John Kenneth Galbraith

"The myth that holds that the great corporation is the puppet of the market, the powerless servant of the consumer, is, in fact one of the devices by which its power is perpetuated."

"The privileged have regularly invited their own destruction with their greed."

"The Metropolis should have been aborted long before it becameNew York, London or Tokyo."

"Man, at least when educated, is a pessimist. He believes it safer not to reflect on his achievements; Jove is known to strike such people down."

"But there is merit even in the mentally retarded legislator. He asks the questions that everyone is afraid to ask for fear of seeming simple."

"When people put their ballots in the boxes, they are, by that act, inoculated against the feeling that the government is not theirs. They then accept, in some measure, that its errors are their errors, its aberrations their aberrations, that any revolt will be against them. It's a remarkably shrewd and rather conservative arrangement when one thinks of it."

"All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership."

"A nuclear war does not defend a country and it does not defend a system. I've put it the same way many times; not even the most accomplished ideologue will be able to tell the difference between the ashes of capitalism and the ashes of communism."

"Get the process of negotiation away from the small specialized group that some people have called the "nuclear theologians," who in effect said this is a complicated issue of seeing how little we can give away, how much we can extract from the other side; it's highly specialized. Only a few people can understand the nature of these weapons, the delivery systems, the targeting, the nature of the MIRV and the CRUISE, on down, and the MX. This kept the whole discussion to a very limited group of people who, in a way, had assumed responsibility for saying whether we should live or die."

"The huge capacity to purchase submission that goes with any large sum of money, well, this we have. This is a power of which we should all be aware."

"Both we and the Soviets face the common threat of nuclear destruction and there is no likelihood that either capitalism or communism will survive a nuclear war."

"Excessive acreages of unused buildings, commercial and residential were created. The need for such construction, given the space demands of modern business bureaucracy, was believed to be without limit. In later consequence, the solvency of numerous banks, including that of some of the nation's largest and most prestigious institutions, was either fatally impaired or placed in doubt. The lending of both those that failed or were endangered and others was subject, by fear and example to curtailment. The construction industry was severely constrained and its workers left unemployed. A general recession ensued. Any early warning as to what was happening would have been exceptionally ill received, seen as yet another invasion of the benign rule of laissez faire and a specific interference with the market. However in keeping with the exceptions to this rule, there would be eventual salvation in a government bailout of the banks. Insurance of bank deposits — a far from slight contribution to contentment — was permissible, as well as assurance that were a bank large enough, it would not be allowed to fail. A preventive role by government was not allowed; eventual government rescue was highly acceptable."

"The present age of contentment will come to an end only when and if the adverse developments that it fosters challenge the sense of comfortable well-being,"

"One of the things I argue in my book [A Journey Through Economic Time] is the extent to which people go to avoid rational decisions – the very large role of mental deficiency in economic history. Generally, people have been very resistant to attributing a causal role in history to stupidity."

"I was studying agriculture, how to produce better chickens, better cattle, better horses — horses in those days — better fruit, better vegetables. This was in the early years of the Great Depression, and the thoughts crossed my mind that there wasn't a hell of a lot of use producing better crops and better livestock if you couldn't sell them, that the real problem of agriculture was not efficiency in production but the problem of whether you could make money after you produced the stuff. So I shifted from the technical side to, first, the study of agricultural economic issues and then on to economics itself."

"Broadly speaking, [Keynesianism means] that the government has a specific responsibility for the behavior of the economy, that it doesn't work on its own autonomous course, but the government, when there's a recession, compensates by employment, by expansion of purchasing power, and in boom times corrects by being a restraining force. But it controls the great flow of demand into the economy, what since Keynesian times has been the flow of aggregate demand. That was the basic idea of Keynes so far as one can put it in a couple of sentences."

"Going back to the most ancient times, national well-being, the national prestige depended on territory. The more territory a country had, the more income revenue there was, the more people there were to be mobilized for arms strength. So we had an enormous sense of territorial conflict and territorial integrity, and that was unquestionably a part of the cause of war, coupled with the fact that there was a disposition in that direction by the landed class, a disposition to think of territorial acquisition and territorial defense and to think of the peasantry as a superior form of livestock which could be used for arms purposes."

