada, and was raised in Dunwich Township, Ontario. He had three siblings: Alice, Catherine and Archibald William (Bill). His early school years were spent at a one room school on Willy's Sideroad, which is still standing. The family farm is on Thomson Line. He went to school at Dutton High School. His father was a farmer and school teacher; his mother, a political activist. By the time he was a teenager, he had adopted the name Ken, and later disliked being called John.[4] Both his parents were supporters of the United Farmers of Ontario in the 1920s. After initially studying agriculture, Galbraith graduated with a B.Sc in agricultural economics from the University of Toronto in 1931, and then received an M.Sc (1933) and Ph.D in Agricultural Economics (1934) from the University of California, Berkeley. In 1934, he also became a tutor at Harvard University. In 1937, he became a United States citizen, at a time when the United States did not contemplate dual citizenship and Canada did not yet have a Citizenship Act, Canadians then being "British Subjects." By the 1980s and '90s respectively, the United States and Canada acknowledged that their citizens who had taken out citizenship in the others' countries were recognized as having also retained their original citizenship and Professor Galbraith died as he had been born - a Canadian, though he had previously already been amply honoured as a Canadian as well as American. In the same year, he took a year-long fellowship at Cambridge University, England, where he became influenced by John Maynard Keynes, then traveled in Europe for several months in 1938, attending an international economic conference and developing his ideas. Galbraith was a very tall man, growing to a reported height of 6'9" [206 cm].

Galbraith taught intermittently at Harvard in the period 1934 to 1939.[5] From 1939 to 1940, he taught at Princeton University. From 1943 until 1948, he served as editor of Fortune magazine. In 1949, he was appointed professor of economics at Harvard.

World War II and Price Administration

During World War II, Galbraith, charged with keeping inflation from crippling the war effort, served as deputy head of the Office of Price Administration. Because wartime production needs mandated large budget deficits and an accommodative monetary policy, the outbreak of inflation and a runaway wage-price spiral was seen as a very real possibility. In 1942, Roosevelt issued a General Maximum Price Regulation, followed a year later by a "Hold the Line Order" which froze prices and gave the OPA power to keep prices in check. The OPA itself - through its Consumer Division - mobilized the public on behalf of these guidelines, reducing the likelihood of "cheating" by those who would seek higher wages or prices. The result was that wages and prices were kept in check, and the U.S. enjoyed rapid growth and price stability through the war.[citation needed]

Although little appreciated at the time, the actual power Galbraith wielded in this position was so great that he joked later that the rest of his career had been downhill. Indeed, congressional and business backlash against the OPA meant that Galbraith would be forced out in 1943, eventually replaced by advertising executive Chester Bowles.

At the end of the war, Galbraith was asked to be one of the leaders of the Strategic Bombing Surveys of both Europe and Japan. He also became an adviser to post-war administrations in Germany and Japan.

Political posts under Kennedy

Galbraith, first from left, as US ambassador to India, 1961

During his time as an adviser to President John F. Kennedy, Galbraith was appointed as United States Ambassador to India from 1961 to 1963. His rapport with President Kennedy was such that he regularly bypassed the State Department and sent his diplomatic cables directly to the President.[6] In India, he became an intimate of Prime Minister Jawaharlal Nehru, and extensively advised the Indian government on economic matters; he harshly criticised Louis Mountbatten, the last Viceroy of British rule, for Mountbatten's passive role in the Partition of India in 1947 and the bloody partition of the Punjab and Bengal. While in India, he helped establish one of the first computer science departments, at the Indian Institute of Technology in Kanpur, Uttar Pradesh. Even after leaving office, Galbraith remained a friend and supporter of India and hosted a lunch for Indian students at Harvard every year on graduation day.

Because of his recommendation, First Lady of the United States Jacqueline Bouvier Kennedy undertook her diplomatic missions in India and Pakistan.

Family

Galbraith married Catherine Merriam Atwater on September 17, 1937, whom he met while she was a Radcliffe student. They resided in Cambridge, Massachusetts, and had a summer home in Newfane, Vermont. They had four sons: J. Alan Galbraith is a partner in the prominent Washington, D.C. law firm Williams & Connolly; Douglas Galbraith died in childhood of leukemia; Peter W. Galbraith has been a US diplomat who served as Ambassador to Croatia and is a widely published commentator on American foreign policy, particularly in the Balkans and the Middle East; James K. Galbraith is a prominent progressive economist at the University of Texas at Austin Lyndon B. Johnson School of Public Affairs. The Galbraiths also have ten grandchildren. [2]

Later life and recognition

In 1972 he served as president of the American Economic Association.[7] The Journal of Post Keynesian Economics benefited from Galbraith's support, and he served as the chairman of its board from its beginning.[4] In 1985, the American Humanist Association named him the Humanist of the Year. In 1997 he was made an Officer of the Order of Canada[8] and in 2000 he was awarded his second U. S. Presidential Medal of Freedom. He was also awarded an honorary doctorate from Memorial University of Newfoundland at the fall convocation of 1999.[9] He was also awarded in 2000 with the Leontief Prize for his outstanding contribution to economic theory by the Global Development and Environment Institute. The library in his hometown Dutton, Ontario was renamed the John Kenneth Galbraith Reference Library in honor of his attachment to the library and his contributions to the new building.

On April 29, 2006, Galbraith died in Cambridge, Massachusetts of natural causes, after a two-week stay in a hospital.

