Where Galbraith's Ideas Come From
By Richard Parker
- The Galbraith International Symposium
Wednesday, September 22, 2004
Speech delivered by Richard Parker at
The Galbraith International Symposium
September 22-25, 2004
First, let me thank Blandine la Perche, James Galbraith, and the other organizers of this conference for what has already been accomplished--and what still lies ahead in the next day or two. Second, let me note what a pleasure it is to have Catherine Galbraith here. Behind every great man there is a great woman, and for those who don't know Kitty Galbraith, let me say that her diminutive stature is deceiving; this is a woman who in character and courage stands at least six feet, nine inches tall.
Let me also say how pleased I am to see so many Galbraith scholars from around the world here today. If I may paraphrase John F. Kennedy's famous remark to a White House dinner honoring Nobel Laureates, "This is the most extraordinary collection of talent, of human intelligence, gathered in one place, with the possible exception of when John Kenneth Galbraith dined alone." I am deeply indebted to many of you in my own work, and I look forward to continuing the conversations several of you have already begun with me here. Finally, let me say how appropriate it is that we gather in Paris for this meeting. I can imagine no place better than the City of Lights, with its ancient heritage of intellectual rigor and engagement, style, and rebellious- -indeed revolutionary--elan for us to celebrate the world's most famous living economist.
John Kenneth Galbraith is a towering figure in economics (perhaps the only giant of his generation who has not yet received the Nobel Prize)--and this conference, in taking his influence and legacy seriously, in seeking both to analyze and resurrect attention to his thought, will, I believe, itself be noted by future historians as a turning point in the West's appreciation for Galbraithian economics.
It moreover seems appropriate that we meet now at what is, of course, a critical moment in more than this man's career. In barely six weeks American voters will choose a new President and Congress, a choice that will reverberate across the world as powerfully as the choice the United States made on December 8th, 1941, when--a day after Pearl Harbor--it entered World War II. On that day 64 years ago, America chose not only to go to war, but to engage the world as it never had before. Following Pearl Harbor, the world's largest economy transformed itself into the world's greatest military power, and projected its power across the planet, from the plains of Germany, the deserts of North Africa, and the jungles of Asia and the South Pacific.
What Americans did not know then--but all of us now today--is that once that choice was made, America would never again turn back from its new role of global superpower, or from using its immense military, economic, political, and diplomatic power to constantly reshape, for better or worse, the lives of billions of human beings around the world.
Today, America believes it is once again at war, as the consequence of the events of September 11, 2001--and is in many ways as full of righteous anger in its mission as it was after Pearl Harbor, convinced that it has again been attacked without cause by evil madmen bent on the destruction of its way of life, an innocent actor in the world who has been called once again from peaceful slumber to battle against darkness in the name of both good and God.
But of course America is not so simply innocent, and the unwelcomed role of America as superpower to many who see the United States as a hated world changer of the lives, values, and cultures of others--without seeking their opinion, assent or cooperation--is at the heart of the anger which drive Washington's "terrorist" enemies today.
But why is war and global power relevant to a discussion of economics and Galbraith the economist? Because, I believe, it is in his distinctive understanding of the deep interconnections between economics as a blackboard theory of production and distribution--and the far larger world of politics and nations, of statecraft, of economic and political interests, class, corporations, lobbyists, a concentrated media, and a global citizenry educated into thinking that the particular values of a hegemonically-organized world, driven by the latest evolutionary state of capitalism, are simply normal and inescapable--that his genius lies. But where do those ideas come from?
The commonplace explanation to many is that Galbraith's embrace of Keynesianism in the 1930s, along with many young economists of that generation, is sufficient. In the cauldron of the Depression, although he was an early supporter of the New Deal, it was his reading of The General Theoryin 1936, and the 1937-38 academic year he spent in Cambridge, England, that ever after determined the broad outlines of his thought, although from the 1950s onward, Galbraithian economics took on distinctive characteristics that often placed him at odds with his Keynesian colleagues in the Neoclassical Synthesis.