"I react to what is necessary. I would like to eschew any formula. There are some things where the government is absolutely inevitable, which we cannot get along without comprehensive state action. But there are many things — producing consumer goods, producing a wide range of entertainment, producing a wide level of cultural activity — where the market system, which independent activity is also important, so I react pragmatically. Where the market works, I'm for that. Where the government is necessary, I'm for that. I'm deeply suspicious of somebody who says, "I'm in favor of privatization," or, "I'm deeply in favor of public ownership." I'm in favor of whatever works in the particular case."

"I write with two things in mind. I want to be right with my fellow economists. After all, I've made my life as a professional economist, so I'm careful that my economics is as it should be. But I have long felt that there's no economic proposition that can't be stated in clear, accessible language. So I try to be right with my fellow economists, but I try to have an audience of any interested, intelligent person."

"The only function of economic forecasting is to make astrology look respectable."

"In the mid-1960s, I was a typical left-wing undergraduate student at Caltech. For any social problem that arose, I had no doubt that the appropriate cure involved some form of government intervention. So, naturally, Galbraith was my hero, and I was therefore greatly excited when he came to my school in 1964 to give a speech in support of Lyndon Johnson’s campaign for the presidency. I confess that I cannot remember a lot of the details of the speech, but I know that I was disappointed. In particular, I recall feeling that his arguments for bigger government were not compelling. No doubt, this event started me on the road to doubting the wisdom of governmental activism and appreciating the wonders of free markets. When I discussed this experience with Ken after more than thirty years, his surprising reaction was to apologize for what must have been a bad speech. He said that he especially regretted his endorsement of Lyndon Johnson, who was later to become anathema to liberals because of his pursuit of the Vietnam War. If it had been me, I would have apologized mainly for Johnson’s Great Society programs."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"If there were justice in the world, John Kenneth Galbraith would rank as the twentieth century’s most influential American economist. He has published several books that are among the best analyses of modern US history, played a key role in midcentury policymaking, and advised more presidents and senators than would seem possible in three lifetimes. Yet today, Galbraith’s influence on economics is small, and his influence on US politics is receding by the year."

"Galbraith propounded no such easily summarized doctrine. The closest we can get is: "the world is complicated, and both right-wing ideology and the conventional wisdom that is this age's self-image are terribly wrong." He offered critiques that required you to read and understand old theories, not new theories that allowed you to dismiss everything prior as irrelevant. The result? Nearly all economists today are Paul Samuelson's children. Many are Keynes' children. Friedman, Robert Lucas, Robert Solow, and James Tobin all have plenty of descendants. But there are few Galbraithians on the ground. Would economics as a discipline be stronger if the 50-year-old and 30-year-old economists had a better appreciation of Galbraith? Almost surely. Will the winds of economic fashion shift and cause economists to appreciate Galbraith once again? For that to happen, an astute young economist would have to devote himself to "mathing up" chapters of The Affluent Society and The New Industrial State and publishing them in journals—not a likely prospect in today's risk-adverse academic environment."

"At the beginning of the twenty-first century, it has become clear who John Kenneth Galbraith really is: Sisyphus, constantly pushing the boulder of social-democratic enlightenment up the hill. But the hill, it turns out, is too steep, and Galbraith not mighty enough."

"The general educated—the public that watches McNeil/Lehrer or read The New Yorker—thinks of Galbraith as an important economic thinker. Although Galbraith is a Harvard economics professor, however, he has never been taken seriously by his academic colleagues, who regard him as more of a “media personality”. The contrast between public and professional perception became particularly acute in 1967, when Galbraith made a grand statement of his ideas about economics in The New Industrial State, a book that he hoped would come to be regarded as being in the same league as John Maynard Keynes’s General Theory or even Adam Smith’s Wealth of Nations. The book was rapturously reviewed in the popular press, but it met with indifference from the academics. Galbraith’s book wasn’t what they considered real economic theory. Not incidentally, the academics were right in believing that The New Industrial State could be safely ignored."

