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

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

Read Next
 

i Editor’s Letter: The Sussex teenager killed fighting in Syria

Oliver Duff Oliver Duff
Actor Zac Efron  

Keep your shirt on Zac – we'd all be better for it

Howard Jacobson
How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit