John Kenneth Galbraith
John Kenneth Galbraith
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A Journey Through Economic Time
ISBN: 0395741750
A Journey Through Economic Time
Professor Galbraith talked about his lifelong interest in economics and discussed his recent book. A Journey Through Economic Time describes the evolution of his own economic thought over his long academic career. He says he has learned a good deal, including that economic theory is not constant but must change with changing circumstances. He began teaching at Harvard University in 1934.
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A Journey Through Economic Time
Program Air Date: November 13, 1994

BRIAN LAMB, HOST: John Kenneth Galbraith, author of "A Journey Through Economic Time: A Firsthand View," when did you first get interested in economics?
JOHN KENNETH GALBRAITH, AUTHOR, "A JOURNEY THROUGH ECONOMIC TIME: A FIRSTHAND VIEW" Oh, that was a good many years ago, almost 60-odd years ago in Canada. I was studying agriculture, how to produce better chickens, better cattle, better horses -- horses in those days -- better fruit, better vegetables. This was in the early years of the Great Depression, and the thoughts crossed my mind that there wasn't a hell of a lot of use producing better crops and better livestock if you couldn't sell them, that the real problem of agriculture was not efficiency in production but the problem of whether you could make money after you produced the stuff. So I shifted from the technical side to, first, the study of agricultural economic issues and then on to economics itself.
LAMB: Where were you living in Canada?
GALBRAITH: Southern Ontario. If you think of Lake Erie as like the arch over a bridge, our farm -- my father was a livestock breeder -- was just at the top of that bow of Lake Erie, about equidistant between Detroit and Buffalo.
LAMB: When did you come to the United States?
GALBRAITH: I came to the United States in 1934, the year I graduated from college. That was in the middle of the Depression, and really the best offer I had was a scholarship to the University of California, so I had no trouble making up my mind because there were no alternatives.
LAMB: What was your degree in?
GALBRAITH: My first degree? Bachelor of science in agriculture.
LAMB: How about the Ph.D.?
GALBRAITH: My Ph.D. -- well, I have no Ph.D. in economics. My Ph.D. was in agricultural economics from the University of California.
LAMB: After California, where did you go?
GALBRAITH: I taught for a year at Berkeley while I was still writing my thesis. I was on the Berkeley faculty, but I taught out at Davis, which was then part of Berkeley, now a separate university. I taught economics and various other related subjects while I was writing my thesis. Very happy. I liked California very much; I still do. I was enjoying myself very much. I had a handsome salary of $1,800 a year. One day I got a telegram from Harvard offering me an instructorship at $2,400 a year. These were unimaginable wages at that time. Well, I didn't want to leave Berkeley, but, on the other hand, there was that extra money, so I took the telegram into the dean and showed it to him, thinking he'd give me an advance. He looked at the telegram, looked at me and said, "Well, Galbraith, you're not worth that to us," and so I moved after a year to Harvard. They apparently took a somewhat more extravagant view of my ability than my friend, my old dean at Berkeley.
LAMB: How many years did you teach at Harvard?
GALBRAITH: Well, this is something of an anniversary for me. I began teaching at Harvard 60 years ago last week, but I was away for several years during the war, first in the war matters and then as an editor of Fortune. I taught also one year at Princeton. Then I was away, of course, in India for a while. But, roughly speaking, off and on -- some people would think more off than on -- I've been teaching now 60 years at Harvard. Well, 60 years subject to retirement.
LAMB: But you're the Warburg Professor Emeritus.
GALBRAITH: That's right.
LAMB: Who was Warburg?
GALBRAITH: Paul Warburg was one of the great figures in American economic life. He came from the famous Warburg family in Europe, was the dominant member of it. The family came to the United States, and he interested himself, of course, in financial matters. He was a noted banker, but he also was one the founders of the Federal Reserve System and one of the first governors of the Federal Reserve System.
LAMB: When did he live?
GALBRAITH: Roughly from the 1860s to the 1940s.
LAMB: Did you ever know him?
GALBRAITH: No, but his son, James Warburg, who was later Assistant Secretary of the Treasury and also a noted public figure, was a very close friend of mine.
LAMB: Did you ever know John Maynard Keynes?
