John Kenneth Galbraith

Infobox Philosopher
region = Western economists
era = 20th century economists
(Institutional economics)
color = #B0C4DE

name = John Kenneth Galbraith
birth = October 15 1908
Iona Station, Ontario, Canada
death = April 29 2006 (aged 97)
Cambridge, Massachusetts
school_tradition = Institutional economics
main_interests = Economics, Political economy
notable_ideas = Keynesian economics, institutional economics

John Kenneth Galbraith, OC (October 15 1908–April 29 2006) was an influential 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 in the 1950s and the 1960s.

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 a few two-time recipients of the Presidential Medal of Freedom. He received one from President Truman in 1946 and another from President Bill Clinton in 2000. [ [http://news.bbc.co.uk/1/hi/world/americas/4959302.stm Liberal thinker JK Galbraith dies] , an April 2006 BBC article] He was also awarded the Order of Canada in 1997 [ [http://www.gg.ca/honours/search-recherche/honours-desc.asp?lang=e&TypeID=orc&id=3766 Order of Canada Citation] ] and, in 2001, the Padma Vibhushan, India's second highest civilian award, for his contributions to strengthening ties between India and the United States. [ [http://www.news.harvard.edu/gazette/2001/06.14/05-galbraith.html Galbraith receives prestigious award] , a June 2001 Harvard News Gazette article]

Life

Early life and teaching

Galbraith was born to Canadians of Scottish descent, Bruce Alexander Galbraith and Sarah Catherine Kendall, in Iona Station, Ontario, Canada, and was raised in Dunwich Township, Ontario. He went to school at Sugar-Salem High School. His father was a farmer and school teacher and mother a political activist. He was sent to boarding school Appleby College of nearby Oakville, Ontario for the final two years of high school. Both his parents were supporters of the United Farmers of Ontario in the 1920s. After initially studying agriculture, Galbraith graduated from the Ontario Agricultural College (then affiliated with the University of Toronto, and now the University of Guelph) with a B.Sc degree 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. In the same year, he took a year-long fellowship at Cambridge University, England, where he became influenced by John Maynard Keynes, then lived in Berlin 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. [ [http://www.thecrimson.com/article.aspx?ref=513162 John Kenneth Galbraith, Longtime Economics Professor, Dies at 97] , an April 2006 "Harvard Crimson" article] 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. Although little appreciated at the time, the actual power he wielded in this position was so great that he joked later that the rest of his career had been downhill. At the end of the war, he was asked to be one of the leaders of the Strategic Bombing Surveys of both Europe and Japan. These reports concluded the costs outweighed the anticipated benefits and did not shorten the war in the case of Germany. However, they found that the war against Japan had proved beyond question the success of bombing and went on to call for additional funding and the creation of an independent American Air Force (AAF). After the war, he became an adviser to post-war administrations in Germany and Japan.

Political posts under Kennedy

. Even after leaving office, Galbraith remained a friend and supporter of India and even 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 Lyndon B. Johnson School of Public Affairs. The Galbraiths also have ten grandchildren. [http://select.nytimes.com/gst/abstract.html?res=FB0F15FE3A5B0C738FDDAD0894DE404482]

Later life and recognition

Galbraith was one of the last living former advisers to President Franklin Roosevelt.

In 1972 he served as president of the American Economic Association. [cite web |title=Past AEA Officers |url=http://www.vanderbilt.edu/AEA/officerspast.htm |publisher=American Economic Association |accessdate=2008-10-10]

In 1997 he was made an Officer of the Order of Canada [ [http://www.gg.ca/honours/search-recherche/honours-desc.asp?lang=e&TypeID=orc&id=3766 Order of Canada citation] , from the website of the Governor General of Canada] and in 2000 he was awarded his second U. S. Presidential Medal of Freedom. Also in 2000, he was awarded the Leontief Prize for his outstanding contribution to economic theory by the Global Development and Environment Institute.

