John Kenneth Galbraith

The Gifted Writer from the Pig Philosophers

            Nature gave to no person (among those writing English works in Twentieth Century economic science) a greater talent for literary expression than it gave to Galbraith.  If that were all, he could have at best gone public to popularize the thoughts of others, for he was far too good for mere textbooks.  He could have written sparkling entertainments, such as Heilbroner’s The Worldly Philosophers.  He even did some of that, e.g., The Great Crash, presenting 1929 as drama.  Fortunately, he possessed also an excellent analytic mind, not in the sense of the usual high theorist, but as an institutionalist with the ability to take the panoramic vision and see important relations that the myopic mathematician (which describes at least some high theorists) will not or cannot see.

For all that, or perhaps because of that, no other major economist, not even the mordant Joan Robinson, drew more ire from the orthodox cohort.  To them he was a renegade who compounded the offense by being effective at it.  Mark Blaug takes note of this disrespect inside the profession, attributing it to Galbraith’s numerous undocumented assertions, his contempt for rigor, his championing of governmental solutions, and even somewhat to jealousy of his extraordinary success.[i]  He has been called “the Grand Panjandrum of bad economics” by one conservative economist given to such jeu d’esprit.[ii] In private, the annoyance of his detractors sometimes takes the form of a shrug or a disrespectful remark, almost in the fashion of an astronomer dismissing Velikovsky.  Then too Galbraith displayed the acid sense of humor that one finds in Bernard Shaw.  In the First World War, Bertrand Russell compared the vindictive attitude toward his own criticisms of British policy with how people tolerated Shaw’s funnier way of saying the same things.  Similarly, the public found Galbraith’s humor entertaining.  Many of his presumed peers did not.[iii]  One major economist dismissed him as nothing but a phrase maker, clearly not intending to kick him into camp with Shakespeare.

Because of his popularity with the public, Galbraith was harder to ignore than Robinson.  As a public figure, he is probably known to the general reader.  An institutionalist, he writes for a large audience and theorizes in English.  The same sparkling talent as a writer that achieved public success got him dismissed as science fiction by the social physicists.  However, Galbraith has demonstrated the power of literary analysis, when done well, as superior or equal to mathematics, which he views as complementary or subordinate.   His approaches have been forcefully theoretical without mathematics, his theory of the corporation and of the public-private dichotomy being well developed generalizations.  He has articulated the interdependence of supply and demand.  In the case of all but necessities, producers use advertising to create all or part of the demand for their supply.  That makes the notion of market efficiency ambiguous.  Advertising and other corporate information sources (including the corporate state) are, in Galbraith’s view, heavily biased toward private as against public consumption.  He concludes that the resulting public-private imbalance lowers net economic welfare.

The trouble with Galbraith was his charisma, a quality seldom associated with economists, and the terrible fact that he put his theories into best sellers.  While a few economists made significant money with undergraduate text writing, that pedestrian trick was turned with captive audiences, most of whom took forced marches (if at all) through some of the pages.  Kenneth Galbraith was read by the public voluntarily.  Doubtless his orthodox detractors took a certain pleasure in the failure of his one novel.

            For the Nobel Committee, the notion of knighting the career of a popular literary economist would have been laughable.  He wrote books outside the reach of peer review, addressed to the world instead of to the profession.  For the economic Pontificate in Sweden, it would be too much like Carl Sagan getting the Nobel Prize in physics.  Edward Teller once asked an interviewer who expressed an interest in Sagan why he was bothering about such a nobody.  That could have been a high theorist’s attitude toward Galbraith.  However, Galbraith was no such lightweight as Sagan, who was an affable purveyor of middlebrow physics.  Galbraith had taken a long hard look at the world the economist was supposed to be seeing.  In spite of his panache, his writings brought to the profession the kind of insight that only the institutionalist generates.  During the Keynesian episode, he even became in the universities a frequent supplement to the lower economics (as M.E. Sharpe would call the Galbraithian pursuits).  He was then, if one wishes, a low theorist, never just a competent explainer of the Sagan sort, much less a Velikovsky fraud.  The trouble with looking down on the lower economics comes from the fact that it often carries a heavier freight than the higher kind.  Galbraith was a public intellectual of rare quality who had some serious things to tell us about economic phenomena.

            His weakest theory was the one that first brought him serious attention among economists in 1952, that of countervailing power, the Hegel-like notion of power breeding its opposite force.[iv]  Galbraith was looking in the right place, the corporate center, not the presumed perfect markets.  He saw the struggle between the concentration of power in management and the offsetting organization of power among the workers.  The attempt at stressing the imperfect world rather than the perfect model would become the dominant theme of Galbraith’s work.  He was not, however, anti-capitalist.  Not since Bastiat’s Harmonies Economique a century earlier had capitalist conflicts been so safely smoothed over.  Even so, mainstream reluctance to accept countervailing power is understandable.  In it, the perfect market vanishes.  The theory did some justice to the concept of monopoly capitalism as the truth at the heart of the machine.  As well, it rationalized the existence of unions as a natural consequence of corporate power.

