Review of Richard Parker, John Kenneth Galbraith, His Life, His Politics, His Economics
March 01, 2006
The great value of Richard Parkers admiring, though not uncritical, biography lies in the case he makes for Galbraiths approach to economics, which has long been out of fashion.In truth it adds little to our knowledge of Galbraith the man, who has already written about himself in A Life in Our Times, published in 1981. One senses that the desire to pay homage to the still living Galbraith overcame the natural instinct of a biographer to discover more than his subject is willing to tell. Parker falls back on the strategy of offering large chunks of times separated by thin slices of life. This works quite efficiently. The reader who wants a scholarly review of the history of American politics, economics, and economic policy over the near century of Galbraiths life, written from a Democratic Party standpoint, will be will rewarded. He might find out more than he wants to about the politics of Harvard University, but this too was part of the age of Galbraith.
John Kenneth Galbraith was born in Ontario, Canada, in 1908, of reasonably prosperous farming stock. His fathers ancestry was Scottish, the name Galbraith being apparently derived from the Celtic Gail Breaton or strange Briton. Parker follows the biographical convention of telling us a lot about Galbraiths fathers, but almost nothing about his mothers, forbears, forgetting that ancestral voices come from both sides of the family. In his memoirs, Galbraith skips through his childhood in a couple of pages. Parker tries to make more of it. He suggests that his father, whom Galbraith described as a moderately well compensated township and country official set Galbraith a model of political involvement and public service.This may be so, but the real legacy of his childhood seems to have been a revulsion against what Marx called rural idiocy. He couldnt get out of farming fast enough. One does not have to be a psychological genius to see in the mature Galbraiths provocative but disarming style a way of coping with the effects of early social humiliation - on account of his being a country hick, of being conspicuously ungainly (he was 6 ft.10 inches tall) , of having an unimpressive speaking voice, and of the inferiority of agricultural economics in the economists pecking order.
For agricultural economics was Galbraiths way out of farming. He was trained as an economist at Ontario Agricultural College, an institution for which he formed a considerable dislike, and at Berkeley, where he studied the prices of cling peaches, came under radical influences, and discovered Thorstein Veblen. In a passage in his memoirs not quoted by Parker, Galbraith wrote: Veblens scholarship was an eruption against all who, in consequence of wealth, occupation, ethnic origin or elegance of manner, made invidious claim...to superior worldly position. I knew the mood.
Parker rightly sees the Great Depression as the catalyst for Galbraiths career.In the summer of 1934 it took him into temporary government service at FDRs Agricultural Adjustment Administration, where he got a first-hand lesson in the importance of power in shaping economic outcomes in this case the power of Southern Democrat landowners to veto New Deal efforts to protect sharecroppers and tenants against eviction.As a young instructor at Harvard, he was nurtured by John D Black, the head of agricultural economics, his first major patron, who, more than anyone else, was responsible for getting him a permanent berth at Harvard. With Blacks encouragement, he wrote a series of papers on agricultural topics which displayed some of his later themes, though not style: the importance of marketing in stimulating consumer demand, and of lumpy supply costs in explaining agricultural overproduction.Parker claims that Galbraiths early research into the structure of agriculture left an abiding conviction that blackboard models of smoothly adjusting supply and demand curves fail to capture real life relations.
