Anyhow, sometime during the Sixties, Hicks came to my little town in India where I grew up, and delivered a lecture that went pretty much over my head. I was only 14 or 15 at the time. Interestingly for you free market thinkers - of which I, too, am a living, walking creation (founder/CEO of two companies in the USA of all places) - Hicks made the following opening remark.

“On my way from the airport to my hotel, I saw a lot of billboards urging people to save. I did not see many billboards telling people to spend.” The other billboards he probably saw but never brought up must have been, “Do ya teen bachey, bus.”

I didn’t understand Hicks’s emphasis on spending. My father, an uber-intellectual, violently disagreed with consumer spending as a fuel for economic growth, and my uncle, a London School of Economics product, kind of understood Mr. Hicks’s point but still disagreed. It was the Sixties. I was groovin’ to the Beatles. My dad was listening to K. L. Saigal. And we all lived in an India that was headed towards disaster.

P.S. Chandra, I did not mean that the economic thinkers were literally listening to the common masses. Obviously, the masses do not develop policy or even theories. The opinion leaders do. BUT, the opinion leaders do reflect their times, and most “new” ideas in any society are not developed in a vacuum, with no influence of current trends, populist opinions, even global trends. During that era, there was a widespread global acceptance of planned economies. There was even an acceptance of more than planned economies - the entire Communist block. Ahhh, forget it…I am just repeating myself. I do respect your point of view, Chandra.

Here is an interest memo Friedman wrote to GOI in 1955 which I saw a few years ago. I dug it up recently:

http://web.archive.org/web/20010213221054/http://indiapolicy.org/debate/Notes/friedman.htm

Sarat, I couldn’t disagree more with you. I don’t think there was anything inevitable about economic choice. I doubt the economic elite in the country considered what the people in chai stalls were thinking at the time (or, for that matter, now).

Remember the Sixties and Seventies? Almost every conscionable person was a socialist back then. The halls of learning, as well as the chai stalls of India, were rife with discussions about the need for a responsible government to manage the run-amok economic engine of India for the betterment of all. A truly free economy was considered an American anomaly - fine for those Yanks but a potential disaster for most of the world.

As we criticize Galbraith for his influence on India’s past economic policies, let’s also remember that he was ultimately a product of his times. It would be similar to criticizing your parents for not being as enlightened a parent as you probably are. They didn’t know a lot of the new age parenting techniques that we now know.

Chalk it up to “that’s the way things were back then.”

However, two economists I hold in high regard, Milton Friedman and Paul Krugman (in his original avatar as an economist, not the political pundit) don’t think much of JKG. Interestingly enough, Friedman and Krugman have different sensibilities but both diss JKG.

http://www.pkarchive.org/cranks/GalbraithGoodSociety.html

http://web.mit.edu/krugman/www/ricardo.htm

http://books.google.com/books?id=GcmvijkDrEcC&dq=paul+krugman+john+kenneth+galbraith&oi=print&pg=PA13&ots=S5Zwhae9Ka&sig=mtAjIAfpV2BAZAsfBkYIB0ikmUk&prev=http://www.google.com/search%3Fhl%3Den%26q%3Dpaul%2Bkrugman%2Bjohn%2Bkenneth%2Bgalbraith&sa=X&oi=print&ct=result&cd=2

Here’s Hit & Run’s post on JKG…

http://www.reason.com/hitandrun/2006/04/john_kenneth_ga.shtml

“No economist reads him now”. All I can say is- 1)Untrue and 2)Those economists who dont read him ignore him to their detriment. He has much more critical things to say than the latest fad in econometrica and so on.

Atanu–It would be good to try and consider the counterfactuals when you speak of ‘disastrous Nehruvian socialism’. What would have been a reasonable and promising prescription in 1950 for economic growth, say? You were trained in Berkeley– what might David Card say for example to put some quantitative heft to that statement?

Galbraith was right about the Russian system’s success ‘partly’ due to optimal usage of manpower. Contrary to the fashionable belief, the Soviet system isn’t a failed one. It did have its negatives like the American system, but it surely wasn’t an out and out failure.

The Indian system is succeeding due to manpower (quality is a different issue).

The bottomline is Man, Material, Capital, and Organization and an Affluent Society does use all the four in good measure and combination.

He was skewered rather terribly in BBC. When asked by the BBC presenter if Galbraith would still be read in ten years’ time, Desai gave this money quote, “Nobody reads him now. No economist reads Galbraith now.”
http://www.samizdata.net/mt/mt-tb.cgi?__mode=view&entry_id=8890

And one of JKG’s most idiotic statements:
“Partly, the Russian system succeeds because, in contrast to the Western industrial economies, it makes full use of its manpower.”

Good riddance to an idiot.

TWG

For the moment, I would like to quote from a Salon article called The Galbraith I Knew by Richard Parker in which he writes:

Galbraith began warning President Kennedy of the dangers Vietnam posed in the summer of 1961, before the first U.S. troops were dispatched there. Kennedy heard him, and amazingly agreed with him, but was in a sense boxed in by the near unanimity of his top advisors that Vietnam was a place where America must “take a stand.” Through recently declassified State and Defense Department documents, I was able to learn just how in tune JFK was with Galbraith’s warning. The two men understood that this was no mere “foreign misadventure,” but could become a quagmire that would not only blow back to the United States but destabilize its economy, delegitimize the Democratic Party and ultimately destroy the confidence of the American people in government itself.

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