John Kenneth Galbraith, RIP

John Kenneth Galbraith, for all intents and purposes, left the American stage on a November evening in 1980. On that night America chose Ronald Reagan over Jimmy Carter for president and Keynesian economics as a force in national policy was effectively put to rest.

Prior to Reagan’s presidency, even Republican presidents paid lip service to the man who British economists, both left and right, still call “The Great Keynes”. Richard Nixon, on the day he signed his disastrous wage and price control legislation, was said to have remarked “We are all Keynesians now.” But with the election of Reagan, Schumpeter and Hayek took center stage and have been the greater forces since.

In the forty years leading to Ronald Reagan’s America, John Kenneth Galbraith was front and center in policy discussions that favored Keynesian like government spending as the best way to stimulate the economy. His debates with William F. Buckley on television and influence over a series of Democrat leaders made his a household name. In the fifty years between the 1929 stock market crash and the Reagan presidency, when American economic policy crept ever leftward, John Kenneth Galbraith was the economist who most effectively moved it along that track.

We all know what happened during and after that period. Government consumed more and more of the national wealth. Regulation proliferated and, by the end, we had “stagflation”, fifteen percent interest rates, ten percent unemployment, and a “misery index” off the charts. Socialism in Russia, Europe, India and China rose, struggled, and was, country by country, rejected. By the end, private investors and managers had breached even the “commanding heights” of their respective economies.

Not much was heard of Galbraith after Reagan’s America began to boom. Granted he was past his physical prime and the rise of the Republican Party and conservative think tanks put an end to the "shuttle consultancy" between Cambridge and Capital Hill. But also the American economy moved south and west, seeking non-unionized labor, lower taxes and freer markets. Later, it went global in pursuit of bigger and bigger markets. The command and control economy offered by northeastern liberal elites was simply put out of business.

It is instructive to see how the remnants of the old liberal establishment note Galbraith’s death. The New York Times headlines its obituary article “Economist Held a Mirror on Society.” Twenty-five years after Ronald Reagan’s first election, a time when three Republican presidents and one centrist Democrat have overseen the American economy, it is only the dying remnants of the old liberal political establishment who think that Galbraith and his fellows reflected anything that was historically or culturally American.

John Kenneth Galbraith represents in many ways a political and economic movement that held sway in America during the middle fifty years of the 20th Century, but is now gone forever. Although command and control economics did not survive, Galbraith was and is an important figure in American history.

John Kenneth Galbraith, Rest in Peace.

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