Honors

Honorary Degrees

John Kenneth Galbraith received 50 Honorary Degrees from institutions around the world:[citation needed]

Works

Although he was a president of the American Economic Association, Galbraith was considered an iconoclast by many economists. This is because he rejected the technical analyses and mathematical models of neoclassical economics as being divorced from reality. Rather, following Thorstein Veblen, he believed that economic activity could not be distilled into inviolable laws, but rather was a complex product of the cultural and political milieu in which it occurs. In particular, he believed that important factors such as advertising, the separation between corporate ownership and management, oligopoly, and the influence of government and military spending had been largely neglected by most economists because they are not amenable to axiomatic descriptions. In this sense, he worked as much in political economy as in classical economics.

His work included several best selling works throughout the fifties and sixties. After his retirement, he remained in the public consciousness by continuing to write new books and revise his old works as well as presenting a major series on economics for BBC television in 1977 "The Age of Uncertainty".[26] While some considered his views anachronistic during the pro-market, small-government, anti-regulation and low-tax orthodoxies which came to prominence in the 1980s, the downfall of those ideas' popularity with the late 2000s economic crisis has awakened interest in his theories once again.

In addition to his books, he wrote hundreds of essays and a number of novels. Among his novels, A Tenured Professor achieved particular critical acclaim.

Economics books

Galbraith was an important figure in 20th century institutional economics, and provides perhaps the exemplar institutionalist perspective on Economic Power[27].

In American Capitalism: The Concept of Countervailing Power, published in 1952, Galbraith outlined how the American economy in the future would be managed by a triumvirate of big business, big labor, and an activist government. Galbraith termed the reaction of lobby groups and unions "countervailing power." He contrasted this arrangement with the previous pre-depression era where big business had relatively free rein over the economy.

His 1954 bestseller The Great Crash, 1929 describes the famous Wall Street melt down of stock prices and how markets progressively become decoupled from reality in a speculative boom. The book is also a platform for Galbraith's keen insights, and humour, into human behaviour when wealth is threatened. It has never been out of print.

In his most famous work, The Affluent Society (1958), which also became a bestseller, Galbraith outlined his view that to become successful, post-World War II America should make large investments in items such as highways and education using funds from general taxation.

Galbraith also critiqued the assumption that continually increasing material production is a sign of economic and societal health. Because of this Galbraith is sometimes considered one of the first post-materialists. In this book, he coined and popularized the phrase "conventional wisdom".[28] Galbraith worked on the book while in Switzerland, and had originally titled it Why The Poor Are Poor but changed it to The Affluent Society at his wife's suggestion.[29] The Affluent Society contributed (likely to a significant degree, given that Galbraith had the ear of President Kennedy [30]) to the "war on poverty", the government spending policy first brought on by the administrations of Kennedy and Johnson.

In The New Industrial State (1967), Galbraith argues that very few industries in the United States fit the model of perfect competition. In The New Industrial State Galbraith expanded his analysis of the role of power in economic life. A central concept of the book is the revised sequence. The conventional wisdom in economic thought portrays economic life as a set of competitive markets governed ultimately by the decisions of sovereign consumers. In this original sequence, the control of the production process flows from consumers of commodities to the organizations that produce those commodities. In the revised sequence, this flow is reversed and businesses exercise control over consumers by advertising and related salesmanship activities.

The revised sequence concept applies only to the industrial system - that is, the manufacturing core of the economy in which each industry contains only a handful of very powerful corporations. It does not apply to the market system in the Galbraithian dual economy. In the market system, composed of the vast majority of business organizations, price competition remains the dominant form of social control. In the industrial system, however, composed of the 1,000 or so largest corporations, competitive price theory obscures the relation to the price system of these large and powerful corporations. In Galbraith's view, the principal function of market relations in this industrial system is not to constrain the power of the corporate behemoths but to serve as an instrument for the implementation of their power. Moreover, the power of these corporations extends into commercial culture and politics, allowing them to exercise considerable influence upon popular social attitudes and value judgments. That this power is exercised in the shortsighted interest of expanding commodity production and the status of the few is both inconsistent with democracy and a barrier to achieving the quality of life which the new industrial state with its affluence could provide.

The New Industrial State not only provided Galbraith with another best-selling book, it also extended once again the currency of Institutionalist economic thought. The book also filled a very pressing need in the late 1960s. The conventional theory of monopoly power in economic life maintains that the monopolist will attempt to restrict supply in order to maintain price above its competitive level. The social cost of this monopoly power is a decrease in both allocative efficiency and the equity of income distribution. This conventional economic analysis of the role of monopoly power did not adequately address popular concern about the large corporation in the late 1960s. The growing concern focused on the role of the corporation in politics, the damage done to the natural environment by an unmitigated commitment to economic growth, and the perversion of advertising and other pecuniary aspects of culture. The New Industrial State gave a plausible explanation of the power structure involved in generating these problems and thus found a very receptive audience among the rising American counterculture and political activists.

A third related work was Economics and the Public Purpose (1973), in which he expanded on these themes by discussing, among other issues, the subservient role of women in the unrewarded management of ever-greater consumption, and the role of the technostructure in the large firm in influencing perceptions of sound economic policy aims.

In A Short History of Financial Euphoria (1994), he traces speculative bubbles through several centuries, and argues that they are inherent in the free market system because of "mass psychology" and the "vested interest in error that accompanies speculative euphoria." Also, financial memory is "notoriously short": what currently seems to be a "new financial instrument" is inevitably nothing of the sort. Galbraith cautions: "The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version." Crucial to his analysis is the assertion that the common factor in boom and bust is the creation of debt to finance speculation, which "becomes dangerously out of scale in relation to the underlying means of payment." The financial crisis of 2008, which took many economists by surprise, seemed to confirm many of Galbraith's theses.

