Galbraith John Kenneth: basic ideas

Galbraith John Kenneth is a Canadian (later American) economist, civil servant, diplomat and supporter of American liberalism. His books were bestsellers from the 1950s to the 2000s. One of them is "The Great Crash of 1929". John Kenneth Galbraith topped the list of best-selling authors again in 2008, after the onset of the global financial crisis. In 2010, many of the scientist's works were reissued under the editorship of his son.

The views of Galbraith as an economist were significantly influenced by the ideas of Webstein and John Maynard Keynes. The scientist spent almost his entire life (more than 50 years) at Harvard University. He wrote about 50 books and thousands of articles on various topics. Among his most famous works are the trilogy on economics: "American capitalism" (1952), "Society of abundance" (1958), "New industrial state" (1967).

John Kenneth Galbraith: Biography

The future famous economist was born into a family of Canadians of Scottish descent. He had two sisters and one brother. His father was a farmer and a school teacher, his mother a housewife. She died when Galbraith was only 14 years old. In 1931 he received a bachelor's degree in agriculture, then - a Master of Science and defended his Ph.D. in the same field. From 1934 to 1939 he worked (with interruptions) as a teacher at Harvard University, from 1939 to 1940 - in Princeton. In 1937 he received American citizenship and a scholarship in Cambridge. There he became acquainted with the ideas of John Maynard Keynes. Political career Galbraith began with a job as a consultant in the administration of Roosevelt. In 1949 he was appointed professor of economics at Harvard University.

Galbraith John Kenneth, or simply Ken (he did not like his full name), was an active politician, supported a democratic party and worked in the administrations of Roosevelt, Truman, Kennedy and Johnson. He also served as Ambassador to India for some time. He is often called the most famous economist of the second half of the XX century.

As a theorist of institutionalism

Galbraith John Kenneth was a supporter of the so-called technocratic determinism. Working in the Kennedy administration, he played a significant role in the development of the program of "new frontiers". Based on the technical and economic factors of production, he distinguished two different systems: market and planning. The first includes millions of small firms that work in various industries. The planning system consists of thousands of large corporations that produce most of the goods and services. The latter are exploited by small firms, for which a significant portion of the costs of large business are shifted. The main element of the planning system Galbraith considered the so-called "mature" corporation. By its nature it should be a technostructure that unites scientists, engineers, specialists in the field of trade and public relations, lawyers, intermediaries, managers, administrators and other specialists and monitors the preservation and strengthening of the organization's position in the market.

About the American economy

In 1952, Galbraith John Kenneth began his famous trilogy. In the book "American Capitalism: the Concept of the Contending Power," he concluded that the economy is governed by the combined efforts of big business, the main trade unions and the government. And this state of affairs, according to the scientist, was not typical for the United States. He called the opposing force the actions of industry lobby groups and alliances. Before the depression of 1930-1932. Large business relatively freely managed the economy. In his work The Great Crash of 1929, he describes the famous drop in the price of shares on Wall Street and how the markets gradually moved away from reality during the speculative boom. In The Society of Abundance, which also became a bestseller, Galbraith argues that in order to become a successful state after World War II, the US must invest in road construction and education using the funds received from taxpayers. He did not consider the increase in material production as evidence of the health of the economy and society. The views of the scientist significantly influenced the policy pursued by the administrations of Kennedy and Johnson.

The concept of a new industrial society

In 1996, Galbraith was invited to the radio. In six programs, he had to tell about the economy of production and the influence of large corporations on the state. The book "New Industrial Society John" Kenneth Galbraith in 1967 released on the motives of these programs. In it, he revealed his method of analysis and argued why he believes that perfect competition suits only a small number of sectors of the American economy.

About financial bubbles

The works of Galbraith are devoted to a multitude of questions. In the "Brief History of Financial Euphoria," written in 1994, he explores the emergence of speculative bubbles for several centuries. He believes that they are a product of a free-market system, which is based on "mass psychology" and "self-interest in making mistakes." Galbraith believed that "... the world of finance invents the wheel again and again, often even less stable than the previous version." It is interesting that the global crisis of 2008 , which surprised many economists, confirmed many of his views.

Heritage

John Kenneth Galbraith considered macroeconomic analysis as an additional tool, he believed that neoclassical models often do not reflect the real state of affairs. All the basic theories of the scientist are connected with the influence of large corporations on the market. Gabrayt believed that they set prices, not consumers. He advocated for state control where he was needed. In the Society of Abundance, Galbraith argues that the methods of classical economic theory were effective only in the past, in the "age of poverty." He advocated the artificial reduction of consumption of certain goods through the taxation system. Also, Galbraith proposed a program of "investing in people."

Criticism of theories

Galbraith John Kenneth, whose main ideas determined the greater part of the development of the American economy, was the opponent of simplified neoclassical models explaining economic processes. The Nobel laureate Milton Friedman spoke with harsh criticism of the scientist's views. He claimed that Galbraith believes in the superiority of the aristocracy and paternalistic power and denies ordinary consumers the right to choose. Paul Krugman did not consider him a scientist. He argued that Ken wrote popular science works that give simplistic answers to complex questions. Krugman considered Galbraith to be a "media persona," and not a serious economist.

John Kenneth Galbraith (quotes):

• "I am for pragmatic actions. If the market works, then I am for it. If government intervention is needed, I also support this. I am extremely suspicious of those who say that they are for privatization or state property. I always support what works in this particular case. "
• "The study of money, more than all other branches of the economy, uses complexity in order to disguise the truth or to evade its disclosure, and not vice versa. The process in which banks create money is so simple that the mind simply does not perceive it. It seems that the formation of something so important should be a great mystery. "
• "Politics is not the art of the possible. It is a choice between the terrible and the unpleasant. "
• "There is no doubt that the corporations have now taken on the main management process."
• "Having presented themselves with a choice between changing their own opinion and searching for a reason not to do so, almost everyone stops at the second."