Review: John Kenneth Galbraith: His Life, His  Politics, His Economics

May 01, 2005

For most of his public life, John Kenneth Galbraith has been a sane man on a ship of fools. When he was in charge of price controls during World War II, he kept the economy from going into inflationary overdrive. Instead of thanking him for performing a necessary wartime service, a substantial number of business and congressional leaders named him a communist and extremist. One business association headed its monthly newsletter with the banner Galbraith Must Go, and eventually he did go. When he was responsible for assessing the effect of Allied bombing in Germany after the war, he found that the massive bombing of cities and factories had little effect on production. The equipment in bombed factories was moved to schools, churches, and hospitals, and production rose to its peak in the last year of the war under the direction of Albert Speer. Galbraith learned in conversations with Speer how badly the German economy had been organized. The Nazi leaders were a gang of inept mobsters who had taken over a country and had no idea how to run it. The American Air Force generals did not want to hear that the massive bombing raids had little effect on the German war effort, and they did all they could to keep the truth from coming out. Galbraith remarked to Orvil Anderson, deputy chief of the Army Air Force in Europe, General, this is just a matter of intellectual honesty. The general replied, Goddamn it, Ken, you carry intellectual honesty to extremes. Galbraith did carry intellectual honesty to extremes, and the published report had a large element of truth in it. He then went to Japan and found that the Japanese had decided to surrender t wo weeks before atomic bombs were dropped on Hiroshima and Nagasaki, but the high command was determined to demonstrate the effects of its new weapons. These incidents instructed Galbraith about the terrific struggles for power going on in public life, which did not exclude mendacity when mendacity served a higher purpose, namely, ones own interest.

Ken Galbraith has the good fortune of a biographer who knows everything and has had the patience to write it down. There will never be a bigger or better or more reverential biography of Galbraith. I say this with the confidence of foresight. The subtitle, His Life, His Politics, His Economics, is too modest. The book is also an account of the politics and economics of the United States from the New Deal to the present; the personalities, the diplomatic history, and the history of economic thought in Galbraiths time, because Galbraith either counseled or opposed everybody in the upper spheres of public life and polemicized in the lower spheres for what passes as economic thought.

I came across just one fact unawares. Galbraith wrote for Fortune from 1943 to 1948with two absences for government assignments by invitation of Henry Luce, who had become a Keynesian and found in Galbraith an adroit expositor of Keynesianism. At the same time that Henry Luce became a disciple of Keynes, so did I. In those days I read every issue of Fortune from cover to cover and thereby also became converted. What I had forgotten or never knew was who was writ ing the Keynesian articles for Fortune. At the same time, I was writing Keynesian articles for my high school civics class. My connection with Galbraith, then, to my current amazement, goes back to the 1940s. My regard for Galbraith has been more steadfast than Henry Luces, who wrote to President Kennedy, I taught Kenneth Galbraith to write and I can tell you Ive certainly regretted it ever since.

Galbraith went back to Harvard in 1948 after an absence of nine years. The first time around, his appointment was not renewed because he had signed a petition against firing two popular and competent instructors whose sin was being too far left for the board of trustees. By some mysterious operation of chance the first time around, one of his students was named John Fitzgerald Kennedy. A fast friendship developed between master and pupil. When Kennedy became president in 1961, he turned to Galbraith for advice, some of which was taken. One gets the impression from Richard Parkers account that Kennedys relation to his officials and generals was like that of a man trying to drive a herd of wild elephants in a straight line. One elephant went off into the Bay of Pigs, a terrible disaster, since Cuba under Castro was no more than a flea on an elephants back. But the flea on the elephants back almost caused the end of the world in the Cuban Missile crisis. Galbraith was off as ambassador to India at the time and couldnt have much influence on the course of events. For a few weeks in October 1962, we didnt know if we were going to live or die. I would not be writing this now if Kennedy and Khrushchev had not been cool poker players who ignored the advice of their own hotheads and decided that we would live. This outcome illustrates a profound point: at crucial moments, the course of history is decided by a handful of men and women. I happen to have met both Castro and Khrushchev. They were both amiable men in person, at least in my presence.

Galbraiths time as ambassador to India is an instructive period in private diplomac y. His advice was sought by both Nehru and Kennedy. The channel of communications was evidently shorter to the former than to the latter. Dean Rusk at the State Department was not one of Ken Galbraiths admirers, and Galbraiths briefings to Kennedy frequently got stuck somewhere in the maw of that great institution. His really serious correspondence with Kennedy bypassed Rusk and was sent directly to the White House. Galbraith was led to write to Kennedy, Mr. President, tr ying to get a message to you through the State Department is like fornicating through a mattress. Rusk, however, did express appreciation to Galbraith for helping to end the Sino-Indian war of 1962, although Galbraith had nothing to do with it except counseling restraint on the Indian side.

By the time of the Kennedy administration, Keynesian fiscal policy had become an accepted juncture between economic theory and practice. When Kennedy had to decide how to keep the postwar boom going, Walter Heller, the chairman of the Council of Economic Advisers, a cheerful and committed man whom I interviewed for Challenge around that time, proposed a tax-cut stimulus to Kennedy. That was a good move, but Galbraith had a better one: increase spending on public needs like schools, housing, and health care, a neglected side of society that received attention in The Affluent Society in 1958. The business pressures were all on the side of the tax cut. I preferred Galbraiths way, but my attitude was: Thank the Lord for small favors. I did not imagine that in a decade Keynesian economics would be abandoned because the effort to curtail inflation was bungled and Keynesians would be blamed. It was as if an experiment in chemistry had been botched and the chemistry profession decided to abandon chemistry and go back to alchemy. That is why I look back with nostalgia on the deliberate tax cut made with a deliberate objective in mind and why I have a warm spot in my bosom for Walter Heller.