Lest we forget, however, John Kenneth Galbraith in three weeks will celebrate his 96th birthday, meaning that far more than any of us here, he has lived the 20th century first-hand--and that he didn't read The General Theory until his late twenties, which leaves open the question of what influences shaped him before then.
At his birth in 1908, kings, sultans, and emperors ruled most of the nations of the earth, just as they had for thousands of years, and the number of authentically democratic states could be counted on two hands--or perhaps even one. Electricity was new, the automobile was new, motion pictures and the telephone and the airplane and modern medicine were all new. The majority of the world's citizens were illiterate, and still lived by primitive farming in many ways just as their ancestors had, not by industry. And yet the seeds of today's world--our world--were already present then: industry, technology, and science were creating a new mode of production; cities were exploding in number and size, with uneasy mixtures of extreme wealth and extreme poverty side-by-side; and migration, mass education, and mass entertainment together were giving birth to unprecedented new forms and possibilities for individual identity and community.
It was a world, in short, in the throes of change--in many ways far greater than those of the past twenty years, when talk of post-industrialism, the new economy, and the revolutionary impact of computers, the Internet, and biotechnology have been all the rage. In Europe, socialists, communists, social democrats, and others were challenging unstable monarchic and half- monarchic, half-democratic governments on the continent, while in North America, populist and progressive forces were no less challenging the entrenched power of a new capitalist plutocracy built on unprecedented concentration of wealth and its servile allies in politics. Yet the world also then stood poised to give birth to the bloodiest, most destructive century in human history, ten decades when more than 150 million would die in wars, millions more would die in revolutions and their aftermaths, and more than a billion would die of preventable disease or malnutrition generated in large measure by the dislocations all this modern change entailed.
Galbraith has talked sparingly in his writings of the influences those early years of his life had on him, and yet as we understand from psychology, they inevitably exercised a powerful effect on his later thinking. The start of World War I came when Galbraith was just six years old, but by the time it ended, not only the larger world, but the intimate world he knew in tiny Iona Station, Ontario had been changed forever. Canada in 1914 had loyally sent off hundreds of thousands of her sons to fight and die in Europe, and over the next four years had suffered horrendous casualties in the process. In Ontario alone, 70,000 men, nearly a third of those who served, were killed or wounded during those four years.
The war's political effects were no less gargantuan. The Liberal Party of Sir Wilfrid Laurier--to which Galbraith's parents had long been loyal--had broken apart during the war over the issue of conscription, as more and more Canadians came to see the insanity of "the war to end all wars." In 1917, the national election--"the bitterest campaign in Canadian history," as one historian described it--ended with one wing of the Liberals narrowly winning power in an incongruous coalition with Conservatives. For those rebellious Liberals whose candidates were defeated--including Galbraith's parents, Archie and Kate--it was a break point in their lives. Archie joined the local draft board, not to support the war but in order to exempt as many neighboring farm boys as possible from the slaughter.
When the war ended, he then joined the new United Farmers of Ontario, a remarkable (though today little remembered) insurgent party that won control of the Ontario legislature in 1919, during one of the most rebellious years in Canadian history, when strikes swept the country, and insurrection was in the air. Galbraith was eleven, and has often recalled going out with his father to campaign for party candidates, most famously the time his father spoke in a nearby farmer's barnyard, and climbed atop a large pile of manure, where he then began his speech by apologizing for speaking from "the Tory platform."
Archie's campaigning was, of course, a lesson in the power of wit--but also indelibly about the importance of choosing sides, and in fighting for what one believed. Over the next four years, the victorious United Farmers of Ontario, in concert with their Labour Party allies, acted on their beliefs, unleashing an extraordinary torrent of progressive legislation that, as one historian wrote, "Canada and North America had never seen, or perhaps thought possible." Minimum wage laws for women, expanded welfare for widows and orphans, civil service pensions, workers' compensation reforms, an overhaul of education, new taxes on corporations and utilities, new public savings banks, new credits for farmers and cooperatives, rural road and rail construction, giant public hydroelectric projects, even critical funding for medical research that led to the discovery of insulin--all these now poured forth from the UFO/Labour government.
