A FOX AND NOT A HEDGEHOG
In the current issue of Foreign Affairs
, Brad DeLong
has reviewed the new biography
of economist John Kenneth Galbraith
by Richard Parker
and bemoaned the current lack of influence by one of American liberalism's most productive intellects:"Lots of ideas in the background of contemporary U.S. political and economic thought are Galbraith's. His work as an economist was a scattered but comprehensive attempt to think through the consequences of the transition from a nation of small farms and workshops to one of large factories and superstores. In doing so, he took on many of the questions most central to the new U.S. economic landscape: How much can advertising shape demand? In a world of passive shareholders, autonomous managers and engineers, and firm decisions that emerge out of internal bureaucratic contests, just what are the objectives that drive big firms? How does competition work when its principal dimensions are quality and marketing rather than price? And critically, how do the limits of polite discourse allow the system to hold itself together while constraining its flexibility? For decades, Galbraith's influence in politics was unmatched by any other economist. The pieces of his advice best remembered are those that went against the "conventional wisdom" (a now ubiquitous phrase that Galbraith coined): strategic bombing did not win World War II; Vietnam was a strategically unimportant quagmire where the United States would do more harm than good; macroeconomic "fine tuning" is likely to blow up in the face of policymakers; the businessman's capacity for self-delusion is nearly infinite. Galbraith sees the United States as a would-be social democracy that has lost its way, assuming that if only the self-serving declarations of the right could be wiped away, the benefits of a bigger, more activist government would become obvious to everyone. The right-wing claim that the most efficient economy is one in which the gales of perfect competition scour the land is, in Galbraith's view, nonsense. Modern industrial and post-industrial production is a large-scale process, large-scale processes require planning, and planning requires stability -- which means that the gales of the market must be calmed.This political vision, however, has been in retreat since the early 1980s. Nobody wants to hear about the importance of Big Government, Big Bureaucracy, or Big Labor (which hardly even exists). Galbraith's economic views have undergone an even more distressing eclipse. Among economists (excluding economic historians), the 70-year-olds have read Galbraith and think he is very important; the 50-year-olds have read Galbraith and know that the 70-year-olds think he is important but are not sure why; and the 30-year-olds have not even read him."
Unlike Professor DeLong's grad students, I read Galbraith well before I was thirty and I can attest that the man has a gift for creating concepts of great utility and horizontal application - my favorite being " countervailing power". The answer for Galbraith's lack of relevance today is easy to see.
John Kenneth Galbraith, for all his many intellectual contributions, was fundamentally wrong on the great economic and political question of the twentieth century - which is best for society, freedom or planning ?
Galbraith was on the side of the planners. An elitist philosophy that could not be made to work even during the second wave, industrial revolution, smokestack and lunch pail society of Ortega y Gasset's " Mass-Man", is now a quaint anachronism in the era of globalized markets and virtual products.
Galbraith was a fox and not a hedgehog.