Our government's decision to stimulate economic growth by means of state-directed pump-priming, instead of the market-friendly remedies of the Washington consensus, would please John Kenneth Galbraith, professor emeritus of economics at Harvard University and the world's most famous living economist.
Since becoming an apostle of John Maynard Keynes in the years following the Great Depression, Galbraith has argued consistently for the state's role, alongside the market, in the running of a productive, people-serving economy. His views are grounded in Keynes's seminal formula for macro-managing an economy - public deficit-spending in times of recession and fiscal restraint in times of inflation.
Though critical of capitalism's shortcomings, Galbraith, like Keynes, has sought to reform the system and remove its excesses, not replace it. Like the intellectual Keynes, too, he believes an economist's role is to educate and persuade the public.
His academic teachings, huge output of path-breaking books, including The Great Crash of 1929, The New Industrial State, The Liberal Hour and The World Economy Since the Wars, countless newspaper articles and television series all reflect his core belief that economics is too important to be left to economists - that democratic government requires choices about values that ought not to be made by the market alone.
Economics cannot be considered, in his view, in isolation from the human world of politics, institutions and power. For more often than not the erratic behaviour of individuals and powerful groups makes nonsense of orthodox belief in the rational maximising of self-interest.
The author also of works on politics, art and economic history, a novelist and coiner of such well-known phrases as "the conventional wisdom", "countervailing power" and "the affluent society", Galbraith is the only economist to have been elected as president of the American Academy of Arts & Letters. He was an adviser to three Democratic presidents and was particularly close to John F Kennedy, whom he served as ambassador to India.
Blessed with an acute sense of irony and a dry wit - directed mostly at the rich and powerful, but often at himself - Galbraith's writings are to be appreciated as much for their style as their content. A typical observation: "If you hear someone in public life say he is going to stand firmly on principle, you should take cover and warn others to do the same."
Galbraith has always been the quintessential political economist. An unabashed liberal (social democrat in our parlance), he rejects the laissez-faire axioms of the likes of Alfred Marshall, F A von Hayek and Milton Friedman in favour of a regulatory state acting "as a counterweight, referee and overseer of private economic power, in the name of democratic liberty and individual rights".
His familiarity with the Great Depression and Roosevelt's "New Deal", during which he was controller of prices, and his post-World War 2 and Cold War experiences have convinced him of the interconnectedness of government and markets - and the need to regulate both.
His most influential book, American Capitalism, with its theory of countervailing power between public and private sectors, within industries and within markets (for example, between manufacturers and retailers) was his first attempt to reconcile liberal aims with a market economy dominated by large corporations. While freedom is to be nurtured, he argues, so too are equality, social stability, security, reduced social tensions and a quality of life that sustains creativity rather than promotes an unabashed consumerism.
Galbraith's quixotic nature has caused him to depart frequently from Keynesian orthodoxy and liberal nostrums. He has never shared his fellow liberals' concerns about overconcentration in industry and the size of corporations, which he regards as natural to advanced capitalism and conducive to technical innovation and constant progress. Yet he is scathingly critical of "military-Keynesianism", which turned Roosevelt's temporary war-making machine into Eisenhower's military-industrial complex and paved the way for the excesses of Nixon, Reagan and Bush jnr.
His scepticism about military spending led to his outspoken opposition to Lyndon Johnson's war in Vietnam and later to excoriating criticisms of successive Republican and Democratic administrations and the self-satisfied "culture of contentment" they have fostered.
Yet for all his erudition, Galbraith's legacy remains disputed. His colleagues, particularly those in the modern mathematically sophisticated mainstream of economic thought, regard him as a maverick whose contributions have been marginal. Fellow Keynesian Paul Samuelson described him as America's foremost economist for non-economists - a put-down that Galbraith no doubt values highly. Reaching out to a politically aware audience has always been more important to him than arguing with fellow economists whose theories are based on mathematical formulas.
In this illuminating account of a fascinating life, Oxford and Harvard economist Richard Parker does full justice to Galbraith's towering intellect and contribution to progressive thought over more than seven decades. At a time when markets are commonly regarded as being deficient in their ability to safeguard human as well as economic rights, or to create balances between trade and the environment and national and international interests, Galbraith's theories are worthy of re-examination. His scepticism about wealth and power and his passion for justice make many of his ideas timely and relevant in the 21st century.
* This book is not readily available in SA but may be ordered (at a discounted price) from Amazon.com.
