dismal but not abysmal: 
john kenneth galbraith explains it all for you

The Essential Galbraith
John Kenneth Galbraith
(Houghton Mifflin/Mariner, 400 pages)

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One doubtless unintended consequence of the Cold War was the furious intensification of a tendency to cast competing schools of economic thought as virtual faiths; quasi-religious dogma battling for the monetary soul of the world while real religion waned. Notwithstanding the corroding and eventual downfall of Marxism, the differing sects of liberal capitalism would informally come to blows on the editorial pages of newspapers and in fixed bouts (pun intended) known popularly as federal elections. It took the sobering events of September 11th to remind us of the continued relevance and profound, historical volatility of real religion.

In the economy wars of the previous half-century, the (Ontario-born but essentially American) economist John Kenneth Galbraith cut a figure equal parts Savonarola and Swift. To fiscal conservatives, Libertarians, and the fundamentalist fringe in places like the John Birch Society, Galbraith was definitely the former. But it's hard to reconcile their image of him - a mad Keynesian socialist championing big government and punitive taxation against business and the market - with the patrician Harvard professor who began his career in FDR's wartime Wage and Price Control Office.

Reading The Essential Galbraith, a new anthology that surveys his career, one tends to encounter the Swiftian Galbraith, a dry and decidedly unhysterical thinker armed with reserves of desiccating sarcasm. Occasionally, as in "The Unfinished Business of the Century", the lecture that closes the book, one finds the moralist behind the imperturbable facade, the Galbraith responsible for books like The Culture of Contentment and The Good Society. This would also be the Galbraith that, alone among the bright young men sent by Washington to interrogate Nazi armaments minister Albert Speer before the Nuremberg Trials, regarded the astutely contrite war criminal with barely concealed disgust. Speer might have miraculously increased production under withering Allied bombardment, but Galbraith still saw a man who performed this miracle through ruthless use of slave labour.

This moral Galbraith has been the one best served by the editing of this compilation. In the early chapters, which draw from the meat of his economic writing, Galbraith makes a strong case for the inadequacy of poorly-divined market forces at addressing the basic needs of society. In "The Nature of Social Balance", from 1958's widely-read The Affluent Society, Galbraith describes the dilemma of states and municipalities that, unable to underwrite their own loans and at the mercy of transfer payments from federal authorities who can, begin starving their citizens of decent public services out of a morbid, politically-induced fear of taxation. To those familiar with the abusive tango between Ontario and Toronto for the past half-decade or so, it's a chilling passage.

Perhaps his greatest gift to modern vocabulary is the term "conventional wisdom", an idea that Galbraith regards as essential when dealing with economists and those professing fiscal wisdom. In politics, and even (perhaps especially) business, where authorities are often poorly apprised of the positions they regard as gospel, the concept of conventional wisdom is a guiding light: "An understanding of our economic discourse requires an appreciation of one of its basic rules: men of high position are allowed, by a special act of grace, to accommodate their reasoning to the answer they need. Logic is only required in those of lesser rank."

In his essays on Adam Smith, Marx and Keynes, Galbraith acknowledges the sad truths that render economics "the dismal science": the fact of constant change in social and economic circumstance, the seductiveness of conventional wisdom, and the difficulty in reading both accurate statistics and the future clearly. It's perhaps because of this that Galbraith's reputation is stronger as a historian and popular essayist than as an economist. It was his caustic but confiding wit - along with some fantastic visuals - that drove the 1977 t.v. series "The Age of Uncertainty", a PBS/BBC/CBC co-production that greatly impressed me, even as a twelve-year old boy.

Despite the much-heralded "triumph of the market", there's remarkable choice, but little depth, in the panoply of books and magazines on business, management, money, investment and economy today. Alone among Galbraith's younger contemporaries, Princeton's Paul Krugman offers a broad, skeptical perspective on the world of money. Yet, in his book Peddling Prosperity, Krugman feels obliged to point out that Galbraith was never able to author an economic treatise as influential as Keynes or Milton Friedman. Even John F. Kennedy, while employing numerous academic economists in his administration, saw fit only to make Galbraith ambassador to India, a post Galbraith recalls as "an often undemanding occupation".

A few years ago, Krugman wrote a pollyanna-ish piece on Enron for Fortune magazine, doubtless under the influence of the bright "new economy" moment that seemed so promising before the Nasdaq crash - that, and the $50,000 fee that Enron paid him for a bit of consulting. It's come back to bite him now, of course, but it illustrates how "dismal scientists" can become a bit more optimistic under the influence of "market forces" that aren't often discussed in economic theory. Doubtless The Essential Galbraith has been edited to excise similar failures of prognostication.

This does not, however, diminish the pleasures of the best of Galbraith's writing. One essay, "The Proper Purpose of Economic Development", might be useful reading for opponents on both sides of the recent, enraged protests over globalization. If any recent economic skirmish has been so freighted with conventional wisdoms, long past any ability to discern priorities or truth, it has doubtless invoked globalization, that dismal palimpsest of fear and hopeless jargon.

©2001, 2002 Rick McGinnis