The main effect of the Depression was to give Galbraith, like most economists of his generation, the passionate conviction that it was the job of government to remedy the failings of private enterprise. This became the leitmotif of his career. He was confronted with two alternative explanations of the Depression, which Parker usefully labels structuralist and macroeconomic. The first stemmed from the work of Chamberlin and Robinson on oligopolistic competition, and Berle and Meanss analysis of the shift in corporate power from owners to managers. Both could be used to show why oligopolistic, manager-run, firms preferred output to price cuts in a depression. The second influence was John Maynard Keynes. Keyness General Theory of Employment, Interest, and Money (1936) showed how a failure in aggregate demand could produce underemployment equilibrium. This suggested a major role for government in stimulating total spending, either directly or by cutting taxes
The way Galbraith interpreted and combined these influences is the key to all his subsequent work. Galbraith accepted Keyness fundamental insight, but substituted a more disaggregated approach, which emphasised the influence of uneven changes in sectoral wages and prices on the behaviour of aggregate demand. Keynes also influenced Galbraith as a political operator. He saw him as a model of the economist as an engaged and politically purposive intellectual. The example of Keynes strengthened his inclination to work through elite social and political networks. He learnt how to get on with the famous, the wealthy, the powerful. He would become the subversive insider, the licensed critic, the court jester. He also learnt from Keynes the importance of expressing arguments in good, clear prose
In 1939 Galbraith got a job at Princeton when Harvard failed to make him assistant professor, but soon got leave of absence to enter Roosevelts war administration, ending up in 1941 as Commissioner of |Prices under Leon Henderson. Two days after Pearl Harbour he..imposed a nation-wide freeze on the sale of new tires and then hastily put in place a rationing scheme... Eventually he established control over all prices in the United States, with a staff of over 4000. (One of them was Richard Nixon). It was a heady experience for someone still in his mid-thirties, , which did nothing to diminish Galbraiths natural sense of superiority.(He later had a cushion embroidered Modesty is a Vastly Overrated Virtue) His paper The Selection and Timing of Inflation controls clearly marks out his distance from Keynes. In How to Pay for the War, Keynes had argued for a fiscal approach to wartime inflation. Galbraiths line was that structural imbalances in the economy required that price controls and rationing which Keynes had denounced as instruments of a slave state had to come before fiscal policy. On the analytic point, Galbraith was right to point out that fiscal policy on its own would be too blunt (and probably too deflationary); what was absent from his paper was Keyness ardent wish to preserve free prices and freedom of consumer choice even in wartime. With the Republicans strengthened in mid-term Congressional elections and the business press denouncing Galbraiths communistic tendencies, Galbraith got the sack in May 1943. Price controls were a success, the consumer-price index barely budging in the war years.Galbraith wrote up his experience in a short book, A Theory of Price Control, which he regards as one of my more important books. Its failure to get noticed decided him to write in future for a wider audience.(Galbraith, 174-5)
Peace brought little diminution in the Democratic Administrations demand for Galbraiths services. As a member of the United States Strategic Bombing Survey, he headed a team of economists set up to assess the Allied air attacks on the German war effort. Its report endorsed the brilliant hypothesis of his assistant Nicky Kaldor that Allied bombing..by destroying civilian enterprises, released labour for the [German] war effort a classic instance of the law of unintended consequences. Soon Galbraith was off to Japan to assess the effect of aerial destruction there. In 1946, he got a job at the State Department to help reconstruct Germany.He quit after six months because he disapproved of the move to the Cold War and confrontation with the Soviet Union. His experience provoked an amusing diatribe about the secular priesthood which controlled foreign policy.(Galbraith, 242-4) Service on a further commission, in 1950, on German refugees, convinced Galbraith that migrations were the key to the solution of the worlds poverty problem; a curious vestige of belief in the efficacy of market forces.
In between Galbraith had served as a feature writer on Fortune magazine. Its millionaire proprietor Henry Luce, a visceral opponent of FDR, but an admirer of Keynes and a visionary advocate of The American Century (now postponed to the present one), was his second major sponsor. He later told J.F. Kennedy I taught Kenneth Galbraith to write. And I can tell you Ive certainly regretted it ever since. Galbraith educated businessmen in Keynesian economics, and Fortune educated Galbraith in the realities of corporate power. This, he said, immunised him for ever from the mythology of the neoclassical textbook economics and its image of competitive firms. Parker argues,though, that in helping to convert many of the nations most powerful business leaders to Keynesian economics and The American Century Luce and Galbraith helped seal the capitulation of Keynesian economics to business and military priorities.
In 1949, with John Black again pulling the strings, Galbraith finally got a Harvard chair in economics, over the strenuous opposition of Gottfried Haberler and several of the Overseers, who thought he was much too left-wing. (He got his revenge years later when, in a speech, he attributed Austrias postwar economic success to the flight to the United States of distinguished members of the Austrian School.) With Eisenhower and the Republicans back in power, Galbraith used his enforced rest from government service to write his three most important books, and a minor gem, The Great Crash (1954).
Galbraiths writings from this point onwards cease to be academic and start to deal with big themes, like the future of American capitalism. He was an admirer, critic, and analyst of that quintessential American institution, the business corporation, and set out to show how corporations interacted with other institutions to shape the American system, and indeed Americas role in the world. Although he came to praise, not bury capitalism, he was also a left-wing Keynesian who believed that large public expenditures were needed not just to balance aggregate supply and demand at high employment, but to tilt the balance of demand towards public goods. In Britain and western Europe he would have been a non-Marxist social democrat. In the USA this slot did not exist and Galbraith had to stake out his own position within the liberal camp.