The dogs of war were the undoing of the Keynesian interregnum. The generals and diplomats pressed Kennedy to replace the French in Indochina and stop the spread of communism in Vietnam. Galbraith was much concerned, and he advised Kennedy to just say no. What happened in Vietnam would not change the world much one way or the other. Since the end of World War II, Galbraith has consistently been for negotiations instead of confrontation, including negotiations with the Soviet Union instead of Cold War. The logic of confrontation leads to more confrontation and the logic of negotiations leads to more negotiations. But the Cold War mindset created its own reality and required otherwise presumably sane men and women to see the world as a titanic confrontation between communism and capitalism or dictatorship and democracy and in its current incarnation as between good and evil. Now comes the speculation about the course that Kennedy would have taken had he not been killed in Dallas on November 22, 1963. I have no idea, and neither does anyone else.

Lyndon Johnson sought out Galbraith, who continued to advise against getting in deeper in Vietnam. But the close personal relationship with a president and the level of influence that goes with it was at an end. Johnsons record on civil rights, Medicare, Medicaid, Head Start, and the like was revolutionary: Like any good businessman, he threw money at problems, an unpopular procedure since then unless it is the Pentagon doing the throwing. Johnsons undoing was getting ever more deeply mired in an unnecessary and unwinnable war without enough money to throw at military and domestic problems at the same time and without the will to raise taxes. The whole welfare state enterprise crashed with the unleashing of inflation.

For some reason Richard Parker missed an episode in Ken Galbraiths life in which I was involved. In 1975, Leonard Woodcock, president of the United Automobile Workers, called me and said, I would like to do something about planning. I asked him, What? He answered, I dont know. I responded, Give me a few days to think about it. I then called Ken Galbraith, Wassily Leontief, Bob Heilbroner, Bob Lekachman, and a few others, and we decided to form a committee to draft legislation for the purpose of coordinating government programs, programs that would support a high level of employment without inflation. Woodcock agreed. We recruited a few bankers, businessmen, and government officials. Galbraith suggested that we call ourselves The Initiative Committee for National Economic Planning. At that time even President Ford was talking about economic planning. But we got it hot and heavy from the press and in retrospect the name was a mistake. Nevertheless I worked with Senators Humphrey and Javits to write the first draft of what became the Humphrey-Hawkins Bill, subsequently enacted as The Full Employment and Balanced Growth Act of 1978. Humphrey and Javits were two of the most intelligent and best informed men I ever knew, proving that what you see in public is not necessarily what you get. The Act was ninety percent watered down from the original draft and Galbraith didnt like it. Richard Parker says that Galbraith didnt like Humphrey-Hawkins from the start. That depends on when the start started, since Galbraith was in at the start. I was not so critical. The Act set the goal of four percent unemployment and three percent inflation. I have said, and I admit that I have said it lightheartedly, that every president since Ford could be impeached retroactively for failing to reach four per cent unemployment except Clinton, and he has already been impeached.

One other small cavil with Richard Parker. He quotes me as saying that American Capitalism: The Concept of Counter vailing Power was the only one of Galbraiths major books that had about it an aura of complacency. I did say that in John Kenneth Galbraith and the Lower Economics. The issue was his theory of countervailing power. Instead of the market as regulator, in the modern economy countervailing organizations arise: unions against large corporations; retail chains against manufacturers; farmers cooperatives against their suppliers. In the first edition of American Capitalism, Galbraith presents this process as a fait accompli. Mr. Parker does not think that Galbraith was complacent. But Galbraith thinks that he was. In 1952, he wrote in A Life in Our Times, I made it far more inevitable and rather more equalizing than, in pract ice, it ever is. Countervailing power often does not emerge. Numerous groupsthe ghetto young, the rural poor, textile workers, many consumersremain weak and helpless. Again: There was an erroneous implication in the title and a euphoric tendency in the text. Do we need countervailing power? More than ever. Do we have it? It is very much battered.

Well, Richard Parker, I hope that you will not be angry with me for caviling with you and for making the following suggestion. John Kenneth Galbraith is so massive that it needs Cliffs Notes. Short of Cliffs Notes, it needs a chronology and a bibliography and you have the most complete chronology and the largest bibliography on Galbraith of anyone in the world. If Farrar, Straus and Giroux wont publish them in the next edition, I offer my services.

I have known Ken Galbraith for over thirty years. His main fault is telling each publisher that he knows that he or she is the best in the world; each teacher that he or she is the best; each writer that he or she is the best. I doubt if this applies to economists. I have spoken with him, I have exchanged letters with him, and I have read him. I can say with confidence that his two main beliefs are, Thou shalt not kill and Love thy neighbor as thyself. What is wrong with him? Very few people have such extreme views.

Challenge,vol. 48, no. 3, May/June 2005, pp. 125129.
2005 M.E. Sharpe, Inc. All rights reserved.

by Mike Sharpe, Challenge