Editing John Kenneth Galbraith (section)

==Writings==
Even before becoming a president of the American Economic Association, Galbraith was considered as an [[iconoclasm|iconoclast]] by many economists. This is partly because he rejected the technical analysis and mathematical modelling of [[neoclassical economics]] as being divorced from reality. Following [[Thorstein Veblen]], he believed that economic activity could not be distilled into inviolable laws, but rather was a complex product of the cultural and political milieu in which it occurs. In particular, he posited that important factors, such as the separation between corporate ownership and management, [[oligopoly]], and the influence of government and military spending had been largely neglected by most economists because they are not amenable to axiomatic descriptions. In this sense, he worked as much in [[political economy]] as in [[classical economics]].

His work included several best selling books throughout the fifties and sixties. His major contribution to the field of economics is the so-called ''American capitalism'' trilogy: The ''Affluent Society'' (1958), ''The New Industrial State'' (1967), and ''Economics and the Public Purpose'' (1973). Written in a clear and concise style, they were comprehensible to lay readers, not just economists.

After his retirement from Harvard as the Paul M. Warburg Professor of Economics, Emeritus,<ref name="Harvard Gazette" /> he remained in the public spotlight by continuing to write 21 new books, as well as completing a script in 1977 for a major series on economics for [[PBS]] and [[BBC]] television—''[[The Age of Uncertainty]]'', broadcast in 38 countries.<ref name="Harvard Gazette" />

In addition to his books, he wrote hundreds of essays and a number of novels. Among his novels, ''[[A Tenured Professor]]'' achieved particular critical acclaim. Galbraith wrote book reviews, e.g., of ''[[The Report from Iron Mountain]] on the Possibility and Desirability of Peace'', a 1967 political satire, under the pen name of ''Herschel McLandress'', a name of a fictional Scottish mentor featured in the ''Tenured Professor''.<ref>Collins, Phillip Darrell and Collins, Paul David (2004) ''The Ascendancy of the Scientific Dictatorship: An Examination of Epistemic Autocracy from the 19th to the 21st Century''. New York: IUniverse. {{ISBN|0595311644}}. p. 125.</ref><ref>{{cite encyclopedia |title=Galbraith, John Kenneth |encyclopedia=encyclopedia.com |year=2009}}</ref> He also used the pseudonym, Mark Épernay, when he published ''The McLandress Dimension'' in 1963.<ref>Galbraith, John Kenneth (1963). ''The McLandress Dimension''. Boston: Houghton Mifflin.</ref>

===Economics books===
Galbraith was an important figure in 20th-century [[institutional economics]], and provided an exemplary ''institutionalist'' perspective on [[economic power]].<ref>Stilwell, Frank J. B. (2002) ''Political Economy: The Contest of Economic Ideas''. South Melbourne, Vic: Oxford University Press. {{ISBN|0195575016}}</ref> Among his numerous writings, Galbraith cherished ''The New Industrial State'' and ''The Affluent Society'' as his two best.<ref>{{Cite book|last=Adams|given=Philip|title=Interview on Radio National, Late Night Live|publisher=[[Australian Broadcasting Corporation]]|year=1999|url=http://www.abc.net.au/rn/talks/lnl/stories/s64155.htm|access-date=January 17, 2006|archive-url=https://web.archive.org/web/20060214063133/http://www.abc.net.au/rn/talks/lnl/stories/s64155.htm|archive-date=February 14, 2006|url-status=dead}}. Accessed January 17, 2006.</ref> As for the later works, economist and Galbraith friend Mike Sharpe visited him in 2004, on which occasion Galbraith gave Sharpe a copy of what would be Galbraith's last book, ''[[The Economics of Innocent Fraud]]''. Galbraith confided in Sharpe that "this is my best book", an assertion Galbraith delivered "a little mischievously."<ref>{{Cite journal|last=Sharpe|given=Mike|title=John Kenneth Galbraith, 1908–2006|journal=[[Challenge: The Magazine of Economic Affairs]]|volume= 49 |issue=4|page=7|year=2006 |doi= 10.2753/cha0577-5132490401 |s2cid=153529393}}</ref>

