John Kenneth Galbraith, the Canadian-born economist and JFK’s Ambassador to India, has died.
Galbraith was probably the second most well-known and widely read economist of the 20th Century, after John Maynard Keynes. He was the first pop-star economist, a distinction achieved by few others (Paul Krugman and Jeff Sachs are perhaps the other two). He spent most of his life at Harvard, though he studied for his Masters and PhD here in Berkeley.
His most well-known work was The Affluent Society, published in 1958, in which he famously contrasted ‘private affluence and public
squalor’. He argued that public services lag behind private goods and services, in part because there is no mechanism to ensure that part of a nation’s rising prosperity is spent on public goods. In general, as people become more prosperous they want both extra public goods – such as better schools or a clean environment – and extra private goods. Indeed the proportion of their income they would spend on public goods may well rise as a share of their income. But in general, public goods and services do not keep pace with this demand because there is nothing like a market mechanism to ensure that public provision keeps pace. Galbraith argued that this is a political failure (though this was later analyzed somewhat differently by public choice economists). A few years ago he said:
There’s no question that in my lifetime, the contrast between what I
called private affluence and public squalor has become very much
greater. What do we worry about? We worry about our schools. We worry
about our public recreational facilities. We worry about our law
enforcement and our public housing. All of the things that bear upon
our standard of living are in the public sector. We don’t worry about
the supply of automobiles. We don’t even worry about the supply of
foods. Things that come from the private sector are in abundant supply;
things that depend on the public sector are widely a problem. We’re a
world, as I said in The Affluent Society, of filthy streets and clean
houses, poor schools and expensive television. I consider that contrast to be one of my most successful arguments.
Though he had a distinguished career, and was in many ways a member of the establishment, Galbraith always saw himself as somewhat detached from the political and intellectual classes. He coined the term "conventional wisdom", which he meant pejoratively as meaning a widely shared view which was often incorrect.
Galbraith expressed in his autobiography (A Life in Our Times) a thought which must be familiar to every blogger today:
One of my greatest pleasures in my writing has come from the thought
that perhaps my work might annoy someone of comfortably pretentious
position. Then comes the realization that such people rarely read.
It is easy to underestimate Galbraith’s impact. Like Darwin’s theory of evolution, The Affluent Society seems obvious, almost clichéd, to a modern reader. But it was a revolutionary idea that private markets alone would not deliver many of the goods and services that we value as part of the good life, and we are still arguing today about the implications of this important insight.
He was also a funny man. One of his most famous aphorisms always sticks in my mind:
The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.