Sunday, April 30, 2006

John Kenneth Galbraith

Economist John Kenneth Galbraith has passed away at 97. Galbraith was one of the most influential economists in American history - despite his enduring status as a heretic within his own academic specialty - and one of my favorite writers. I'm sure a number of articles and commentary will be done about him the next week or so. Here are a couple of my favorite quotes from the early crop:

New York Times:

Amartya Sen, a Nobel Prize-winning economist, maintains that Mr. Galbraith not only reached but also defined the summit of his field. In the 2000 commencement address at Harvard ... Mr. Sen said the influence of "The Affluent Society" was so pervasive that its many piercing insights were taken for granted.

"It's like reading 'Hamlet' and deciding it's full of quotations," he said.
Boston Globe:

"I hear that in your country you are considered a man of the left," Leonid Brezhnev once said to him. "I invite you to the Soviet Union so you will have the experience of being a reactionary."
In his most recent book, The Economics of Innocent Fraud: Truth for Our Time (2004), Galbraith wrote about the rebranding of "capitalism" as "the market system".


He explained that the Great Depression gave the brand name "capitalism" an unpleasant connotation among too many people. So a variety of alternative names were tried such as "free enterprise" or "social democracy". The currently prevailing label is "the market system":

There was no adverse history here, in fact no history at all. It would have been hard, indeed, to find a more meaningless designation - this a reason for the choice. ...

So it is of the market system we teach the young. It is of this, as I've said, that sophisticated political leaders, compatible journalists and many scholars speak. No individual or firm is thus dominant. No economic power is evoked. There is nothing here from Marx or Engels. There is only the impersonal market, a not wholly innocent fraud. ...

Another name for the system does come persuasively to the eye and ear: "the Corporate System." None can doubt that the modern corporation is a dominant force in the present-day economy, and certainly so in the United States. Nonetheless, allusions to it are used with caution or not at all. Sensitive friends and beneficiaries of the system do not wish to assign definitive authority to the corporation. Better the benign reference to the market.


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