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

Tradewind Recruitment: PMLD Teacher

Negotiable: Tradewind Recruitment: PMLD Teacher A specialist primary school i...

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

Read Next
.  

When league tables claim that 0% of students at top schools are getting a good education, it's glaringly obvious that they need to be scrapped

Chris Sloggett
 

If I were Prime Minister: Every privatised corner of the NHS would be taken back into public ownership

Philip Pullman
As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links