Man Out Of Time: The World Once Turned On The Ideas Of This Guelph Grad, But Does The Economist John Kenneth Galbraith Know The Way Forward?

By David South

Id Magazine (Canada), January 23 to February 5, 1997

It was with hungry enthusiasm that I rushed to hear the great liberal economist John Kenneth Galbraith speak. It was with enormous disappointment that I found a genius emptied of solutions to the current political battles in today’s Ontario.

For those unfamiliar with Galbraith, think of him as a hybrid of the liberalism of former prime minister Pierre Trudeau and the manner of Jimmy Stewart. Now 88, the former Guelph agricultural economist became a servant of the US government just as president Franklin Roosevelt was beginning to introduce the New Deal – today’s rusting welfare state – as a solution to the cruel hardships imposed on Americans as a result of the Great Depression. Galbraith rode out the Second World War in a senior government position as Roosevelt’s price-control czar. He later advised Democratic presidents John F. Kennedy and Lyndon Johnson, before seeing his influence in American economic thought wane under Ronald Reagan’s Republicans.

Galbraith has long followed the ideas of British economist John Maynard Keynes, who believed goverments should keep money tight in good times, but should spend their way out of bad times to avoid undue hardship. Galbraith also made the plight of the poor one of the pillars of his economic theory, and criticized the unnecessary appetites and demands created by the goliath American advertizing industry. He has supported wage and price controls and once, in the 1930s, even wanted to join the American Communist Party.

Last week, Galbraith breezed into Toronto with his ivy league roadshow. Speaking to a stodgy crowd of liberals (and Liberals, including former prime minister Pierre Trudeau and failed Ontario leadership candidate Gerrard Kennedy) at the University of Toronto, Galbraith was at an institution that comes as close as Canada gets to his current stomping ground, Harvard.

Symbolically, Galbraith couldn’t have visited Ontario at a better time. The Conservative government of Mike Harris is in the middle of an ambitious campaign to reverse everything that Galbraith has stood for: budget deficits to avoid depressions; social programmes to prevent poverty; taxes on the rich to fund those programmes; government policy subservient to public good. Harris oozes contempt out of every pore for the pillars of Galbraith’s thinking. In fact Ontario, once the bedrock of Canadian liberalism, is now joining Alberta in dismantling the welfare state.

A graduate of the University of Guelph when it was still the Ontario Agricultural School, Galbraith took his bitter memories of farming in southern Ontario to the University of California, Berkeley and subsequently to the Roosevelt government.

In his day, Galbraith was amongst a rare species of mainstream economists that earned respect from the once-abundant Marxists who cluttered universities. Not that the Marxists liked his compromises and complicity with the American government, or his assertions that he could save capitalism. But they thought he softened up the system for some body blows to be delivered by the workers’ revolution.

I am a member of a generation that grew up on government largesse, well-funded public schools, family allowance, university grants, and make-work progammes. But we have seen a lot of that eroded over the past eight years, during a period of high unemployment not seen since the Depression. It was time to see if this titan of liberal thought had something new to say.

Galbraith’s talk had two main points: the market economy is the best system going; he supports a guaranted minimum salary to prevent poverty. Other than that, Galbraith’s speech was a rehash of the same ideas he has been mulling over for the past 50-plus years. It could be called Liberalism 101.

His speech was peppered with euphamisms like the “socially concerned.” Perhaps he was pulling his punches so as not to offend the “distinguished” audience. The most exciting moments displayed his dry wit: “In the United States , the war against the poor having now been won,” or “We, the socially concerned, do not seek the euthanasia of the rentier class.”

He struck out against annual balanced budgets because they have been used as an excuse in the US to cut off benefits to the poor. He also slammed the globalization-uber-alles philosophy that sees welfare policies as uncompetitive – a sentiment that doesn’t seem to be in vogue these days with liberals. Last week, Prime Minister Jean Chretien told the South Koreans they need to remove jobs-for-life provisions to join the global marketplace.

His ideas and his approach to communicating those ideas come from a special historical time. A time when governments under pressure from trade unions and the far-left and right political parties decided to make capitalism a little friendlier. But they needed advisers who could speak the language of the elite. Eloquent, confident, pragmatic – advisers who felt comfortable in the courts of the democratic government. They didn’t want hot-headed union guys or hectoring left-wing demagogues.

