The first thing you notice as you approach John Kenneth Galbraith’s home in Cambridge, Massachusetts, a stone’s throw from Harvard University, is a ”Kerry/ Edwards for president” poster in a ground-floor window, a hint of the politics that has dominated his life.
At 95, Galbraith, one of the greatest political and economic thinkers of the past century, is still politically engaged, although ill health forced him to miss this year’s Democrat convention in nearby Boston.
He is quite deaf now and slumped in a chair but still has the aura and stature that his two-metre frame has always commanded. His wit and intellect are still very much intact.
Although in poor health and reclusive, he is happy to talk about his new book, The Economics of Innocent Fraud: Truth for our Time, which comes almost half a century after his most famous work, The Affluent Society.
Galbraith was born into a rural Scottish family in Canada in 1908 and moved to the United States in the early 1930s, taking American citizenship in 1937. In his early professional life, during the Depression, he worked as an economist for Franklin D Roosevelt.
Given the wartime job while in his early 30s and eventually running a staff of nearly 1 500, he recalls how he and his workers relished the tale of a hungry colony of ants, antennae quivering with excitement at the sight of a pile of horse manure.
”When an industrialist, already making more money than in the previous decade, came to see us to ask permission to put his prices up, my staff and I would quiver our index finger and the next one to it on the desk, as a sign to each other that the guy was talking horse shit.” His sense of humour is undiminished.
Galbraith says he is proudest of the work on prices he was asked to do by Roosevelt. ”That we came through World War II with no appreciable price inflation and no depressive aftermath was by far the most important thing with which I have ever been associated,” he says.
His experience of the depression years and working on Roosevelt’s New Deal programme made him a lifelong Democrat. He has known every president since, and worked for John F Kennedy as ambassador to India in the early 1960s.
As the war ended, he was asked to carry out a survey of the US and allied strategic bombing during the war. His conclusion, that it served no use and did nothing to shorten the war, did not endear him to the military-industrial complex, as president Dwight Eisenhower later called it.
Galbraith says the issue delayed his appointment as a Harvard professor by a year, to 1948. It was there that his writing career took off. His definitive history of the great crash of 1929 appeared in 1955, followed three years later by The Affluent Society.
In it he developed the idea that modern economies are dominated by producer power, with firms deciding what to make and then persuading people to buy it through advertising. Thus, people preferred to spend money on things they often did not need rather than on good schools, hospitals and roads.
He coined the phrase ”private affluence, public squalor”, still in common usage today.
Galbraith fell out of favour in the 1980s of Reaganomics and Thatcherism, when the views of economists such as Milton Friedman held sway and Keynesians, who believe in public spending as a way out of recession, were in retreat.
But he remains undimmed in his passion for what he believes is right.
The new book explores many modern themes, including the ever-growing power of corporations, excessive executive pay and the Iraq war. Many of these issues represent ”the peddling of an innocent fraud”, as he calls it.
For example, company managements tell us they work for, and answer to, their shareholders, while they really work for themselves and answer to no one, except when things go really wrong, as in the case of Enron.
”Corporate power is exercised not by investors but, frequently at their expense, by those who wield the real corporate power. There has come into the American language for the first time a brand new phrase ‘the corporate scandal’.”
He does not know where it will end. ”It will depend on public action. But I do not expect the sort of vigorous and dynamic limitation of corporate power we need from the likes of George W Bush.”
Has not Bush’s presidency been characterised by tax cuts for the rich, an explosion in directors’ pay and, of course, the Iraq war?
”Bush’s political, intellectual and other shortcomings cannot be restricted to a single sentence or two. He presides over a context far more complex and authoritative than he could possibly understand.”
So how important is it that Bush lose the November election?
”That is a good, even decisive question. The power of the modern economic enterprise will be great whoever is president. But the chance of a detached control, limited but characterised by effort, will be much the strongest with a Demo-cratic president and Congress.”
Galbraith, a critic in the 1960s of the Vietnam War, is less than impressed by the Iraq conflict. ”It is the biggest military misadventure in US history. And I think in future the possibility of further military conflict will be a source of deep anxiety.”
War, Galbraith says in the conclusion to his new book, ”remains the decisive human failure”, a dark cloud atop the white tower of human achievement. — Â