John Kenneth Galbraith

Market Structure and Stabilization Policy

Although such generalizations must always be made with cautions, differences in market structure - differing degrees of monopoly and competitiveness - have not usually been thought of central importance in their bearing on general price movement. It has been customary to assume broad homogeneity of product markets - the labour market is ordinarly treated as a special case - and the particular assumption have not be considered decisive for the analysis. Certainly in the Keynesian tradition market structures have been assigned a secondary role as compared with the aggregative relations of demand to the level of employment and the current capacity of the economy.

The Good Society Considered: The Economic Dimension

In our time we hear much of what is wrong with our economic world with the shortfalls in economic performance and general well-being. My purpose in this lecture is to ask what would be right: what is the nature, what are the requirements, of the good and achievable economy and polity. This is a time of intense and, indeed, dangerous disorder in the countries, notably those of the former Soviet Union, that are making their uncertain and difficult way to a different economic and political system. That is perhaps the greatest economic and political issue and challenge of our time, the one where failure will portend the greatest disaster. On this I will have a later word.

Economics in the Century Ahead

This paper deals with the implications for economics of changing social, political and institutional attitudes and structures proceeding from the hypothesis that economics cannot be a static discipline, that so to regard it is an assurance of scholarly obsolescence. The corporation and the increasingly evident pursuit of personal power within the corporate structure, other bureaucratic patterns of behavior so evident in the firm, the changing political context of economics, the policy errors from the ever more damaging distinction between microeconomics and macroeconomics and the extraordinary problems associated with the movement from comprehensive socialism to welfare-moderated capitalism are cited as examples of the accommodation that economics must make in the years ahead and, to repeat, of the irrelevance that awaits failure so to acommodate. Copyright 1991 by Royal Economic Society.

The Strategy of Direct Control in Economic Mobilization

IT has become evident, from the discussions of the last few months, that the major unresolved question of mobilization policy in the United States is the role that should be assigned to direct price and wage controls. The disagreement holds, especially, for conditions of considerable but still limited mobilization. Given expenditures on the scale of those being made prior to the Korean War expenditures, it will be wise to recall, that were more modest in their achievement than in their volume there was effective agreement that direct controls were unnecessary. For full mobilization, a loose euphemism for what a country does if it has a full-scale war on its hands, there is something close to agreement that comprehensive controls over prices and wages are necessary or at any rate inevitable. But in mid-December, as this is written, plans are still being based on an intermediate situation. The transfer of resources to military use that is now in prospect promises to enforce an actual and perhaps a substantial reduction in civilian consumption. But it is not assumed that this will proceed to the point where, if the maximizing of military potential were the only criterion, the reduction in civilian living standards would have to stop. In this situation as the President indicated in his speech announcing the declaration of a state of emergency the decision has been taken to invoke direct controls. It would not appear, however, that this decision is based on an agreed or even a clear view of the role of these controls in the strategy of defense against inflation. This becomes evident from even a brief review of the discussion of recent months.

Hereditary Land in the Third Reich

I. Provisions of the Reichserbhofgesetz, 465.—Amendments and modifications, 467.—II. Motives underlying the law: improving the immediate condition of the farmer, 467.—III. Social or national objectives: checking subdivision of farm properties, 469; establishment of a rural caste, 470; protection to the rural birthrate, 471.—IV. Effects of the law, 472. — The problem of new farm financing, 473.—Destruction of property values, 474. — Check to progress of landless toward land ownership, 475.—V. General conclusions, 476.

