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

Senior IP Opportunity at Major Firm

vary Attractive Salary: Austen Lloyd: MANCHESTER - AN OPENING AT A VERY HIGH Q...

Nursery Manager

£100 - £110 per day: Randstad Education Ilford: Nursery Manager Long term Ran...

Sales Consultant – Permanent – West Sussex – £24-£25k plus commission and other benefits

£24000 - £25000 Per Annum plus company car and commission: Clearwater People S...

SEN Teaching Assistant

£45 - £65 per day: Randstad Education Bristol: Supply SEN Support Jobs in Bris...

Day In a Page

Read Next
The Liberal Democrats leader says efforts need to be focused on cracking down on the criminal gangs  

Nick Clegg: We should to go to war on drugs, not on addicts

Nick Clegg
East German border guards stand on a section of the Berlin wall in front of the Brandenburg gate on November 11, 1989  

Twenty-five years after the Berlin Wall fell, Hungary’s PM thinks it is Western capitalism that is in its death throes

Peter Popham
The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes