Paul Krugman on John Kenneth Galbraith

“The general educated—the public that watches McNeil/Lehrer or read The New Yorker—thinks of Galbraith as an important economic thinker. Although Galbraith is a Harvard economics professor, however, he has never been taken seriously by his academic colleagues, who regard him as more of a “media personality”. The contrast between public and professional perception became particularly acute in 1967, when Galbraith made a grand statement of his ideas about economics in The New Industrial State, a book that he hoped would come to be regarded as being in the same league as John Maynard Keynes’s General Theory or even Adam Smith’s Wealth of Nations. The book was rapturously reviewed in the popular press, but it met with indifference from the academics. Galbraith’s book wasn’t what they considered real economic theory. Not incidentally, the academics were right in believing that The New Industrial State could be safely ignored.”

“The example of Galbraith is not an accidental one: in many ways, Galbraith broke important new ground in the relationship between politics and economics. He was the first celebrity economist (where the definition of a celebrity is the usual one: someone who is famous for being famous). His rise as a policy entrepreneur was one marker of the growing dominance of style (which he has in abundance) over substance in American political discourse, even among those who image themselves to be well informed about public affairs.”

“So Galbraith is oblivious to the most serious problem facing modern liberalism: reconciling social justice with full employment. In the real world this is a terrible dilemma; even Sweden, with its powerful sense of community and overwhelming consensus for the welfare state, has found itself suffering from an acute case of Eurosclerosis. But in Galbraith's world there is no dilemma at all: Unemployment is merely a problem of inadequate demand, to be cured by New Deal-type public works programs and redistribution of income away from rich people who save too much.”