When after four years, the government fell, in a rift between its "dry" farmers and "wet" urban workers over the issue of Prohibition, a pall settled over the Galbraith household, made far worse for the family because that same year Kate Galbraith suddenly died. Here again, Galbraith has told us little about the effects of events in 1923, when he was fifteen, but they are not hard to imagine. His sister has said that the gloom that settled over the house during the next several years was palpable, with their father so distraught there was no Christmas tree, no Christmas presents, no celebration of any kind for two years after. Galbraith soon found his grades plunging, and eventually took five years to complete high school. Whatever the pain a child feels losing his mother, it must have been equally terrible to experience the ongoing pain of his father, who never remarried, and who only gradually recovered over several years the warm and affectionate character he had shown his children for so many years prior.
I am not a psychological historian, but the impact of those early years must have been extraordinarily powerful on young Ken Galbraith's character and imagination. He had been born into a progressive, and in many ways modern, family. His father, both in his farming practices and community service, was considered what Galbraith later called, using the vernacular of the Canadian Scots, "a man of standing", someone widely respected for his views and habits by the rest of the community, and sought out for his opinion ("When Archie gave his word," a contemporary later recalled, "it was as good as a Dominion bond.") And indeed, when Archie Galbraith died in 1938, it is testimony to that community's respect for Archie (and not just a son's affectionate memory) that more than 600 people turned out in the midst of a raging Canadian snowstorm in the depths of winter for his funeral. One admirer of Archie's was so determined to pay his respects that when his car broke down, he hired a farmer to carry him and his car on a horse-drawn sled more than six miles to reach the funeral.
If Archie Galbraith and the progressive political tradition he embodied are the patrimonial legacy present in Galbraith's thought, the teaching of economics in the late 1920s and early 1930s is the academic pre-Keynesian element of no less importance. Galbraith was first exposed to this at Berkeley, where, as you know, he was first trained in academic economics. Galbraith in his memoirs makes much of his introduction to Marshall and neoclassical thought, in which he was drilled by Ewald Grether. But, because most of us are not trained in the history of profession, his classes with teachers such as Leo Rogin and Howard Tolley are of critical importance in terms of their impact.
Leo Rogin was a fairly young figure when Galbraith encountered him, only a decade or so older than most of his students, and was caught up in several challenges to conventional neoclassical thought. It was he who introduced Galbraith to Keynesian thought, albeit in its pre-General Theoryoutlines, as well as to the generally progressive thinking of other non- Marshallians. (Paul Sweezy later judged Rogin to have been an "Marxist- influenced" scholar, though from my own reading of Rogin's few published works, I think that is incorrect.)
Few today, however, fully understand the role of figures such as Rogin, or realize that the history of early modern academic economics in America up to the Great Depression and Keynes is not one continuous unbroken line that ran from Smith, Ricardo, and Mill through Marshall, Walras, the Austrians, and Pareto, but something quite different, akin to an ongoing academic war that spanned the decades from the American Civil War up to the Depression.
In this war, there were two camps, one basically Marshallian and neoclassical, and one far more "Galbraithian" if you will, in its earlier form known as the Social-Historical school, and later, as the first Institutionalists (although neither of these terms is fully satisfactory). With the publication of Marshall's great Principles in 1890, teaching of economics in the powerful private universities of the East--Harvard, Yale, Princeton, and so on--quickly found its master text. But in the public universities of the Midwest and West, in states such as Wisconsin, Texas, Washington, and California, it was Richard Ely's text that was dominant. (Indeed, as Joseph Dorfman's history of American economics reminds us, Ely's Outline of Economics far outsold Marshall nationally, because of the greater size of the public universities, for more than forty years after the appearance of Marshall's text).
