A Long Ago Summer

It was very fortunate for the friends and family of John Kenneth Galbraith that he lived 97 years, dying last week on April 29. However, from a public relations standpoint, Galbraith lived long enough that support for liberal economic policies and his personal prominence have both atrophied. Had the renowned and prolific Harvard professor of economics died in the 1960s, the story would have probably not have been relegated to page A7 in the Washington Post . News of his death might have appeared on the front page. From World War II to the 1960s, Galbraith was a leading spokesman for liberal economics and progressivism. Galbraith occupied many positions from leading the government’s effort to control prices during World War II, to advising Democratic presidents, and serving as Ambassador to India for President John Kennedy. Frankly, the fact that no one has seriously proposed price controls during the current bout of high gas prices is one measure of the decline of the economic school of thought Galbraith once championed.

After the Great Depression, the conventional wisdom (a phrase originally coined by Galbraith) was that free markets have failed and governments should manage the economy. This conclusion has since been disputed and the failure during the Depression attributed to the government’s excessive tightening of the money supply in the 1930s. Galbraith would have enjoyed a vigorous argument about the causes of the Depression, but it is only necessary to know that in the post-war years the belief in the efficacy of government in directing the economy was accepted with little dissent. It was in this context the Galbraith led liberal economists in laying the intellectual foundation for aggressive government management of the economy. This liberal hubris was weakened during the stagnation of the 1970’s and crushed during the high inflation and high unemployment of the Carter Administration. High inflation and high unemployment at the same time was not supposed to be possible Galbraith lived long enough to see his policies spectacularly fail, or at least the implementation of his policies by the feckless Carter Administration.

Memory begins to fail, but somewhere in the early 1970’s while still in high school I was educated one summer by two of the day’s best teachers, John Kenneth Galbraith and William F. Buckley. The education was exemplary, but freely available to anyone. That was the summer I read Galbraith’s The Affluent Society and the New Industrial State , and Up From Liberalism by Buckley. Buckley was Galbraith perpetual and friendly intellectual arrival. They often debated publicly and civilly.

Galbraith’s essential case was that the government, especially a government run by progressives like himself, was better at allocating and organizing resources than independent individuals acting freely. Individuals are under the illusion that they are free, but the masses are too easily seduced and controlled by coporate advertising. This advertising creates demand for items that are not needed. His classic example is the tail fins on cars popular in the 1950s. The appendages do nothing for the aerodynamics of cars, but the styling was popular for a while. Given the intervening decades since then, Galbraith’s argument looses force. Despite their best advertising efforts, American car manufactures have lost market share. Even the failure of the infamous Ford Edsel that disappeared after only a few of years despite an aggressive ad campaign provides evidence of the difficulty of controlling demand using advertising.

Nonetheless, it is impossible to defend all personal choices. They are so varied from person to person. Certainly, effective marketing can affect consumer demand, though generally it is not to create new demand but switch demand from one producer to another. Beer advertising does not so much affect total demand but the allocation of that demand from one brand to another. But even if we concede that people are influenced to make what others might find indefensible personal consumer decisions, does that mean government should make the decisions for them?  In the 1950s and 1960s people had confidence that governments could make wise decisions on their behalf. Vietnam and the economy of the 1970s disabused most of that notion. However, if we were to concede that governments could be more efficient, is not the government exercise of that power an infringement of personal freedom?  Certainly, we would all concede that the government should not control the ideas people have even if they are demonstrably wrong.

As Buckley explained:

“Professor Galbraith is horrified by the number of Americans who have bought cars with tail fins on them, and I am horrified by the number of Americans who take seriously the proposals of Mr. Galbraith. But whereas he would, by preempting the people’s money, take the power from them to put tail fins on their cars, I should be hesitant (though I would prefer the society with lots of tail fins to the society with Dr. Galbraith’s proposals running around dangerously) to preempt the people’s money, even though part of it is due to be spent on purchasing books by Dr. Galbraith — which, by the way, have been prodigiously advertised.”

Galbraith once said, “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” To this the appropriate reply is that modern liberalism is yet another exercise in moral philosophy in search for a superior moral justification for government control over the individual.

What I came to appreciate that summer long ago was the conservative intuition that thought taxation is sometimes necessary; it is an infringement of freedom. Government taxation should not only be weighed on the balance of economic efficiency but on the scale of freedom. Economic freedom is no longer part of the modern liberal vocabulary.  These lessons were better learned because they emerged out of the robust debate of the kind that is rarely today. For this I owe Professor Galbraith.

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