He rejected Eisenhower Keynesianism, whose limited aim was to stabilise the business-cycle, and which sanctioned increases in public spending only for defence purposes.As Parker rightly says it was government defence contracts which reconciled corporations to Keynes. Galbraith wanted liberals to regain control over the public agenda.
Galbraith also stood apart from the theoretical Keynesians led by Harvard wunderkind Paul Samuelson. This groups two goals, as described by Parker, were to bring postwar economics to an entirely new level of mathematical sophistication by incorporating econometrics, linear programming, computers, and game theory, and to hybridize Keynesian macroeconomics with the older Marshallian microeconomic legacy into what Samuelson christened the Neo-Classical Synthesis. Galbraith rejected this attempt to make economics like physics. Mathematical Keynesianism, he thought, was grossly oversold. Because of its sophistication and precision its advocates convinced themselves that they could deliver whatever they wanted, forgetting that Keynes had treated uncertainty as a given condition of economic life. Apart from this, Galbraith was chiefly distinguished from other Keynesians by stressing the problems the oligopolistic structure of the US economy posed for macroeconomic managment. This explains his persistent advocacy of wage and price controls: he never believed that fiscal policy alone could deliver full employment without inflation.
The aim of his first big book American Capitalism (1952), was to put the defence of free enterprise on a more secure basis. Traditional defences of the private market system emphasised its integral connection with liberty and efficiency. Galbraith denounced these claims as cant, because the economy of small, intensely competitive, privately owned firms which it assumed had long been killed off by the growth of oligopoly and managerial control. But this did not mean that a pragmatic defence of decentralised decision-making could not be offered. Bigness offered clear advantages in achieving technological innovation, and the system of large institutions generated its own corrective in the form of countervailing power. Galbraith explained that in the typical modern market of few sellers, the active restraint [on the exercise of economic power] is provided not by competitors but from the other side of the market by strong buyers. Corporate power summoned into existence the countervailing power of labour unions, retail chains, and other large producers. Power was checked by power. This brilliant insight, with its simultaneous refutation of Marx and Marshall, owed much to the characteristic American political theory of pluralism. Parker points out that it seemed to offer little scope for government leadership, a failing which Galbraith later recognised. He also came to feel that it had been too complacent: countervailing power often did not emerge; producers colluded to push up prices. But the book had enormous influence on younger social democrats in Europe trying to wean their parties off dogmatic faith in nationalisation.
Galbraiths attempt to display the free enterprise system as it really was and not as textbooks said it was owes a great deal to his Harvard colleague, Joseph Alois Schumpeter. Schumpeters importance for Galbraith was to de-link the defence of capitalism from the competitive, neoclassical faith. His hero was the creative entrepreneur; the capitalist system was marked not by smooth adjustments but by gales of creative destruction. Even monopoly, ran Galbraiths commentary on Schumpeter, could be tolerated, for it allowed its possessors the rewards of their innovation as the competitive model did not. (Galbraith, 50) Schumpeters influence on Galbraiths own strategy for defending capitalism is clear. Critics replied that he was either wrong on his facts (business concentration was less than he claimed) or that his facts did not invalidate the competitive model; often simultaneously. However, the real reason why Galbraiths defence of capitalism left true believers cold was that the cant which links private enterprise to freedom and efficiency is an essential, and not contingent, part of their faith. True believers prefer dogma to pragmatism, because pragmatism is necessarily provisional. By the time he came to write Economics and the Public Purpose (1973) a disillusioned Galbraith had embraced socialism as the answer to Americas problems. American Capitalism offered no principled reason why he should not.
Galbraiths best book, The Affluent Society, was written in the Swiss ski resort of Gstaad in 1956, a charming place to ponder the paradoxes of affluence and register a protest against the growthmanship the absolute importance attached to increasing the size of GNP - that was starting to dominate the thinking of economists. To satirise this thinking Galbraith invented the phrase the conventional wisdom. He conveyed the contrast between private affluence and public squalor in highly mannered prose:
The family which takes its mauve and cerise, air-conditioned, power-steered, and power-braked car out for a tour passes through cities that are badly paved, made hideous by litter, blighted buildings, billboards, and posts for wires that should long since have been put underground.