            Galbraith then took a stronger theorizing look at the world’s reflection, resulting in an attack on the Standard Model’s doctrine of consumer sovereignty.  This he combined with an imbalance theory of the public-private dichotomy.  The publication of The Affluent Society in 1958 defined Galbraith as an informal, literary, institutionalist economist, and (some would say) a manufacturer of small beer.  Nevertheless, given its phenomenal commercial success, Galbraith’s book stung the profession.  Von Hayek, for example, felt called upon to reason in print against Galbraith’s dependence effect.  Supply and demand had been, among the theorists, independent functions.  The functions were confounded if affluent consumers felt no compelling need for newly marketed gizmos.  The supplier, however, could create demand for the latest gadget through advertising.  The vaunted efficiency of the market became then merely effectively supplying the public’s artificial demand for trivial goods.  The demand had been manufactured along with the supply.  In the meantime, the unadvertised public sector languished.  The “efficient” economy produces pet rocks (novelty stones with cute faces painted on them) and ties the retarded child to a tree in the backyard.  Of course, this was the summer of the Keynesian discontent (which would have its “winter” circa 1965 forward).  Consequently, the lower economics of the affluent society had a remarkable run in the universities, even sullying the waters in graduate seminars outside the Chicago city limits.  Worse, it went over with the public.

            He was a tireless writer on contemporary affairs, e.g., Viet Nam.  Within economics, he contributed importantly to the study of the corporation and the commanding role of technocrats.  He challenged profit maximization and depicted the diminution of private ownership into corporate myth and ritual.  He continued to extend his long argument in favor of price administration and corporate planning as inherent in the large-firm sector of the private economy.  These ideas are worked out in a closely reasoned vision of what the real world of economics is like.  His indictment of the profession was that its formalism constitutes a state of denial.  His critics replied that his notion of price constraint was fantasy and that his 1967 book on the power of the technocracy was overstated to the extent of being just plain wrong.  Despite the contemptuous opposition, both his theory of price administration and technocracy were powerfully argued and more disparaged than confuted.  His writings were too numerous and varied for economics alone.  From a purely literary viewpoint, his best book after 1967 was his sparkling autobiography, written while in his seventies.[v]

            One need not insist that a commanding case existed for Galbraith’s becoming a Nobel Laureate to see the point about exclusion.  The nature of his work lay outside the pale as to method and orientation.  His economic vision conflicted with that of Stockholm, which is entitled to no vision of its own other than an openness to any major advancement in understanding the subject.  Of course, a scientific prize was not meant to reward a prestigious career of high governmental posts that were part of Galbraith’s remarkable life.  All the same, such positions as wartime price administrator, ambassador to India, advisor to President Kennedy, etc., separate him greatly from closeted life.  It had to enhance the realism of his worldly perceptions.

He headed a section of the Office of Price Administration in the Second World War. He also has served, in addition to his run as Presidential advisor, as ambassador to India.  He has continued to advocate straight price controls as a peace-time replacement for corporate price management, thereby expanding employment without causing inflation.  The phrase “price controls” is an expletive among most economists, who treat such proposals as Russian fantasies, no matter how modest.  “You can’t get just a little bit pregnant.”  The case may be similar to those scientists who resisted building a practical H-bomb that would fit in an airplane or on a missile.  Because they did not want to do it, they thought it could not be done.  Arguably even partial direct controls in peacetime lack the skill and consensus to work, but they remain physically possible.  If tried, their probable failure would be rooted in politics, not economics, particularly in view of the lively indirect-control alternative that some economists have devised (cap-and-trade, etc).  The practical arguments against them have prevailed, perhaps rightly, but the theoretical reservations are the artifact of political outlook.  While Galbraith has enjoyed far more influence than most economists dream of achieving, that influence has never been felt in the inner courts of the economics profession.  His literary methods and egalitarian values are out of place in capitalism’s Praetorian Guard.  The Nobel Prize that he never won has the obvious explanation.

What Galbraith did in economics, he did with a puissance that required an answer.  The profession has never plausibly dismissed his critical insights into important theoretical flaws.  Doubtless, he will be one of the better remembered economists of the Twentieth Century, long after many a Nobelist of his era is forgotten.  Partly, this will be because he wrote well and accessibly, which few economist can do.  Over and above that, he knew a hawk from a handsaw, never practicing economic theory as an exercise in fairy chess, so popular with the scholastics among us.  He was once asked before a large audience why he had not received the Nobel Prize.  He immediately changed the subject without comment.  We can here answer the question for him.  The prize in economics has its own cloning program and is greatly inferior to the ideals of Alfred Nobel.  Never confuse that award with the applause of the gods.             


[i] Mark Blaug, Great Economists since Keynes, Cambridge University Press, New York, 1985, p. 70.

[ii] This stab at Galbraith comes from economist Arthur Shenfield, “On the State of Bad Economics,” The Spectator, 3/22/68.  He accuses Galbraith of writing for the literate and uninformed.  Among Schenfield’s other bad economists are Thorstein Veblen, Balogh, Walt W. Rostow, Gardiner Means, John R. Commons, Henry George, Gunnar Myrdal, Wassily Leontieff, Lawrence Klein, Sir Richard Stone, J. A. Hobson G.D.H. Cole—anyone apparently from the general category “left of Calvin Coolidge.”

[iii] Galbraith’s peers do not realize how how lucky they are.  He has kept a tongue more civil than his mind.  He bit his tongue when introduced to an audience at his Ontario College  as their “most distinguished graduate.”  He had thought, “But I’m your only distinguished graduate!”  When at Kennedy’s funeral, DeGaulle had reminded Galbraith that DeGaulle himself had undergone assassination attempts, Galbraith mind flashed, “that’s because Americans are better shots.”  Had he stopped biting his tongue, the hostility of presumed peers would have been personal jaundice rather than political pique.  Somehow, the lost opportunities of esprit d'escalier (repartee thought of too late) are less poignant than biting one’s tongue.

[iv] John Kenneth Galbraith, American Capitalism: the Concept of Countervailing Power, Houghton Mifflin, Boston (1952)

[v] See Galbraith’s entertaining A Life in Our Times: Memoirs, Houghton Mifflin, Boston (1983)