Galbraith cherished The New Industrial State and The Affluent Society as his two best.[31] Economist and friend of Galbraith Michael Sharpe visited Galbraith in 2004, on which occasion Galbraith gifted him with a copy of what would be Galbraith's last book, The Economics of Innocent Fraud. Galbraith confided in Sharpe that "[t]his is my best book", an assertion Galbraith delivered "a little mischievously." [32]

Some of Galbraith's Ideas

Galbraith's main ideas focused around the influence of the market power of large corporations.[4] He believed that this market power weakened the widely-accepted principle of consumer sovereignty, allowing corporations to be price makers, rather than price takers,[33] allowing corporations with the strongest market power to increase the production of their goods beyond an efficient amount. He further believed that market power played a major role in inflation[4] and argued that corporations and trade unions could only increase prices to the extent that their market power allowed them to. He argued that in situations of excessive market power, price controls effectively controlled inflation, but cautioned against using them in markets that were basically efficient such as agricultural goods and housing.[34] He noted that price controls were much easier to enforce in industries with relatively few buyers and sellers.[34]:244 Galbraith's view of market power was not entirely negative; he also noted that the power of US firms played a part in the success of the US economy.

In The Affluent Society Galbraith asserts that classical economic theory was true for the eras before the present, which were times of "poverty"; now, however, we have moved from an age of poverty to an age of "affluence", and for such an age, a completely new economic theory is needed. Galbraith's main argument is that as society becomes relatively more affluent, so private business must "create" consumer wants through advertising, and while this generates artificial affluence through the production of commercial goods and services, the public sector becomes neglected. He points out that while many Americans were able to purchase luxury items, their parks were polluted and their children attended poorly maintained schools. He argues that markets alone will underprovide (or fail to provide at all) for many public goods, whereas private goods are typically 'overprovided' due to the process of advertising creating an artificial demand above the individual's basic needs. This emphasis on the power of advertising and consequent overconsumption may have anticipated the drop in savings rates in the USA and elsewhere in the developing world.[4]

Galbraith proposed curbing the consumption of certain products through greater use of consumption taxes, arguing that this could be more efficient than other forms of taxation, such as labour or land taxes. Galbraith's major proposal was a program he called "investment in men" — a large-scale publicly-funded education program aimed at empowering ordinary citizens. Galbraith wished to entrust citizens with the future of the American republic.

Volume 20, issue 4 of the Review of Political Economy was dedicated to John Kenneth Galbraith's ideas.

Criticism of Galbraith's Work

Galbraith's work, in general, and The Affluent Society, in particular, have drawn sharp criticism from free-market supporters at the time of its publication. Monetarist Milton Friedman in "Friedman on Galbraith, and on curing the British disease" views Galbraith as a 20th century version of the early 19th century Tory radical of Great Britain. He asserts that Galbraith believes in the superiority of aristocracy and in its paternalistic authority, that consumers should not be allowed choice, and that all should be determined by those with "higher minds":

Many reformers – Galbraith is not alone in this – have as their basic objection to a free market that it frustrates them in achieving their reforms, because it enables people to have what they want, not what the reformers want. Hence every reformer has a strong tendency to be averse to a free market.

Richard Parker, in his biography John Kenneth Galbraith: His Life, His Economics, His Politics, characterizes Galbraith as more complex. Galbraith's primary purpose in Capitalism: The Concept of Countervailing Power (1952) was, ironically, to show that big business was now necessary to the American economy to maintain the technological progress that drives economic growth. However, Galbraith saw the necessity of "countervailing power", not only including government regulation and oversight, but also collective bargaining, and the suasion that large retailers and distributors could bring to bear on large producers and suppliers. In The New Industrial State (1967), Galbraith argued that the dominant American corporations had created a technostructure that closely controlled both consumer demand and market growth through advertising and marketing. While Galbraith defended government intervention, Parker notes that he also believed that government and big business worked together to maintain stability.[35]

Paul Krugman, the influential, Nobel Prize–winning Princeton University professor and New York Times op-ed columnist, has denigrated Galbraith's stature as an economist. In Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations, he calls Galbraith a "policy entrepreneur" – an economist who writes solely for the public, as opposed to one who writes for other professors, and who therefore makes unwarranted diagnoses and offers over-simplistic answers to complex economic problems. He asserts that Galbraith was never taken seriously by fellow academics, who viewed him as more of a "media personality". For example, Krugman believes that Galbraith's work The New Industrial State is not considered to be "real economic theory", and that Economics in Perspective is "remarkably ill-informed".[36] However, acknowledging the alleged damage caused by the George W. Bush administration, Krugman now says of his polemics in the 1990s, "I was wrong obviously. If I’d understood where politics would be now, it would have been quite different."[37]

Memoirs

The Scotch (published in the UK under two alternative titles as Made to Last and The Non-potable Scotch: A Memoir of the Clansmen in Canada)[38] (illustrated by Samuel H. Bryant), Galbraith's account of his boyhood environment in Elgin County in southern Ontario, was written in 1963. His description of the people he grew up among is amusing, but hardly charitable.

Galbraith's 1981 memoir, A Life in Our Times[39] stimulated discussion of his thought, his life and times after his retirement from academic life. In 2004, the publication of an authorised biography, John Kenneth Galbraith: His Life, His Politics, His Economics[40] by friend and fellow progressive economist Richard Parker, renewed interest in his career and ideas.

