Galbraith, John Kenneth (1908–)

JOHN KENNETH GALBRAITH was born in Ontario, Canada, and studied at the University of Toronto, the University of California, and Cambridge University. He immigrated to the United States in 1931 and became an assistant professor of economics at Princeton University in 1939. After holding a number of administrative positions, he became Paul W. Warburg Professor of Economics at Harvard University, a chair he held from 1949 to 1975. A politically active liberal Democrat, Galbraith became an adviser to Adlai Stevenson and President [Page 414]John F. Kennedy. Kennedy appointed him U.S. ambassador to India (1961–63) during the Chinese-Indian border conflict.

Galbraith has written many books in economics, and has also published works of fiction and nonfiction in other fields. His best known works are American Capitalism (1952); The Great Crash (1955); The Affluent Society (1958); The Liberal Hour (1960); Made to Last (1964); The New Industrial State (1967); The Triumph (1968); Ambassador's Journal (1969); Economics, Peace and Laughter (1972); “Power and the Useful Economist,” American Economic Review (1973); Money (1975); The Age of Uncertainty (1979); Annals of an Abiding Liberal (1979); A Life of Our Time (1981); The Tenured Professor (1990); A Journey Through Economic Times (1994); and The Good Society: The Human Agenda (1996).

Some critics of the Kennedy and Lyndon Johnson administrations say Affluent Society most likely contributed to the War on Poverty being a disastrous government spending policy first brought on by Kennedy and Johnson. The main content of the book was not really the affluence of society. A major theme was the alleged contrast between private affluence and public squalor. Although the thesis was not astoundingly new, having long been argued by others, Galbraith's attack on the myth of “consumer sovereignty” went against the cornerstone of economics and, in many ways, the culturally hegemonic “American way of life.”

The New Industrial State expanded on Galbraith's theory of the firm, arguing that the orthodox theories of the perfectly competitive firm fell far short in analytical power. Companies, Galbraith claimed, were oligopolistic, autonomous institutions vying for market shares (and not profit maximization), which wrested power away from owners (entrepreneurs/shareholders), regulators, and consumers via conventional means (such as vertical integration, advertising, and product differentiation) and unconventional ones (such as bureaucratization and capture of political favor).

Naturally, these were themes already well espoused in the old American institutionalist literature, but in the 1960s, they were apparently forgotten in economics. The issue of political capture by firms was expanded upon in his book Economics and the Public Purpose, published in 1973. But new themes were added, notably public education, the political process, and stressing the provision of public goods.

Galbraith is more or less influenced by the economist John Maynard Keynes for the relevance of government intervention to correct market failure when it is needed. There is an inbuilt public choice approach in Galbraith's analysis of economics, like J.M. Buchanan's and others’.