After the beginning of the [[Great Recession in the United States|Great Recession of 2008]], Galbraith's ''[[The Great Crash, 1929]]'' (1955) and other books containing warnings about the dangers of an unrestrained speculative mood without proper government oversight found an attentive readership again. In 2010, the [[Library of America]] published a new edition of Galbraith's major works, edited by his son, [[James K. Galbraith]]: ''The Affluent Society & Other Writings, 1952–1967'': ''American Capitalism'', ''The Great Crash, 1929'', ''The Affluent Society'', and ''The New Industrial State''.<ref>Galbraith, John Kenneth (2010). ''The Affluent Society & Other Writings, 1952–1967''. New York: [[The Library of America]]. {{ISBN|978-1-59853-077-3}}</ref> On this occasion, [[Bill Moyers]] interviewed James K. Galbraith about his father, his works, and his legacy.<ref>{{cite AV media | url=https://www.youtube.com/watch?v=JxDmw7rCfeQ | archive-url=https://ghostarchive.org/varchive/youtube/20211113/JxDmw7rCfeQ| archive-date=November 13, 2021 | url-status=live| title=The Unconventional Wisdom of John Kenneth Galbraith: A Conversation with Bill Moyers and James K. Galbraith. Part 1–4. | publisher=The Library of America | date=February 22, 2011 | people=Moyers,  Bill and Galbraith, James K. | medium=Video | location=The Grolier Club, New York City. November 17, 2010.}}{{cbignore}}</ref>

====American economy====
In ''[[American Capitalism|American Capitalism: The Concept of Countervailing Power]]'', published in 1952, Galbraith concluded that the American economy was managed by a triumvirate of big business, big labor, and an activist government. Galbraith defined the actions of the industry lobby groups and unions as ''countervailing power''. He contrasted this arrangement with the period prior to the previous Depression, when big business had relatively free rein over the economy.

His 1955 bestseller ''[[The Great Crash, 1929]]'' describes the Wall Street meltdown of stock prices and how markets progressively become decoupled from reality in a speculative boom. The book is also a platform for Galbraith's humor and keen insights into human behavior when wealth is threatened. It has never been out of print.

In ''[[The Affluent Society]]'' (1958), which became a bestseller, Galbraith outlined his view that to become successful, post–World War II America should make large investments in items such as highways and education, using funds from general taxation.

Galbraith also critiqued the assumption that continually increasing material production is a sign of economic and societal health. Because of this Galbraith is sometimes considered one of the first [[post-materialism|post-materialists]]. In this book, he popularized the old phrase "[[conventional wisdom]]".<ref>(Galbraith, 1958 The Affluent Society: Chapter 2 "The Concept of Conventional Wisdom")</ref> Galbraith worked on the book while in Switzerland and had originally titled it ''Why The Poor Are Poor'', but changed it to ''The Affluent Society'' at his wife's suggestion.<ref name="Rediff India Abroad"/> ''The Affluent Society'' contributed (likely to a significant degree, given that Galbraith had the ear of President Kennedy<ref name="NY Times">Noble, Holcomb B. and Martin, Douglas (April 30, 2006) [https://www.nytimes.com/2006/04/30/obituaries/30galbraith.html John Kenneth Galbraith, 97, Dies; Economist, Diplomat and Writer]. ''The New York Times''.</ref>) to the "[[war on poverty]]", the government spending policy introduced by the administrations of Kennedy and Johnson.

====New industrial state====
In 1966, Galbraith was invited by the BBC to present the Reith Lectures,<ref name="BBC Reith Lectures">{{cite web | url=http://www.bbc.co.uk/reithlectures | title=The Reith Lectures | publisher=BBC Radio 4 | access-date=July 3, 2013}}</ref> a series of radio broadcasts, which he titled ''The New Industrial State''.<ref>{{cite web | url=http://www.bbc.co.uk/programmes/p00h3y23 | title=The Reith Lectures, J K Galbraith: The New Industrial State (1966) | publisher=BBC Radio 4 | access-date=July 3, 2013}}</ref> Across six broadcasts, he explored the economics of production and the effect large corporations could have over the state.

In the print edition of ''[[The New Industrial State]]'' (1967), Galbraith expanded his analysis of the role of power in economic life, arguing that very few industries in the United States fit the model of [[perfect competition]]. A central concept of the book is the revised sequence. The 'conventional wisdom' in economic thought portrays economic life as a set of competitive markets governed, ultimately, by the decisions of sovereign consumers. In this original sequence, the control of the production process flows from consumers of commodities to the organizations that produce those commodities. In the revised sequence, this flow is reversed and businesses exercise control over consumers by advertising and related salesmanship activities.