John Maynard Keynes: From Retrospect to Prospect

It is now, as this is published, sixty-two years since I first bought and read The General Theory. It was for me, as for so many others, the dawning of a new day in economic reality and policy. I was then finishing a book on the compelling causes of the Depression and concluding that it was the larger consequence of monopoly, imperfect or monopolistic competition, price rigidity, and their counterparts. These kept production and, notably, employment below the competitive norm. None of this was wholly original; it was broadly in line with the classical thought of the time. The market was being kept from its normally adequate performance and employment. I left the book with the publisher. They thought well of it, as did the stalwart traditionalists who had read it. (I later dropped it from my list of published works.) I quickly made my way to the University of Cambridge to study under Keynes. That was slightly disappointing; 1937 was the year of his first heart attack and he did not appear that academic year. However, this mattered less than I expected. With Joan Robinson, R.F. Kahn, Piero Sraffa, and John Dunlop, who was also there from the United States then, I engaged in constant, almost daily discussions. The subject was always the same: the concepts of John Maynard Keynes. It was sad, but it made no vital difference that he was not present to participate. I returned from Cambridge to Cambridge to find my fellow economists at Harvard and those a bit older in equally deep discussion of Keynes. Alvin H. Hansen and Seymour Harris brought The General Theory into their teaching. A committee of Harvard graduates was formed to combat the Keynesian heresy at their beloved alma mater. It no doubt hurt that they had not read the book. Paul Samuelson would later be the most influential younger voice. His textbook brought Keynes fully into undergraduate instruction, an enormous step. To the surprise of some,

The Autonomous Military Power: An Economic View

I begin with some reflections on the state of economics in our time and the social purpose of a subject with which I have been associated for some 60 years. That it is, or should be, the purpose of economics to explore and illuminate the reality of economic life will surely be accepted. There can, most will agree, be no other. Yet economics fails sadly in its pursuit of this purpose. A large and socially critical part of all economic production lies outside the range of economic concern, and so also does a very important part of present-day international trade. With respect to the latter, where a wise and intelligent use of resources is most urgent — where it is a matter of life or starvation and death — nearly all economic analysis evades the problem. That, of course, is the arms trade to the poor countries of the planet: a trade that denies people the first essentials of survival and supports the most egregious of human slaughter. But economics also stands largely aside from the allocation of resources to military purposes in the affluent world, and especially in the USA. To this I turn first. I deal here with matters on which I have spoken elsewhere, and which I have previously urged. Plagiarism in scholarly discourse is rightly condemned. A certain tendency to restatement of personal beliefs must, however, be forgiven.

Puerto Rican Lessons in Economic Development

HE general revival of interest in T economic development and change makes it certain that the experience of Puerto Rico will be searched closely for clues to the broad problem of development. To the extent that current Puerto Rican efforts to promote industrialization meet with success, they are likely to become a model to be recommended elsewhere. The same is true of agricultural programs, improvements in social services, reforms in market organization, and other innovations. It is very interesting that at precisely the moment when the United States proclaimed its interest in Point Four, the people of Puerto Rico constituted themselves a kind of pilot plant to demonstrate the process. The task of this paper is to explore the extent to which Puerto Rico con-

The Federal Land Banks and Agricultural Stability

It is my purpose in this paper to appraise the policies of the Federal Land banks as they promise to promote the stability or instability of agricultural enterprise. This does not mean that I am to play the role of forecaster; in fact, I have no such intention. My method has been, rather, to make certain assumptions about future agricultural and business conditions. On the basis of these assumed conditions I have undertaken to appraise the effect of present land bank policies (as I understand them) on agricultural stability. At the end of the paper I have drawn attention to some alternative lines of land bank policy which may point more positively toward stability than the policies which are now being followed.

The Quantitative Position of Marketing in the United States

Introduction, 394. — The definition of marketing, 396. — Retailing costs, 398. — Wholesaling costs, 398. — Manufacturers marketing costs more difficult to estimate, 399. — Total cost of marketing in excess of 24 billion, 1929, 401. — Marketing costs compared with value added by manufacture, 402. — Income from marketing, 403. — Census of distribution facilitates estimate of marketing employment, 404. — Total marketing employment in excess of 8 million, 1929, 406. — Employment in marketing increased rapidly during the last two decades, 407. — Conclusions, 411. — Increasing specialization as a cause of increasing marketing costs, 412.