Magazine article The Spectator

Galbraith versus Friedman: The Great Debate Is Not over Yet

Magazine article The Spectator

Galbraith versus Friedman: The Great Debate Is Not over Yet

Article excerpt

I would love to have been a fly on the wall -- or a butler -- at the US embassy in New Delhi in March 1963 when Milton Friedman, champion of laissez-faire, came to lunch with J.K.

Galbraith, high priest of higher welfare spending and at that time President Kennedy's ambassador to India. Not only were the two economists lifelong intellectual opponents who found each other's core beliefs morally reprehensible, but the magisterial Galbraith stood some 20 inches taller than the bantam-cock Friedman.

Despite their differences they had in fact been on friendly terms since both worked in Washington during the second world war -- and Friedman claimed credit for the origin of Galbraith's connection with India. Some years earlier Galbraith had encountered an Indian government official who told him that Friedman -- then one of a tiny, Chicagobased academic minority who dared to challenge the Keynesian orthodoxies embraced by Galbraith -- had been proposed by the Eisenhower administration as an adviser on India's economic planning. Galbraith responded that such an appointment would be 'like asking the Holy Father to advise on the operations of a birth control clinic', and found himself invited in Friedman's place.

When Friedman and his wife Rose visited India in 1963, their invitation to lunch came with a gracious note from the ambassador:

'As you know, I do not agree with your ideas, but they will do less harm in India than anywhere else I can think of.' But Rose recorded that lunch was 'delightful', and Milton sought cheerful revenge in due course by opposing Galbraith's candidacy for president of the American Economic Association.

Now Friedman, who is coming up to 94, has outlived his lanky sparring partner, who died last weekend aged 97, and it would be easy to conclude that he has also won the debate. But has he? Galbraith spent his last quarter-century offering eloquent explanations why his case for 'affirmative government' had gone so conclusively out of fashion: it was, he said, all down to a rationalisation of self-interest by a comfortable elite.

Friedman, by contrast, has spent the same period complaining that although many governments may now salute his ideas, few have been brave enough to practise them to the full by taking a big axe to welfare, regulation and public-sector jobs. Gordon Brown was quick to eulogise Galbraith as a 'brilliant economist . . . and a great friend of the United Kingdom [whose] books will be widely read in generations to come'. But it is difficult to imagine David Cameron summoning Friedman to Downing Street for his advice, as Margaret Thatcher once did. Meanwhile in the academic world, studies such as Avner Offer's The Challenge of Affluence -- which I reviewed here recently -- indicate a deep reexamination of free-market values. Ken Galbraith has gone, but the argument he and Milton Friedman aired over the ambassadorial silverware is far from over yet.

My theory that high oil prices are good for us, developed here last year and restated in the Daily Telegraph last week, has been causing quite a stir. A prior engagement prevented me from defending myself on Newsnight, but I did submit to a 'drive-time' grilling on Dublin's NewsTalk 106 radio station. In answer to my pitch that an era of relatively expensive fuel will focus all our minds on using less of it and accelerate the search for abundant, clean alternatives, the interviewer took the wind out of my sails by cataloguing George W. …

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