John Kenneth Galbraith

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John Kenneth Galbraith

John Kenneth Galbraith (October 15 1908April 29 2006) was an influential Canadian-American economist of the 20th century. 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 late 1950s and during the 1960s.

Galbraith was a prolific author, producing four dozen books and over a thousand articles on various subjects. His most famous works were perhaps a popular trilogy of books 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 also 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 U.S. ambassador to India under Kennedy.

He was one of the few two-time recipients of the Presidential Medal of Freedom, receiving one from President Truman in 1946 and another from President Bill Clinton in 2000<ref>Liberal thinker JK Galbraith dies, an April 2006 BBC article</ref>. He was also awarded the Padma Vibhushan, India's second highest civilian award, for his contributions to strengthening ties between India and the United States.<ref>Galbraith receives prestigious award, a June 2001 Harvard News Gazette article</ref>.

Contents

[edit] Life

[edit] Early life and teaching

Galbraith was born to Canadians of Scottish descent, William Archibald Galbraith and Sarah Catherine Kendall, in Iona Station, Ontario, Canada and was raised in Dutton, Ontario. His father was a farmer and school teacher and mother a political activist. 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 (at a time when neither the US nor Canada contemplated dual citizenship), but he was honoured by his native country to his life's end and frequently adverted to his Canadian origins[citation needed]. In the same year, he took a year-long fellowship at Cambridge University, England, where he became influenced by John Maynard Keynes. Galbraith was a very tall man, growing to a reported height of 6'9".

Galbraith taught intermittently at Harvard in the period 1934 to 1939 <ref>John Kenneth Galbraith, Longtime Economics Professor, Dies at 97, an April 2006 Harvard Crimson article</ref>. 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.

[edit] WWII and Price Administration

During World War II, Galbraith was America's "price czar," charged with keeping inflation from crippling the war effort. He 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 of the rest of his career being downhill. At the end of the war, he was asked to carry out a survey of US and allied strategic bombing, and concluded the costs outweighed the anticipated benefits and did not shorten the war.[citation needed] After the war, he became an adviser to post-war administrations in Germany and Japan.

[edit] Political posts under Kennedy

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John Kenneth Galbraith, circa 1960
During his time as an adviser to President John F. Kennedy, Galbraith was appointed as U.S. ambassador to India from 1961 to 1963. There 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, as to 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 demitting office, Galbraith remained a friend and supporter of India and even hosted a lunch for Indian students at Harvard every year on graduation day.

In 1972 he served as president of the American Economic Association.

[edit] Later life and recognition

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

In 1997 he was made an Officer of the Order of Canada<ref>Order of Canada citation, from the website of the Governor General of Canada</ref> and in 2000 he was awarded his second U. S. Presidential Medal of Freedom.

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

[edit] 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 leukaemia. 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. The Galbraiths also have ten grandchildren. [1]

[edit] Works

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The Essential Galbraith, 2001
Although he was a former 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 neo-classical 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. 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.

[edit] Economics books

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. He contrasted this with the previous pre-depression era where big business had relatively free rein over the economy.

In his most famous work, The Affluent Society (1958), which 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 claims to have coined 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.<ref>Galbraith interview with Colonel Anil Athale (retd), July 2003</ref>

The Affluent Society contributed (likely to a significant degree, given that Galbraith had the ear of President Kennedy <ref>John Kenneth Galbraith, 97, Dies; Economist, Diplomat and Writer a New York Times obiturary from April 30, 2006</ref>) 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 financial bubbles through several centuries, and cautions that what currently seems to be "the next great thing" may not be that great and may have quite irrational factors promoting it. A common factor in financial bubbles is easy access to borrowed money for speculation.

Many of Galbraith's best known works are controversial, particularly to libertarian and those of the Austrian schools who disagree with many of his assertions (see Controversy).

