The Essential Galbraith

Rating:
Summary: More people need to know this stuff
Review: It does not take this book very long to get to how organizations need a system of motivation which appeals to the individuals who will take part in the organization's activities. Economists primarily serve planners, with whatever can promote the organizers of the technostructure who are looking for ways to expand their activity, usually in ways that produce private profit. To produce examples of individual motivations, Galbraith mentions "Ditch-digging" (p. 81) and soon moves up, or down, depending on your point of view. "But once again the ditch-digger is not the most powerful example. The cabinet officer or high official who serves and on occasion concurs in action that he finds repugnant in order to advance measures of which he approves is a better case. He came to be part of something approaching a majority of American officialdom as those involved in the Vietnam war came to explain why they went along." (p. 82). A common form of ditch in Vietnam was a latrine, dug by soldiers because each of them was likely to need to use the latrine as much as the next G.I., and a place that had already been prepared next to a big pile of loose dirt, or a can under a simple crate with a large hole on top, was as luxurious an accommodation as any soldier could expect prior to being evacuated from Nam himself. Digging the ditch was a pleasure, compared to the chore of burning what was in the can, but Nam was a situation that lasted so long, the Army needed to provide for human waste in a way that avoided unsanitary results from new troops coming in and digging up an area that had been the previous unit's latrine.

After a century of fantastic organizational growth, and fifty years of economics from Galbraith, it takes a tremendous amount of balancing contrary ideas to avoid the worst of what has gone before, in particular, the "cabinet officer or high official who serves and on occasion concurs in action that he finds repugnant." (p. 82). "The Case for Social Balance" on pages 40-54 noted how, in times of economic growth that was highly profitable, industry salaries could rise faster than governments could keep up, and with high inflation, the revenues of cities "lag behind when prices rise. The problem of financing services thus becomes increasingly acute as and when inflation continues." (p. 52). Trying to balance public needs with the views of typical investors, "Urgent warnings were issued of the unfavorable effects of taxation on investment" (p, 53), Galbraith ends his balancing by trying to foist the higher sense of disorder on F. A. von Hayek, who wrote "Where distinction and rank is achieved almost exclusively by becoming a civil servant of the state . . . it is too much to expect that many will long prefer freedom to security." [THE ROAD TO SERFDOM, p. 98] (THE ESSENTIAL GALBRAITH, pp. 53-54).

Arguments tend to illustrate how primitive political positions are, and sending millions of individuals from America to Vietnam as members of the armed forces, supposedly to protect American interests in drilling for oil in the South China Sea, where oil reserves had not even been identified at the time, helped some of them to learn, "Compulsion is inconsistent with either identification or adaptation. If a person is compelled to accept the goals of an organization, he is unlikely, at least as long as he is under the sense of compulsion, to find them superior to his own." (p. 83). This does not resolve the situation in 2003, except for those lucky investors who check the news every day to see if the oil wells are still safe.

After everyone has absorbed "The Concept of the Conventional Wisdom," (pp. 18-30) in a way that assumes a higher standard of living will be most highly regarded in our society, pursuant to "The Myth of Consumer Sovereignty," the position of Galbraith as a thinker might be considered self-effacing in the extreme. Once you see what he is saying about American society, the truer it is, the less likely a political movement which must appeal to voters with such values is to succeed in putting his point across. Anyone who claims to represent the interests of the people, whether they are people of America, or peasants in Nam, or the people of Iraq, is quickly accused of being a fake with views that do not conform to reality in any corner of the globe.

If readers are looking for irony, allow me to point out the observation, common in 1987 prior to the crash of October 19, "Galbraith doesn't like to see people making money." in "The Speculative Episode." (p. 254). Themes in THE ESSENTIAL GALBRAITH might be considered to be in the order followed by the economic cycle. Near the end, "In Goldman, Sachs We Trust" is a selection from THE GREAT CRASH, 1929, which was published in 1955 "and is still in print today; on occasion it sells more than all my other books combined. The reason for its durability is simple: a citizen of sense, encountering someone deeply involved with the imaginative technology of recent times and the speculative enthusiasm surrounding it, advises, `You should read Galbraith on 1929.' " (p. 255)

I like history. The history of economics is represented by Adam Smith, Karl Marx, and Thorstein Veblen in pages 153-223. Keynes is a key topic of "The Mandarin Revolution" (pp. 224-235) and "How Keynes Came to America" (pp. 236-248). The great political triumph achieved by Walter Heller for Presidents Kennedy and Johnson is described as, "they added the new device of the deliberate tax reduction to sustain aggregate demand." (p. 248). This book ends with a lecture in June 1999, which began with the idea, "Over the years I've often presented myself to ardent conservatives as a student of von Hayek; it has added in an agreeable way to their normal confusion." (p. 307).

Rating:
Summary: 1 a.m. and I'm still reading an economics book
Review: Perhaps Galraith's greatest appeal as an economist is the disdain he holds his own profession in. He is a merciless critic of thoughtlessness, ignorance, and the status-quo--and he's quite fun to read.

Because this is an anthology of his life's work, themes are occassionally repeated. But you don't need to know much economics, and the writings are current.