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J K Galbraith on the USSR

“Partly, the Russian system succeeds because, in contrast to the Western industrial economies, it makes full use of its manpower.”

John Kenneth Galbraith (1984), an American intellectual who passed away yesterday.

40 comments to J K Galbraith on the USSR

  • Yup, the great thing about slavery is it uses 100% of the labour force. Never was a man so feted for all the wrong reasons.

  • joel

    I am no economist, but when I was younger and he was active, I was never impressed by him. Imagine. A leftist economist.

  • Yes, history has not been kind to Galbraith and many of his assertions. His son, JK (James) Galbraith is still “fighting the good fight” in a similar vein.

  • When I was a kid my father took me to one of his lectures in Switzerland. It was the usual statist crap, but he made one point that was valid then and is still valid now. Big corporations behave like socialist states. He meant it as a compliment.

  • Karl Rove

    Slavery, Mr PdH?
    What about your friends in China? (See previous correspondence.)

  • nic

    The more stories emerge, the more it seems that “the corporation” as an institution is as incompatible with capitalism and libertarianism as the welfare state. Both just offer two parallel ways of avoiding personal responsibility.

  • bob

    I am not sure what is meant by “success” in
    – “…Russian system succeeds”

    As far as my child memories go, there was a complete failure

  • Slavery, Mr PdH? What about your friends in China?

    Huh? Like this(Link) perhaps? Or maybe this(Link)?

    (See previous correspondence.)

    My guess is any e-mails I might have got from you went straight into my spam trap.

  • The corporate form of organization is dictated by the state, like patents and copyrights. One has to wonder if it does more harm than good in encouraging freedom and prosperity. The state hands out tax breaks and limited shelter from liability (in its own courts!) in return for supervisory control of the corporation’s actions. If all businesses were sole proprietorships, the scale of businesses might be smaller, but government mismanagement of the economy might be more easily guarded against.

  • pete

    I’m pretty sure there is a way to contractually form a corporation without the legal framework of the State. I definetly agree that we should stop corporate welfare and special treatment.

  • Robert

    “There is no unemployment in Soviet Russia or in Dartmoor Prison – and for the same reason”
    Winston S Churchill

  • joel

    There is a good obituary in the NY Times, fairly evenhanded.

    When I read it the obit, I was reminded of what Pope Innocent III said when informed of the death of Cardinal Richelieu:

    If there is a God, he will have much to answer for. If not, well, he had a successful life.

  • The Wobbly Guy

    The russian system is so good because everybody is employed… even if half of them are digging holes and the other half filling them in!


  • Tuscan Tony

    …and this is the chappie who’s advising the next UK pirime minister:

    UK Chancellor Gordon Brown paid tribute to him as a “brilliant economist and writer and a great friend of the United Kingdom”.

    “Even in recent years in his 90s he was never slow to give me and others advice,” he said, “and he will be remembered for his erudition, his wit and eloquence, and particularly for his economic insights into our age”.

    Glad I’m outa there!

  • It’s a shame that Galbraith’s thinking won’t accompany him to the grave.

  • guy herbert

    I’m pretty sure there is a way to contractually form a corporation without the legal framework of the State.

    No. You can’t even have formal contracts without the legal framework of the state. (Though of course you can have bargains that may be arbitrable if both parties assent to arbitration, enforcement is another matter.)

    Because a corporation needs separate legal personality from its owners or controllers (that being the definition of a corporation) – for third parties to deal with it, for it to sue and be sued, you can’t create it on the basis of contract alone.

  • ‘The modern corporation operates under the mystique of the market, which is extensively under its control. This is a matter which modern economics recognises but does not pursue.’- JK Galbraith
    It seems that most readers of this blog don’t even recognise this matter, let alone pursue it.
    RIP J.K. you were the best.

  • veryretired

    Ah, yes, the old “evil corporations control the market” canard. Funny how GM and Ford, to name only a few, seem to be sliding right into bankruptcy, their being omnipotent and all.

    Better that Galbraith and his theories had both been stillborn in 1908.

  • I think Neil is one of those people who thinks that the Russian system was working in 1984.

  • John Gill

    American intellectual – strictly speaking Canadian

  • nic

    “Funny how GM and Ford, to name only a few, seem to be sliding right into bankruptcy, their being omnipotent and all.”

    Well I think those corporations are for the most part, good examples of simple but large manufacturers. But what about corporations in other markets and closer to government. The archetype is Enron that had a strategy of pretty much eating through pretend assets acquired from the state like termites leaving everyone screwed. But you see traces of this in many corporate systems.

    Think of Capita in the UK that takes on so many government IT projects, spectacularly fails at them and gets rewarded with more. Or Bank of America financing that bridge to an island just off the coast of Scotland in the 90’s. Or private firms being paid to build hospitals and then leasing them out to the NHS. It follows the pattern of governments nationalising or centralising assets, then selling them back into private ownership into corporations divorced from the consumers.

    While government is a habitual thief, corporations are often the fence.

  • D Anghelone

    Partly, the Soviet system endured because, like the military, it kept its manpower occupied.

  • I always liked what G. K. Chesterton said, that if there is too much capitalism, that doesn’t mean that there are too many capitalists. It means that there are too few.