The revised sequence concept applies only to the industrial system—that is, the manufacturing core of the economy in which each industry contains only a handful of very powerful corporations. It does not apply to the market system in the Galbraithian dual economy. In the market system, composed of the vast majority of business organizations, price competition remains the dominant form of social control. In the industrial system, however, composed of the 1,000 or so large corporations, competitive price theory obscures the relation to the price system of these large and powerful corporations. In Galbraith's view, the principal function of market relations in this industrial system is, not to constrain the power of the corporate behemoths, but to serve as an instrument for the implementation of their power. Moreover, the power of these corporations extends into commercial culture and politics, allowing them to exercise considerable influence upon popular social attitudes and value judgments. That this power is exercised in the shortsighted interest of expanding commodity production and the status of the few is both inconsistent with democracy and a barrier to achieving the quality of life that the new industrial state with its affluence could provide.

''The New Industrial State'' not only provided Galbraith with another best-selling book, it also extended once again, the currency of ''institutionalist'' economic thought. The book also filled a very pressing need in the late 1960s. The conventional theory of monopoly power in economic life maintains that the monopolist will attempt to restrict supply in order to maintain price above its competitive level. The social cost of this monopoly power is a decrease in both allocative efficiency and the equity of income distribution. This conventional economic analysis of the role of monopoly power did not adequately address popular concern about the large corporation in the late 1960s. The growing concern focused on the role of the corporation in politics, the damage done to the natural environment by an unmitigated commitment to economic growth, and the perversion of advertising and other pecuniary aspects of culture. ''The New Industrial State'' gave a plausible explanation of the power structure involved in generating these problems and found a very receptive audience among the rising American counterculture and political activists.

A third related work was ''[[Economics and the Public Purpose]]'' (1973), in which he expanded on these themes by discussing, among other issues, the subservient role of women in the unrewarded management of ever-greater consumption, and the role of the [[technostructure]] in the large firm in influencing perceptions of sound economic policy aims.

====Financial bubbles====
In ''A Short History of Financial Euphoria'' (1990), he traces speculative bubbles through several centuries, and argues that they are inherent in the free market system because of "mass psychology" and the "vested interest in error that accompanies speculative euphoria." Also, financial memory is "notoriously short": what currently seems to be a "new financial instrument" is inevitably nothing of the sort. Galbraith cautions: "The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version." Crucial to his analysis is the assertion that the common factor in boom-and-bust is the creation of debt to finance speculation, which "becomes dangerously out of scale in relation to the underlying means of payment."

===Legacy===
Galbraith's main ideas focused around the influence of the [[market power]] of large corporations.<ref name=Dunn2005/> He believed that this market power weakened the widely accepted principle of consumer sovereignty, allowing corporations to be price makers, rather than price takers,<ref name=Galbraith1970>{{Cite journal|last=Galbraith|first=John K|year=1970|title=Economics as a System of Belief|journal=American Economic Review|volume=60|issue=2|pages=469–78|url=http://cas.umkc.edu/econ/AFEE/EconomicsAsaSystemofBelief.pdf|archive-url=https://web.archive.org/web/20090326030041/http://cas.umkc.edu/econ/AFEE/EconomicsAsaSystemofBelief.pdf|url-status=dead|archive-date=March 26, 2009}}</ref> allowing corporations with the strongest market power to increase the production of their goods beyond an efficient amount. He further believed that market power played a major role in inflation.<ref name=Dunn2005/> He argued that corporations and trade unions could only increase prices to the extent that their market power allowed. He argued that in situations of excessive market power, price controls effectively controlled inflation, but cautioned against using them in markets that were basically efficient such as agricultural goods and housing.<ref name=Money>Galbraith JK. (1977). ''Money: Where It Came, Whence It Went''. Houghton Mifflin.</ref> He noted that price controls were much easier to enforce in industries with relatively few buyers and sellers.<ref name=Money/>{{Rp|244}} Galbraith's view of market power was not entirely negative; he also noted that the power of US firms played a part in the success of the US economy.

In ''[[The Affluent Society]]'' Galbraith asserts that classical economic theory was true for the eras before the present, which were times of "poverty"; now, however, we have moved from an age of poverty to an age of "affluence", and for such an age, a completely new economic theory is needed.