Ely, like most of the Social-Historical economists, had received his graduate training in Wilhelmine Germany, in a moment when following unification, the new German state soared as an economic and political power, and not only deeply involved the state in economic development, but pioneered (under Bismarck, ironically) the creation of the first modern welfare state. To figures like Ely, the "German model" exercised magnetic attraction in confronting the massive disruptions of America's industrialization and the Social Darwinist justifications that accompanied it. To Ely, economics was foremost a moral science, and as a Christian Socialist, he founded the American Economic Association in 1885 in the belief that economists must direct state action "and say what will be the consequences of such action, and whether it will be for good or evil."
As Mary Furner, Dorothy Ross, and other historians of American economics have underscored, the split between the more conservative Marshallians and the progressive Elyites defined the young profession for decades. There were repeated purges of the progressives by university presidents and trustees, who were alarmed at the supposedly "socialist" direction of this sort of economics, purges that cost hundreds, including Ely himself, their jobs--and taught a lasting lesson about the values of caution to the profession that remained. After leaving Johns Hopkins, Ely eventually found work at the University of Wisconsin, where (after an attempted purge of him there) he went on to create the so-called "Wisconsin School" of economics that served as a model for engaged progressive scholarship, using his research to draft a vast array of reform-minded legislation for the Progressive state governor Robert Lafollette. As late as 1919, this rift in the profession was still so large that the profession's first great mathematical economist, Irving Fisher of Yale, made it the subject of his AEA Presidential address. Fisher, in that address, frankly described the profession as deeply riven between "conservatives" and "radicals", and called for a truce based on simultaneous adoption of a Marshallian theoretical approach and a highly progressive legislative agenda that included a sharply progressive income tax, a nearly one hundred percent inheritance tax to reduce wealth inequality, and transformation of large corporations into cooperatively-owned institutions.
Through teachers in Berkeley's Economics Department such as Leo Rogin, young instructors such as Paul Taylor, and through progressive fellow graduate students such as Gregory Silvermaster and Robert Merriman (who died in the Spanish Civil War fighting for the Republic), Galbraith learned as much about this second, competing, progressive "camp" in American economics as he did about Marshall at the hands of Ewald Grether.
No less important, in his agricultural training at Berkeley's Giannini Foundation, he was also introduced to the latest thinking in agricultural policy by men such as Howard Tolley. Here again we, as modern city- dwellers, know little about this germane history or the attempts of economists such as Tolley to bring the power of the state to bear on the ongoing crisis of agriculture. Yet it is also crucial in tracing out the origins of Galbraithian. The Department of Agriculture in those years was the most advanced and sophisticated cabinet department in Washington, with its own degree- granting graduate school, more Ph.D. economists than any other department, and a robust sense of the ways in which the federal government could reinvent its 150 year long history of engagement in land and agricultural policy to remake the world in which half of all Americans still then lived. It was under Tolley that Galbraith was introduced to issues such as the hotly- contested McNary-Haugen bill, parity, domestic allotments, and the many other ways government was capable of structurally intervening on behalf of farmers, who--though the embodiment of Marshall's ideal small producer in a competitive world of millions of small buyers and sellers--were being driven to ruin, not prosperity, by the unfettered "the market". Tolley had worked for many years at the Department of Agriculture before coming to Berkeley to teach, and would return there after Roosevelt became President, rising to become head of the legendary Agricultural Adjustment Administration.
It was, in short, at the hands of men such as Rogin and Tolley that a young Ken Galbraith moved beyond the powerful emotional foundations of his father's progressive world view, and the lessons of his father's behavior during World War I and under the United Farmer/Labour government of the early 1920s, to a disciplined and informed academic initiation into economics as far more than conventional Marshallian thought. (And it was of course Tolley who first introduced Galbraith to public service, hiring him to work for the "triple A" the summer after he graduated from Berkeley.)
