John Kenneth Galbraith revisited

January 21, 2007


I have been reading Richard Parker's excellent biography of John Kenneth Galbraith and encouraging my students to do the same. Parker's work is a rich and rewarding treatment of this outstanding Canadian - American economist.   In many ways the work is also a history of the coming of Keynesian ideas to America.
This Keynesian arrival was in large measure promoted by Galbraith who very early on(early 1936 to be precise) recognized the seminal importance of Keynes' work. Lauchlin Currie, a personal economic advisor to FDR and former Harvard instructor   who incidentally was also a Canadian and brought Galbraith as a young man to Washington to work for him, as well as his colleague from Harvard, Harry Dexter White later of Bretton Woods fame, Mariner Eccles who came to head the Federal Reserve, Alvin Hansen, a classical business cycle theorist who was won over by Keynesian doctrine; the far seeing Massachusetts businessman Henry Dennison who was an economic advisor to Roosevelt and hired Galbraith to tutor him in economic theory for a book he and several other progressive businessmen had decided to write to advise Roosevelt in a constructive fashion; and a number of younger economists like Paul Samuelson,James Tobin, Seymour Harris, Abba Lerner, Louis Rasminsky, Mabel Timlin, Clarence Barber, Jack Weldon, and Robert Bryce in Canada, and Lorie Tarhsis who was Canadian but taught at Stanford were all involved in this transformation. Eccles, Dennison and Currie had somewhat independently arrived at comparable conclusions to those of Keynes even before the General Theory was published and they played a critical role in pushing FDR toward interventionist Keynes style policies.

For it must be remembered that FDR was first elected on a classically orthodox balance the budget economic program that soon was shown to be woefully inadequate and misguided in the face of the depression.( For a thorough discussion of this history   see Parker. But also see Galbraith's account in his memoirs, A Life in Our Times   and Arthur Gayer, Public Works in Prosperity and Depression prepared for the National Planning Board Federal emergency administration of Public works, National bureau of economic research, New York, 1935)

Parker's book captures the excitement and drama of the tale and also describes the enormous hostility to himself and to Keynes' doctrine that Galbraith had to overcome at Harvard. His mentor Prof.John D. Black an institutionalist leaning agricultural economist derves credit for having sought and found Galbraith a tenure track position at Harvard despite considerable opposition among the hidebound conservatives who had enormous influence at Harvard and who distrusted Galbraith and Keynes.

Reading Parker has stimulated me to reread some of Galbraith's classics, for example ,American Capitalism:the concept of Countervailing Power. This work published in 1952 sold 400,000 copies much to the surprise of its publisher and Galbraith himself. It is is intriguing to see the way that Galbraith weaves together his notion of countervailing power with certain notions of institutionalism, Veblen's insights and his penetrating knowledge of Keynes' economics.

With this book   Galbraith launched himself on a path that led to world renown and many more best sellers.His capacity for synthesizing several streams of thought in an integrated way is what made his work as appealing and analytically powerful as it was. Of course, the fact that he could write and took pains to write well and with style made his work extremely attractive.It is a great pity that the bulk of the contemporary mainstream neo-classical tradition knows little or nothing of his work