John Kenneth Galbraith The Great Crash

The Dissenting Economist: John Kenneth Galbraith Biography and Theory

Galbraith Affluent Society, Galbraith The Great Crash

John Kenneth Galbraith was born on 15 October, 1908 in Iona Station, Ontario, and spent his childhood in a Scottish-Canadian farming community dominated by the Puritan hostility to luxury and the Calvinist work-ethic. His father was a teacher turned farmer (and in addition an active member of Canada's Liberal Party), and Galbraith originally intended too to follow some sort of agrarian career. He graduated in 1931 with a BSc degree from the Ontario Agricultural College (at the time a part of the University of Toronto) and then departed for the United States (not all that foreign a country to a farm boy from Iona Station, situated as it was less than 100 miles from Detroit: heavily dependent on American markets, local farmers were well in­formed about economic and social conditions south of the border) to do a PhD in agricultural economics at the University of California, Berkeley. Two years later he arrived at Harvard as an instructor in economics. His starting salary was $2400.

Berkeley in the Depression taught Galbraith about the miseries of unemployment and the tragedy of the Hoovervilles; Harvard in the New Deal convinced him of the necessity for Keynesian-type interventionist policies to combat, via reform rather than revolution, the demonstrated failures of laissez-faire capitalism. At Harvard he was exposed to the sophisticated arguments of Paul Samuelson, Seymour Harris, Alvin Hansen (the latter being far more of a heterodox and evolutionary economist than is usually realised, as might indeed be expected from a man who had studied with two of the giants of institutional economics, John R. Commons and Wesley Mitchell) and, of course, to the ideas of Joseph Schumpeter on technological change, the nature of the corporation and the future of economic systems. In 1937/8 he was a Social Sciences Research Fellow at Cambridge, where, although he did not meet Keynes, he deepened his knowledge of economics through wide reading and discussions with Maurice Dobb, Piero Sraffa and Joan Robinson. Meanwhile, he had gained entree to the salons of the moneyed classes in the United States as a result of his marriage to Catherine Atwater, a modern-languages student at Radcliffe.

In the Second World War Galbraith became, at the young age of 33, the Deputy Administrator in the Office of Price Administration; and was, from 1941 until the unpopularity of his policies led to his forced resignation in 1943, in charge of price control for the whole of the United States. From 1943-48 he was on the board of editors of Fortune magazine, where he learned from Henry Luce how to write with clarity for a popular audience. In this period he was also involved in the Strategic Bombing Survey, which stud
ied the effects of allied air attacks on the economy of Germany and Japan.

Galbraith returned to Harvard in 1949 and remained there until his retirement in 1975 (from 1959-75 as the Paul M. Warburg Professor of Economics). It was in this later period that he became a celebrity in his own right. Partly this was because of his active participation in the Democratic Party, as chairman of the domestic policy committee of the Democratic Advisory Council, as president of the radical Americans for Democratic Action, as speech-writer for and advisor to Adlai Stevenson, John Kennedy (for whom he served from 1961 to 1963 as an outspoken and forceful Ambassador to India, taking time as well to warn the President against American involvement in Vietnam), Eugene McCarthy and George McGovern. Principally, however, it is by virtue of his position as a leading commentator on the economic, social and political problems of advanced industrial countries that Galbraith has become one of the best-known intellectuals and most influential social critics of our time. A prolific if also a repetitive author, his publications range from historical accounts of the economic problem {The Great Crash; The Age of Uncertainty) through books of reminiscences {Ambassador's Journal; A China Passage) and works of fiction {The Triumph; The McLandress Dimension) to tracts on social and political reform {How to Control the Military; How to Get Out of Vietnam), and even include an often-ignored attempt to integrate price controls into the body of economic thought {A Theory of Price Control); but it is most of all due to four important and provocative best­sellers (books that stand alongside The Theory of the Leisure Class, The Lonely Crowd, The Power Elite, The Organization Man and The Sane Society as classics of modern American thought) that his ideas have come to be more widely discussed than those of virtually any other economist of his generation. It is with those four books - American Capitalism, The Affluent Society, The New Industrial State and Economics and The Public Purpose - that we shall be concerned in the four sections which follow.