GALBRAITH: Yes. In 1937, after the publication of "The General Theory," the most influential book of the century -- I think even my friend Milton Friedman would concede that -- I went to Cambridge to study under Keynes. That was the year he had his first heart attack, so he never showed up at the university, but we had intense discussion with Joan Robinson, her husband and, as he became later, Lord Kahn; the other younger people there. We had intense discussion every day of Keynes. Then in the war years, I was put in charge of price control.
LAMB: World War II?
GALBRAITH: World War II. I started with a staff of six people and ended with a staff of 16,000. Well, some of those were devoted to rationing and some to rent control. They weren't all under my authority, but a great many of them were. One day when I was still getting this mass organization underway, my very nice secretary came in and said, "There's a Mr. Keynes out here." I said, "I just can't see anybody today. You know that." She said, "He rather expects you to see him." She handed me a paper he had given her. The paper was "Thoughts on the Pig-Fodder Ratio," what we call the corn-hog ratio. Who was it by? John Maynard Keynes. As I say, I was almost in the situation of a minor priest who had refused admission to the Holy Father.
LAMB: Why was he and why is he so revered today?
GALBRAITH: Among his other many qualifications, he was a leading pig farmer. He thought I had made a mistake in the relation of hog feed, corn, to the price of hogs. But we went on from that subject to talk about general economics. I saw him later on in the war because he was in Washington a lot. But I never was closely acquainted with him.
LAMB: What does it means to be a Keynesian?
GALBRAITH: Broadly speaking, that the government has a specific responsibility for the behavior of the economy, that it doesn't work on its own autonomous course, but the government, when there's a recession, compensates by employment, by expansion of purchasing power, and in boom times corrects by being a restraining force. But it controls the great flow of demand into the economy, what since Keynesian times has been the flow of aggregate demand. That was the basic idea of Keynes so far as one can put it in a couple of sentences.
LAMB: How did he become so prominent and his name become so prominent?
GALBRAITH: Because this was the terrible tragedy of the Great Depression. Massive employment in Europe, massive unemployment in the United States, giving rise to the angry development in Germany that brought Hitler and in Italy that brought Mussolini -- the first Mussolini, of course. This was the plausible answer, as indeed it was. It was the answer that the government should compensate for the waste of unemployment and the horror of mass unemployment by putting people to work, even -- or especially -- though that involved borrowing and expenditure for the employment. Here Keynes came up decisively with this proposal at the time when people were struggling for an answer to the problem of depression and unemployment. He was peculiarly, uniquely a man of his times, and that thought that the government has a positive action, including the Federal Reserve is with us today and is quite bipartisan. There are very few people who would leave the government out of responsibility for depression and even fewer people who would relieve the government of responsibility for inflation.
LAMB: This book, "A Journey Through Economic Time," was written for what particular reason?
GALBRAITH: Oh, unless I do some writing every morning, I become psychiatrically a little disturbed, and I thought it was nice to take a look at how my economic ideas had developed -- perhaps nicer for me than even for the reader -- and what I had seen over a lifetime.
LAMB: Which book is this? How many?
GALBRAITH: There are two or three that I've written that I've dropped out of my syllabus because I no longer quite believe what I once urged, but 25 or 30, I suppose.
LAMB: In your lifetime, what have you changed your mind about in economics?
GALBRAITH: I started out as a rigorous 19th century classical economist in the 1930s and 1940s. I saw the Great Depression problem as a problem of monopoly, great firms constricting their output, constricting their employment and thus causing the depression, a very common view at that time. One of the books that I've dropped out of my syllabus was one developing that thesis. In my lifetime, I've seen the importance of, on the one hand, taking a critical view of some of the received wisdom of the time and also seeing that economics is in a process of constant change. One of the errors of economics is not in accommodating your views to the moment, to the changing situation.
LAMB: I noticed that in your book you talk about having known Joseph Schumpeter. Who was he?
GALBRAITH: Joseph Schumpeter was one of the most interesting men of his time, very conservative. He was born and brought up in Austria, was an Austrian scholar. In the years immediately after World War II he was, for a brief time, the Austrian finance minister, presided over the Austrian inflation. He developed an enormous sense of doubt about the role of the state in economics and an enormous commitment to the creative power of capitalism, both views with which I would take some issue, but I wouldn't take any issue with the fact that he was one of the most interesting people I've ever known. Among other things, he had a marvelous sense of humor, a perceptive view of life. He once said, apropos a household, that one servant is worth a thousand gadgets. He was in favor of democracy, but he loved to say that "every spring young Americans with the most democratically disposed instinct go to Europe, and what do they go to see? They go to see the monuments of past despotism." Oh, there were so many things from Schumpeter. We used to meet with him every afternoon. He never argued with anybody; he just instructed.
