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Home > Macroeconomic Issues Thinkers > John Kenneth Galbraith

Macroeconomic Issues Thinkers

John Kenneth Galbraith

Leading 20th-century economist and institutionalist

Timeline

1908
Born in Iona Station, Ontario, Canada.
1931
Received BSc from the Ontario Agricultural College.
1933
Received MSc from the University of California, Berkeley.
1934
Received PhD in agricultural economics from the University of California, Berkeley.
1934
Appointed a tutor at Harvard University.
1939
Taught at Princeton University.
1943
Appointed editor of Fortune magazine.
1947
Cofounded Americans for Democratic Action.
1949
Appointed professor of economics at Harvard University.
1952
Publication of American Capitalism: The Concept of Countervailing Power.
1954
Publication of The Great Crash, 1929.
1958
Publication of The Affluent Society.
1961
Appointed US ambassador to India.
1967
Publication of The New Industrial State.
1977
Presented The Age of Uncertainty for the BBC in the United Kingdom.
1972
Appointed president of the American Economic Association.
1975
Became professor emeritus at Harvard University.
1990
Publication of A Short History of Financial Euphoria.
2006
Died in Cambridge, Massachusetts.

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Life and Career

J. K. Galbraith was one of the most influential and best-known economists and writers of the 20th century. He taught at Harvard and Princeton, before serving as deputy head of the Office of Price Administration during WWII. He was also a leader of the Strategic Bombing Surveys of Europe and Japan, an adviser to post-war administrations in Germany and Japan, and later became US Ambassador to India. During the 1950s and 1960s, his economics books, based on his ideas of liberalism and progressivism, became international bestsellers. As well as teaching at Harvard for many years, he served in the administrations of Franklin D. Roosevelt, Harry Truman, John F. Kennedy, and Lyndon B. Johnson, and was a two-time recipient of the Presidential Medal of Freedom.

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Key Thinking

  • Galbraith was a Keynesian economist and liberal, and seen as the rebel of modern economics, due to his advocacy of government spending to combat unemployment, and warnings over the dangers inherent in deregulated markets, corporate greed, and overspending on the military.

  • He rejected the technical and mathematical views of neoclassical economics, as being divorced from reality, and argued that most economists were ignoring key areas, such as advertising, corporate ownership, and the influence of government spending.

  • In examining the priorities of modern economics, he supported the use of national wealth for public services and not private consumption, the curbing of demand through consumption taxation, and publicly funding education programs aimed at ordinary people.

  • He propounded the advantages of countervailing forces in the economy, where groups such as labor unions helped maintain a political and social balance.

  • Was also described as the first post-materialist, due to his contention that continually increasing material production was not a sign of economic well-being.

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In Perspective

  • The Affluent Society turned him into a celebrity—it proposed that classical economic theory may have worked for previous eras, but that the rising affluence of the US in the 1950s needed completely new economic theories.

  • American Capitalism was also a popular success for its critique of the excesses of consumerism, and predictions about the economy becoming dominated by big business, labor, and government.

  • In Economics and the Public Purpose, he examined the issue of “political capture” by firms, and discussed issues surrounding political processes, public education, and the provision of public goods.

  • Followed the views of Thorstein Veblen, that economic activity was not bound by inviolable laws, but was a complicated mix of the cultural and political.

  • In New Industrial State, he expanded his theory of the firm, arguing that current concepts of the perfectly competitive firm were unsuccessful, but that they were oligopolistic, autonomous institutions vying for market share.

  • He was involved in the presidential campaigns of Eugene McCarthy, and George McGovern.

  • During the 1980s, he criticized President Reagan and President Bush’s policies of trickle-down economics.

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Quotation

“Trickle-down theory—the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”

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Further reading on John Kenneth Galbraith

Books:

  • Galbraith, John Kenneth. The Affluent Society. Boston, MA: Houghton Mifflin, 1958.
  • Parker, Richard. John Kenneth Galbraith: His Life, His Politics, His Economics. New York: Farrar, Straus, and Giroux, 2004.
  • Stanfield, James Ronald, and Jacqueline Bloom Stanfield (eds). Interviews with John Kenneth Galbraith. Jackson, MS: University Press of Mississippi, 2004.

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