They pass on into a countryside which has been rendered largely invisible by commercial art...They picnic on exquisitely packaged food from a portable icebox by a polluted stream and go on to spend the night at a park which is menace to public health and morals. Just before dozing off on an air-mattress, benath a nylon tent, amid the stench of decaying refuse, they may reflect vaguely on the curious unevenness of their blessings.
The main idea of the book was not new. The time would soon come, Keynes had argued in 1930 (in his essay Economic Possibilities for Our Grandchildren) when society would need to accommodate its psychology to plenty, not scarcity. Given affluence, more and more people would (or should) opt for leisure, free time, and intellectual achievement rather than more consumption. Galbraith simply said this stationary state had come at least in America. America was suffering from the ills of affluence, not poverty. With a declining marginal propensity to consume, new wants had to be constantly created by advertising. Galbraiths most incisive idea, again not original, was that growing private consumption required matching spending on public services what he called a social balance if it was not to foul up cities and countryside and reduce people to idiocy.An increasing fraction of growing national income should be raised in taxes and spent in correcting the social imbalance created by the private consumption boom. Production should be tested for its environmental effects.
The Affluent Society was praised for its ethics, but not for its economics. The late Harry Johnson argued that Galbraith had made the gross theoretical error of assuming that the marginal utility of present aggregate output, ex advertising and salesmanship, is zero.This is absurd. Galbraith was not arguing that all wants were contrived, but that the balance between private and public consumption needed to shift. Ronald Reagan and George W. Bush took the opposite, tax-cutting road. As hurricane Katrina reveals the folly of starving public services, public opinion may shift back to Galbraiths way of thinking.
Events have dealt an even more intriguing blow to Galbraiths hopes than presidential policy. Like a good classical economist he believed in the law of diminishing marginal utility. As people got richer each extra dollar of income would give them less pleasure. How then is one to explain the fact that hours of work in Britain and the USA have scarcely fallen since 1960, though their societies have grown much wealthier? Is it because economists are simply wrong about human nature: that as peoples consumption expands they want more not less? Or is it because advertising turns us into consumption addicts? Or is it because globalisation has made affluence too insecure and too uneven in its spread for most people to ease off work?
Galbraiths fertile decade of enforced rest from government service culminated in his third major book, The New Industrial State, largely written in the late 1950s, though not published till 1967. This is his most ambitious, systematic attempt to describe the American system as it was, rather than as depicted in textbook models of perfect or imperfect competition. Its main propositions, as summarised by Robert Solow in a critical review cited by Parker, were:
- The US landscape is dominated by giant corporations because of advantages due to size (economies of scale) and because the cost of advanced technological investment requires extensive bureaucratic organization. Economists had failed to realize that these behemoths undermined their idealized model of competition.
- Managers (the technostructure) not shareholders shape the culture and goals of the corporation.
- The technostructure substitutes for profit maximisation planning for security through manipulating wants, supplies, and the regulatory system.
- Planning and risk reduction dictates vertical integration, internal financing, and the cooption of labour unions (no longer a countervailing power).
- The constant stimulation of consumer wants mis-shapes the demand for private and public spending.
- The giant corporation suborns the educational and scientific estate, which should be independent, to its goals.
The New Industrial State was a noble failure too wordy, too sweeping in its claims, too much a product of temporary conditions. Solows attack concentrated on Galbraiths central claim that the corporation was independent of the market. Here Parker concedes reluctantly that Solow had the advantage even though neither economist anticipated Americas financialisation or the sweep of globalization. Investment funds of all sorts have come to define a new competitive market-place that is in some ways more traditional than the one described in The New Industrial State. In The Good Society (1996) a chastened Galbraith implicitly acknowledged that his description of American capitalism was obsolete. Monopoly power had surrendered to international competition and the explosive force of technological change. Modern corporate management is committed to...profit maximisation. Far from being immortal, even the largest firm is subject to the discipline of actual and prospective bankruptcy. Contrary to the literature on the managerial revolution, managers have started behaving like owners again because much of their compensation now comes in the form of stock grants and options.