LAMB: The reason I brought it up is that there were a whole group of Austrians who seemed to have had a tremendous influence on economists in this country -- von Hayek and von Mises and people like that. Why the Austrians?
GALBRAITH: This is a good question. The old kingdom, the old monarchy, had an intensely intellectual community in two subjects, psychiatry and economics. They built on each other; I mean, the communities built people in the community. They educated each other and engaged in intense discussion. Then the economists after World War II came to the United States, either, as in the case of Hayek and some others, by way of England and a rejection of the socialist tendencies of the time in Austria which they didn't like; then later, an escape from Hitler. American academic life was enormously refreshed by this Austrian migration, even though it was, by my standards, most of it, much more conservative than I would be disposed to be.
LAMB: You knew Joseph Kennedy, Jr?
GALBRAITH: Yes, I knew both senior and junior.
LAMB: And you worked for Jack Kennedy when he was President, but how did you know Jack Kennedy's older brother?
GALBRAITH: In 1935, I became a tutor in Winthrop House, one of the Harvard houses. That was a house that prided itself on being pro-Irish, being very catholic in its view of the ethnic communities of Boston, particularly the Irish, and to that house came all of the members of the Kennedy family at one time or another, all of the male members. The first to come was Joe, who became one of my closest friends. He wasn't my tutor, but he spent a great deal of his time in my rooms and I was very fond of him and I think he rather liked me.
LAMB: What was the difference in your age? Who was older?
GALBRAITH: Oh, I was older but not by that much. I was then in my late 20s and he was in his late teens.
LAMB: That was in 1935.
GALBRAITH: This was between 1936 and 1940.
LAMB: When did he died?
GALBRAITH: He died in 1944.
LAMB: How did you know his father Joseph Kennedy, Jack Kennedy's father?
GALBRAITH: He introduced me, and his father came to the house to visit his sons and I saw him there.
LAMB: What was he like?
GALBRAITH: Well, Joe Kennedy doesn't lend himself to any brief account. He was a man of determined ideas, great ambition, a strong family sense. One should not overlook an incredible capacity for making money, but he didn't see that as the end of life. He went on from that to cherish public life and became, as you know, the head of the Maritime Commission. He was the first head of the SEC, the Securities and Exchange Commission, and then went on to be ambassador to London.
LAMB: You've, I know, read over the years that some people think that had Joe Kennedy lived, the son, that he would have run for President. Do you think that would have been the case?
GALBRAITH: Well, I don't know. This, of course, is something no one can say, but he would certainly be a plausible candidate for high office. No question about that. He had political sense. He had political drive. He had great intelligence, and he was charming. He had all the qualities that JFK had and maybe more determination. He was a much stronger scholar at Harvard than his younger brother. He regarded his younger brother as being somewhat too easygoing.
LAMB: When did you know that Jack Kennedy was interested in you as a speechwriter or as someone to advise him on economics?
GALBRAITH: Well, I always said my relations with him went through three stages when he was Congressman and Senator. There was a time when he would call up and say, you know, "How should I vote on this bill?" He would ask me, and I was very proud and I would make suggestions. Then at the next stage, he would call up and say, "Look, explain this situation to me," but never asked me how to vote. And the third stage was he didn't call up at all. I had a close relationship with him during the years when he was Congressman and Senator, and that, of course, continued when he became President.
LAMB: How did you become the ambassador to India?
GALBRAITH: In 1955, I went to India in a quasi role, semi-important role as an adviser to the Indian government. I was with the Indian Statistical Institute, which was an arm of the Indian government. I was captured by the Indian scene, Indian art, Indian community in general and the Indian problem. This became very much a part of my life, very much a part of my wife's life. One day my wife and I had lunch with the then-ambassador. The problems we discussed were interesting, the surroundings were beautiful, the scene was exotic, and I said to Kitty, my wife, "You know, if the Democrats ever get back, I'm going to bid for that job."

