Read What Critics Are Saying About the Book
"An Economist Who Didn't Just Play by the Numbers"
Wednesday, February 16th, 2005
There was a time when John Kenneth Galbraith was the most famous economist in America, a man whose books regularly became best sellers. But today he is little honored in the economics profession, where, as Richard Parker remarks in his engaging and exhaustive biography, Mr. Galbraith is regarded as something of an outsider, a fine writer who never became comfortable with the detailed mathematical formulas that came to dominate economics.
When a Galbraith book, "The Affluent Society," spent months on the best-seller list in 1958, George J. Stigler, the University of Chicago economist who would eventually win the Nobel Prize in economics for his work on the economic effects of government regulation, was outraged. He called it "shocking that more Americans have read 'The Affluent Society' than 'The Wealth of Nations,' " the classic work by Adam Smith.
Mr. Galbraith's response was typical, witty and anything but self-deprecating. "Professor Stigler's sorrow," he suggested, "may be not that so many read Galbraith and so few read Smith but that hardly anyone reads Stigler at all." A man who grew up on a Canadian farm and who spent formative years trying to control wages and prices during the New Deal, and then did pioneering work assessing the effectiveness of strategic bombing at the end of World War II, Mr. Galbraith was acutely aware of the role of power in society at a time when many economists preferred to step around that issue.
How does his work stand up now? Mr. Parker - like Mr. Galbraith, a man who was trained in economics and who taught at Harvard while active in both journalism and Democratic politics - is generally supportive. He praises Mr. Galbraith's ability to analyze how the economy really worked, as opposed to how models said it should work, and sees in his writing a precursor to behavioral economics, which has become a major force in the profession by moving away from assumptions that investors and consumers can be expected to act rationally. His early work showed that large companies in mid-20th-century America were run more for the benefit of their managers, who seldom owned much stock, than for the benefit of their shareholders, and were not as interested in maximizing profits as conventional economists assumed. But he did not see the renewal that was coming, as the threat of takeovers and new technologies revolutionized American business.
Mr. Galbraith, 96, leaves no Galbraithian school of economists, although Mr. Parker quotes Amartya Sen, the Indian economist and Nobel Prize winner, as saying his work will endure. Reading "The Affluent Society" now, Mr. Sen said, is "like reading 'Hamlet' and deciding it is full of quotations."
"You realize," he continued, "where they came from."
Mr. Galbraith's early days did not signal great academic success. After repeating 12th grade at a high school in rural Ontario, he graduated from Ontario Agricultural College, an institution whose entrance requirements did not include a high school diploma. Years later the college gave him an honorary degree, then considered taking it back after Mr. Galbraith described it as "not only the cheapest but probably the worst college in the English-speaking world."
Such a comment bespoke a haughtiness that would characterize his career as he earned a doctorate at the University of California at Berkeley and then arrived at Harvard as an agricultural economist, a field that has largely died out but one that clearly influenced the critiques of the larger economy that made him famous.
Mr. Galbraith had a way of getting under conservatives' skins. In 1954, on the 25th anniversary of the 1929 crash, he testified before Congress on the dangers of excessive speculation, and the stock market promptly stumbled - a move for which some blamed him. Homer E. Capehart, a Republican senator from Indiana, saw evidence of Communism in the idea, and then another of Mr. Galbraith's opponents, Secretary of Commerce Sinclair Weeks, demanded that J. Edgar Hoover conduct an F.B.I. investigation.
In due course, the report came back to Mr. Hoover, and was forwarded to Mr. Weeks: "Investigation favorable except conceited, egotistical and snobbish." Republican enmity toward Mr. Galbraith - which was richly reciprocated - endured for decades. In 1971 he testified before Congress that the government should consider wage and price controls. President Richard M. Nixon told his treasury secretary that the testimony had "unmasked" the real aim of "all these bright New Dealers" and could be used to destroy Mr. Galbraith. "Make the Democratic candidates and spokesmen repudiate him," he said. Less than three weeks later, Nixon announced his New Economic Policy, which featured wage and price controls. Mr. Galbraith told a reporter he felt "like the streetwalker who had just learned that the profession was not only legal but the highest form of municipal service."
His own service to the government came as President John F. Kennedy's ambassador to India. Mr. Parker credits him with doing excellent work to defuse a war that broke out between China and India in 1962, just as the Cuban missile crisis was preoccupying Washington. He was also an early critic of the Vietnam War inside - and later outside - the government.
It was characteristic of Mr. Galbraith that his nomination to the Indian post was threatened by his willingness to speak what he saw as common sense but that others saw as "virtual treason," as Mr. Parker puts it. At his confirmation hearing in 1961, he suggested that the United States might consider offering diplomatic recognition to the Chinese government in Beijing if that government would accept the right of Taiwan to exist independently. When the United States finally did recognize China, it made no such demand, and today China threatens war if Taiwan formally proclaims an independence that has in fact lasted more than half a century.
This book may tell some readers more than they want to know about the details of politics, economics and public policy in the mid-20th century. But it also shows how good Mr. Galbraith was at both assessing problems and dealing with them.
It was 52 years ago, after Adlai E. Stevenson lost to Dwight D. Eisenhower despite witty speeches written by Mr. Galbraith, that this economist summed up the problem in words that sound as if they could have been written last year. "American liberals have made scarcely a new proposal for reform in 20 years," he wrote. "It is not evident that they have had any important new ideas." In the following years, Mr. Galbraith helped to provide the ideas that shaped the Kennedy and Johnson administrations. Liberals could use a new Galbraith now.
© Copyright 2005 The New York Times Company
by Floyd Norris
The New York Times