In his reply to Solow, Galbraith brought the debate back to the question of how to do economics. Solow wanted it to be viewed as a scientific project, consisting of testable mathematical hypotheses. This depended, Galbraith insisted, on the assumption that wants originate in the individual, and are efficiently translated by the market to profit-maximising firms, leaving the consumer sovereign. If in fact, the individual is not sovereign, but the instrument or vessel of those who supply him, economics will need to be different. The work of economists will will be far less precise, far less elegant, seemingly far less scientific than those who are fitting pieces into the [accepted] structure. There is more than an echo of Keyness plea that pioneers of thought should be given the benefit of a sympathetic hearing.
Parker uses the Galbraith archives to greatest effect to document his subjects involvement in Democratic politics. In particular he makes a strong case that Galbraith had more influence on President Kennedy than has been acknowledged. This is hard to reconcile with Kennedy posting him to India as ambassador from 1961-3, which Galbraith describes, with commendable candour, as an enjoyable interlude of disguised unemployment.
Galbraith wrote speeches for Adlai Stevenson in 1952 and 1956. After the first defeat, he helped form a brains trust to educate Stevenson in the new economics. The so-called Finletter Group had little effect on Stevenson, but is credited with supplying the thinking for the New Frontier and Great Society programmes of Kennedy and Johnson. Following the Soviet success in launching Sputnik in 1957, Kennedy jumped onto the growth bandwagon. Talk of the output gap became all the rage, and Kennedy recruited Democratic economists to tell him how to close it. He spent more and more time with Galbraith in Boston and Cambridge. Galbraith, Parker writes, became part of the inner circle, just outside the Irish mafia. He knew how to play the courtier, and was master of the entertaining letter. He once wrote to Kennedy that communicating with him through the State Department was like fornicating through a mattress. In more elevated mood he wrote President Kennedys famous inaugural speech line: Let us never negotiate out of fear, but let us never fear to negotiate.
In fact, Galbraith could not give Kennedy what he wanted. He was never entranced by growthmanship, thinking, correctly, that its single-minded pursuit would lead to inflation. Growth with balance was the theme of speeches he wrote for Kennedy. He criticised Kennedys New Economists (Samuelson, Tobin, etc) for ignoring the significance of the armed forces in federal spending (Parker calls it their self-censorship on instrumentalities) and for their mathematical hubris, particularly their reliance on a stable trade-off between inflation and unemployment. As Tobin put it, We thought we could not only make the bicycle go faster but keep it at high speed and determine the path it would follow.
Galbraith tried to steer the President away from reliance on military-led growth to the ideas of The Affluent Sociey. Tax cuts should be resisted as they prevented targetted investment. Once we start talking about tax cuts we will take the pressure off the rest of your program...We now say that housing, school building and urban renewal are needed both for themselves and for their effect on employment. Given the tax cut conservatives will not be slow to say that this will do the job. However, with the weight of solidly reputable economic opinion on the other side, the outcome was never really in doubt and taxes were reduced in 1964.
Parkers case for Galbraiths influence rests not on his economic advice, but in causing Kennedy to hesitate over commiting US troops to Vietnam.
Galbraiths economic strategy, involving reduction of US overseas military spending, was incompatible with military escalation in Vietnam. An important thread running through Parkers book is that Galbraith never abandoned the Roosevelt position of active negotiations with the Soviets. Galbraiths dissent from the secular priesthood on this issue determined his opposition to military Keynesianism. For Galbraith there were no differences so intractable, threats so mortal, as to justify the diversion of huge resources from social programmes to the arms race. His rejection of Cold War thinking was influenced by the fashionable left-wing theory of convergence. Following a visit to the Soviet Union in 1959, Galbraith became convinced that the industrial systems of the USA and USSR were becoming increasingly similar. Detroit and Sverdlosk, he thought, were twin expressions of a common engineering culture which would force the development of compatible political forms a striking example of misplaced technological determinism. The idea that the United States should spend its lives and treasure to prop up a gangster government in Saigon simply on the ground that it was anti-communist struck him as politically inept and morally outrageous.