He was awarded an honorary doctorate from the Memorial University of Newfoundland at the fall convocation of 1999. [cite web |title=John Kenneth Galbraith in St. John's |url=http://www.cbc.ca/news/story/1999/10/21/nf_galbraith991021.html |publisher=Canadian Broadcasting Corporation |accessdate=2008-10-12]

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

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", episode content, retrieved 30 May 2007. [http://amapedia.amazon.com/view/Age+of+Uncertainty/id=100225] ] However, from the Nixon presidency onwards, he was regarded as something of an anachronism, as the public discourse centered more and more around the pro-market, small-government, anti-regulation and low-tax orthodoxies which came to prominence in the 1980s. In addition to his books, he wrote hundreds of essays and a number of novels. Among his novels, "A Tenured Professor" in particular achieved critical acclaim.

Economics books

In "", 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 popularized the phrase "conventional wisdom".(Galbraith, 1958 The Affluent Society: Chapter 2 "The Concept of Conventional Wisdom")

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. [ [http://www.rediff.com/news/2003/jul/28spec.htm Galbraith interview with Colonel Anil Athale (retd), July 2003] ]

"The Affluent Society" contributed (likely to a significant degree, given that Galbraith had the ear of President Kennedy [ [http://www.nytimes.com/2006/04/30/obituaries/30galbraith.html John Kenneth Galbraith, 97, Dies; Economist, Diplomat and Writer] a "New York Times" obituary from April 30, 2006] ) 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. 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" (1990), He traces speculative bubbles through several centuries, and argues that they are inherent in the economic 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".

Galbraith was a fine writer, and was widely regarded as an influential and serious economist. Many of Galbraith's best known works raised controversies, particularly with his antagonism toward libertarians and those of the Austrian schools (see Criticism).

He was an important figure in 20th century institutional economics, and provides perhaps the exemplar institutionalist perspective on Economic Power [Political Economy: The Contest of Economic Ideas, 2002, by Frank Stilwell] .

Galbraith cherished "The New Industrial State" and "The Affluent Society" as his two best. [Harvard reference|Surname=Adams|Given=Philip|Title=Interview on Radio National, Late Night Live|Publisher=Australian Broadcasting Corporation|Year=1999| URL=http://www.abc.net.au/rn/talks/lnl/stories/s64155.htm . Accessed 17 Jan 2006.] 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." [Harvard reference|Surname=Sharpe|Given=Michael|Title=John Kenneth Galbraith, 1908-2006|Publisher=Challenge: the Magazine of Economic Affairs, 49 (4):7|Year=2006]

Some of Galbraith's Ideas

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 as a result. 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.

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.

Criticism of Galbraith's Work

Galbraith's work and "The Affluent Society" in particular drew 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."

Galbraith defended government intervention as not imposing the will of reformers on the masses, but rather protecting them from corporate exploitation and manipulation, particularly through advertising and "manufactured demand," which are not considered in textbook models of free markets but, according to Galbraith, are prevalent in real economies.

Paul Krugman, the influential 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 for solely 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 view him as more of a "media personality." For example, Galbraith's work "The New Industrial State" is not considered to be "real economic theory", and "Economics in Perspective" is "remarkably ill-informed". [Paul Krugman. "Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations". (Scranton, Pennsylvania: W. W. Norton, 1994), 10-15.]

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") [ISBN 0-395-39382-5] (illustrated by Samuel H. Bryant), Galbraith's account of his boyhood environment in southern Ontario, was written in 1963.

Galbraith's 1981 memoir, "A Life in Our Times" [ISBN 0-395-31135-7] 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" [ [http://www.johnkennethgalbraith.com/ Promotional website for "John Kenneth Galbraith: His Life, His Politics, His Economics"] ] 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.
* "", 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" (a 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)
* "", 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.
* "", (with Paul McCracken)1983.
* "A View from the Stands", 1986.
* "", 1987.
* "Capitalism, Communism and Coexistence" (with Stanislav Menshikov), 1988.
* "", 1989. (Editor)
* "A Tenured Professor", 1990.
* "", 1991.
* "The Culture of Contentment", 1992.
* "", 1992. (Editor)
* "A Journey Through Economic Time", 1994.
* "", 1994.
* "A Short History of Financial Euphoria", 1994.
* "", 1996.
* "Letters to Kennedy", 1998.
* "The socially concerned today", 1998.
* "", 1999.
* "The Essential Galbraith", 2001.
* "The Economics of Innocent Fraud", 2004.
* "John Kenneth Galbraith and the future of economics", 2005.