Bibliography

  • Modern Competition and Business Policy, 1938.
  • A Theory of Price Control, 1952.
  • American Capitalism: The Concept of Countervailing Power, 1952.
  • The Great Crash, 1929, 1954.
  • Economics and the Art of Controversy, 1955.
  • The Affluent Society, 1958.
  • Perspectives on conservation, 1958. (Editor)
  • The Liberal Hour, 1960
  • Economic Development in Perspective, 1962.
  • The Scotch, 1963
  • The McLandress Dimension, 1963 (pseudonym Mark Epernay)
  • Economic Development, 1964.
  • The New Industrial State, 1967.
  • Beginner's Guide to American Studies, 1967.
  • How to get out of Vietnam, 1967.
  • The Triumph (novel), 1968.
  • Ambassador's Journal, 1969.
  • How to control the military, 1969.
  • Indian Painting (with Mohinder Singh Randhawa), 1969.
  • Who needs democrats, and what it takes to be needed, 1970.
  • American Left and Some British Comparisons, 1971.
  • Economics, Peace and Laughter, 1972.
  • Power and the Useful Economist, 1973, AER
  • Economics and the Public Purpose, 1973
  • A China Passage, 1973.
  • John Kenneth Galbraith introduces India, 1974. (Editor)
  • Money: Whence It Came, Where It Went, 1975.
  • Socialism in rich countries and poor, 1975.
  • The Economic effects of the Federal public works expenditures, 1933-38, (with G. Johnson) 1975.
  • The Age of Uncertainty (also a BBC 13 part television series), 1977.
  • The Galbraith Reader, 1977.
  • Almost Everyone's Guide to Economics, 1978. (With Nicole Salinger.)
  • Annals of an Abiding Liberal, 1979.
  • The Nature of Mass Poverty, 1979.
  • A Life in Our Times, 1981.
  • The Voice of the Poor, 1983.
  • The Anatomy of Power, 1983.
  • Essays from the Poor to the Rich, 1983.
  • Reaganomics: Meaning, Means and Ends, (with Paul McCracken) 1983.
  • A View from the Stands, 1986.
  • Economics in Perspective: A Critical History, 1987.
  • Capitalism, Communism and Coexistence (with Stanislav Menshikov), 1988.
  • Unconventional Wisdom: Essays on Economics in Honour of John Kenneth Galbraith, 1989. (Editor)
  • A Tenured Professor, 1990.
  • A History of Economics: The Past as the Present, 1991.
  • The Culture of Contentment, 1992.
  • Recollections of the New Deal: When People Mattered, 1992. (Editor)
  • A Journey Through Economic Time, 1994.
  • The World Economy Since the Wars: A Personal View, 1994.
  • A Short History of Financial Euphoria, 1994.
  • The Good Society: the humane agenda, 1996.
  • Letters to Kennedy, 1998.
  • The socially concerned today, 1998.
  • Name-Dropping: From F.D.R. On, 1999.
  • The Essential Galbraith, 2001.
  • The Economics of Innocent Fraud, 2004.
  • John Kenneth Galbraith and the future of economics, 2005.

See also

References

Footnotes

  1. ^ Liberal thinker JK Galbraith dies, an April 2006 BBC article
  2. ^ Order of Canada Citation
  3. ^ Galbraith receives prestigious award, a June 2001 Harvard News Gazette article
  4. ^ a b c d e Dunn, SP; Pressman, S (2005). "The Economic Contributions of John Kenneth Galbraith" (). Review of Political Economy 17 (2): 161–209. doi:10.1080/09538250500067254. http://www.bib.uab.es/socials/exposicions/galbraith/docs/bgalbraithDunn.pdf. 
  5. ^ John Kenneth Galbraith, Longtime Economics Professor, Dies at 97, an April 2006 Harvard Crimson article
  6. ^ "India-China war 'accidental:' Galbraith", Colonel Anil Athale (retd), retrieved 12 October 2008.[1]
  7. ^ "Past AEA Officers". American Economic Association. http://www.vanderbilt.edu/AEA/officerspast.htm. Retrieved 2008-10-10. 
  8. ^ Order of Canada citation, from the website of the Governor General of Canada
  9. ^ "John Kenneth Galbraith in St. John's". Canadian Broadcasting Corporation. http://www.cbc.ca/news/story/1999/10/21/nf_galbraith991021.html. Retrieved 2008-10-12. 
  10. ^ http://www.bard.edu/catalogue/index.php?aid=278&sid=59&pid=
  11. ^ http://www.governingcouncil.utoronto.ca/Assets/Boards+and+Committees/Committee+for+Honorary+Degrees/1850.pdf
  12. ^ http://www.usask.ca/archives/history/hondegrees.php?id=163&view=detail&keyword=&campuses=
  13. ^ http://www.bc.edu/publications/factbook/meta-elements/html/fb97honor_dg_recip.html] [http://www.bc.edu/publications/factbook/meta-elements/pdf/06-07/06-07_honorary_deg.pdf
  14. ^ http://academic.hws.edu/library/archives/pdfs/HDR.pdf
  15. ^ http://www.uwo.ca/univsec/senate/honorary_degrees_by_surname.pdf
  16. ^ http://www.tufts.edu/trustees/data/hondeg.pdf
  17. ^ http://www.albion.edu/library/specialcollections/Histories/commencement.asp
  18. ^ http://www.knox.edu/About-Knox/Our-History/Honorary-Degrees.html
  19. ^ https://www.msu.edu/~vprgs/honorarydeg/Chronlist1961.htm
  20. ^ http://www.yorku.ca/secretariat/senate/committees/hondeg/recipients.htm
  21. ^ http://ruweb.rutgers.edu/governance/secretary/degrees-year.shtml
  22. ^ http://www.grinnell.edu/car/confops/commencement/sp_awards/hd/
  23. ^ http://www.smith.edu/collegerelations/honorary.php
  24. ^ http://www2.lse.ac.uk/ERD/pressAndInformationOffice/newsAndEvents/archives/1999/press-release_galbraith.aspx
  25. ^ http://www.mun.ca/president/99-00report/honor/honorary_galbraith.html
  26. ^ "The Age of Uncertainty", episode content, retrieved 30 May 2007
  27. ^ Political Economy: The Contest of Economic Ideas, 2002, by Frank Stilwell
  28. ^ (Galbraith, 1958 The Affluent Society: Chapter 2 "The Concept of Conventional Wisdom")
  29. ^ Galbraith interview with Colonel Anil Athale (retd), July 2003
  30. ^ John Kenneth Galbraith, 97, Dies; Economist, Diplomat and Writer a New York Times obituary from April 30, 2006
  31. ^ Adams, Philip (1999), Interview on Radio National, Late Night Live, Australian Broadcasting Corporation, http://www.abc.net.au/rn/talks/lnl/stories/s64155.htm . Accessed 17 Jan 2006.
  32. ^ Sharpe, Michael (2006), John Kenneth Galbraith, 1908-2006, Challenge: the Magazine of Economic Affairs, 49 (4):7 
  33. ^ Galbraith, JK (1970). "Economics as a System of Belief" (). American Economic Review 60 (2): 469–78. http://cas.umkc.edu/econ/AFEE/EconomicsAsaSystemofBelief.pdf. 
  34. ^ a b Galbraith JK. (1977). Money: Where It Came, Whence It Went. Houghton Mifflin.
  35. ^ Madrick, J. (May 26, 2005). "A Mind of His Own." Review of John Kenneth Galbraith: His Life, His Economics, His Politics. The New York Review of Books.
  36. ^ Paul Krugman. Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations. (Scranton, Pennsylvania: W. W. Norton, 1994), 10-15.
  37. ^ http://www.dissentmagazine.org/article/?article=790
  38. ^ ISBN 0-395-39382-5
  39. ^ ISBN 0-395-31135-7
  40. ^ Promotional website for John Kenneth Galbraith: His Life, His Politics, His Economics

External links

Diplomatic posts
Preceded by
Ellsworth Bunker
United States Ambassador to India
1961 – 1963
Succeeded by
Chester Bowles

Quotes

Up to date as of January 14, 2010

From Wikiquote

I react pragmatically. 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 favor of privatization," or, "I'm deeply in favor of public ownership." I'm in favor of whatever works in the particular case.

John Kenneth Galbraith (1908-10-152006-04-29) was a Canadian-American economist and author.

Contents

Sourced

There is certainly no absolute standard of beauty. That precisely is what makes its pursuit so interesting.
When you see reference to a new paradigm you should always, under all circumstances, take cover.
I believe the greatest error in economics is in seeing the economy as a stable, immutable structure.
  • In the usual (though certainly not in every) public decision on economic policy, the choice is between courses that are almost equally good or equally bad. It is the narrowest decisions that are most ardently debated. If the world is lucky enough to enjoy peace, it may even one day make the discovery, to the horror of doctrinaire free-enterprisers and doctrinaire planners alike, that what is called capitalism and what is called socialism are both capable of working quite well.
    • "The American Economy: Its Substance and Myth," quoted in Years of the Modern (1949), ed. J.W. Chase
  • You roll back the stones, and you find slithering things. That is the world of Richard Nixon.
    • Adlai Stevenson speech, Los Angeles (1956), written by Galbraith
  • There is certainly no absolute standard of beauty. That precisely is what makes its pursuit so interesting.
  • Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable.
  • Total physical and mental inertia are highly agreeable, much more so than we allow ourselves to imagine. A beach not only permits such inertia but enforces it, thus neatly eliminating all problems of guilt. It is now the only place in our overly active world that does.
    • Foreword to The Beach Book by Gloria Steinem (1963); reprinted in Galbraith's A View from the Stands (1986)
  • Clearly the most unfortunate people are those who must do the same thing over and over again, every minute, or perhaps twenty to the minute. They deserve the shortest hours and the highest pay.
    • Made to Last (1964), ch. 4
  • People are the common denominator of progress. So, paucis verbis, no improvement is possible with unimproved people, and advance is certain when people are liberated and educated. It would be wrong to dismiss the importance of roads, railroads, power plants, mills, and the other familiar furniture of economic development. At some stages of development — the stage that India and Pakistan have reached, for example — they are central to the strategy of development. But we are coming to realize, I think, that there is a certain sterility in economic monuments that stand alone in a sea of illiteracy. Conquest of illiteracy comes first.
    • Economic Development (1964), ch. 2
  • Then the shit hit the fan.
    • Ambassador's Journal (1969), p. 45. Galbraith claimed to have originally coined this phrase in A Life In Our Times (1981), p. 274
  • You will find that [the] State [Department] is the kind of organisation which, though it does big things badly, does small things badly too.
    • Quoted in conversation with Charles Frankel, High on Foggy Bottom: an outsider's inside view of the Government (1969), p. 11
  • In economics, hope and faith coexist with great scientific pretension and also a deep desire for respectability.
  • The only function of economic forecasting is to make astrology look respectable.
    • Money: Whence It Came, Where It Went (1975)
  • Most things in life - automobiles, mistresses, cancer - are important only to those who have them. Money, in contrast, is equally important to those who have it and those who don't.
    • Money: Whence It Came, Where It Went (1975), p. 6
  • The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.
    • Money: Whence It Came, Where It Went (1975)
  • If all else fails immortality can always be assured by adequate error.
    • Money: Whence It Came, Where It Went (1975)
  • The process by which banks create money is so simple that the mind is repelled.
    • Money: Whence it came, where it went (1975), p. 29
  • Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
    • Economics, Peace and Laughter (1971), p. 50
  • The enemy of the conventional wisdom is not ideas but the march of events.
    • Introduction (1977) to The Affluent Society (originally published in 1958)
  • Much literary criticism comes from people for whom extreme specialization is a cover for either grave cerebral inadequacy or terminal laziness, the latter being a much cherished aspect of academic freedom.
    • "H.L. Mencken," The Washington Post (1980-09-14); reprinted in A View from the Stands (1986)
  • Any country that has Milton Friedman as an adviser has nothing to fear from a few million Arabs.
    • on Friedman's advising of the Israeli government, "The Private Man and the Public Life; Interview With Galbraith", The Washington Post' (1981-04-26)
  • Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows.
    • "Recession Economics," New York Review of Books, Volume 29, Number 1 (1982-02-04)
  • Wealth, in even the most improbable cases, manages to convey the aspect of intelligence.
  • Any consideration of the life and larger social existence of the modern corporate man... begins and also largely ends with the effect of one all-embracing force. That is organization — the highly structured assemblage of men, and now some women, of which he is a part. It is to this, at the expense of family, friends, sex, recreation and sometimes health and effective control of alcoholic intake, that he is expected to devote his energies.
    • "Corporate Man," The New York Times (1984-01-22)
  • Increasingly in recent times we have come first to identify the remedy that is most agreeable, most convenient, most in accord with major pecuniary or political interest, the one that reflects our available faculty for action; then we move from the remedy so available or desired back to a cause to which that remedy is relevant.
    • "The Convenient Reverse of Logic in Our Time," commencement address, American University (1984); reprinted in A View from the Stands (1986)
  • In any great organization it is far, far safer to be wrong with the majority than to be right alone.
  • In all life one should comfort the afflicted, but verily, also, one should afflict the comfortable, and especially when they are comfortably, contentedly, even happily wrong.
  • There is something wonderful in seeing a wrong-headed majority assailed by truth.
  • In the first place I identify this ["the equilibrium of poverty"] with primitive agriculture, and two factors have been at work there. One is, of course, population growth. If you were a poor farmer in India, Pakistan, or in much of Africa, you would want as many sons as possible as your social security. They would keep you out of the hot sun and give you some form of subsistence in your old age. So, you have pressure for population growth that is, itself, the result of the extreme economic insecurity. This is something which hasn't been sufficiently emphasized.
    • Interview with John Newark (1990) from Interviews with John Kenneth Galbraith (2004), ed. James Ronald Stanfield and Jacqueline Bloom Stanfield [1]
  • One must always have in mind one simple fact — there is no literate population in the world that is poor, and there is no illiterate population that is anything but poor.
    • Interview with John Newark (1990) from Interviews with John Kenneth Galbraith (2004), ed. James Ronald Stanfield and Jacqueline Bloom Stanfield
  • We can safely abandon the doctrine of the eighties, namely that the rich were not working because they had too little money, the poor because they had much.
  • The great dialectic in our time is not, as anciently and by some still supposed, between capital and labor; it is between economic enterprise and the state.
    • A History of Economics (1991), ch. 21
  • People who are in a fortunate position always attribute virtue to what makes them so happy.
  • There's a certain part of the contented majority who love anybody who is worth a billion dollars.
  • The contented and economically comfortable have a very discriminating view of government. Nobody is ever indignant about bailing out failed banks and failed savings and loans associations... But when taxes must be paid for the lower middle class and poor, the government assumes an aspect of wickedness.
  • We now in the United States have more security guards for the rich than we have police services for the poor districts. If you're looking for personal security, far better to move to the suburbs than to pay taxes in New York.
  • It is my guiding confession that I believe the greatest error in economics is in seeing the economy as a stable, immutable structure.
    • A Journey Through Economic Time (1994)
  • Modesty is a vastly overrated virtue.
    • Interview with Lorie Conway (1997) from Interviews with John Kenneth Galbraith (2004) ed. James Ronald Stanfield and Jacqueline Bloom Stanfield. Conway saw these words on a framed needlepoint, entitled "Galbraith's First Law," at Galbraith's home
  • When you see reference to a new paradigm you should always, under all circumstances, take cover. Because ever since the great tulipmania in 1637, speculation has always been covered by a new paradigm. There was never a paradigm so new and so wonderful as the one that covered John Law and the South Sea Bubble — until the day of disaster.
    • Quoted in Ben Laurance and William Keegan, "Galbraith on crashes, Japan and Walking Sticks," The Observer (1998-06-21)
  • Let's begin with capitalism, a word that has gone largely out of fashion. The approved reference now is to the market system. This shift minimizes — indeed, deletes — the role of wealth in the economic and social system. And it sheds the adverse connotation going back to Marx. Instead of the owners of capital or their attendants in control, we have the admirably impersonal role of market forces. It would be hard to think of a change in terminology more in the interest of those to whom money accords power. They have now a functional anonymity.
  • Hitler also anticipated modern economic policy . . . by recognizing that a rapid approach to full employment was only possible if it was combined with wage and price controls. That a nation oppressed by economic fear would respond to Hitler as Americans did to F.D.R. is not surprising.

The Great Crash, 1929 (1954)

In the autumn of 1929 the mightiest of Americans were, for a brief time, revealed as human beings.
  • But now, as throughout history, financial capacity and political perspicacity are inversely correlated.
  • In the autumn of 1929 the mightiest of Americans were, for a brief time, revealed as human beings.
  • Men have been swindled by other men on many occasions. The autumn of 1929 was, perhaps, the first occasion when men succeeded on a large scale in swindling themselves.

