Robert Skidelsky: JK Galbraith's ideas will continue to inspire

Hurricane Katrina revealed the folly of starving public services, so opinion may shift back to his way of thinking

Share

For 20 years in the middle of the last century, John Kenneth Galbraith, who died yesterday at 97, was the "best known living economist". But he was not, and will never be, regarded as a great economist by economists. He is best thought of as a sociological economist, who tried to develop a theory and a policy from an analysis of the institutions of contemporary American capitalism. He had a genius for significant description, and wrote with confidence, wit and a notable talent for phrase-making, but the theory he sought proved elusive and he had no lasting effect on policy.

His big idea was that the "market system" lauded by economists was a fiction to disguise the existence of economic power. Far from consisting of small, competitive firms whose decisions were determined by consumer choice, the economy was ruled by big corporations, independent of the market, and run by managers who were able to fix prices and control sales through advertising.

Although he came to praise, not bury capitalism, he was also a left-wing Keynesian who believed that large public expenditures were needed. In his first big book, American Capitalism (1952), he explained that corporate power had provoked the "countervailing power" of trade unions, retail chains and other large producers. As capitalism was itself working to minimise exploitation, public ownership was no longer required.

This book had a big influence on British Labour Party thinkers such as Tony Crosland, who were trying to wean the party off their faith in nationalisation. Much later, Galbraith partially admitted he had been wrong: under the impact of globalisation, monopoly power had surrendered to international competition, restoring to some extent the traditional picture.

Galbraith's best book, The Affluent Society, was written in the Swiss ski resort of Gstaad in 1956, a charming place to challenge the contemporary obsession with economic growth at all costs. To satirise this thinking, Galbraith invented his most famous phrase: "the conventional wisdom".

The main idea of the book was not new. The time would soon come, Keynes had argued in 1930, 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 situation had arrived - at least in America.

America was suffering from the ills of affluence, not poverty. With declining satisfaction from consumption, new wants had to be constantly created by advertising. His most incisive idea 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. A pioneering thought was that production should be tested for its environmental effects.

Galbraith was in effect arguing that the balance between private and public consumption needed to shift. Ronald Reagan and George W Bush took the opposite, tax-cutting road. Of course Hurricane Katrina revealed the folly of starving public services, so public opinion may shift back to Galbraith's way of thinking.

Other events have dealt an even more intriguing blow to Galbraith's hopes. He believed that as people got richer, each extra dollar would give them less pleasure. How then is one to explain the fact that hours of work in Britain and the US have scarcely fallen since 1960, although these societies have grown much wealthier? Is it because economists are simply wrong about human nature: that as people's 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?

Galbraith's 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 JF Kennedy wanted arguments against the war he dreaded. Had Kennedy not been killed, history might have turned out differently.

Galbraith has often been compared to Keynes, and 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 ideas ruled the roost; Galbraith thought it was structures of power. His was a non-Marxist version of class struggle, with the intelligentsia as the engine of social innovation and carrier of the "public purpose".

His position seemed to be that 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.

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" He was a man both in and for his time but he will continue to inspire those who think economics should be brought into closer touch with life as it is and as it should be.

The writer is professor of Political Economy at Warwick University, and the biographer of John Maynard Keynes

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Year 5 Teacher

£80 - £140 per day: Randstad Education Leeds: Year 5 Teacher KS2 teaching job...

Software Developer

£35000 - £45000 Per Annum Pensions Scheme After 6 Months: Clearwater People So...

Systems Analyst / Business Analyst - Central London

£35000 - £37000 per annum + Benefits: Ashdown Group: Systems Analyst / Busines...

Senior Change Engineer (Network, Cisco, Juniper) £30k

£30000 - £35000 per annum + Benefits: Ampersand Consulting LLP: Senior Change ...

Day In a Page

Read Next
David Cameron has painted a scary picture of what life would be like under a Labour government  

You want constitutional change? Fixed-term parliaments have already done the job

Steve Richards
Nigel Farage has backed DJ Mike Read's new Ukip song  

Ukip Calypso by Mike Read? The horror! The horror!

Patrick Strudwick
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

How We Met: Hugh Bonneville & Peter James

'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

Bill Granger's heavenly crab recipes

Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
Radamel Falcao: How faith and love drive the Colombian to glory

Radamel Falcao: How faith and love drive the Colombian to glory

After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

Terry Venables column

Premier League managers must not be allowed to dictate who plays and who does not play for England
The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

Michael Calvin's Inside Word

Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past