John D. Black is the final figure I wish to mention today as seminal in shaping Galbraith's thought before he encountered the Keynes of The General Theory. It was Tolley who recommended that Black hire Galbraith for a lowly one-year instructor's position at Harvard that began what became Galbraith's forty year long career there. And it was Black who became Galbraith's first real mentor, a man who not only used Galbraith as an assistant, but meticulously advanced his career both at Harvard in the 1930s, but helped advance his career thereafter, and willingly and persistently engineered his return to Harvard in 1948.
Black, like Tolley, was a towering figure in American agricultural academics and policy, who singlehandedly made urbane Harvard for a time into the second largest producer of agricultural economics Ph.Ds in the country. His unparalleled energies, his devotion to his students, his tireless service to advancing progressive farm policies both in the 1920s and then, with far greater success, during the New Deal, marks him as a giant, now all too sadly barely known. He encouraged Galbraith not only in his farm- related research, but in much broader concerns about structural questions about price behavior, competition, and concentration in the non-farm economy that gave Galbraith the needed preparation for usefully "discovering" Keynes. (Black, it should be noted, although he had no particular interest in Keynesianism, nonetheless was the hand behind the fellowship that allowed Galbraith to go to England to study with Keynes's key disciples in 1937-38.)
Black, it should be noted, in his own progressive attitudes was deeply influenced by the training he'd received while earning his PhD at the University of Wisconsin, where he'd studied under Richard Ely's great ally, John R. Commons. And it was to Alvin Hansen, Black's Harvard colleague and America's leading academic Keynesian (and a fellow Wisconsin graduate) that Black in many ways metaphorically "passed on" Galbraith after his time in England and during the war years, that laid the grounds for Galbraith's completion of his anointment as a full-fledged "Keynesian economist."
As all of this week work through the myriad of issues associated with the Galbraithian legacy, I would urge you to keep in mind the influence of these early pre-Keynesian figures in the formation of Galbraith's thought. Despite the pretensions of some intellectual historians, influences on the imagination of a leading figure in any field are never simply a matter of simple causation, of one scholar or scholarly tradition "determining" the thinking of a major new figure in that field. Often times, there are deeply- rooted sources for that thinking, many of them non-academic or non- intellectual, and rooted in family, in youthful associations, in the very earliest academic training which may not easily offer lines of connection to better- known later influences.
From all these early influences, I believe Galbraith had assembled the mental architecture as well as the disposition to embrace Keynesianism when it arrived in the late 1930s, and more important that it is from elements of these pre-Keynesian influences that Galbraith drew to place his own distinct stamp on post-war Keynesian thought that makes his own work so singular.
Galbraith in many ways was educated in the broadest sense to embrace "the Keynesian spirit" of generosity, of humanity, and of the essentially instrumental role of economics in achieving a post-capitalist world in some sense, a "Keynesian spirit" that is inescapable when one reads Keynes in the original but which has been obliterated by an attempt to turn the master into a gigantic machine producing state-guided growth without end, and in some more profoundly moral sense, without purpose.
We owe Ken Galbraith an enormous debt for keeping alive that "Keynesian spirit" by bringing to bear the full weight of his own talent--his distinct intellectual adaptation of Keynes's ideas, his humor, and his determination--in his own work. In a profession that today shows little of the confident unity of purpose that the Neoclassical Synthesis had fifty years ago, convinced that government could, with the aid of economists, mathematical models, and computers, swiftly guide the world to a prosperous material equivalent of Fukayama's infamous "End of History," the work we are doing this week in Paris is of manifest importance.
As we do so, we would do well to remind ourselves that there are great economists today who understand afresh what Galbraith has given us. Amartya Sen, asked recently to appraise Galbraithian thought, singled out The Affluent Society as an example of the greatness of Ken's work. The book represents, he says Galbraith's "great insight" which "has become so much a part of our understanding of contemporary capitalism that we forget where it began. It's like reading Hamlet and deciding it's full of quotations. Your realize where they come from."