And so by 1960, I had already had my full round with the big leather chairs in Washington, seeing people that I never wanted to see again, so I had no interest in a job in Washington and I had let it be known that I would be just delighted to be ambassador to India. A couple days after the election, Kennedy called me up and said, "OK, it's yours." He had got the message along with everybody else. That was how you became an ambassador. Nobody had previously noticed my diplomatic skills, and I have to tell you that nobody's noticed them since.
LAMB: How long did you stay there?
GALBRAITH: I was there just during the Kennedy years.
LAMB: What did you learn about India?
GALBRAITH: I had started in the early 1950s, some 10 years earlier, courses at Harvard on economics of the poor countries, economic development. I had noticed, along with some others, that we had a large number of people coming to Harvard from the Third World, as it was eventually to be called, who were studying a very sophisticated, very refined, very theoretical doctrines applicable to the United States, to the developed countries. So, with a couple of younger colleagues, we started courses for the poor countries, started courses in economic development, assuming the very elementary stages of economic life. From that, I became interested in what was happening about Puerto Rico, what was happening in Haiti. It was for that reason that I went to India, and that was how I became interested in India. But I went on from that to the whole magic of India -- Indian architecture, Indian religion, Indian art. All of those things became very much a part of my life.
LAMB: As you look back on some of the things that you learned in your life about the different writers of economics -- look back at Karl Marx. How does he look to you today compared to what you thought he might be 50 years ago?
GALBRAITH: Well, 50 years ago or 60 years ago, Marx was a much more central figure. There's no novelty in saying that. The great dichotomy at that time, extending far beyond Marx's view, was between capital and labor, the industrialist and the working mass. That was, as I say, the Marxian dialectic, which had an enormous influence far beyond Marx. Widely speaking, it came close to being the accepted view of the modern society. Well, what has happened since is that the old-fashioned capitalist has given way to management. Some would go so far as to call them the corporate bureaucracy. To the ruling community has been added lawyers, accountants, journalists, great television figures, the academicians, a huge Social Security and rentier class, all of which have now political voice, political power.

The other side of that dialectic, of course, are the voiceless masses in our great cities, people who are still poor. That is a situation which Marx did not envisage and to which Marxian economics has no relevance. Also -- not to get this into an extended lecture -- we have since discovered that the comprehensive socialist system, the Marxist system, as it evolved in Eastern Europe and Russia and the other countries of the Soviet Union and in China, was not a workable model. It produced physical results. There's no question that it gave China and particularly the Soviet Union a great working industrial base. But it wasn't consistent with the freedoms, the demands to be heard, the number of journalists, the number of television stars, the number of professors, the number of artists, poets that also come into existence with economic development, and that was something that Marx did not foresee. He did not foresee that the comprehensive Socialist state produced more people than could be kept quiet, that it had within itself a thrust for democratic expression.
LAMB: How would you define your politics today?
GALBRAITH: I would have no difficulty doing that. I react to what is necessary. I would like to eschew any formula. There are some things where the government is absolutely inevitable, which we cannot get along without comprehensive state action. But there are many things -- producing consumer goods, producing a wide range of entertainment, producing a wide level of cultural activity -- where the market system, which independent activity is also important, so I react pragmatically. Where the market works, I'm for that. Where the government is necessary, I'm for that. I'm deeply suspicious of somebody who says, "I'm in favor of privatization," or, "I'm deeply in favor of public ownership." I'm in favor of whatever works in the particular case.
LAMB: Would you call yourself a liberal?
GALBRAITH: Oh, sure. I would be very happy to be called a liberal.
LAMB: What does that mean to you today?
GALBRAITH: As I say, that means to me that you have a pragmatic attitude toward the role of government, toward the role of the private economy, that you don't govern yourself by any solidified rule.
LAMB: What's the difference between a liberal and a conservative, in your opinion?
GALBRAITH: Well, I would say that most conservatives bend inward to think of their own interest and accommodate the state to their own interest and are, on the whole, more governed by ideology than I would think wise. As I say, I want to adjust to the practical situation. When I hear some of my conservative friends speak of the evils of government, I think they're being controlled by a formula rather than by specific thought.
LAMB: As you look back at the stock market crash of 1929 and the Great Depression, what caused it?
GALBRAITH: Oh, the speculation that preceded it. I wrote a book on that, "The Great Crash."
LAMB: Still sells?
GALBRAITH: Well, what has happened is that every time the book was about to go out of print, there comes another period of speculation and recession-depression, and that brings the book back into circulation again. It's the most permanent piece of writing I ever did.