Galbraith takes credit for civilizing capitalism and ensuring its survival: “It would not have survived had it not been for our successful civilizing efforts. We, the socially concerned, are the custodians of the political tradition and action that saved classical capitalism from itself. We are frequently told to give credit where credit is due. Let us accept it when it is ours.”

Galbriath’s economic theories have always been grounded by morality, preferring to avoid being a servant to flow charts. It is his most insightful side. When many fear to speak in broad terms about current economic problems, where many fear to make connections, Galbraith has pieced the complex puzzle together, much to the frustration of those who believe capitalism should be left unfettered. It is his worthiest legacy.

The Galbraith Interview

You point out it is reforms that have given capitalism a new lease on life. What policies would alleviate the worst aspects of today’s capitalism?

We still have the oldest problem. (That is) to eliminate the cruelties that are inherent in the system. In the United States, and I imagine also in Canada, we still have the terrible problems of the urban poor, of the people who do not make it. I see one of the central tasks of our time is to do two things: to provide a safety net so that in a modern rich society we don’t let people starve, and that we provide the means for escape from urban poverty.

How would you elliminate poverty?

No novelty about that. Two things are absolutely essential. One, that there be a basic safety net. That we accept in a modern society that there has to be a level of income below which people are not allowed to go. I do not join this attack on welfare, this notion the poor should be allowed to starve. Another thing is a strong educational system, which allows people to escape from poverty in the next generation. Those are the two absolute essentials.

Should government just concentrate on ending poverty and abandon universal programmes like public health care?

You can always have a conversation that separates itself from the reality. I think in Canada if some politician or some political group wanted to repeal the health system, they would soon find themselves in considerable disfavour. If they were committed to allowing the poor to starve, they would get a reputation for cruelty that no civilized society would tolerate. And if they started saving money on the schools, as some already have, we would find out how absolutely essential good education is for economic and social well-being. So we have a difference between what is possible in oratory and what is possible in reality … When the axing comes, it is a good deal less popular than it is in the previous rhetoric.

Who do you think, within or outside political movements, represents the socially concerned today?

I don’t speak generally on this. There is in all countries a substantial voting and politically expressive group. In the United States it is the political left, in Britain it is the Labour Party, in France it is the socialists, in Germany the social democrats. They are broadly committed to the welfare state and I think will remain so.

Would you include the Liberal Party in Canada amongst those?

I would include a substantial part of the Liberal Party in the United States. The Liberal Party in Canada, like the Democrats in the United States, have a double orientation, on one hand to the welfare state and on the other hand a more centrist attitude. Both parties have an internal problem to resolve.

Do you think they have lost interest in the welfare state?

To some extent I regret that. We must take some responsibility for human suffering and human well-being.

You don’t see that with the Democrat Party?

I prefer it to the Republicans.

Are some of these policies like welfare reform in the US making it harder for the poor?

I was not in favour of welfare reform.

I grew up in a very poor household but was able to go to the University of Toronto because of various government policies. In fact, they have kept me from destitution. You have written about a culture of contentment that prevents further social reforms. Will it whither?

Those of us who have been associated with the welfare state have made a lot of people comfortable, happy and conservative. We have undermined our own political influence by our success.

Do you think current levels of high unemployment and economic stagnation might erode that contentment?

No, if we suffer another recession there will be a desperate effort to have the government do something about it. The present conservatism is an aspect of good times. We had it in the 1980s under Reagan.

Are we still in good times?

We still have a lot of people who have a problem. We should have sympathy.

Do you see any political parties in Canada who defend the welfare state?

I’ve lived all my life in the the United States and I’ve always avoided coming back to give Canada advice. As I said in my lecture, anybody who does that should have stayed in Canada for his own lifetime. Let Canadians look after their affairs in Canada.

You said the socially concerned don’t seek income equality. I guess that is where you split with socialists?

I accept the inevitable, that people are going to be different in aspirations, ability and luck and probably different in parentage. All of this is going to mean differences in income.