New at Reason

David Weigel | May 1, 2006

Jeff A. Taylor recalls the life and legacy of John Kenneth Galbraith.

Comments

|5.1.06 @ 8:44AM|#

Interesting, but while aptly applauding his success in shaping debate, this seems to miss a more significant contribution: the contribution of what was, at the time, a new and unique take distinct from a growing estabilishment favoring almost fervent belief in the derivative laws of supply and demand. Economics is a very well-established discipline, but whenever any area of science is cross-bred with human society, and government policy it invites misinterpretation, inconsistency and a thrilling little hint of danger. Galbraith made a very successful career of coughing politely and pointing this out.

It is also, probably, a little bit hyperbolic to reduce all of theoretical work to 'a thin veneer'.

Nevertheless, an interesting obit, and a good reply to the one in the Times. Now, I wonder if they've finished the one for the Economist...

|5.1.06 @ 12:23PM|#

It's always a tragedy when ones intellectual offspring dies before the parent does.

|5.1.06 @ 1:17PM|#

It may seem cruel and disrespectful to some, but John Galbraith--as well as its communist brat--deserves eternal condemnation. As do all who do not despise this filth. Galbraith outlived its usefulness by 98 years: it deserved to die.

If there were such a thing as Hell (there isn't), the Galbraith monster and its filthy ilk would deserve to burn in it.

|5.1.06 @ 1:30PM|#

I think you're wrong Joson, as is a lot of Taylor's article. It's just too easy to take a quote from someone like JKG, who had a huge amount of written work, that came out to be plain wrong. It would not be hard to do the same with Mises or Friedman.
Galbraith was a towering intellect. He may have been wrong on some issues and was biased in his economic analysis, but no more than libertarian dogmatists (here is an amusing example, the constant mantra that raising taxes will reduce iniative and the economy goes down the drain. Isn't it all so rational and derived from self-evident axioms? Unfortunately it has a mixed empirical sucess, look at Scandinavian nations which have sound economies and a monumental tax load. Things are not so simple).

|5.1.06 @ 1:34PM|#

It doesn't seem that intellectual disagreement should automatically codemn a person to eternal torment (even if only figuratively). I think it likely Mr. Galbraith's work will slip into oblivion just like anybody else's, but I stand by the principle that for the most part the dead deserve respect regardless of how you felt about them in life. That is, of course, unless they find out he was a serial killer or one the architects of the chines famine. Then we can talk about hell.

|5.1.06 @ 5:51PM|#

the contribution of what was, at the time, a new and unique take distinct from a growing estabilishment favoring almost fervent belief in the derivative laws of supply and demand.
The stubborn denial that supply and demand pricing occurs, despite all contrary evidence, is not my idea of innovation.

Some pithy observations I recall from Galbraith's "The New Industrial State" (all from memory):

"Courage means going down the line with Marx."

When an author seeks to make a huge advance in the economic thought, empirical data is not particularly important.

Corporate executives and directors do nothing except ratify the decisions of their subordinates.

Shareholders have no influence in modern corporations, until it becomes necessary for them to use it, at which point they conveniently have it again.

The American Tobacco Company (i.e. Lucky Strike) obviously doesn't advertise to inform people about its product, because everyone knows that it makes cigarettes.

I don't care how tall or charming he was in person. What comes across in his writing, over and over, is the arrogance of an academic who has decided how business works without once asking a businessman.

|5.2.06 @ 2:07AM|#

Rex, youre kidding, right?
http://www.oecd.org/document/5/0,2340,en_2649_201185_35472591_1_1_1_1,00.html

|5.2.06 @ 7:58AM|#

Sowell's takedown of him was so complete and so devastating that his death was merely punctuation.

|5.2.06 @ 10:44AM|#

Oh Rex,

You can say absurd things like that at an economic leftist site and get away with it I suppose, but not here.

This post orignally had a bunch of links but Reason's anti-spam software rejected (my guess as to why it didn't go through anyway, apologies if it winds up double posting) it so I am reposting with only one link. Hopefully this will work.

Warning: Long post below.

From Ken's link:

In 2004, the OECD publication reveals, Sweden once again had the highest tax-to-GDP ratio among OECD countries, at 50.7% against 50.6% in 2003. Denmark came next at 49.6% (48.3%), followed by Belgium at 45.6% (45.4%). At the other end of the scale, Mexico had the lowest tax-to-GDP ratio, at 18.5%, against 19.0% in 2003. Korea had the second lowest, at 24.6% (25.3%), and the United States had the third, at 25.4% (25.6%) (See Table 2).

Link for the actual Index of Economic Freedom webpage that Rex "quoted" from:

http://www.heritage.org/research/features/index/countries.cfm

First of all, none of the Scandanavian countries scored significantly more free-market than the US. 1)Hong Kong 1.28, 5-6) Iceland 1.74, 8)Denmark 1.78 9-11)US 1.84 12)Finland 1.85 19-20)Sweden 1.96 30-32)Norway 2.29

The gap between Hong Kong and the 5th through 20th could be argued as significantly more free-market , but not 1.74 to 1.84. If you look closely at how these Scandanavian countries got their great overall rankings, it becomes clear that it is despite their government spending, not because of it. They score quite well on monetary policy and property rights and things like that.

I originally provided the links for these quotes, but I took them out so I could get my post past the Reason software. Just click on the country from my above link and you will get the country info.

According to the Economist Intelligence Unit, Sweden's income tax burden is one of the heaviest among the world's industrialized economies: a 60 percent top income tax rate. The top corporate tax rate is 28 percent. In 2004, government expenditures as a share of GDP decreased 1.5 percentage points to 57.1 percent, compared to a 0.3 percentage point increase in 2003.

