Monday, May 01, 2006

On Looking Out of the Window

‘Farewell, Professor Galbraith’ (Reformer.com 1 May):
In the trilogy that stands as his greatest economic writing -- "American Capitalism" (1952) "The Affluent Society" (1958) and "The New Industrial State" (1967) -- Galbraith liberated economics from its impenetrable prose.
Like his role model, the English economist John Maynard Keynes, Galbraith recognized that it was impossible to write about economics without addressing economic and political power, and that it was more important to write for the general public than one's peers.

Galbraith wanted to be what he called "a useful economist." He spent as much time in politics and in government service as he did teaching at Harvard. In his work in a variety of roles for every Democratic president from Roosevelt to Clinton, he learned the sharp difference between economic theory and the political and social realities that often altered those theories.

In short, Galbraith more than earned his reputation as the most widely read economist of all time and as one of the great public intellectuals of the past century.

Galbraith was never well liked by his peers, who thought of him more as a popularizer than an innovator. Economist and Nobel laureate Paul Samuelson once said that Galbraith was "America's foremost economist for non-economists."

When another Nobel laureate, George J. Stigler of the University of Chicago, lamented that it "was shocking that more Americans have read 'The Affluent Society' than 'The Wealth of Nations,' Adam Smith's seminal book on economics, Galbraith's response was that "Professor Stigler's sorrow may not be that so many read Galbraith and so few read Smith but that hardly anyone reads Stigler at all
."

Comment
I would imagine that most social science students of my generation at university (in the 60s) read one or more of Galbraith’s books, as well as a large sprinkling of people who were not at university.

Apart from his typical cutting response to George Stigler, a far greater proportion of economics students read Stigler because his works included many tutor set texts and journal articles because average students’ exhibit sensible aversions to reading anything other than what they are examined upon. The best students in economics hardly have time to read all the titles of the materials that they might be examined upon, or, at least, it seems that way.

My complaint about George Stigler’s acerbic put down of Galbraith’s influence is not that enough people do not read the ‘Wealth of Nations’, but that even Nobel Prize winners (Bank of Sweden) like George Stigler, who did read it, seem not to have appreciated what Smith was saying (for example, Stigler’s misreading of Smith’s role for ‘self-interest’ in calling it the ‘granite’ underlying Smith’s analysis of a commercial economy).

On the basis of his ‘granite’ declamation, Stigler and students from the University of Chicago used Smith’s authority to evangelise for a view of markets that is at variance with Smith’s intentions (see my ‘Adam Smith’s Lost Legacy’, 2005).

Of Galbraith himself, I didn’t have much sympathy for his viewpoint – though I thoroughly enjoyed his ‘Affluent Society’ and the ‘New Industrial State’, the copies of which I still have somewhere in my library - mainly because I was always sceptical of what I used to call the ‘effluence’ argument (now known as environmentalism or 'global warming').

All societies produce waste and rubbish and its significance is often exaggerated. Visit any Neolithic human camp site or cave of 10-20,000 years ago and there is so much rubbish and detritus piled high in the places where they lived, ate, slept, conversed and died that one doesn’t have to go to modern shanty-towns, inner-suburbs and ghetto areas to see how humans have not changed all that much. With more of us than ever before, the garbage is still with us, and thank goodness that our predecessors like us were so messy, even casting aside recently dead compatriots to the back of the cave or burying them among the rubbish nearby. Without this untidiness where would our anthropologists get their data?

The editor of Reformer.com notes a difference between Galbraith (who got close to US Presidents) and those economists who seem never to leave the campus: he ‘learned the sharp difference between economic theory and the political and social realities that often altered those theories’. I was much taken with this notion as a student and remember Keynes writing, or one of his students at Cambridge (Joan Robinson?) advising, as he or she put it, ‘classical’ economists (a term of abuse), who were stuck inside their theories, to ‘look out of their windows’ and note that labour markets were not clearing as their theories allegedly said they would or should.

Smith also ‘looked out of his window’ and sought opportunities to conduct his research in the raw with the human materials that actually existed, and on the basis of his knowledge of history. As Samuel Fleischacker put it, Smith went out of his way to speak to labourers, tradesmen, traders and manufacturers; he corresponded with entrepreneurs in national and international trade; he conversed with legislators, and British Prime Ministers, who in the 18th century were as important to national and world affairs as US Presidents in the 20th century, and had, overall, a sound practical knowledge of how markets worked – even when following policies which he considered sub-optimal for achieving opulence.

He too could write well (in the 18th century style) and his books were good sellers (even ‘international best sellers’, in so far as such a thing existed at that time). Of course, Stigler suggesting that people in the 20th century should have read Smith’s two volume classic, near on a million words, wrapped as it is in the history and present of the 18th century with more than a few allusions to the history of ancient Greece and Rome, and the details of much that had happened in the past millennium, is a hope founded on his woeful lack of appreciation of the realities of the attention span of the reading population, including those in the graduate classes of the University of Chicago, and betrays a naiveté associated with a sincere man not ‘looking outside his window’.

The author of the farewell to Professor Galbraith quotes from his latest book, "The Economics of Innocent Fraud," (2004):

"Civilization has made great strides over the centuries in science, health care, the arts, and most, if not all, economic well-being," he wrote. "But also it has given a privileged position to the development of weapons and the threat and reality of war. Mass slaughter has become the ultimate civilized achievement. ... War remains the decisive human failure."

And yet the so-called bloody twentieth century, with two world wars, Stalin’s Gulags, Hitler’s Holocaust, Mao’s famines and Pol Pot’s mountains of skulls, does not have the unenvious record for mass slaughter in human history. Proportionally worse mass slaughters have occurred throughout history; fewer people proportionally are killed in wars and genocides so far in the 21st century than previous centuries, going right back as far as we can count. And this is the problem with popularising complex subjects by looking too quickly ‘outside our windows’; close-up, big events dominate our vision and block out historical perspective, no matter how well we write.

[Read the ‘farewell’ at: http://www.reformer.com/editorials/ci_3771353

Reformer.com 62 Black Mountain Road, Brattleboro, Vermont]

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