Galbraith's main argument is that as society becomes relatively more affluent, private business must create consumer demand through [[advertising]], and while this generates artificial affluence through the production of commercial goods and services, the public sector becomes neglected. He points out that while many Americans were able to purchase luxury items, their parks were polluted and their children attended poorly maintained schools. He argues that markets alone will under-provide (or fail to provide at all) for many public goods, whereas private goods are typically "over-provided" due to the process of advertising creating an artificial demand above the individual's basic needs. This emphasis on the power of advertising and consequent over-consumption may have anticipated the drop in savings rates in the US and elsewhere in the developing world.<ref name=Dunn2005/>

Galbraith proposed curbing the consumption of certain products through greater use of [[pigovian tax]]es and [[land value tax]]es,<ref>{{cite web|last=Bourke|first=Joe|title=Opinion: Land Value Tax – an old idea with lots of modern supporters|url=http://www.libdemvoice.org/opinion-land-value-tax-an-old-idea-with-lots-of-modern-supporters-28459.html|access-date=September 24, 2013}}</ref>  arguing that this could be more efficient than other forms of taxation, such as labor taxes. Galbraith's major proposal was a program he called "investment in men"—a large-scale, publicly funded education program aimed at empowering ordinary citizens.

An International Symposium to honor John Kenneth Galbraith, sponsored by the l'Université du Littoral Côte d'Opale, Dunkerque and the Institut de Gestion Sociale, Paris, France, was held in September 2004 in Paris.<ref>Laperche, Blandine and [[Dimitri Uzunidis]]. ''John Kenneth Galbraith and the Future of Economics''. Papers from the International Symposium Honoring John Kenneth Galbraith Held in Paris in September 2004. Basingstoke, England: Palgrave Macmillan, 2005.</ref>

A special issue ''Commemorating John Kenneth Galbraith's Centenary'' of the ''Review of Political Economy'' was dedicated in 2008 to Galbraith's contribution to economics.<ref>{{cite news | url=http://www.tandfonline.com/toc/crpe20/20/4 | title=Special Issue of the Review of Political Economy: Commemorating John Kenneth Galbraith's Centenary | newspaper=Taylor & Francis | volume=20 |issue=4 |year=2008 | access-date=July 2, 2013}}</ref>

Three days before his death, Galbraith urged his son, economist [[James K. Galbraith]], to "write a short book on corporate predation"; the younger Galbraith completed ''[[The Predator State]]'' in 2008.

===Reception===
Galbraith's work in general, and ''The Affluent Society'' in particular, have drawn sharp criticism from [[laissez-faire]] supporters since the time of their publications. Nobel Prize-winning economist [[Milton Friedman]] in "Friedman on Galbraith, and on curing [[the British disease]]" views Galbraith as a 20th-century version of the early-19th-century [[Tories (British political party)|Tory]] radical of Great Britain. He argues that Galbraith believes in the superiority of aristocracy and in its paternalistic authority, that consumers should not be allowed choice, and that all should be determined by those with "higher minds", commenting: "Many reformers—Galbraith is not alone in this—have as their basic objection to a free market that it frustrates them in achieving their reforms, because it enables people to have what they want, not what the reformers want. Hence every reformer has a strong tendency to be averse to a free market."<ref>{{Cite book |last=Friedman |first=Milton |title=Friedman on Galbraith and on Curing the British Disease |publisher=The Fraser Institute |year=1977 |isbn=0-88975-015-7}}</ref>

Nobel Prize-winning economist [[Robert Solow]], in a review of ''[[The New Industrial State]]'', points at Galbraith's lack of [[empiricism]] and selectiveness in his use of evidence. He points out that "It may be unjust and pointless to consider the degree of literal truth of each of the assertions that make up this argument. One would hardly discuss Gulliver's Travels by debating whether there really are any little people, or criticize the Grande Jatte because objects aren't made up of tiny dots. Nevertheless, it may help to judge the truth of Galbraith's."<ref>{{Cite news|url=https://www.nationalaffairs.com/public_interest/detail/the-new-industrial-state-son-of-affluence|title=The New Industrial State: Son of Affluence|access-date=September 26, 2017}}</ref>

