”Under capitalism, man exploits man. Under communism, it's just the opposite.” - John Kenneth Galbraith
As economists go, John Kenneth Galbraith probably ranks right up there with the likes of Adam Smith, Karl Marx, John Stuart Mill, Thorstein Veblen and John Maynard Keynes. He also served as an advisor to President John F. Kennedy and was Kennedy’s Ambassador to India and has been awarded the Presidential Medal of Freedom. He has been on the board at Harvard University since 1948.
Born in Canada in 1908 and educated at the University of California, Berkeley, JKG, similar to the economists listed above, is considered somewhat of a renegade. While some of his work has been disproved, almost all of it has been provocative.
During World War II Galbraith acted as head of President Franklin D. Roosevelt's Office of Price Administration. It was his experience in that role that led him to develop a theory that the use of price controls could be used as a tool against inflation. He also argued that America’s economic success after the war didn’t arise from getting prices right, rather but getting them wrong. This allowed for a concentration of industry and technological advancement. Galbraith argued this advancement was only successful because it was countered by trade unions, corporate watchdogs and government regulations. He argued that those three entities would curtail corporate abuse and thereby “have a “countervailing power.”
In 1958 he published what is probably his best known work, The Affluent Society. It’s main argument was an attack the theory of “consumer sovereignty”. This can probably best be described as consumers having the final say in choices thereby giving them final economic power. He based his argument on corporations such as General Motors which at one time commanded about 50% of the market share for automobiles. His theory was such that if a corporation could command such a large share of the market, consumers were ultimately being dictated to rather than being afforded real choices.
To sum it up, John Kenneth Galbraith has always flown in the face of current economic theory. This is mainly because of its preoccupation with growth simply for growth’s sake. It does not take into account the production of waste along the way nor does it take in to account the need for public services. He has argued that in modern day economies, more consideration should be given to the distribution of products among the classes of people. At the same time, he believes that many economists of today are guilty of being caught up in conventional schools of thought and are losing touch with the “real world.”
Major works of John Kenneth Galbraith
Modern Competition and Business Policy, 1938
A Theory of Price Control, 1952.
American Capitalism: The concept of countervailing power, 1952.
The Great Crash, 1929, 1954.
The Affluent Society, 1958.
The Liberal Hour, 1960
The New Industrial State, 1967
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The Triumph, 1968.
Ambassador's Journal, 1969.
Economics, Peace and Laughter, 1972.
"Power and the Useful Economist", 1973, AER
Economics and the Public Purpose, 1973
Money, 1975.
The Age of Uncertainty, 1977.
Annals of an Abiding Liberal, 1979.
A Life in Our Times, 1981.
The Tenured Professor, 1990.
A Journey Through Economic Time, 1994.
The Good Society: the humane agenda, 1996.
John Kenneth Galbraith departed this world for what will hopefully be greener pastures. He died at the ripe old age of 97 on April 30, 2006.