John K. Galbraith

John K. Galbraith

John Kenneth Galbraith was born in Iona Station, Ontario, Canada, on 15th October, 1908. He graduated with a BSc from Ontario Agricultural College (now part of the University of Guelph) in 1931. He took a MA in 1932 from the University of California at Berkeley and two years later a PhD in economics.

In 1934 Galbraith began teaching economics at Harvard University. After spending a year at Cambridge University he became an assistant professor of economics at Princeton University.

Galbraith was a disciple of John Maynard Keynes and a supporter of Franklin D. Roosevelt and the New Deal. In 1941 Galbraith was placed in charge of price control in the United States. In April, 1942, general price controls were introduced by Roosevelt's government. As a result, during the rest of the war, the inflation rate was two per cent a year, unemployment was virtually nonexistent and output rose by almost a third.

Galbraith also worked for the US Strategic Bombing Survey. Along with other economists such as, Nicholas Kaldor, Paul Sweezy and E. F. Schumacher, Galbraith had to assess the damage done to the German war economy by the allied bombing. He discovered that factories were back to full production within weeks of them being destroyed. Galbraith concluded that the bombing cost the United States far more output than it cost Germany.

After the Second World War Galbraith argued that the government should introduce a prices and incomes policy. He believed that this policy would result in full employment with a reasonable degree of price stability.

In his first book, American Capitalism: The Concept of Countervailing Power (1952), exposed the myth that competition between different firms in an industry prevented monopolistic exploitation. This was followed by The Great Crash (1955), an account of the 1929 Wall Street Crash.

In The Affluent Society (1958) Galbraith exposed the idea of "consumer sovereignty". He argued that large corporations invested large sums in the design, planning and manufacturing of a new product. To make sure that the product sold, they had to create a want for it. In other words, "wants are created by those who satisfy them". Galbraith also argued that the government should make large investments in education and transport infrastructure by using funds from general taxation.

Galbraith worked as an adviser to President John F. Kennedy who originally planned to appoint him as Secretary of the Treasury. After pressure from Phil Graham and Lyndon B. Johnson, Kennedy gave the job to C. Douglas Dillon. In 1961 Galbraith was appointed U.S. ambassador to India. He held the post until the assassination of Kennedy in 1963.

In his next book, The New Industrial State (1967) Galbraith continued his attack on the capitalist system. He argued that in advanced industrial economies it is the managerial and other experts of the large corporations who really run the system, "subordinating the activities of the state to their own goals of corporate growth and personal self-esteem".

Galbraith remained active in politics and worked as an adviser to politicians on the left of the political spectrum. He once said that: "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." He was also critical of communist governments: "under capitalism, man exploits man. Under Communism, it's just the opposite."

In 1990 Galbraith published A Short History of Financial Euphoria. The book looked at economic crashes from the tulip mania in Holland in the 1630s to the Wall Street collapse in October, 1987. Other cases include arrival of gold in Louisiana, the advent of joint-stock companies, real estate in Florida, and the economic activities under Ronald Reagan.

Galbraith published The Culture of Contentment in 1992. He pointed out that around 50% of Americans take little interest in politics. As they rarely vote, they are ignored by politicians. The two major political parties in the United States therefore concentrate on those who do vote (the "better off classes"). This group tend to demand that taxes are kept low and that they are used on programmes that help the contented classes themselves. As a result, only a small percentage of government revenues are spent on helping the underclass or repairing America's crumbling infrastructure.

Other books by Galbraith include Ambassador's Journal: A Personal Account of the Kennedy Years (1969), Age of Uncertainty (1977), A Life in Our Times (1982), Almost Everyone's Guide to Economics (1990), The History of Economics (1991), Nature of Mass Poverty (1993), The Triumph (1994), The Good Society: The Humane Agenda (1996) The Anatomy of Power (1996), The Essential Galbraith (2001)

John Kenneth Galbraith died on 29th April, 2006.

© , September 1997 - April 2014

Primary Sources

(1) Michael Stewart, J. K. Galbraith, The Guardian (1st May, 2006)

As Galbraith saw it, the short-sighted selfishness of the contented majority, and its counterpart of ever-increasing deprivation in the inner-city ghettos, threatened the possibility of an underclass revolt of unknowable proportions and consequences. What he found particularly depressing about all this was that the contented majority, having rationalized this state of affairs to its own satisfaction as representing the optimal and inevitable working of a benign economic system, was incapable of taking any remedial action.

There was much more to Ken Galbraith than his serious books on economics. He advised John F Kennedy and Lyndon Johnson, and worked hard in the ill-starred presidential campaign of George McGovern - running against Richard Nixon - in 1972. His irony and wit were persistently deployed against the absurdities of the monetarist doctrines of Milton Friedman, and Arthur Laffer's notion that cutting income tax on the rich would increase government revenue.

