Category Archives: Great reads

A great read: Economics and the Art of Controversy

Economics and the Art of Controversy by John Kenneth Galbraith, published by Vintage Books, 1959 (105 pgs)

“There is no reason for democracy to partake of the nature of a barroom brawl. However, the purpose of this essay is not to suggest an improvement in public manners or in the comportment of our debate on public issues. Such suggestions have been made before without notable effect. Rather its purpose is to look beyond the sound and fury of contemporary political argument in one important field of affairs—that having to do with economic policy—and to see how grave are the questions being debated. It is always possible that a cool and tolerably unemotional examination of issues will serve as an antidote to the more commonplace exaggeration and overstatement.”

With that introduction, economist, Harvard professor, and public figure John Kenneth Galbraith launched his observations, assessments, and insights in his 1959 book Economics and the Art of Controversy. Galbraith compiled the book from a series of lectures he delivered at the College of Puget Sound in Tacoma, Washington in 1954. While he insists that his goal is not to improve the nature of political discourse, he ends his book with a brilliant (and cutting) discussion on the nature of political argument and the politicians who render it.

In fact, many of his observations on labor, trade, the “Welfare State”, and overall economic policy shine even brighter today than when he delivered them 60 years ago.

Galbraith developed his lectures at the perfect midpoint of the twentieth century. The Great Depression was a mere 25 years past, the Second World War had ended less than a decade before, and the United States had just exited the Korean War in 1953. He provides an excellent history of the first half of the 1900s as he brings us to his modern era. Once there, he also suggests that new things are afoot for America.

“The argument of these pages, rather, is that the present topics of economic controversy have seen their best days … My case is only that the substance back of most of our current economic arguments is, indeed, rather slight. On some subjects it has become hard to think of anything new to say. As a widely regarded philosopher of our economic system remarked not long ago, ‘our present need is for some new platitudes.’”

America during the 50’s was doing what other countries were not able to do despite their best efforts: Build a solid middle class, keep unemployment low, and significantly increase personal wealth. Unemployment was well under 5 percent nationwide. Home building and home ownership soared. Personal savings grew. The federal government was focused (and capable) of balancing the budget and stimulating growth. Manufacturing and agriculture were still mainstays of the American economy, but the increase in prosperity was giving rise to a new economy: consumerism.

“As a people, we react violently to the suggestion that we are materialistic. We aver strongly that we are not,” writes Galbraith. “But in searching for the reasons for the long-standing pre-eminence of economics issues as objects of political controversy, it is perhaps fair to say that we are intelligently sensitive to political activity in the vicinity of our pocketbooks.”

Of course, there was constant political and economic debate during that time about how to maintain the current level of growth and prosperity, and to avoid another depression. President Eisenhower was carefully protecting the New Deal reforms of the 30’s from Republican conservatives focused on overturning them and other programs of “the Welfare State.”

Although several major American manufacturing corporations were beginning to accept unions as a reality and recognize their right to exist, conservative politicians and business associations continued to cast labor unions as the death knell of American capitalism and crushing free trade. Equally as important to the debate was whether the government should intervene proactively with monetary supply and price measures, or step back and let the economy do what it would.

Galbraith’s observations and sense of humor, at times bordering on satire, are a joy to read. He seems chillingly prescient in some areas like national health insurance, “Should the country one day enact a health insurance scheme, there is at least a chance that medical catastrophe would not ensue. The reputation of the AMA as a prophet [against it] would be sadly impaired.”

In other cases, he reassures us that congressional behavior, whether directed at economic policy or other issues, often follows the same paths and is usually cut from the same two bolts of cloth.

“Certain numbers of our political figures always achieve their distinction by being negotiators, brokers, and architects of comprise … But the more typical political career requires controversy; political recognition or notoriety is won by participation in argument and dispute. If such a politician cannot argue over one thing, then he must pick a quarrel over something else.”

I first read Galbraith’s book in the early 1980’s studying economics as an undergraduate. At that time, supply-side economics (also Reaganomics, trickle-down economics, or free market economics, depending on your leaning) was the wisdom of the moment. My professor had the good sense to suggest Economics and the Art of Controversy as a way to clean out the conservative leanings of the required textbooks of the program.

Unfortunately, this book is out of print, and I long ago misplaced my original copy. I happened upon one at Book Buyers in Mountain View, California a few weeks ago. I found a second copy at Powell’s in Portland last week that I can loan. Several are also available on Amazon at the time of this writing.