John Kenneth Galbraith was a leading scholar of the American Institutionalist school and arguably the most famous economist in the post-World War II world. His views were a stinging indictment of the modern materialistic society that championed personal achievement and material well-being over public interest and needs. In spite of these views, he served as an advisor in both the American and Canadian governments from the 1930s onward.
Galbraith was born October 15, 1908, in southern Ontario, Canada, to a farming family of Scotch ancestry. He studied agricultural economics at the Ontario Agricultural College (then part of the University of Toronto; later University of Guelph) and graduated with distinction in 1931. He studied agricultural economics at the University of California, receiving his Ph.D. in 1934. In this year he also began his long, though frequently interrupted, tenure at Harvard University. Galbraith's academic career frequently gave way to public service. He worked in the Department of Agriculture during the New Deal and in the Office of Price Administration and Civilian Supply during World War II.
After the war in Europe, Galbraith worked with the Office of Strategic Services directing research on the effectiveness of the Allies' strategic bombing of Germany. He was a speechwriter in the presidential campaign of Adlai Stevenson and then chaired the Democratic Advisory Council during Dwight D. Eisenhower's administration. He campaigned for President John F. Kennedy, and after Kennedy's victory he was named U.S. ambassador to India in the early 1960s. An outspoken critic of U.S. involvement in Vietnam, he campaigned on behalf of presidential hopefuls Eugene McCarthy (1968) and George McGovern (1972). Later he worked in the campaigns of Morris Udall (1976) and Edward Kennedy (1980).
Galbraith's major intellectual contributions lie in the trilogy The Affluent Society (1958), The New Industrial State (1967), and Economics and the Public Purpose (1973). Along the way he published over twenty other books, including two novels, a co-authored book on Indian painting, memoirs, travelogues, political tracts, and several books on economic and intellectual history.
Another important work is Galbraith's American Capitalism: The Concept of Countervailing Power (1952) which asserts that growth of economic power in one economic sector tends to induce countervailing power from those who must bargain with the powerful. This book solidified Galbraith's position as a continuing spokesperson for the New Deal perspective in economics. Galbraith coupled the new economics of John Maynard Keynes with the New Deal corporatist view, as did other Institutionalists of the time.
The Affluent Society examined the continuing urgency that affluent societies attach to higher consumption and production. It argued that the outmoded mentality of more-is-better impeded the further economic progress. Advertising and related salesmanship activities create artificially high demand for commodities produced by private businesses and lead to a concomitant neglect of public sector goods and services that would contribute far more to the quality of life.
Galbraith's breakthrough as a best-selling author came with The Affluent Society for which he was honored with the American Economic Association's prestigious presidency. The book also influenced both the Great Society program and the rise of the American "counterculture" in the 1960s.
In The New Industrial State Galbraith expanded his analysis of the role of power in economic life. A central concept here 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 New Industrial State 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 concerns 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.
Economics and the Public Purpose, the last work in his major trilogy, Galbraith continued his characteristic insistence on the role of power in economic life and the inability of conventional economic thought to deal adequately with this power. Conventional economic thought serves to hide the power structure that actually governs the American economy. Thus, economists fail to come to grips with this governing structure and its untoward effects on the quality of life. Galbraith employed what he called "the test of anxiety" in this attack on conventional economics. He argued that any system of economic ideas should be evaluated by the test of anxiety--that is, by its ability to relate to popular concern about the economic system and to resolve or allay this anxiety.
After years served in both the American and Canadian governments, Galbraith returned to scholarly activity, extensive travel, and writing, using Harvard University as his home base. In January 1997 Galbraith, in a lecture at the University of Toronto, again espoused his views that governments should create jobs by direct intervention in the economy. Although he represented the obscure Institutionalist school of economic thought, he nonetheless continued to convey his message that "there must be, most of all an effective safety net [of] individual and family support for those who live on the lower edges of the system."
Recent Updates
February 2005: Richard Parker's John Kenneth Galbraith: His Life, His Politics, His Economics was published by Farrar, Straus & Giroux. Source:New York Times, www.nytimes.com, February 16, 2005.
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