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

Galbraith cherished The New Industrial State and The Affluent Society as his two best.<ref>Adams, Philip (1999), Interview on Radio National, Late Night Live, Australian Broadcasting Corporation. Accessed 17 Jan 2006.</ref> 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." <ref>Sharpe, Michael (2006), John Kenneth Galbraith, 1908-2006, Challenge: the Magazine of Economic Affairs, 49 (4):7</ref>

[edit] 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 a state of poverty into 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 it generates artificial affluence through the production of commercial goods and services, the "public sector" becomes neglected as a result. He pointed 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 the process of advertising creating artificial demand above individual's basic needs.

He proposed curbing the consumption of certain products through greater use of consumption taxes, arguing this could be more efficient than other forms of taxes such as labour or land taxes.

Galbraith's major proposal was a program he called "investment in men" - a large-scale governmental education program to influence the wants and tastes of the citizenry. He advocated developing a "New Class" of citizen, "with its emphasis on education and its ultimate effect on intellectual, literary, cultural and artistic demands...". Galbraith wished to entrust the future of the American republic into the hands of the members of this class, asserting that their ability to see beyond "the conventional wisdom" entitled them to govern.

[edit] 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.

Author and capitalism advocate Ayn Rand stated that "Galbraith advocates... medieval feudalism."<ref>Rand, Ayn (1961). Lecture "Political Vacuum of Our Age," presented to a group of women in journalism (Indiana, 1961) Reprinted in Ayn Rand Answers: The Best of Her Q & A. NAL Trade (November 1, 2005). ISBN 0-451-21665-2.</ref>

Libertarian Murray Rothbard in his detailed criticisms of the Affluent Society in Man, Economy and State summarized that it is "replete with fallacies ... dogmatic assertions and time-honored rhetorical devices in place of reasoned argument."<ref>Man, Economy and State, Second Edition, Chapter 12: The Economics of Violent Intervention in the Market, a February 2004 Ludwig von Mises Institute publication</ref> He characterized much of Galbraith's writing (particularly his references to "conventional wisdom") as a "sustained sneer".

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."

[edit] 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)<ref>ISBN 0-395-39382-5</ref> (illustrated by Samuel H. Bryant), Galbraith's account of his boyhood environment in southern Ontario, was written in 1963. Some members of his boyhood community claimed that Galbraith had misrepresented the town of Dutton and that he had grown 'too big for his britches.'[citation needed] This resentment from the Dutton community was not as prevalent in later years.

Galbraith's 1981 memoir, A Life in Our Times<ref>ISBN 0-395-31135-7</ref> 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<ref>Promotional website for John Kenneth Galbraith: His Life, His Politics, His Economics</ref> by friend and fellow progressive economist Richard Parker, renewed interest in his career and ideas.

[edit] Bibliography

[edit] Quotations

  • "Economics is extremely useful as a form of employment for economists."
  • "Faced with the choice between changing one's mind and proving that there is no need to do so, almost everybody gets busy on the proof."
  • "It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled sea of thought."
  • "If you feed enough oats to the horse, the sparrow will survive on the highway." - in relation to trickle-down economics
  • "The only function of economic forecasting is to make astrology look respectable."
  • "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."
  • "If all else fails, immortality can always be assured by spectacular error."
  • "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."
  • (Having been asked how he managed to write so much) "I wake up early, have a good breakfast, and begin."
  • "Humility is not always compatible with truth."
  • "People of privilege will always risk their complete destruction rather than surrender any material part of their advantage."
  • "Politics is not the art of the possible. It consists of choosing between the disastrous and the unpalatable."
  • "One of my greatest pleasures in my writing has come from the thought that perhaps my work might annoy someone of comfortably pretentious position. Then comes the realization that such people rarely read."
  • "As a military ally, the entire Laos nation is clearly inferior to a battalion of conscientious objectors from World War I." (regarding the Nixon administration's suggestion that the addition of Laos as an ally in the Vietnam War would significantly help the US win the war)
  • "The conventional view serves to protect us from the painful job of thinking."

[edit] 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 [2], also see talk).
  • "Never underestimate the power of very stupid people in large groups."

[edit] See also

Wikiquote has a collection of quotations related to:

[edit] References

<references />

[edit] Sources

[edit] External links

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John Kenneth Galbraith

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