John K. Galbraith Conventional Wishdom

John Kenneth Galbraith Conventional Wishdom, Evalution

Galbraith is a man of letters in the eighteenth-century mould. Although his hypotheses are loosely formulated, his evidence often intuitive rather than factual, his economic determinism a mask to conceal moral judgements, his presentation theatrical and frequently exaggerated, it would be wrong to underestimate his contribution to economics in particular and to the social sciences in general.

First, his methodology is unusual insofar as he adopts a historical and evolutionary approach to the study of economic phenomena. Galbraith believes that actions and perceptions are to be understood within the situational framework of their cultural and institutional context, and this conviction impels him to proceed in an interdisciplinary and functionalist manner to the construction of a holistic synthesis. He is thus writing rather in the tradition of systems-builders such as Smith and Marx than in that more modern tradition which focuses on the purely purposive, the narrowly rational, the useful, the technological; which takes ends as constants; and which dismisses social institutions and interac­tion (and the laws governing their development) as more the province of the sociologist and the philosopher than of the economist.

Secondly, he introduces political concepts into economics, both in his theory of the firm (as where he examines the power of the corporation to influence other economic actors and even the State) and in his theory of governmental intervention (as where he argues that the non-market sector should be expanded). He has in this way become the prophet of the mixed economy and a staunch critic of that conventional wisdom in economics which teaches (if not preaches) the valuable function performed by automatically self-stabilising markets and invisible hands. Here he would argue that historical change has made the description of what once was into an irrelevant approach to what is; and would also no doubt wish to stress the extent to which a heterodox economist who rejects neo-classical ideas of competition, laissez-faire, consumer sovereignty, profit maximisation, the existence of scarcity, the importance of growth, and the need efficiently to suit means to random ends, will even today find it difficult to obtain a doctorate or a lectureship, to have his articles accepted by leading scholarly journals, or to secure a grant from a major foundation or research council. Such an economist will quickly discover to his own cost the true nature of social power and vested interest.

Thirdly, he recognises that ideas have consequences, and that there exists a dialectical relationship between mind and matter such that the scholar not merely identifies social change but helps to influence it. Convinced that social theories are themselves social facts both produced by and capable of transforming other social facts, Galbraith has himself sought to formulate a non-Marxist theoretical system aimed at persuading a wider audience than professional economists alone to alter their beliefs and thus their society as well; and he has in great measure succeeded, not only due to the force of his arguments but also because of the articulate, witty and accessible manner in which they are presented. As John Gambs has put it, explaining why Galbraith has succeeded where Veblen failed, in winning the interest and sympathy of an extensive popular audience, 'Veblen was an eccentric scholar; Galbraith is a smoothie and a man of the world'.