Galbraith John Kenneth: Key Ideas

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:55

Galbraith John Kenneth is a Canadian (later American) economist, civil servant, diplomat and supporter of American liberalism. His books were bestsellers from the 1950s to the 2000s. One of them is The Great Crash of 1929. John Kenneth Galbraith topped the lists of best-selling authors again in 2008, after the onset of the global financial crisis. In 2010, many of the scientist's works were republished under the editorship of his son.

Galbraith's views as an economist were significantly influenced by the ideas of Trostein Veblen and John Maynard Keynes. The scientist worked almost all his life (more than 50 years) at Harvard University. He has written about 50 books and thousands of articles on various topics. Among his best known works is a trilogy on economics: American Capitalism (1952), Affluent Society (1958), The New Industrial State (1967).

John Kenneth Galbraith: Biography

The future famous economist was born in a family of Canadians of Scottish origin. He had two sisters and one brother. His father was a farmer and school teacher, his mother was a housewife. She died when Galbraith was only 14 years old. In 1931In 2011, he received a bachelor's degree in agriculture, then a master's degree in agriculture and a Ph. D. in the same field. From 1934 to 1939 he worked (intermittently) as a teacher at Harvard University, from 1939 to 1940 - at Princeton. In 1937 he received American citizenship and a scholarship to Cambridge. There he became acquainted with the ideas of John Maynard Keynes. Galbraith's political career began as a consultant to the Roosevelt administration. In 1949 he was appointed professor of economics at Harvard University.

Galbraith John Kenneth, or simply Ken (he didn't like his full name), was an active political figure who supported the Democratic Party and served in the Roosevelt, Truman, Kennedy and Johnson administrations. He also served as ambassador to India for some time. He is often referred to as the most famous economist of the second half of the 20th century.

As a theorist of institutionalism

Galbraith John Kenneth was a supporter of the so-called technocratic determinism. While serving in the Kennedy administration, he played a significant role in developing the New Frontier program. Based on the technical and economic factors of production, he singled out two different systems: market and planning. The first includes millions of small firms that operate in various industries. The planning system consists of thousands of large corporations that produce most of the goods and services. The latter exploit small firms, to which a significant part of the costs of large business is shifted. main elementplanning system Galbraith considered the so-called "mature" corporation. By its nature, it should be a technostructure that brings together scientists, engineers, sales and public relations professionals, lawyers, brokers, managers, administrators and other professionals and ensures the preservation and strengthening of the organization's position in the market.

About the American economy

In 1952, John Kenneth Galbraith began his famous trilogy. In American Capitalism: The Concept of Opposing Force, he concluded that the economy is driven by the combined efforts of big business, major labor unions, and government. Moreover, this state of affairs, according to the scientist, was not always typical for the United States. He called the actions of industry lobbying groups and unions an opposing force. Before the depression of 1930-1932. big business ran the economy relatively freely. In The Great Crash of 1929, he describes the famous fall in Wall Street stock prices and how the markets gradually drifted away from reality during the speculative boom. In The Affluent Society, also a bestseller, Galbraith argues that in order to be a successful nation after World War II, the US must invest in roads and education using taxpayer money. He did not consider the increase in material production as evidence of the he alth of the economy and society. The views of the scientist significantly influenced politics,conducted by the Kennedy and Johnson administrations.

The concept of a new industrial society

In 1996, Galbraith was invited to the radio. In six programs, he had to talk about the economics of production and the impact of large corporations on the state. The book "The New Industrial Society John" Kenneth Galbraith published in 1967 based on these programs. In it, he revealed his method of analysis and argued why he believes that perfect competition suits only a small number of industries in the American economy.

About financial bubbles

Galbraith's works are devoted to many issues. In A Brief History of Financial Euphoria, written in 1994, he examines the emergence of speculative bubbles over several centuries. He believes that they are a product of the free market system, which is based on "mass psychology" and "selfish interest in mistakes." Galbraith believed that "… the world of finance reinvents the wheel again and again, often even less stable than the previous version." Interestingly, the global crisis of 2008, which took many economists by surprise, confirmed many of his views.

Legacy

John Kenneth Galbraith considered macroeconomic analysis as an additional tool, he believed that neoclassical models often do not reflect the real state of affairs. All the main theories of the scientist are connected with the influence of large corporations on the market. Gabraith believed that it wasthey set prices, not consumers. He advocated state control where it was needed. In The Affluent Society, Galbraith argues that the methods of classical economics were only effective in the past, in the "age of poverty." He advocated artificially reducing the consumption of certain goods through a system of taxation. Galbraith also proposed the "investing in people" program.

Criticism of theories

Galbraith John Kenneth, whose main ideas determined much of the development of the American economy, was an opponent of simplified neoclassical models that explain economic processes. Nobel laureate Milton Friedman spoke out with harsh criticism of the views of the scientist. He argued that Galbraith believes in the superiority of the aristocracy and paternalistic power and denies simple consumers the right to choose. Paul Krugman did not consider him a scientist. He claimed that Ken writes non-fiction works that provide simplistic answers to complex questions. Krugman considered Galbraith a "media person" and not a serious economist.

John Kenneth Galbraith (quotes):

• "I'm all for pragmatic action. If the market works, then I am for it. If government intervention is needed, then I also support that. I am extremely suspicious of those who say that they are for privatization or state property. I always support what works in this particular case.”
• “The study of money, more than any other branch of economics, uses complexity to mask the truth or avoid revealing it, not the other way around. The process by which banks create money is so simple that consciousness simply does not perceive it. It seems that the formation of something so important must be a big secret.”
• “Politics is not the art of the possible. It represents a choice between terrible and unpleasant.”
• "There is no doubt that corporations have now taken over the main process of management."
• "When faced with a choice between changing one's mind or finding a reason not to, almost everyone chooses the latter."