LAMB: You tell the story in the book about going into an airport. Tell that story.
GALBRAITH: Well, that was how I learned to be careful about how you entitle books. In the old La Guardia Airport, there was a book shop just at the bottom of the main entrance before you went out to the planes. The book, "The Great Crash," was on the bestseller list for a few weeks, a couple of weeks, and that has a bad effect, my dear fellow, on the most sterling character, because you can never again go by a store window without looking to see whether the book is there. It usually isn't. So one night coming through the La Guardia terminal, I looked at the book shop. The book wasn't there and I had a little time, so I wandered in to see if they had a copy.

After I stood around a while, the lady who was running the bookstore said, "You're looking for something, sir?" I was ashamed of myself, god, that here I should be going in looking to see if a bookstore had one of my own, but I was already caught, so I said, "Well" -- I stumbled a bit. I said, "I kind of forget the author's name. Something like Galbraith." Then I said, "But I remember the title of the book." I decided I'd better come in a little strong on that. I said, "It's called The Great Crash.'" She looked at me with tears in her eyes and said, "That's not a book you could sell in an airport." I've since learned that you must be more careful with your titles.
LAMB: When you write -- and let's take this book right here, the latest, "A Journey Through Economic Time" -- who do you write for? What's the audience out there you want to read this?
GALBRAITH: Oh, I'd like to think that anybody who has an interested, intelligent view of our times and my times. I write with two things in mind. I want to be right with my fellow economists. After all, I've made my life as a professional economist, so I'm careful that my economics is as it should be. But I have long felt that there's no economic proposition that can't be stated in clear, accessible language. So I try to be right with my fellow economists, but I try to have an audience of any interested, intelligent person. I hope that doesn't sound too self-serving.
LAMB: You write a lot about war and the impact of war on the economy, on a country. Let me just ask you a general question about war. Why do we have wars? What leads us into war, in your opinion?
GALBRAITH: Well, this is the question that may be changing. Until the First World War -- and I say in the book that World War II was really the last battle of what had come to be called "The Great War." Going back to the most ancient times, national well-being, the national prestige depended on territory. The more territory a country had, the more income revenue there was, the more people there were to be mobilized for arms strength. So we had an enormous sense of territorial conflict and territorial integrity, and that was unquestionably a part of the cause of war, coupled with the fact that there was a disposition in that direction by the landed class, a disposition to think of territorial acquisition and territorial defense and to think of the peasantry as a superior form of livestock which could be used for arm purposes.

Now, particularly in the last 50 years in the fortunate countries -- the poor countries are another subject -- we've had much more powerful power for the industrial and trading community, much closer trading relationships. We have the multinational corporations. We have international finance. We have tourism, close cultural relations. The landed interest has faded into the background. We have, in consequence, a much more peaceful situation, far more peaceful than we had in the years of World War I. I think the tendency of the fortunate countries has been, on the whole, pacific, and something in which we should take satisfaction. I worry about the problems of economic disorder in Eastern Europe and the Soviet Union. I think this is one of the great problems we have. I think the whole transition there has been, on the whole, not well managed, either in terms of our support for it and in terms of what has been done. We still have the terrible conflict in places like Somalia, Rwanda, former Yugoslavia. But those are much poorer countries.
LAMB: Let me ask you something about the Soviet Union because ...
GALBRAITH: I think economic development is a great pacifying influence.
LAMB: If the Soviet Union called you up and called Milton Friedman up and had you both sitting at the table and said, "I want the two of you to advise us on this country's future," what would be the difference in the way you would apply your economic theories?
GALBRAITH: I can't speak for Professor Friedman because I haven't talked with him about this. I can only speak for myself, and I did speak on this. I argued for a more gradual process. I argued that, sure, there are some things that could be turned back very quickly and easily to the private sector -- restaurants, places of entertainment, the service industry, to some extent agriculture. There are problems there.
LAMB: What would you do with factories?
GALBRAITH: But not to trade a poorly working economic system, which was what the Russians, the Soviet Union had, for no system at all -- to not move the great corporations back to the private sector until full provision had been made for that transfer process. Do you follow me? This is a matter that could not proceed by formula. It had to proceed by thought. I'm not sure what Milton Friedman's views would be, but I think he might be a little more drastic than I would.
LAMB: In your opinion, why did the Soviet Union fall? Why did the system there not work?