  • Corporations and the state often work hand in hand to rob the productive classes. True enough. Why that is an argument for increasing the power of the state is anyone’s guess.

    – Josh

  • Nowadays a book like this might be titled An Army of Philosopher-Kings.

  • John K

    I heard a discussion of Galbraith’s life this morning on the Today programme. They had Lord Desai on, and I think they were expecting a respectful eulogy to the Great Man. Instead Desai ripped him a new one. Priceless. When something unscripted like that happens, the Today lefty presenter really does not know what to say. They obviously thought that Desai was “one of us”, and didn’t bother to do their homework and found out what he would actually say.

  • Umbongo

    John K

    I think I can predict that Lord Desai won’t be back on the BBC for some time to come and the BBC researcher who suggested Desai as a “safe” commentator has done irreparable harm to his/her career.

  • nic

    What time was it on? I’ll use “listen again”

  • John K

    It must have been on around 8.30 am.

  • Johnathan Pearce

    Galbraith was not a serious economist as is the case with the still-very-much-alive Milton Friedman. Friedman made actual theoretical advances in the fields of price theory, monetary economics and so forth, and his political views were not the main or early reason for his fame, although he later became as well known for his championship of causes like school vouchers, drug decriminalisation and ending military conscription. With Galbraith, I always got the feeling that here was a man a bit lazy with the facts and all a bit too keen on authortarian political systems so long as they supported some notion of progress. Hence his dimwitted comment about the Soviets.

    Alas, Galbraith’s influence was enormous among many people who, after reading one of his books, thought they had economics figured. He was not an entirely bad writer and he could be funny. One should never understimate that factor. Even early Marx could be quite amusing to read.

    97 is not a bad innings, though. Some of these grand old men of economics seem to be living into a ripe old age.

  • Gordon

    Galbraith was one of those western intellectuals to which the term “trahison des clercs” applied perfectly.

  • Does anyone have a link to that radio show?

  • Johnathan Pearce

    Is the Neil Clark who wrote his comment about corporations the same Neil Clark who has, in the manner of one of Mike Tyson’s boxing opponents, been left bleeding on the canvas by Stephen Pollard in recent weeks?

    The comment was silly anyway. Some classical liberal writers have argued that the modern corporation owes its quasi-government features to laws that should be repealed: ie, limited liability laws, etc. And tariffs, subsidies and the rest enable corporations to behave as they do. I do not recall Galbraith argued for the abolition of LL, by the way. That would have been genuinely radical and brave. Instead, he argued for yet more regulation.

  • John K

    Does anyone have a link to that radio show?

    Check out the BBC Radio 4 website for the Today programme. The interview starts 2 hrs 39 minutes into the programme.

    I’ve just listened to it again, and it’s still hilarious. Lord Desai starts off by saying that Galbraith was the Geoffrey Archer of economics, accuses him of lazy thinking, pontificating, adhereing to the Keynesian compromise and 1950’s corporatism. He points out that the monetarists won the battle of ideas, and that Galbraith, like some members of the Labour Party, was stuck in the 1950’s. When asked by the shell shocked presenter if Galbraith would still be read in ten years’ time, he answered that no economist reads Galbraith now.

    It was one of the most elegant hatchet jobs I have ever heard, and all the better for being so obviously what the Today programme lefties did not expect. Top marks to Lord Desai, but as pointed out above, that’s the last time he’ll be invited on the BBC. Worth it though!

  • Haha – brilliant! They’re obviously embarrassed – they buried the interview by simply labelling it “business news”. Here’s a link to the interview. That interview is closely followed by another – “Can big companies ever become a force for good in the world?” With some guy and George Monbiot.

    Ah, that’s more like the BBC.

  • John K

    I liked the way the other chap pronounced the “t” in Monbiot, to rhyme with idiot.

  • Kim du Toit

    “I liked the way the other chap pronounced the “t” in Monbiot, to rhyme with idiot.”

    That’s how one should pronounce it.

  • joel

    This “economist” didn’t even like economics. He insisted the GNP was not a good measure for economic progress, because so much of the good things in life were “free.” (My words, not his.) However, he gave the following example.

    A kind and loving mistress would greatly enhance your life, but would not affect the GNP much, whereas hiring a prostititute would increase the GNP but not really give you much happiness.

    At the time I read this, I was in college, and had never had a kind and loving mistress or hired a prostitute. I thought Galbraith had a good point.

    Now, older and wiser, I must say that the cost of a mistress dwarfs that of hiring a prostititute. I guess that the good professor never really had a real mistress or hired a prostitute.

    Sorta reminds me of Karl Marx, who never entered a factory in his life. Just good talkers, is all. Like the big ugly football lineman said about quarterbacks: “They ain’t nothing. They just be pretty boys.”

  • What is frightening about Galbraith, ist hat in spite of the fact that most of his premises have been disproved about 20 years ago, his economic philosophy remains so popular.

  • I was reading Bucky Fuller’s “Critical Path” (I have a signed copy) again and noticing for the first time just how little sense his economic prescriptions made.

    Brilliant as a student of the rate of change of industrial technology. A wonderful engineer/designer.

    Lousy at economics.

    He knew that only capitalism allowed the individual to excell but still he didn’t like it. Too messy. Too much greed involved. Too much money.

    It is a wonder that I ever thought that socialist economics run by engineers was ever a good idea.