Galbraith and the Problem of Uneven Development
Peach, Jim, Journal of Economic Issues
John Kenneth Galbraith and "some of his younger colleagues" taught one of the first courses on economic development offered in the United States in the early 1950s. The course was motivated by "... the considerable number of students at Harvard from poor countries who were studying the sophisticated and, for them, often irrelevant models of the modern advanced economy" (Galbraith 1994, 161). Again and again, Galbraith returned to the idea that not everything produced, learned or taught in the developed world had meaning for the developing nations. But when Galbraith attempted to have economic development accepted as an approved field of study for a PhD in economics at Harvard, there was little interest: "... my request was promptly and, in keeping with accepted academic style, rather righteously rejected. As a different field of study, the special economics of the poor countries was held not to exist" (1979, 27).
Galbraith's contributions to the field of economic development were numerous, remain largely ignored and are consistent with (and perhaps inspired by) original institutional economics (OIE). Various similarities of Galbraith's development works with the OIE tradition will be pointed out in the remainder of this article. Three of these similarities should be described now to set the stage for the rest of the discussion.
First, Galbraith, like many of his OIE colleagues, regarded economic development as a historical process and not, like the growth theorists, a goal with a definite end in sight: "More specifically, we must recognize that economic development is a process...." (1962, 12). Second, it was apparent to Galbraith that examining the process of economic development meant examining the entire structure of society and not just some (micro) part. In his words (1962, 5), "[w]e have been enthusiastically and quite capably discussing the parts of the problem; we have paused all too infrequently to inquire whether they fit into a viable whole." If these two points sound familiar, they should. Gunnar Myrdal (1974) defined economic development as occurring in a process with no beginning and no end. For Myrdal (1974, 729), economic development meant "the upward movement of the entire social system." And, while Myrdal's words are quoted here, the similarity to Veblen, Ayres, Gordon and others should also be apparent.
Third, for Galbraith and the OIE tradition, uneven development and poverty were not the result of a shortage of natural resources. More than once, Galbraith dismissed the scarcity of natural resources argument citing numerous counter-examples. These included, among others, the rapid expansion of the economies of Japan and Taiwan (both resource poor) and the relative poverty of West Virginia (a resource rich area). Poverty of individuals and nations resulted from many causes and it was rather silly to assign the blame to a shortage of natural resources. The constraints on the development process were to be found elsewhere--perhaps the shortage was in public administration, access to education and health-care, feudalistic landlords who inhibited the growth of agriculture, inadequate investment, or perhaps a combination of all these factors and more.
In his various writings about economic development, Galbraith addressed nearly all of the major topics generally found in current economic development textbooks (e.g., Cypher and Dietz 1997). The list of these topics is truly impressive and included the definition of economic development, development theory, the role of savings and investment, development planning, the distribution of income, foreign aid, population, migration, colonialism, the role of the state, agricultural versus industrial development, the role of the entrepreneur and the modern corporation, multi-national organizations such as the World Bank and the IMF, technological change, international trade, and investment in human capital. Fortunately, Galbraith was not writing a textbook nor was he addressing his fellow economists. …