Opinion Editorial | |
| Wednesday, October 14, 1998 | |
Galbraith is Wrong But Successful |
This week, on October 15, economist John Kenneth Galbraith turns 90 years old. He is among the best known and most influential economists in the U.S. over the last half century. A long-time professor of economics at Harvard University, Galbraith has seen many of his books become best-sellers, he has hosted widely-viewed television programs, and he is often quoted and interviewed on economic topics. Born in Canada, Galbraith first rose to prominence during World War II, when he worked in the Office of Price Administration in Washington, which controlled all prices during the war. He later wrote possibly the only book ever written by a professional economist extolling the virtues of price controls, which he continued to advocate forever afterwards at the first hint of inflation. Galbraith was also noted for his early and vigorous support for the economic theories of John Maynard Keynes, the British economist. Keynes argued that the budget deficit was the driving force in the economy. Henceforth, Galbraith could be depended upon to support increased government spending for just about any purpose except national defense. In his book, "The New Industrial State," published in 1967, Galbraith ridiculed defense spending as little more than a subsidy to big corporations. Although a strong supporter of President John F. Kennedy, who appointed him as ambassador to India, Galbraith was no fan of Kennedy's tax cut, which he saw as reactionary. Testifying before the Joint Economic Committee of Congress in February, 1965, Galbraith had this to say: "I was never as enthusiastic as many of my fellow economists over the tax reduction last year. The case for it as an isolated action was undoubtedly good. But there was a danger that conservatives, once introduced to the delights of tax reduction, would like it too much. Tax reduction would then become a substitute for increased outlays on urgent social needs. We would then have a new and reactionary form of Keynesianism with which to contend." Despite his celebrity, however, Galbraith has never been very influential among professional economists, most of whom, even liberals, view him as an anachronism. He has almost never written for professional journals and seldom engages in professional debate, preferring to deal with unsophisticated journalists and politicians who are less likely to challenge his opinions. In a review of one of his books, economist Herb Stein put his finger on the source of Galbraith's popularity: "The difference between Galbraith and other economists is that he describes things as being just as they seem, whereas other economists are looking for an explanation behind what is superficially apparent. If you ask Galbraith why the price of gasoline is $1.30 a gallon, he will tell you that Exxon set the price there. If you ask other economists the same question, they will say something about supply and demand, not only for gasoline but also for other types of energy, and possibly something about production costs and the time preference of Arab potentates compared with the marginal efficiency of capital, and that could go on and on. Galbraith's version is much easier for a writer to handle and is much closer to the way most readers look at the matter. It also, however, has much less explanatory power." What Stein was so politely saying is that Galbraith has no idea what he is talking about. Yet because he said it simply and clearly, whereas most economists tend to talk in incomprehensible jargon, Galbraith's views were widely read and quoted, while those of more able and informed economists were ignored. His remarkable career only proves that one does not have to be right to be successful. Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, October 14, 1998. Home | Support Us | All Issues | Social Security Debate Central | Contact Us |