The Affluent Society (1958)

  • Wealth is not without its advantages, and the case to the contrary, although it has often been made, has never proved widely persuasive.
    • Ch. 1
  • Even the word depression itself was the terminological product of an effort to soften the connotation of deep trouble. In the last century, the term crisis was normally employed. With time, however, this acquired the connotation of the misfortune it described.
    • Ch. 4
  • It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought.
    • Ch. 11
  • In a community where public services have failed to keep abreast of private consumption things are very different. Here, in an atmosphere of private opulence and public squalor, the private goods have full sway.
    • Ch. 18

The New Industrial State (1967)

  • By all but the pathologically romantic, it is now recognized that this is not the age of the small man.
  • There is an insistent tendency among serious social scientists to think of any institution which features rhymed and singing commercials, intense and lachrymose voices urging highly improbable enjoyment, caricatures of the human esophagus in normal and impaired operation, and which hints implausibly at opportunities for antiseptic seduction as inherently trivial. This is a great mistake. The industrial system is profoundly dependent on commercial television and could not exist in its present form without it.
  • The real accomplishment of modern science and technology consists in taking ordinary men, informing them narrowly and deeply and then, through appropriate organization, arranging to have their knowledge combined with that of other specialized but equally ordinary men. This dispenses with the need for genius. The resulting performance, though less inspiring, is far more predictable.
    • Ch. 6

The United States (1971)

"The United States" in New York magazine (1971-11-15); reprinted in A View from the Stands (1986)
  • Among all the world's races, some obscure Bedouin tribes possibly apart, Americans are the most prone to misinformation. This is not the consequence of any special preference for mendacity, although at the higher levels of their public administration that tendency is impressive. It is rather that so much of what they themselves believe is wrong.
  • The Senate has unlimited debate; in the House, debate is ruthlessly circumscribed. There is frequent discussion as to which technique most effectively frustrates democratic process. However, a more important antidote to American democracy is American gerontocracy. The positions of eminence and authority in Congress are allotted in accordance with length of service, regardless of quality. Superficial observers have long criticized the United States for making a fetish of youth. This is unfair. Uniquely among modern organs of public and private administration, its national legislature rewards senility.
  • In the United States, though power corrupts, the expectation of power paralyzes.
  • The traveler to the United States will do well, however, to prepare himself for the class-consciousness of the natives. This differs from the already familiar English version in being more extreme and based more firmly on the conviction that the class to which the speaker belongs is inherently superior to all others.
  • Once the visitor was told rather repetitively that this city was the melting pot; never before in history had so many people of such varied languages, customs, colors and culinary habits lived so amicably together. Although New York remains peaceful by most standards, this self-congratulation is now less often heard, since it was discovered some years ago that racial harmony depended unduly on the willingness of the blacks (and latterly the Puerto Ricans) to do for the other races the meanest jobs at the lowest wages and then to return to live by themselves in the worst slums.

Power and the Useful Economist (1973)

"Power and the Useful Economist" (1973); also in Annals of an Abiding Liberal and The Essential Galbraith
  • When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise — to deny the political character of the modern corporation — is not merely to avoid the reality. It is to disguise the reality. The victims of that disguise are the students who instruct in error. Let there be no question: economics, so long as it is thus taught, becomes, however unconsciously, a part of the arrangement by which the citizen or student is kept from seeing how he or she is, or will be, governed.
  • The decisive weakness in neoclassical and neo-Keynesian economics is not the error in the assumptions by which it elides the problem of power. The capacity for erroneous belief is very great, especially where it coincides with convenience. Rather, in eliding power — in making economics a nonpolitical subject — neoclassical theory destroys its relation to the real world. In that world, power is decisive in what happens. And the problems of that world are increasing both in number and in the depth of their social affliction. In consequence, neoclassical and neo-Keynesian economics is relegating its players to the social sidelines where they either call no plays or use the wrong ones. To change the metaphor, they manipulate levers to which no machinery is attached.
  • This is what economics now does. It tells the young and susceptible (and also the old and vulnerable) that economic life has no content of power and politics because the firm is safely subordinate to the market and the state and for this reason it is safely at the command of the consumer and citizen. Such an economics is not neutral. It is the influential and invaluable ally of those whose exercise of power depends on an acquiescent public. If the state is the executive committee of the great corporation and the planning system, it is partly because neoclassical economics is its instrument for neutralizing the suspicion that this is so.

The Age of Uncertainty (1977)

