FEW ECONOMISTS HAVE enjoyed as long or as distinguished a career as John Kenneth Galbraith, professor of economics at Harvard since 1948. An early Keynesian, Dr. Galbraith entered the public arena as the chief price controller for Franklin D. Roosevelt during World War II. During the 1950s Dr. Galbraith campaigned for Adlai Stevenson and John F. Kennedy, serving as Kennedy's ambassador to India from 1961 to 1963. Later that decade, he reentered the political spotlight as a prominent critic of the Vietnam War. Dr. Galbraith became best known for his controversial liberal economic views, first receiving attention in his 1956 work, The Affluent Society. Dr. Galbraith continued to challenge neoclassical economic theory with his books The New Industrial State and American Capitalism.
From the beginning, Dr. Galbraith criticized what he saw as the weaknesses of free market capitalism. He saw American capitalism as enriching most of society while leaving the public sector underfunded and the lowest class marginalized. He also rejected the mainstream idea that the market always "cleared," arguing instead that industrial economies often reached equilibrium below full employment. Dr. Galbraith continues to attack the "conventional wisdom," a term he himself coined, in the articles and books he writes today. Special Features Editor Shirin Sinnar and Staff Writer Valerie Jaffee spoke with Dr. Galbraith in January at his home in Cambridge, Massachusetts.
Harvard International Review: In your 1994 work, Journey through Economic Time, you discussed the globalizing influence of international capitalism and the sense of global association it creates. What do events of the last few years say about the momentum of this trend of economic and political globalization?
I see the trend toward closer trade, cultural, artistic, and travel relationships as inevitable and as something we very much want. I even support the multilateral corporation because when you have a company functioning in several countries, there is an incentive for those countries to avoid stirring up animosity. So I see what is called "globalization" as a civilizing force. On the other hand, that process must be reconciled with the important role of the national state in protecting the welfare of people. When internationalization occurs, there is always a tendency for industry to migrate to those countries where the wages are lowest and where the welfare services are cheapest.
Thus, we have a problem. We have a conflict between two objectives, both of them good. On the one hand, we have to accept the internationalization of economic life, and, on the other hand, we must continue to protect employment, unemployment compensation, social security, health care, and the other services provided by the national state. That is why we must, as in the Maastricht treaty, move toward the unification of economic policy as part of the larger global trend.
As you are well aware, the present international scene is characterized by large gaps between the quality of life in developed countries and developing countries. How persistent do you think these gaps are? Is economic convergence at all occurring, or are these gaps widening?
I spent a good deal of my life on this problem. I started the first courses on economic development that were taught at Harvard, and I have spent a good part of my life in the less-developed lands. I consider this inequality to be one of the great problems of our time, particularly as it affects Africa. The African countries were given independence without the educational preparation, without the economic discipline, and without the political discipline that is absolutely essential for economic improvement. This has been one of the tragedies of our time. I have seen the problem at closest range in India where the picture has, especially recently, been much better. But, even in India, there were enormous barriers to the fulfillment of the economic and social hopes of the newly independent country, and even after almost fifty years of independence many of those problems are still unsolved. …