As Galbraith tirelessly pointed out during the 1980s, President Reagan's policy of cutting taxation at the top end of the scale, and welfare benefits at the bottom, was based on the curious assumption that the rich were not working properly because they had too little money, the poor because they had too much. He was fond, too, of characterizing the trickle-down economics of the Reagan-Bush era as advocating feeding the horse more oats because some would pass through to the road for the sparrows. It might be said of Galbraith, as was said of WS Gilbert, "his foe was folly and his weapon wit". His views on the economic policies of the second President Bush and particularly the large tax cuts for the very rich were equally scathing.

In addition to everything else, Galbraith found time to publish works as diverse as two novels, a book of satirical sketches, and a study of Indian painting. In 1977 he wrote the book, and presented the BBC television series The Age of Uncertainty, about the evolution of economic thought since Adam Smith.

Ken Galbraith was a warm, kind man, wise as well as witty, and the most loyal of friends. He was devoted to his family. He met his wife Catherine (Atwater) when she was a graduate student at Radcliffe College - the "sister" institution of Harvard. They married in 1937 and had three sons. He would have been the first to agree that the unstinting support of family and friends, and the comfortable life he himself led, were what enabled him to do so much for so long.

His contribution to our understanding of the contemporary world was substantial. The degree of hostility he aroused was eloquent testimony to the uncomfortable nature of the truths he told, and kept on telling, about the workings of advanced industrial economies. He was not alone in believing that his intellectual stature matched his physical one. The world will be the poorer for his passing.

(2) Richard Parker, John Kenneth Galbraith: His Life, His Politics, His Economics (2006)

In April 1962, Jacqueline Kennedy invited Galbraith, who was returning to Washington on official business as U.S. ambassador to India, to join the Kennedy family for a weekend at Glen Ora, the family's rented estate in the Virginia countryside. She greeted him, he later proudly wrote, with a "well-televised and widely reported kiss" at National Airport, and they and the President spent the evening watching an hour-long NBC special about her recent Indian visit, which duly impressed her husband. The next day, disrupting the mood of intimacy and innocent charm, Galbraith shared his growing alarm with President Kennedy about Vietnam; at Kennedy's request he left behind a memo about his concerns.

In the memo, Galbraith recapped point by point his opinion of the risks and faulty assumptions behind the policies Kennedy's advisers were advocating. He openly and directly urged the President to seek Soviet help in arranging a major pullback by North Vietnam "in return for phased American withdrawal, liberalization in the trade relations between the two parts of the country and general and non-specific agreement to talk about reunification after some period of tranquility." And he counseled JFK "to resist all steps which commit American troops to combat roles" and to back away immediately from newly implemented State and Defense department policies that called for forcing South Vietnamese peasants into "strategic hamlets" and for using defoliants such as Agent Orange.

From documents declassified in the late 1990s, it's now clear that Kennedy - who himself was by then deeply alarmed by Vietnam and the pressure his aides were putting on him to send in U.S. troops - followed his ambassador's advice almost to the letter.

Assistant Secretary of State for Far Eastern Affairs Averell Harriman was called into the Oval Office the day after Kennedy got Galbraith's memo. There the President read him what it said, and told Harriman he wanted the Russians contacted about the deal Galbraith was proposing. Harriman was also told to instruct Galbraith to ask the Indian government to open simultaneous conversations with the North Vietnamese on the same terms. That same afternoon Kennedy also sent a copy of Galbraith's memo to Secretary of Defense Robert McNamara.

Although he expected this by now, Kennedy's advisers put up quite powerful resistance to his clear intentions. When he insisted that he wanted Galbraith instructed to get the Indians to open up channels to Hanoi, Harriman said he would - and then he never did, despite the President's direct orders. Galbraith never received the President's instructions, and no such orders can be found in State Departments files. (Later in April, after learning that Harriman had rejected the idea of talking to the Russians, Galbraith sent a blistering telegram in dissent, which was, predictably, ignored.)

From the Pentagon came even stronger resistance. McNamara forwarded to Kennedy a bitter rejection of Galbraith's proposals. Written by General Lyman Lemnitzer, Chairman of the Joint Chiefs of Staff, the memo's confidently blunt conclusion left Kennedy no room for doubt about where his senior military advisers stood: "The Department of Defense cannot concur in the policy advanced by Ambassador Galbraith, but believes strongly that present policy toward South Vietnam should be pursued vigorously to a successful conclusion." McNamara scrawled on the margins of his copy of the memo that it should not be sent or shown to Galbraith.