  • Ideas may be superior to vested interest. They are also very often the children of vested interest.
    • Chapter 1, p. 11
  • It's a rule worth having in mind. Income almost always flows along the same axis as power but in the opposite direction.
    • Chapter 1, p. 13
  • People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason.
    • Chapter 1, p. 22
  • Economists are generally negligent of their heroes.
    • Chapter 1, p. 27
  • Because of his compassion Owen was always in trouble with his partners. They would have much preferred a tough, down-to-earth manager who would get a days work out of the little bastards.
  • Economics is not an exact science.
    • Chapter 1, p. 36
  • Of all classes the rich are the most noticed and the least studied.
    • Chapter 2, p. 44
  • American university presidents are a nervous breed; I have never thought well of them as a class.
    • Chapter 2, p. 60
  • The masters thought they were loved until one day one of their favorites farted loudly while serving dinner and the next day was gone. The very first manifestation of the classless society is the disappearance of the servant class.
    • Chapter 2, p. 62
  • The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced. The manners of capitalism improve. The morals may not.
    • Chapter 2, p. 75
  • I've long believed alas, that in highly organized industrial societies, capitalist or socialist, the stronger tendency is to converge - that if steel or automobiles are wanted and must be made on a large scale, the process will stamp its imprint on the society, whether that me be Magnitogorsk or Gary, Indiana.
    • Chapter 2, p. 84
  • All successful revolutions are the kicking in of a rotten door. The violence of revolutions is the violence of men who charge into a vacuum.
    • Chapter 3, "The Massive Dissent of Karl Marx" p. 96
  • Conscience is better served by a myth.
    • Chapter 4, p. 111
  • If inheritance qualifies one for office, intelligence cannot be a requirement.
    • Chapter 5, p. 137
  • Money is a singular thing. It ranks with love as man's greatest source of joy. And with death as his greatest source of anxiety. Over all history it has oppressed nearly all people in one of two ways: either it has been abundant and very unreliable, or reliable and very scarce.
    • Chapter 6, p. 161
  • Who is king in the world of the blind when there isn't even a one eyed man?
    • Chapter 6, p. 180
  • Few can believe that suffering, especially by others, is in vain. Anything that is disagreeable must surely have beneficial economic effects.
    • Chapter 7, p. 211
  • He enlarged perceptibly the scope for debate, liberalized appreciably the intellectual and cultural life of the country and proclaimed the obvious truth that, after an atomic exchange, little would distinguish the Communist ashes from the capitalist ashes.
  • The myth that holds that the great corporation is the puppet of the market, the powerless servant of the consumer, is, in fact one of the devices by which its power is perpetuated.
    • Chapter 9, p. 258
  • The privileged have regularly invited their own destruction with their greed.
    • Chapter 10, p. 293
  • Man, at least when educated, is a pessimist. He believes it safer not to reflect on his achievements; Jove is known to strike such people down.
    • Chapter 12, p. 324
  • But there is merit even in the mentally retarded legislator. He asks the questions that everyone is afraid to ask for fear of seeming simple.
    • Chapter 12, p. 328
  • When people put their ballots in the boxes, they are, by that act, inoculated against the feeling that the government is not theirs. They then accept, in some measure, that its errors are their errors, its aberrations their aberrations, that any revolt will be against them. It's a remarkably shrewd and rather conservative arrangement when one thinks of it.
    • Chapter 12, p. 330
  • All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.
    • Chapter 12, p. 330

The Ashes of Capitalism and the Ashes of Communism (1986)

A nuclear war does not defend a country and it does not defend a system. I've put it the same way many times; not even the most accomplished ideologue will be able to tell the difference between the ashes of capitalism and the ashes of communism.
"The Ashes of Capitalism and the Ashes of Communism," interview (undated) with John M. Whiteley in Quest for Peace: an Introduction (1986), ed. John Whiteley
  • A nuclear war does not defend a country and it does not defend a system. I've put it the same way many times; not even the most accomplished ideologue will be able to tell the difference between the ashes of capitalism and the ashes of communism.
  • Get the process of negotiation away from the small specialized group that some people have called the "nuclear theologians," who in effect said this is a complicated issue of seeing how little we can give away, how much we can extract from the other side; it's highly specialized. Only a few people can understand the nature of these weapons, the delivery systems, the targeting, the nature of the MIRV and the CRUISE, on down, and the MX. This kept the whole discussion to a very limited group of people who, in a way, had assumed responsibility for saying whether we should live or die.
  • The huge capacity to purchase submission that goes with any large sum of money, well, this we have. This is a power of which we should all be aware.
  • Both we and the Soviets face the common threat of nuclear destruction and there is no likelihood that either capitalism or communism will survive a nuclear war.

Booknotes interview (1994)

Interview with Brian Lamb, on Booknotes C-SPAN (1994-11-13)
  • I was studying agriculture, how to produce better chickens, better cattle, better horses — horses in those days — better fruit, better vegetables. This was in the early years of the Great Depression, and the thoughts crossed my mind that there wasn't a hell of a lot of use producing better crops and better livestock if you couldn't sell them, that the real problem of agriculture was not efficiency in production but the problem of whether you could make money after you produced the stuff. So I shifted from the technical side to, first, the study of agricultural economic issues and then on to economics itself.
  • Broadly speaking, [Keynesianism means] that the government has a specific responsibility for the behavior of the economy, that it doesn't work on its own autonomous course, but the government, when there's a recession, compensates by employment, by expansion of purchasing power, and in boom times corrects by being a restraining force. But it controls the great flow of demand into the economy, what since Keynesian times has been the flow of aggregate demand. That was the basic idea of Keynes so far as one can put it in a couple of sentences.
  • Going back to the most ancient times, national well-being, the national prestige depended on territory. The more territory a country had, the more income revenue there was, the more people there were to be mobilized for arms strength. So we had an enormous sense of territorial conflict and territorial integrity, and that was unquestionably a part of the cause of war, coupled with the fact that there was a disposition in that direction by the landed class, a disposition to think of territorial acquisition and territorial defense and to think of the peasantry as a superior form of livestock which could be used for arms purposes.
  • I react to what is necessary. I would like to eschew any formula. There are some things where the government is absolutely inevitable, which we cannot get along without comprehensive state action. But there are many things — producing consumer goods, producing a wide range of entertainment, producing a wide level of cultural activity — where the market system, which independent activity is also important, so I react pragmatically. 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 favor of privatization," or, "I'm deeply in favor of public ownership." I'm in favor of whatever works in the particular case.
  • I write with two things in mind. I want to be right with my fellow economists. After all, I've made my life as a professional economist, so I'm careful that my economics is as it should be. But I have long felt that there's no economic proposition that can't be stated in clear, accessible language. So I try to be right with my fellow economists, but I try to have an audience of any interested, intelligent person.

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