"The example of Galbraith is not an accidental one: in many ways, Galbraith broke important new ground in the relationship between politics and economics. He was the first celebrity economist (where the definition of a celebrity is the usual one: someone who is famous for being famous). His rise as a policy entrepreneur was one marker of the growing dominance of style (which he has in abundance) over substance in American political discourse, even among those who image themselves to be well informed about public affairs."

"So Galbraith is oblivious to the most serious problem facing modern liberalism: reconciling social justice with full employment. In the real world this is a terrible dilemma; even Sweden, with its powerful sense of community and overwhelming consensus for the welfare state, has found itself suffering from an acute case of Eurosclerosis. But in Galbraith's world there is no dilemma at all: Unemployment is merely a problem of inadequate demand, to be cured by New Deal-type public works programs and redistribution of income away from rich people who save too much."

"If Walter Bagehot was right that “one of the greatest pains to human nature is the pain of a new idea,” Ken caused an extraordinary amount of pain. Both in his economic thinking and in his political activities, he was dedicated to resisting, and where possible overturning, what he famously called “conventional wisdom” (one of his many turns of phrase that have since become commonplace locutions). Rejecting the standard economic theory based on small, anonymous households and firms that autonomously engage in perfectly functioning markets, Ken instead saw an economic stage dominated by large, nameable actors: big business, big labor, big government. Sorting out their roles and respective power was central to his analysis, and the continually shifting tensions in the interplay among them—“countervailing power” in another of his deft phrases—was the real story of how an economy behaved."

"Ken also identified the corporation, not “the market,” as the defining institution of modern economic activity, developing these and related themes both in his teaching and in such widely celebrated books as American Capitalism (1952) and The New Industrial State (1967). But his interest in these ideas persisted throughout his life. The central importance of the corporation, and the fear that government was no longer able to provide an adequate countervailing force against corporate influence exerted both legally and otherwise, was the subject of his last book, The Economics of Innocent Fraud (2004)."

"An economist such as John Galbraith is as much a political scientist as Robert Dahl or David Truman."

"I knew Galbraith in the old days; he sat for some little time in my seminar. I must say I am not altogether surprised at what has happened; for I have always thought him a dull fellow, well intentioned enough, but a sort of pedant of New Deal economics — just the kind of man to upset the business community without himself bringing any startling administrative ability to offset the loss of that which he had antagonized."

"Political economy is an art as well as a science. John Kenneth Galbraith has always been a creative artist in formulating theories of the social world. His fabrications constitute the stuff of economic science."

"His is an artistic, speculative mind. He sets up hypotheses which go beyond the data, and some of the greatest scholars in history have been of that type, … Part of Galbraith's strength is that he writes well. Some economists believe writing well is a defect that creates too much spurious impact on thought. If it's a crime, it's not one that many of my profession are guilty of."

"He doesn't get enough praise. The Affluent Society is a great insight, and has become so much a part of our understanding of contemporary capitalism that we forget where it began. It's like reading Hamlet and deciding it's full of quotations."

"Galbraith has often been compared to Keynes, and they had much in common. But the way they did their economics was very different. Keynes produced theories, Galbraith, theoretically-inspired sociology. Keynes thought that ideas ruled the roost; Galbraith thought it was structures of power. His was a non-Marxist version of class struggle, with the intelligentsia as the engine of social innovation and carrier of the "public purpose"."

"What Galbraith understood, and what later researchers (including this author) have proved, is that Adam Smith's "invisible hand" – the notion that the individual pursuit of maximum profit guides capitalist markets to efficiency – is so invisible because, quite often, it's just not there. Unfettered markets often produce too much of some things, such as pollution, and too little of other things, such as basic research. As Bruce Greenwald and I have shown, whenever information is imperfect – that is, always – markets are inefficient; hence the need for government action."

"Und selbst der unerschütterlichste Konservative, der sich nachts nicht auf die Straße wagt, der nur zögernd Wasser trinkt oder Luft einatmet, wird sich jetzt fragen müssen, ob seine persönliche Freiheit wirklich dadurch vergrößert wird, dass man an den öffentlichen Einrichtungen spart."