The Embassy of Denmark reports that Denmark's top income tax rate is 59 percent, up from the 26.5 percent incorrectly reported in the 2005 Index. The top corporate tax rate was cut to 28 percent from 30 percent. In 2004, government expenditures as a share of GDP decreased 0.1 percentage point to 56.3 percent, compared to a 0.2 percentage point increase in 2003.

According to Deloitte, the United States' top federal income tax rate is 35 percent. The top corporate tax rate is also 35 percent. In 2004, government expenditures as a share of GDP decreased 0.5 percentage point to 36 percent, compared to a 0.2 percentage point increase in 2003.

Iceland's top income tax rate is 26.75 percent (a general rate of 24.75 percent plus a 2 percent high income tax rate), down from the 30.75 percent reported in the 2005 Index, The top corporate tax rate is 18 percent. In 2004, government expenditures as a share of GDP decreased 0.4 percentage point to 47.6 percent, compared to the 2.2 percentage point increase in 2003.

Norway's top income tax rate is 47.5 percent (a 28 percent standard tax rate plus a 19.5 percentage point surtax on incomes above NOK 872,000). The top corporate tax rate is 28 percent. In 2004, government expenditures as a share of GDP decreased 2.3 percentage points to 46.6 percent, compared to the 1.4 percentage point increase in 2003.

According to Deloitte, Finland's top income tax rate is 33.5 percent, down from the 35.5 percent reported in the 2005 Index. Effective January 2005, the top corporate tax rate was cut to 26 percent, down from the 29 percent reported in the 2005 Index. In 2004, government expenditures as a share of GDP fell 0.2 percentage point to 50.7 percent, compared to a 0.9 percentage point increase in 2003.

|5.2.06 @ 10:58AM|#

By the way, the above quotes leave out huge VAT's. (Value Added Tax). The VAT is similar to the sales tax many inferior US states have, except that it is invisible to the consumer, with the *tax* being *added* at each point that *value* is *added* to the product in question.

|5.2.06 @ 12:22PM|#

Another point. I read Reason for its social libertarianism. I've always been suspect of economic libertarianism. It seems to me to be a front for rich folks to screw poor folks. I've read Hayek on the importance of private property to thwart dictators, but I actually find Galbraith and his kin to be more persuasive in the society I live in. Who has 'liberty' in their workplace? You have absolutely no say, except to quit and work for another dickhead simiarly situated. Some freedom. Libteratianism should look at real liberty, lifestyle liberty like JKG talked about, free from despotic employers and manipulation from adverstisers (adverstising subverts everything good about the best economic system in the world, capitalism, read Amusing Ourselves to Death about this).

|5.2.06 @ 1:03PM|#

Ken,

It's a shame there is as much regulation as there is. I suspect that with less regulation, even more people would try to start their own businesses.

After being on the employer end of the employer/employee transaction you might see that there's more balance than might appear if you're only on the employee side.

Business people try to point this out in a variety of different ways, but people don't listen to them, because they're biased.

It's been years since I read Amusing Ourselves to Death, but I was sufficiently unimpressed that I threw my copy away rather than keep it on my bookshelf. If I remember correctly, Postman doesn't discuss advertising in animals at all, which isn't surprising since it greatly undercuts his thesis. Advertising in the animal kingdom demonstrates (at least to people who believe in evolution) that there are benefits to advertising even when it seems at first glance to be an inefficient use (or an inducement to inefficient use) of resources.

BTW, both JKG and Neil Postman have been huge beneficiaries of advertising. Were their works not touted in academia, people wouldn't know their names. Not all advertising is paid for in cash and appears on TV.

|5.3.06 @ 12:50AM|#

i guess this is all over now but... the above polls mention a lot of statistics. though it might sound a bit pedantic, how these statistics are calculated is unbelievably crucial. if you don't cite the formulas and reasoning behind their derivation they should be rightly be treated as meaningless numbers. that people don't realize this is woeful and rather dangerous!

consider the following extremely trivial example:
suppose we have an indeterminate number of test scores, for which the newspaper reports an average of 32%. You would probably assume that this means all the test scores were summed and the total was divided by the number of test takers. This is the 'arithmetic mean', that thing most often referred to as the 'average', however there are a number of other 'averages' out there, including the geometric mean and the harmonic mean. All three of these are used interchangeably in certain contexts, depending on established convention. If in our example the test scores turned out to be
A. 20
B. 80
then the percentage would obviously not be the arithmetic mean which you erroneously assumed. It would then be apparent from the cited statistics that the article was discussing the harmonic mean, which heavily penalizes large inconsistencies in the data.

The point here is that statistics is a very, very subtle science. Its numbers and its theory are very well developed, and formulated under a rigorous framework, but they are dreadfully open to easy manipulation, especially when being used with a complacent or unsophisticated public. In this sort of forum you should really state methods explicitly or refrain from basing your arguments on statistical data. If you don't know where the numbers came from then you don't really know what you are talking about.

One last example:
consider improvements in the recognition error rate for a speech recognition system; in a recent trial the system has improved its overall recognition rate from 97 to 98 percent. This represents a 1 percent absolute improvement. However, an alternative and equally legitimate way of measuring the improvement would be to talk about the error rate reduction (ERR) which in this cas would be a reduction from 3% to 2%, for an ERR or 33%. Of course, most business managers would only here 33%...


be careful with these numbers boys and girls!

|5.5.06 @ 3:11AM|#

now that is a respectable obituary:
http://www.economist.com/people/displayStory.cfm?story_id=6877092