So from the start of the Kennedy administration, Galbraith resisted arguments from State and Defence and top military personnel like General Maxwell Taylor that 100,000 or 200,000 troops needed to be sent to Vietnam. This resistance fitted Kennedys instincts. While Kennedy was president the most he would agree to was to dispatch 8000-10,000 non-combatants called flood relief specialists. But the pressure for combatant involvement never abated. The situation in South Vietnam is perilously close to the point of no return Galbraith minuted the President on 3 November 1961, saying that the regime of Ngo Dinh Diem was hopeless and that the US should probe the Russians for the possibility of a negotiated peace. In April 1962 he sent another memorandum to Kennedy urging him to abandon the strategic hamlets and chemical defoliant approach and, above all, resist all steps which commit American troops to combat roles. Not the least interesting part of Parkers narrative is the disclosure of how Kennedys instructions to limit US involvement were continually undermined by officials who wanted to expand it.Parker believes that by 1963 Galbraiths views had persuaded Kennedy who, in the month before his assassination, made US withdrawal from Vietnam a formal policy objective. President Johnson reversed Kennedys policy, committing hundreds of thousands of American troops to Vietnam. Galbraith tried once more. In a private memorandum to LBJ in January 1966, he urged abandonment any attempt to reconquer Vietnam, withdrawal to defendable enclaves, and the start of negotiations.
When Johnson rejected this advice, Galbraith came out openly against the Vietnam war. His 1967 paperback, How to Get Out of Vietnam, sold 250,000 copies.As chairman of the Americans for Democratic Action he campaigned vigorously on a platform of immediate negotiations, and supported Eugene McCarthy as the anti-war candidate for the Democratic nomination. Galbraiths alternative was respectable, rather than heroic. In his memoirs he writes: There was need to have a solution that was...acceptable to the largest possible political constituency in our country. Simply to leave was not. There was another motive, the desire to protect the South Vietnamese loyalists: We cannot simply write them off; even by majority vote we do not assign people to the sanguinary attention of their enemies. Unhappily wrong: democracies do it the whole time.
Galbraiths opposition to the Vietnam war was his finest public stand. There was no one able or willing to play this role at the court of Bush or Blair in 2002-3 where the invasion of Iraq was plotted. It is not that such people were not around. But Bush and Blair wanted to hear arguments for the war they wanted, while Kennedy wanted arguments against the war he dreaded. So he solicited Galbraiths views, and used them to confront his official advisers. Had he not been killed, history might have been decisively different.
After 1967 Galbraith faded away politically and intellectually.Johnson was the last president to ask for his advice.(LBJ threw away one of his drafts for a speech with the remark: Did yever think, Ken, that making a speech on ee-conomics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else). With the election of Nixon in 1968 politics shifted to the right and the era of Republican dominance was inaugurated by Ronald Reagans two victories in 1980 and 1984. Although Nixon announced mysteriously in 1971 he was now a Keynesian in economics, the Keynesian moment had passed, never to return, buried by the Vietnam war,inflation, and civil unrest. Monetarism and rational expectations were the new doctrines which mainstream economics used to cut Keynesianism out of its system. Galbraith was elected President of the American Economic Association in 1971. In his valedictory address Power amd the Useful Economist, he restated his credo. The problem of economics was its wilful denial of the presence of power and political interests.By insisting that consumer sovereignty and a sovereign citizenry rule the roost, conventional economists have presumed away the most compelling questions of our time whether about growth, inequality, global development, the environment, resource use, or consumer protection. Galbraiths remarks were warmly received; but the new guru was Milton Friedman.Galbraiths issues did not go away, but they were now handled by different tools. He continued to write books and coin phrases the culture of contentment was vintage late Galbraith -but ceased to count.
With such a towering figure as Galbraith it is hard to avoid reviewing the man rather than the biography. Let me end with some final thoughts about both.
Parker admires Galbraith as a stylist. He rightly says that economists took as much exception to his style as to his substance, and particularly to the book sales which it commanded. But although Parker gives an adequate sprinkling of examples, there is disappointingly little analysis of Galbraiths technique of writing, and the kind of authorial presence it was intended to convey. Of the genesis of conventional wisdom, Galbraith has written: I needed a phrase that was overtly respectful but with an undertone of disdain, even amusement. Something nicely balanced between approval and ridicule.(Galbraith, 339) In other words, Galbraiths style was crafted to give scope for extensive criticism without surrendering his place in the elite. Disdain, sugared with humour, gave it its familiar urbanity. One does not expect an economist to be a literary critic, but Deirdre McCloskey has written persuasively about economics as a form of rhetoric, and it would have been useful to have had a discussion of Galbraith as a rhetorician.