Quotations

* "The process by which banks create money is so simple that the mind is repelled."
* "Humility is not always compatible with truth."
* "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."
* “Trickle-down theory - the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”
* "It is a well known and very important fact that America's founding fathers did not like taxation without representation. It is a lesser known and equally important fact that they did not much like taxation with representation." (From "Money: Whence It Came, Where It Went")
* "Politics is not the art of the possible. It consists of choosing between the disastrous and the unpalatable."
* (On being asked what it is like having reached the age of 90) "Better than the alternative."

For more quotations, see the [http://en.wikiquote.org/wiki/John_Kenneth_Galbraith Wikiquote] list on Galbraith.

Apocryphal Quotations

Some quotes have been falsely attributed to Galbraith in Internet signature files, and have thus become widespread, including:
* "Under capitalism, man exploits man. Under communism, it's just the opposite." (see [http://query.nytimes.com/gst/fullpage.html?res=9F03E5DA1338F930A25755C0A967948260] ).
* "Never underestimate the power of very stupid people in large groups."

ee also

* Liberalism
* Communitarianism
* List of liberal thinkers
* "The Best and the Brightest"

Footnotes

References

* Robert Sobel "The Worldly Economists" (1980).

External links

* [http://www.internationalscope.org/journal/volume%202006/issue%2013/issue13_edito.htm Article on John Kenneth Galbraith, the Affluent Society, and Social Capital]
* [http://www.encyclopedia.com/html/g/galbrait.asp Short Galbraith biography at encyclopedia.com]
* [http://www.econlib.org/library/Enc/bios/Galbraith.html Galbraith biography at econlib.org]
* [http://cepa.newschool.edu/het/profiles/galbraith.htm The History of Economic Thought Profile]
* [http://www.newsmeat.com/washington_political_donations/John_Kenneth_Galbraith.php John Kenneth Galbraith's campaign contributions]
* [http://www.globalisationinstitute.org/blog/announcements/john-kenneth-galbraith-%281908%112006%29-20060430677/ John Kenneth Galbraith (1908-2006)]
* cite news | title = John Kenneth Galbraith, 97, Dies; Economist Held a Mirror to Society | date = April 30 2006 | publisher = The New York Times | url = http://www.nytimes.com/2006/04/30/obituaries/30galbraith.html?ex=1304049600&en=c486b75860ff8fb3&ei=5090
* cite news | title = John Kenneth Galbraith, writer, economist, dies | date = April 30 2006 | publisher = The Boston Globe | url = http://www.boston.com/news/globe/obituaries/articles/2006/04/30/john_kenneth_galbraith_writer_economist_dies/
*
* [http://www.cbc.ca/story/world/national/2006/04/30/galbraith-060429.html CBC Obituary]
* [http://www.usatoday.com/news/nation/2006-04-30-galbraith_x.htm Associated Press Obituary via USA Today]
* [http://www.legacy.com/Obituaries.asp?Page=LifeStory&PersonID=17618868 Influential economist Galbraith dies at 97] Alternate AP obituary
* [http://www.news.harvard.edu/gazette/daily/2006/04/30-galbraith.html Harvard University's Obituary "John Kenneth Galbraith, economist, professor, and author: Harvard icon dies at 97"]
* [http://www.medaloffreedom.com/JohnGalbraith.htm News story and biography] from the Medal of Freedom website, on the 2004 award of his second medal.
* [http://www.dollarsandsense.org/blog/2006/05/jane-jacobs-and-john-kenneth-galbraith.html John Kenneth Galbraith dies] Dollars & Sense, May 3, 2006.
* [http://www.findagrave.com/cgi-bin/fg.cgi?page=gr&GRid=14125803 John Kenneth Galbraith At Find A Grave]