Academic journal article Journal of Economic Issues

Conflict and Conversion: Henry S. Dennison and the Shaping of J.K. Galbraith's Economic Thought

Academic journal article Journal of Economic Issues

Conflict and Conversion: Henry S. Dennison and the Shaping of J.K. Galbraith's Economic Thought

Article excerpt

A sizable amount of attention in the history of economic thought has been devoted to unraveling the unique contributions of John Kenneth Galbraith. Not nearly as much the subject of contention as is Thorstein Veblen--the intellectual figure with whom his thought is most often compared--Galbraith is no less controversial. [1] Yet within the discourse and despite some guidance from Galbraith in interviews and his "official" and "unofficial" memoirs, very little has been said about a key period in Galbraith's intellectual development, a period that laid much of the philosophical groundwork for his ensuing research agenda. During the second half of the 1930s, following his early New Deal service and initial Harvard appointment, Galbraith became something of a peripatetic scholar, teacher, and researcher and found himself employed as a "tutor-in-residence" to Boston businessman Henry S. Dennison. The two subsequently penned two largely overlooked monographs, Modern Competition and Business Policy and Toward Full E mployment, both of which were published in 1938.

The purpose of this paper is to explore Dennison's influence on an economist considered by many adherents to be the most important living exponent of "old" institutionalism. The central means of going about this task is to review Dennison and Galbraith's work and, more importantly, to utilize the latter's testimony to elaborate upon the snippets of reference in the secondary literature to this key period in his life. [2] It is argued that Dennison played a key role in prodding Galbraith to defect from orthodoxy and to embrace the then-controversial ideas of J.M. Keynes' General Theory before their wider acceptance even at Harvard, which is viewed as "the principle avenue by which Keynes" ideas passed to the United States" (Schlesinger 1984, 9; Galbraith 1971, 49). [3] It is also argued that Galbraith's later foray into the US industrial order was an important outcome of his defection from orthodoxy. The seeds of Galbraith's embrace of more heterodox ideas regarding the functioning of the industrial order wer e planted in his mind as a result of his relationship with Dennison.

The paper is organized as follows: The first section outlines the nature and significance of the intellectual relationship between Galbraith and Dennison and explores the former's recollections as a means of assessing the extent of Dennison's influence on Galbraith's embrace of the ideas of Keynes. This influence is evidenced in the next two parts of the paper by exploring Dennison and Galbraith's joint monographs, as is the emergence of his interest in a more heterodox consideration of industrial organization. In the final section, this line of argument is pursued more forcefully and it is demonstrated that the germ of Galbraith in later writings on industrial organization, the corporation, and the behavior of business managers lay gestating in his joint publications with Dennison.

Dennison's Proto-Keynesianism and Its Impact on Galbraith

After completing his PhD at University of California, Berkeley, and a brief stint with the Agricultural Adjustment Administration in Washington, D.C., Galbraith joined the Department of Economics at Harvard in late 1934. There he met Edwin Gay, who had returned to the Cambridge side of the Charles River following distinguished service as foundation dean of the Harvard Business School. In the summer of 1936, Gay introduced and recommended Galbraith to his friend, Boston businessman Henry S. Dennison, as a possible teacher of economics. Dennison subsequently hired Galbraith as a tutor-in-residence [4] and to assist in the preparation of a manuscript that Dennison, together with fellow scientific managers Lincoln Filene, Morris Leeds, and Ralph Flanders, wished to propound as the liberal business response to the Great Depression. These corporate liberals were united in the view that government had to do something about escalating unemployment and so broke with conservative business ranks in support of President F. …

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