Parker amply documents Galbraiths dislike of mathematical models, but gives us no idea of whether he was any good at maths. While biographers feel free to discuss the most intimate secrets of the body (at least when their subjects are dead) the secrets of the mind are rarely analysed. In fact, it is considered bad taste to raise the subject of intellectual competence. It is assumed that all major thinkers are intelligent enough, but in what exactly does their intelligence lie? With economists a special problem arises, since maths is at the top of their pecking order of esteem. The economists jibe that critics of mathematical models are so only because they are incompetent at mathematics is partly true; but it is also true that those who are good at maths seek to emphasise their comparative advantage by vastly exaggerating its importance for economic understanding. At least, I have never come across any mathematical economist who was good at political economy, and vice versa.So we may assume that Galbraith, who was certainly very intelligent, lacked the particular facility in maths that would have given him a more benevolent view of mathematical economists.
Parker is sympathetic to the attempt to reconstruct economics along sociological lines. This is obviously doomed to failure. Without abstraction (organising principles) there can be no sociology, just random description. Without economics there can be no political economy, just politics, or ethics. Galbraiths depictions of contemporary American capitalism are not theoretical constructs. But without the economic theory of the market, he would not have known how to shape his analysis. The danger against which Galbraith rightly warned is excessive mathematicisation, which produces the illusion that all the significant data of economic, and even human, experience can be fitted into a mathematical model. Fortunately popular mistrust, or ignorance, of mathematics is enough to ensure vigorous resistance to this tendency.
Galbraith has often been compared to Keynes, and certainly they had much in common. But the way they did their economics was very different. Keynes produced theories, Galbraith, theoretically-inspired sociology. Keynes thought that in the end ideas ruled the roost; Galbraith thought it was structures of power. He looked for amelioration of social conditions not to the triumph of the better idea, but to the coming into power of his class the university-based educational and scientific estate.While Keynes thought of the battle of ideas, Galbraith thought in terms of the battle between the educational and scientific estate and the corporate technostructure for the control of the state. His is a non-Marxist version of class struggle with the intelligentsia substituted for the proletariat as the engine of social innovation and carrier of the public purpose.
This reductive attitude explains why Galbraith cannot write well about ideas. For him they are simply sociological variables, which fit the needs, circumstances or technological conditions of the day. Herbert Spencers sociology fitted the needs of 19th century American capitalism; a certain version of Keynesianism fitted the needs of big business in Galbraiths day, and so on. And this low esteem in which Galbraith held ideas is despite the fact that, as one colleague put it, Kens major attribute..is ideas.
In much the same way, Galbraith treats freedom as a sociological variable. There is, of course, a fundamental connection between belief that ideas are freely produced and belief in freedom in general. Galbraith took the freedom of his own circumstances for granted, but no passion for freedom runs through his work. There is nothing in his writing on the Soviet Union to indicate that freedom rather than efficiency is the issue between the two sides. In supporting Galbraiths foreign policy positions, Parker gives figures of the huge cost of the Cold War, but does not say whether or how the Cold War might have been averted.
Parker writes of Galbraiths political position: A pragmatic balance between the opposing ideological ideals lay at the heart of Galbraiths reasoning. The market has value, but so does the state when it acts in the democratic interest.There is a huge unexamined assumption in that last clause. What is that interest? How is it to be discerned? How is the state to be held to it? Galbraith was clear that the existing power holders distorted the economy for their own ends; but he was blind to the public choice critiques of so-called democratic policy-making, and even blinder to the fact that governments have vastly greater powers over the lives of citizens than do private bodies. His position seemed to be: as long as the Democrats are in power and advised by the right people the state can be trusted. This is dangerously close to the Marxist belief that the problem of the abuse of power, and the need to build safeguards against it, would disappear when the dictatorship of the proletariat was established.
This cavalier attitude to the problem of power marks Galbraith as an authentic product of the first half of the last century, for it was widely shared by that generation of statist-minded intellectuals. Their world-view was shaped by the contrast between the transformative possibilities of science and the incompetence and obsolete ideas of the power holders an ineptitude which had produced the calamities of the first world war and the Great Depression. Their goal was to improve the condition of the people by expanding the reach and raising the mental efficiency of the state. It was a worthy aim and its pursuit was attended with considerable success as well as notable failures. But conditions have changed, and with it the relevance of much of this thinking and therefore of Galbraiths writings. The Affluent Society will live on because the questions it discusses are timeless. The wit and wisdom of Galbraith will continue to delight. To those who aspire to public service he will remain a model of a public intellectual. But all things considered, he was a man both in and for his time.
by Robert Skidelsky, Journal of Economic Literature