[[Richard Parker (economist)|Richard Parker]], in his biography, ''John Kenneth Galbraith: His Life, His Economics, His Politics'', characterizes Galbraith as a more complex thinker. Galbraith's primary purpose in ''Capitalism: The Concept of Countervailing Power'' (1952) was, ironically, to show that [[big business]] was now necessary to the American economy to maintain the technological progress that drives [[economic growth]]. Galbraith knew that the "countervailing power", which included [[government regulation]] and collective bargaining, was necessary to balanced and efficient markets. In ''The New Industrial State'' (1967), Galbraith argued that the dominant American corporations had created a [[technostructure]] that closely controlled both [[consumer demand]] and [[Market (economics)|market]] growth through [[advertising]] and [[marketing]]. While Galbraith defended government intervention, Parker notes that he also believed that government and big business worked together to maintain stability.<ref>Madrick, J. (May 26, 2005) [http://www.johnkennethgalbraith.com/index.php?page=press&display=40 "A Mind of His Own: Review of ''John Kenneth Galbraith: His Life, His Economics, His Politics.''"] {{webarchive|url=https://web.archive.org/web/20160309031525/http://johnkennethgalbraith.com/index.php?display=40&page=press |date=March 9, 2016 }} ''The New York Review of Books''.</ref>

[[Paul Krugman]] downplayed Galbraith's stature as an academic economist in 1994. In ''[[Peddling Prosperity]]'', he places Galbraith as one among many "policy entrepreneurs"—either economists, or think tank writers, left and right—who write solely for the public, as opposed to those who write for other academics, and who are, therefore, liable to make unwarranted diagnoses and offer over-simplistic answers to complex economic problems. Krugman asserts that Galbraith was never taken seriously by fellow academics, who instead viewed him as more of a "media personality". For example, Krugman believes that Galbraith's work, ''The New Industrial State'', is not considered to be "real economic theory", and that ''Economics in Perspective'' is "remarkably ill-informed".<ref>Krugman, Paul (1994) ''[[Peddling Prosperity]]''. Scranton, Pennsylvania: W. W. Norton. {{ISBN|978-0-393-31292-8}}. pp. 10–15.</ref>

[[Thomas Sowell]] in his 1995 book ''[[The Vision of the Anointed]]'', criticized Galbraith's claims in ''The Affluent Society'' and ''The New Industrial State'' that large corporations are invincible to competition, by citing [[Toyota]] and [[Honda]]'s takeover of the [[United States]]' automobile market at the expense of [[General Motors]], the decline of [[Life (magazine)|''Life'']] magazine, and overall, the displacement of almost half of the firms in 1980's [[Fortune 500]] in the 1990 edition. Sowell also criticized Galbraith's assertion that successful corporate management was immune to corporate shake-ups. Sowell believed Galbraith's contemptuousness towards the idea of a lone entrepreneur starting up a new, powerful company to not have stood up to the test of time; Sowell used [[Steve Jobs]] and [[Bill Gates]] as counterexamples.<ref>Sowell, Thomas (1995) ''[[The Vision of the Anointed]]''. Basic Books. {{ISBN|978-0-465-08995-6}}. pp. 64-65.</ref>

===Memoirs===
{{external media| float = right| video1 = [https://www.c-span.org/video/?170027-1/john-kenneth-galbraith Discussion with Galbraith and biographer Richard Parker, May 9, 2002], [[C-SPAN]]| video2 = [https://www.c-span.org/video/?186530-1/john-kenneth-galbraith Discussion with Parker on ''John Kenneth Galbraith: His Life, His Politics, His Economics'', April 17, 2005], [[C-SPAN]]}} 
The first edition of ''The Scotch'' was published in the UK under two alternative titles: as ''Made to Last'' and ''The Non-potable Scotch: A Memoir of the Clansmen in Canada''.<ref>Galbraith, John Kenneth (1964). ''The Scotch''. Boston: Houghton Mifflin.</ref> It was illustrated by Samuel H. Bryant. Galbraith's account of his boyhood environment in [[Elgin County, Ontario|Elgin County]] in southern [[Ontario]] was added in 1963. He considered it his finest piece of writing.<ref>[[#Parker|Parker]], p. 435.</ref>

Galbraith memoir, ''A Life in Our Times'' was published in 1981.<ref>[[#Galbraith1981|Galbraith (1981)]]</ref> It contains discussion of his thoughts, his life, and his times. In 2004, the publication of an authorized biography, ''John Kenneth Galbraith: His Life, His Politics, His Economics''<ref name=parker/> by a friend and fellow progressive economist [[Richard Parker (economist)|Richard Parker]] renewed interest in Galbraith's life journey and legacy.