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"A lettered numbers man"

Sunday, February 13th, 2005

John KENNETH GALBRAITH is not merely an extraordinarily well-known economist. Nearly a century old and a prolific author (not only about economics; he has written novels, travelogues and memoirs), Galbraith is the last original Keynesian standing, our best reminder that John Maynard Keynes felt economics had to be about something more than a mathematically elegant description of a free-market world that never was. To really be of use, economics had to deal with the question of power, with the weight of institutions, with the inertia of habits and customs, with all that messiness that lies teasingly just beyond the reach of the algebraic formula.

Galbraith has preserved that fundamental insight, adapted it to changing historical circumstances and remained unflappable in the face of his colleagues' occasional ill-concealed disdain. Of course, in various bastardized forms, Keynesian economics -- the belief that government has an obligation to regulate the oscillations of a free-market economy -- lives on in and outside of the academy, full of theoretical rigor even if its grip on reality seems frailer.

But Galbraith has always been much more than an economist. Over the course of a career that began during the earliest years of the New Deal, he became the country's most celebrated (and sometimes most reviled) public intellectual. When we talk of the "affluent society," "countervailing power" or the "conventional wisdom," we are quoting Galbraith, whose incisive critique of midcentury America stirred passionate debate far beyond the parochial confines of the professional economist. The BBC's celebrated series "The Age of Uncertainty" made him an international television celebrity in the mid-1970s, and he published a bestselling novel after he turned 80. His trenchant prose, witty, often acerbic, but always engaging and accessible to a broad reading public, has earned him a well-deserved reputation as a man of letters; indeed, he has served as president of the American Academy and Institute of Arts and Letters.

And Galbraith has been something even more auspicious than a public intellectual. He was, especially during the first 40 years of an extravagantly productive career -- from 1933 through 1972 -- an intellectual activist. He played that role with grace and integrity, if eventually with declining influence, first as a New Deal apparatchik, then as a chief enforcer of price controls during World War II, later as John F. Kennedy's ambassador to India and as a trusted advisor to three presidents, who listened even when they didn't like what he had to say.

Galbraith was born to an Ontario, Canada, farm family of middling means and was a graduate of an obscure agricultural college with a degree in animal husbandry. He spent most of his adult life mixing with the world's high and mighty, yet he never succumbed to the sycophancy that often afflicts those who suddenly find themselves in the antechamber of power. Galbraith's has been a life of remarkable intellectual courage and creativity, of distinguished public service marked by moral steadfastness and political tenacity.

Richard Parker's biography is a thoroughgoing account of that long and varied life. It is richly informative and clearly written, even when treating more recondite matters of economic theory. It is a largely uncritical biography but not an unbalanced one, because Parker is always at pains to tell the reader what Galbraith's opponents, whether in the academy or in the hurly-burly world of politics, were thinking.

Parker clearly shares Galbraith's commitment to a liberalism that sees a vital role for government in helping correct or prevent abuses of the free market and in regulating the behavior of corporations whose activities affect us all. He sympathizes with Galbraith's sacrilegious insistence that public goods -- parks, museums, clean air, schools, scientific discovery -- are as true a measure of a society's worth as is the level of private material consumption. Because he is a fair-minded and scrupulous scholar, Parker's partisanship is a help, not a hindrance, to understanding the trajectory of Galbraith's life.

That trajectory, to put it bluntly, runs from relevance to irrelevance. During the last third of this biography, Galbraith is less and less of an actor; whole pages go by with no, or only perfunctory, mention of his name. These pages provide a shrewd account of the rise of conservatism as our dominant political persuasion and a sobering assessment of its actual economic achievements. But Galbraith's relative absence is a symptom of his political marginalization. And in that sense, Parker's biography is a study in the collapse of the New Deal liberal order.

It is a truism of recent American political history that the center of the Democratic Party has shifted steadily rightward since the Carter administration. The Democratic Leadership Council in particular has midwifed the party's abandonment of the activist New Deal state in favor of the regnant belief in the infallibility of the free market, a softer version of Reaganism that worships at the altar of the balanced budget and genuflects in the direction of Wall Street and the bond market.

Parker's biography is particularly good in reminding us how much earlier -- even before World War II ended -- that process began. Galbraith's Keynesianism always pivoted around means for checking the power of the country's dominant business institutions. By warping the distribution of wealth and income, by manufacturing and manipulating consumer "needs" and desires, by exerting a preponderant influence over the channels of ostensible democratic decision-making, so Galbraith argued, the country's great corporations did more than generate inequality and injustice. They also undermined economic efficiency and stability, while writing off whole regions of the country -- inner cities, industrial ghost towns, vast zones of rural impoverishment -- as if they were nonperforming assets. Galbraith's prescriptive advice, both when he was close to the centers of power in the 1950s and '60s and in the years of exile afterward, never shied away from a confrontation with that "power elite." But many of his fellow Keynesians were already backing off from that encounter long before they had a conservative counterrevolution to worry about.

Beginning with the Full Employment Act of 1945 -- a toothless piece of legislation that piously declared the government's fondness for an economy in which everyone could have a job who wanted one, but neither obliged the government to see that that happened nor gave it even a scintilla of power with which to make that wish come true -- Keynesian policy focused strictly on the question of economic growth, leaving the prerogatives and privileges of corporate America intact. Surviving mechanisms for structural adjustments and planning -- something even Galbraith was leery of -- were jettisoned in favor of fiscal/monetary fine-tuning. Deficit spending for purposes of social welfare was to be kept on short rations.

Alongside this commercial Keynesianism, the Cold War engendered what Parker calls "military Keynesianism," an economy in which the fiscal policy of the government was mortgaged to President Eisenhower's famous "military-industrial complex" in a kind of perversion of Keynes' original rationale for counter-cyclical deficit spending. By the 1960s, federal dollars devoted to nuclear arms exceeded the total amount spent on education, law enforcement, the environment, social services, job training, scientific research, employment, community and regional development, and energy production.

Even when tutoring people such as Adlai Stevenson, Kennedy and Lyndon Baines Johnson, who were less inclined to break with this new conventional wisdom, Galbraith continued to lambaste the fixation on economic growth. He warned that a bellicose, Pavlovian anti-communist stance would breed economic as well as military disaster. But most of his Keynesian brethren weren't listening. When business and military Keynesianisms met their match in Vietnam -- Galbraith cautioned Kennedy about and broke with LBJ over the quagmire in Southeast Asia -- and in the collapse of the Bretton Woods system of international financial regulation, the liberal order entered its terminal crisis. Commercial Keynesianism had no answer. Soon enough its business allies were defecting to the laissez-faire orthodoxies of their ancestors. As the situation worsened, Galbraith's distance from prevailing opinion lengthened. In "Economics and the Public Purpose," he mounted an argument for a "public service socialism" that would nationalize defense industries to break the back of the military-industrial complex. But his influence had been waning fast since backing George McGovern in his 1972 defeat.

Yet despite all the ballyhoo since then about the virtues of the free market, we continue to live under the reign of corporate and military Keynesianism, whether the president happens to be Bill Clinton or George W. Bush. Parker's closing chapters provide a superb analysis of that hypocrisy: a deficit-financed defense budget that has grown whether the country is at war or peace, and a system of socialized financial risk that off-loads the speculative disasters of American finance and business onto the tax-paying public. Through it all, John Kenneth Galbraith's irreverent wit and wisdom have kept hope alive for some saner and more humane alternative.

Copyright 2005 Los Angeles Times

by Steve Fraser
Los Angeles Times