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JOHN KENNETH GALBRAITH
CONTEMPORARY ECONOMISTS
General Editor: John Pheby, Professor of Political Economy, De Montfort University, Leicester, England
The Contemporary Economists series is designed to present the key ideas of the most important economists of this century. After an opening biographical chapter, the books in this series focus on the most interesting aspects of their subject's contribution to economics, thus providing original insights into their work. Students and academics alike will be fascinated by the wealth of these economists' contributions and will be able to look with fresh eyes on their discipline.
Published titles:
John F. Henry JOHN BATES CLARK Steven G. Medema RONALD H. COASE James Ronald Stanfield JOHN KENNETH GALBRAITH
John Kenneth Galbraith
James Ronald Stanfield Professor of Economics Colorado State University Fort Collins, Colorado
© James Ronald Stanfield 1996
Softcover reprint of the hardcover 1st edition 1996 978-0-333-58836-9
All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE.
Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.
First published 1996 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world
ISBN 978-1-349-24755-4 ISBN 978-1-349-24753-0 (eBook) DOI 10.1007/978-1-349-24753-0
A catalogue record for this book is available from the British Library.
10 9 8 7 6 05 04 03 02 01
5 4 3 2 I 00 99 98 97 96
To the Spring of 1967
Contents
Preface ix
Acknowledgments xi
1 The Useful Economist 1
A Most Unconventional Economist 1 In His Own Words 8
2 Economic Balance and Countervailing Power 19
The Great Depression and the Task of Price Control 20 The Conventional Economic Model 25 The Concept of Countervailing Power 33 Intimations of the Galbraithian System 37
3 Affluence and Social Imbalance 41
The Dependence Effect 43 Social Imbalance and Public Squalor 48 The Test of Time 52
4 The Administered Society 61
The Critical Historical Method 62 The Facts To Be Explained 63 The Administered Sector 69
s The Social Predicame~t 87
The Macroeconomic Dilemma 88 Social Imbalance and the Quality of Life 95 Toward Reform 97
6 Economic Doctrine and the Public Purpose 103
The Imagery of Choice 104 The Dual Economy Redux 107 The Co-opted State 115
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viii Contents
The Test of Anxiety 118 The Emancipation of Belief 125
7 Social Reform and Economic Policy 129
Evolutionary Positivism and Institutional Adjustment 131 Macroeconomic Stabilization Policy 134 The Affirmation of Humanness 147 Conclusion 150
8 Galbraith and Intellectual History 153
Galbraith the Institutionalist 153 The Radical and Liberal Galbraith 160 The Galbraithian Challenge 170
References 173
Index 181
Preface
The scope of this book is standard. The aim is to provide an intellectual portrait of John Kenneth Galbraith. The first chapter offers a brief biographical sketch of Galbraith and some selections from his prose to exhibit his celebrated wit. Chapter 2 surveys his work prior to the first installment of his central trilogy in 1958. Chapter 3 examines The Affluent Society and Chapters 4 and 5 are devoted to his magnum opus, The New Industrial State. Chapter 6 discusses the final book of his trilogy, Economics and the Public Purpose. Chapter 7 provides a summary of the policy recommendations of the Galbraithian System and Chapter 8 places Galbraith's work in the context of intellectual history.
Galbraith may well be the most famous economist of the last half century. Yet there is no doubt that he also represents a very obscure American institutionalist tradition. This paradox I cannot resolve for the reader. Perhaps it is merely a by-product of Galbraith's desire to augment his sales by avoiding academic notation or by exaggerating the originality of his work. Perhaps his success speaks to a desire of the public for literate, relevant economics in an age of intense formalism in the profession. As noted, I cannot say. The Galbraithian Paradox puzzles me.
J Ron S
ix
Acknowledgments
I appreciate the confidence that John Pheby and Giovanna Davitti accorded me in commissioning this book, and their forbearance at my missing the deadline for submitting it.
I dedicate this book to the Spring of 1967. In that youthful season, I encountered the influences that once and for all set my life course.
The book is offered as partial repayment for one of my great intellectual debts. The work of Ken Galbraith has fundamentally shaped my career. Either he rescued me from entree into the comfortable complacency of the neoclassical fold or, more likely given my own constitution, from egress to another walk of life. I also very much appreciate Ken's generous permission to quote freely from his many books and essays.
But as Galbraith came from a flow of events and interpretations so also I had been prepared to be his receptive reader. I cannot imagine anyone having a better basic education than I received in the Tarrant County Texas public school system. I especially remember Anna Ruth Leach, Billy Tyler, Joan Dyer, and Derema McCulley.
I benefitted from a truly outstanding economics faculty at the University of Texas at Arlington. Tom Committee provided me a thorough and lively grounding in the microeconomic analysis of choice and markets. Ted Whitesell introduced me to the issues of the state's economic role and made me memorize the classic treatise of Richard Musgrave. Though I did not develop the basis they provided in mathematical economics and the quantitative investigation of regional economics, I appreciated the skill and friendship with which Paul Hayashi and Walt Mullendore offered them to me. I never fully recovered from the excitement that John McCall brought to the Keynesian model nor from the thoroughness with which Ghazi Duwaji insisted that I learn it.
Most specifically in regard to the present book, I am indebted as well to two other professors whose classes I had the privilege of taking in the Spring of 1967. In a class in the history of economic thought, Joe Ashby introduced me not only to the field that became my major interest but also to The Affluent Society. Dick Shuttee made me aware of Richard Lester, Betty Friedan, and the statistical abstract in a labor economics course. From the two of them I came to respect the evolution of ideas and culture, to mistrust complacency, to value descriptive statistics, to appreciate the task of anticipating social change and its attendant problems, and to see this task exemplified by the ferment in gender and family relationships in
xi
xii Acknowledgments
my lifetime. In retrospect, the principles of the institutional approach to economic analysis could scarcely have been conveyed with more wit, charm, and assiduity.
Thus occupied with what became an obdurate interest in economic institutions and their bearing on the political economic performance which is so fundamental to the quality of our lives, I eagerly awaited the June 1967 publication of The New Industrial State. I abused my position as flunky in. the Arlington Texas public library and took the book out for personal edification before I catalogued it and made it accessible to the general taxpaying public. No doubt I cut myself in line ahead of a substantial wait list. No doubt also I malingered in my duties, hiding in the stacks while I worked through the book.
I cannot overemphasize the excitement with which I read the book, nor thus to the pivotal Spring of 1967. I was elated and transformed. To that point I had been a rather indifferent student, far more devoted to table tennis, bridge and gin card games, and the sensations of mind-altering substances, than to my studies. Whatever I may have accomplished in my academic career thereafter, and be it for the better or the worse, I owe to the awakening I experienced in the remarkable spring of 1967.
Finally, and most important of all, in that momentous spring of 1967, I became engaged to Jacqueline Bloom Stanfield, with whom I have since celebrated more than a quarter of a century of very earthly matrimony. Together we have withstood the test of time and all the challenges laid down for us by one of the most tumultuous eras in human history in so far as family and gender relationships are concerned. Bent but not broken, wounded but not vanquished, we march on together toward a future which is in some degree of our own making. For my part, I do so with infinite gratitude that since that beautiful season of 1967, I have never walked alone.
