Widely known economist John Kenneth Galbraith, who recently died at age 97, was one of the radical left's most articulate and prolific advocates for state control of economic and social activity.
Living through most of the 20th century, Professor Galbraith was the embodiment of the era's atheistic and materialistic religion of socialism, a description he proudly accepted. Naturally, he was a member of the Harvard economics department, the fountainhead of socialistic economics in the United States. From early 20th century Progressivism, to open advocacy of socialism in the 1920s and 1930s, through post-World War II liberalism, he was probably the most quoted and most admired single icon of American left-wing intellectuals.
The Washington Post's obituary observed: "One of the most influential [of Galbraith's books] was The Affluent Society (1958), which argued that overproduction of consumer goods was harming the public sector and depriving Americans of such benefits as clean air, clean streets, good schools and support for the arts.
"Dr. Galbraith was generally considered to have been an apostle of the theories advanced by British economist John Maynard Keynes: that government could promote full employment and a stable economy by stimulating spending and investment with adjustments in interest and tax rates, and deficit financing."
Galbraith's self-assurance not withstanding, Keynes's prescriptions failed miserably; unemployment never fell below 14% until our military mobilization for World War II.
Professor Galbraith was called an economist, but more accurately he should be identified as a liberal sociologist and propagandist. Few of his "economic" ideas are used or respected by economists. Even the New York Times, the journal-of-record for American socialism, admits this.
As the Times obituary put it, "… other economists, even many of his fellow liberals, did not generally share his views on production and consumption, and he was not regarded by his peers as among the top-ranked theorists and scholars."
"…..Later, in The New Industrial State (1967), he tried to trace the shift of power from the landed aristocracy through the great industrialists to the technical and managerial experts of modern corporations. He called for a new class of intellectuals and professionals to determine policy."
"……In 1973 he published Economics and the Public Purpose, in which … [he] called for a "new socialism," with more steeply progressive taxes; public support of the arts; public ownership of housing, medical and transportation facilities; and the conversion of some corporations and military contractors into public corporations."
Michael Harrington, then head of the American Socialist Party, wrote in his 1968 Toward a Democratic Left: A Radical Program for a New Majority:
"The very character of modern technology, [Harvard economist] Galbraith says, renders the old market mechanisms obsolete. In these circumstances planning is obligatory. The state must manage the economy in order to guarantee sufficient purchasing power to buy the products of the industrial system.”
This is typical Galbraithian "wisdom" that, at best, was counter-productive and more often disastrous.
Harrington's book was published as price levels were quadrupling under President Nixon's embrace of Keynesian, socialist economics, leading OPEC to impose its oil embargo and catapult prices to an inflation-adjusted $95 per barrel. On the eve of this unfolding catastrophe, the liberal media lauded the Keynesian-oriented Council of Economic Advisors for having finally learned to exert perfect, fine-tuning socialistic control over the economy.
Economic stagflation – soaring inflation coupled with a moribund economy – soon thereafter revealed the hollowness of this hubristic claim. Savings and loan institutions went bankrupt. Stock market prices fell to fractions of replacement costs for company assets, giving rise to the take-over boom by stock market raiders that dismembered companies and threw long-loyal workers into the streets. Mothers were compelled to leave home for full-time employment and fathers had to moonlight on extra jobs, just to pay monthly bills. With fewer parents at home to supervise their children, crime and drug abuse rose.
Yet to this day Galbraith's ruinous prescriptions remain central tenets of American liberals' socialistic religious catechism.
This article is very unfair to Keynes – I'm a libertarian, but I also study economics. And I can tell you that most serious economists believe that there is a lot of truth in what Keynes had to say. Actually, I would say that he understood the economy far better than the classical economists. Take some time to actually learn the reasoning behind his theories before criticizing them – as far as I can tell, his reasoning is rock solid. The main problem with the classical economists is that they assume there is only one "market-clearing" equilibrium, so of course, all we have to do is let market forces reach that equilibrium. The main insight of Keynes is that there are multiple equilibia – some of which don't correspond to max efficiency or full equilibrium. Actually, even classical theory leads to multiple equilibria, though the classical economists don't admit it (makes things too complicated I suppose). The government can move the economy towards a more efficient equilibrium though monetary policy. This is hardly "socialism" – unless you define socialism as the government taking any action whatsoever. Keynesian economics would be just as effective with a big government as with a small government. Also, a lot of economists acknowledge that monetary policy is more practical than deficit spending. Deficit spending has to go through the political gauntlet, so its far too slow and difficult to get right. I think Keynes' original idea was to have deficits in recessions and surpluses in booms, resluting in a long term balanced budget, but of course we know that politically that doesn't work. You mention stagflation and WWII as evidence that Keynesian economics is wrong – thats just not the case. Stagflation can be reconciled with Keynesian theory – it can be a result of a supply shock (such as the oil embargo that was also in the 70's) WWII, may be taken as evidence FOR keynesian economics. The amount of deficit spending during the Depression paled compared to the deficit spending during WWII. Our national debt climbed to over 100% of GDP by 1945. This was like the ultimate Keynesian policy, and it got us out of the Depression. As for Galbriath – well, I'm not that familiar with his work, but he was certainly not a better economist than Keynes. If you want a real intellectual challenge, try actually reading the General Theory. -Mike
There really are no qualifications to be called an economist anymore. Anybody with an MBA and the inkling to write an ill-informed tirade on liberal social philosophy is an "economist". Understanding how mechanisms of trade function and contributing that knowledge to others should be the true measure, but sadly it is not. Thankfully there are still real economists out there. Let's just hope that the one's deciding our country's financial future are made in the image of Adam Smith and Milton Friedman and not John Keynes and John Galbraith.
Great article. You are right on target with the notion that Galbraith is more a Marxist Socilogist than a legitimate economist. I love the reference to destruction of American family that socialist economic policies inevitably lead to. My sense is we must ultimately stand up the the garbled nonsense that parades as science in contemporary social science departments within most universities. Real economists seem the only social scientists who actual do anything even vaguely resembling science. Their theories are tested continuously and often, must be reworked when found faulty. Ever see that in say… sociology or, God forbid, psychology or, gulp!, Womens Studies? Jim Carmine
I'm sorry… I'm sure you're not (tacitly) suggesting Professor Galbraith was responsible for a whole alleged generation of criminals and drug abusers? I'm not a fan of Galbraith myself, but c'mon? By the same logic, the classical economists whose too-rigid policies led (indirectly) to the Great Depression are surely responsible for a generation of broken homes, unemployed alcoholic fathers and a high suicide rate? And, as nobody blames the classical economists entirely for the Great Depression (it was a combination of factors, many of which they had no control over), surely nobody blames Keynesian economics as the sole cause of the crisis of the early 1970's? A problem with economists is that they tend to see all events as having a primary cause, when in fact often coincidental factors merely happen to arrive at the same instant. It is the same with this article.