Tuesday, May 02, 2006

RIP, John Kenneth Galbraith, the greatest economist of the 20th century. Scratch that. He was the greatest economist of the contemporary world.

Salon has a nice eulogy from his biographer (you'll have to click through ads on that link, but it's worth it).

He also believed that the real audience for a deeper understanding of power was the public and its leaders, not just colleagues behind ivy walls. He argued with professional colleagues because he thought the trend to mathematicize economics led too easily to obscurantism and irrelevance. Economies weren't governed by "natural laws," like gravity or the speed of light in nature itself, but by social conventions, habits, customs, laws and fears. Human beings weren't thus "rational maximizers of their self-interest" but as often frail as they were strong, and highly susceptible to the influence of leaders of all kinds, simply because as Aristotle had long ago noted, humans were zoon politikon, social beings.

The idea that "markets" were somehow best left ungoverned by governments was on the face of it unimaginable to Galbraith. The term "markets" itself merely described the simple daily exchanges of all human life, back to the Neolithic. We lived specifically in one type of market, in modern capitalist economies, and moreover in a special stage therein. The 19th century had been the age of "production capitalism," when human beings had moved (or been moved) off the land and into cities, from farm work to factory work. The result had been the design, building and operation of what William Blake first called "satanic mills" but that grew into factories and companies of all kinds. Here, Galbraith said, was merely the first stage of capitalism. The second dawned with the 20th century, the era of "consumer capitalism" in its early form, when fully productive capitalism now had to figure out how to sell what it made. Advertising, branding, easy credit and the cultivation of status goods and insecurity that consumers weren't partaking in the latest fashion were its hallmarks.


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