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John Kenneth Galbraith,
2006) was an influential
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.
He was also awarded the
Order of Canada in 1997
and, in 2001, the
Padma Vibhushan, India's second highest civilian award, for his
contributions to strengthening ties between India and the United
Early life and teaching
Galbraith was born to Canadians of
Scottish descent, Bruce Alexander Galbraith and Sarah Catherine
Iona Station, Ontario,
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
Harvard University. In 1937, he became a
United States citizen. In the same year, he took a year-long
England, where he became influenced by
John Maynard Keynes, then lived in
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
From 1939 to 1940, he taught at
Princeton University. From 1943 until 1948, he served as editor
Fortune magazine. In 1949, he was appointed professor of
economics at Harvard.
World War II and Price Administration
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
Political posts under Kennedy
Galbraith, far 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.
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
Uttar Pradesh. 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.
Galbraith married Catherine Merriam Atwater on
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
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
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.
Later life and recognition
Galbraith was one of the last living former advisers to President
In 1972 he served as president of the
American Economic Association.
In 1997 he was made an Officer of the
Order 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
Global Development and Environment Institute.
He was awarded an honorary doctorate from the
Memorial University of Newfoundland at the fall convocation of
Galbraith died at
Mount Auburn Hospital in
Cambridge, Massachusetts of natural causes, after a two-week
stay in the hospital.
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,
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
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
television in 1977.
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
A Tenured Professor in particular achieved critical acclaim.
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
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.
The Affluent Society contributed (likely to a significant
degree, given that Galbraith had the ear of President Kennedy
) 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
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.
Galbraith cherished The New Industrial State and The
Affluent Society as his two best.
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."
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
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, in general, and The Affluent Society, in
particular, have drawn sharp criticism from free-market supporters
at the time of its publication.
Milton Friedman in "Friedman on Galbraith, and on curing the
British disease" views Galbraith as a 20th century version of the
early 19th century
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's views on
government intervention were somewhat more complex than this
simple characterization, however, as
Richard Parker demonstrates in his biography of Galbraith
John Kenneth Galbraith: His Life, His Economics, His Politics.
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
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
marketing. While Galbraith defended government intervention,
Parker notes that he also believed that government and big business
worked together to maintain stability.
Paul Krugman, the influential
Princeton University professor and
New York Times
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".
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)
(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
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
by friend and fellow progressive economist
Richard Parker, renewed interest in his career and ideas.