By Ashley Seager
Saturday, August 14, 2004
The first thing you notice as you approach John Kenneth Galbraith's home in Cambridge, Massachusetts, a stone's throw from Harvard University, is a "Kerry/Edwards for president" poster in a ground floor window, a hint of the politics that has dominated his life.
At 95, Galbraith, one of the greatest political and economic thinkers of the past century, is still politically engaged, although ill health forced him to miss this year's Democrat convention in nearby Boston.
The house is a large, New England-style, brick one, probably about as old as its owner, who has lived there for 50 years with his wife Kitty, now in her early 90s.
Once past the front porch, the atmosphere is not of affluence, written so much about by Galbraith, but old-world charm. There is heavy wood panelling in the main hall and adjoining room, and classic furniture dominates the place.
"That you? Glad you could come. I love the Guardian. Been reading it since 1937," booms a voice from the large, book-lined library off the main hall.
The great man is quite deaf now and slumped in a chair but still has the aura and stature that his 6ft 8in frame has always commanded. His wit and intellect are still very much intact.
He barks at our photographer to make sure he gets a picture of him sitting as straight as his advanced years will allow.
Galbraith is in poor health and reclusive, the famous parties he and Kitty used to throw a thing of the past. But he is happy to talk about his new book, The Economics of Innocent Fraud: Truth for our Time, that comes almost half a century after his most famous work, The Affluent Society.
He is excited that edited extracts from the new book, published in the Guardian a couple of weeks ago, were widely distributed and discussed at the Democrat convention. He is, in fact, happy to talk about pretty much anything.
Galbraith was born into a rural Scottish family in Canada in 1908 and moved to the US in the early 1930s, taking American citizenship in 1937. In his early professional life, during the depression, he worked as an economist for Franklin D Roosevelt.
He recalls sitting in his office one day during the second world war - he was in charge of controlling prices throughout the economy - when his secretary said someone wanted to see him. "I said I had no time. But she said 'I think he expects to see you' and gave me his business card. It was John Maynard Keynes. He wanted to talk about agricultural prices." Keynes, he said, was interested in the relationship between the prices of livestock and livestock feed.
Galbraith, who was given the wartime job while in his early 30s and eventually ran a staff of nearly 1,500, recalls how he and his workers relished the tale of a hungry colony of ants, antennae quivering with excitement at the sight of a pile of horse manure.
"When an industrialist, already making more money than in the previous decade, came to see us to ask permission to put his prices up, my staff and I would quiver our index finger and the next one to it on the desk, as a sign to each other that the guy was talking horse shit." His sense of humour is undiminished.
Looking back over a career spanning 70 years, Galbraith says he is most proud of the work on prices he was asked to do by Roosevelt, who was worried about the rampant inflation seen during the first world war. "The fact that we came through the second world war with no appreciable price inflation and no depressive aftermath was by far the most important thing with which I have ever been associated," he says.
"I still have a puzzlement, even at my present advanced age, as to how Roosevelt could have entrusted that to anyone so young. It is also a possibility that no one older or wiser would take it on."
How well did he know FDR? "I was less intimate with him than with Keynes. I knew Eleanor Roosevelt better and she was my avenue to the president if I needed to speak to him."
His experience of the depression years and working on FDR's New Deal programme have made him a lifelong Democrat. He has known every president since, and worked for John F Kennedy as ambassador to India in the early 1960s.
As the war ended, he was asked to carry out a survey of the US and allied strategic bombing during the war. His conclusion, that it served no use and did nothing to shorten the war, did not endear him to the military-industrial complex, as Dwight D Eisenhower later called it, of the time. Eisenhower, as wartime general and postwar president, would have known.
Galbraith says the issue delayed his appointment as a Harvard professor by a year, to 1948. It was there that his writing career took off. His definitive history of the great crash of 1929 appeared in 1955, followed three years later by The Affluent Society, which is still required reading for social science students.
In it he developed the idea that modern economies are dominated by producer power, with firms deciding what to make and then persuading people to buy it through advertising. Thus, people preferred to spend money on things they often did not need rather than on good schools, hospitals, roads and so on.
He coined the phrases "conventional wisdom" and "private affluence, public squalor", still in common usage today.
The book sold millions of copies and he became as much of a household name as an economist can be. He fell out of favour in the 1980s of Reaganomics and Thatcherism, when the views of economists such as Milton Friedman held sway and Keynesians, who believe in public spending as a way out of recession, were in retreat.
But Galbraith, who has published more than 20 books, remains undimmed in his passion for what he believes is right.
The new book explores many modern themes including the ever-growing power of corporations, excessive executive pay and the Iraq war. Many of these issues represent the peddling of an innocent fraud, as he calls it.
For example, company managements tell us they work for, and answer to, their shareholders whereas in fact they work for themselves and answer to no one, except when things go really wrong, as in the case of Enron.
"Corporate power is exercised not by investors but, frequently at their expense, by those who wield the real corporate power. There has come into the American language for the first time a brand new phrase 'the corporate scandal'."
He confesses he does not know where it will all end. "It will depend on public action. But I do not expect the sort of vigorous and dynamic limitation of corporate power we need from the likes of George Bush."
Has not Bush's presidency, I suggest, been characterised by tax cuts for the rich, an explosion in directors' pay and, of course, the Iraq war?
"I would respectfully disagree," he says with a twinkle in his eye. "George Bush's political, intellectual and other shortcomings cannot be restricted to a single sentence or two. He presides over a context far more complex and authoritative than he could possibly understand."
So how important is it that Bush lose the November election? "That is a good, even decisive question. The power of the modern economic enterprise will be great whoever is president. But the chance of a detached control, limited but characterised by effort, will be much the strongest with a Democratic president and Congress."
Galbraith, a critic in the 1960s of the Vietnam war, is less than impressed by the Iraq conflict. "It is my definite belief that it is the biggest military misadventure in US history. And I think in future the possibility of further military conflict will be a source of deep anxiety."
War, Galbraith says in the conclusion to his new book, "remains the decisive human failure", a dark cloud atop the white tower of human achievement.
He has a lot of sympathy for Tony Blair, who he says must have agonised over his decision to back Bush over the war. But Blair's raising of taxes to spend on health and education fit Galbraith's philosophy.
"I am an admiring observer and sometime friend of your prime minister. He seems a very responsible leader facing very difficult choices, particularly because of the war."
Galbraith plans further work, health allowing. He intends looking further at the structure and functioning of companies. His great-grandfather lived to 110, so he feels he still has time.
Education Willey School, Dunwich, Ontario. BSc University of Toronto 1931, MSc University of California (Berkeley) 1933. Also has 45 honorary degrees from universities around the world
Career Economist in Roosevelt administration late 1930s; office of price administration in second world war; head of strategic bombing survey, 1946; professor of economics, Harvard University 1948-75 except 1961-63 when he was US ambassador to India
Publications include The Great Crash of 1929 (1955), The Affluent Society (1958), The Age of Uncertainty (1977)
Leisure Reading, writing books
Family Married with three children