GALBRAITH: I would have no doubt about that. It was a badly working economic system in one important respect. It was very good at producing heavy industry, transportation, electricity, oil. Large-scale industry, on the whole, it was fairly competent. It was very bad producing the whole range of consumer goods, including food, and it never developed a design for handling the instability, the fluctuations that are associated with clothing, with consumer taste, with consumer demand. Those things could not be planned. That was the economic weakness. Further than that, there's the problem, the matter that we've talked about before, that this was a system which had enough success so that it produced a very large number of people who demand to be heard. This was a system which was repressive of the very central feature of economic development, which is the large number of people it brings into existence wanting voice.
LAMB: We talked earlier in our discussion that you were born in Canada and came over here and went to school. Did you become an American citizen?
GALBRAITH: Oh, sure. You don't become an ambassador while you're subject to foreign citizenship.
LAMB: When did you make that decision to become a citizen?
GALBRAITH: I must tell you that in 1934, the second year of the New Deal, I was on my way from California to Harvard, and there were several months intervening. I stopped to see one of my old professors who had a high position in Washington. There was a desperate need for economists. That was the most wonderful thing about the New Deal, the shortage of economists. He put me on the payroll to make a study of some problems of land ownership. It was quite a good job. It paid off my college debts. In those days, I was not asked whether I were a citizen or not, which I wasn't. There was nothing in the Civil Service forms, but I did have to go to the top floor of the Department of Agriculture and affirm that I was a Democrat. That was required, but not the matter of citizenship.
LAMB: What year did you become a citizen?
GALBRAITH: I became a citizen in 1937. I was, by that time, politically, emotionally and morally committed to the United States. Where I grew up in Ontario, we were in the outer fringe of the aura of Detroit, so we never thought very much about the difference. Broadly speaking, we regarded the border as an infringement of human liberty.
LAMB: You write in here that you used to write speeches for Adlai Stevenson.
GALBRAITH: That's right.
LAMB: How did you get to know him?
GALBRAITH: When he was nominated in 1952, he had no staff of any sort. Two great friends of mine were recommended to him -- George Ball, who died a few months ago, a lifelong friend of mine, and Arthur Schlesinger Jr. They needed an economist, so they immediately separately called me to come to Springfield [Illinois] to write the economic speeches. That was my first meeting with Adlai.
LAMB: What was he like?
GALBRAITH: Oh, Adlai was a wonderful person -- a good sense of humor, a delightfully kind figure, intelligent. We were all devoted to Adlai.
LAMB: What was your reaction to writing a speech for someone like Adlai Stevenson and then seeing him read it? Or did he?
GALBRAITH: Yes. Adlai was always uneasy about having people write speeches for him, but there was no alternative. You can't run for President and write your own speeches. So he would make some changes, but many, many times I sat in front of the radio and listened to Adlai's speeches and bowed in substantial agreement with something I'd written myself. Could I tell you a story about that? This was not the 1952 campaign; the 1956 campaign.
LAMB: When he ran again.
GALBRAITH: When he ran again. I wrote the speeches on economics, but I also wrote the speeches on Richard Nixon. You couldn't attack Ike. Ike was sort of a divine figure, but you could attack Nixon -- rightly. Adlai said to me one day, "I want you to write the speeches about Richard Nixon, because you have this tendency to be fair." On the basis of that compliment, I wrote several speeches -- one or two speeches, not several -- featuring the presumed inadequacy of Richard Nixon, including one that was given in the Gilmore Stadium in Los Angeles, which Adlai originally went to far, but then he said, "Well, I don't think we're going to win, so we might as well tell the truth about the man." We were not pro-Nixon. He gave the speech, and there were comments on it even years after. It said, "You roll back the stones, and you find slithering things. That is the world of Richard Nixon."

Terrible when you mention it anymore. The crowd -- it was a huge crowd -- received it well. A year or two later, I was, of all places, in Moscow and went to a meeting of the Soviet Academy one night where a friend of mine was being inducted from India. P. C. Mahalanovis was being inducted in the Soviet Academy. There I fell into a discussion with an old party hack, which he was, who told me that he had been invited to the United States in 1956 by the Eisenhower administration to see the election. It was evidently assumed that seeing a democratic election was a good thing. Some would doubt that. I said, "What impressed you the most?" To my delight, he said, "Well, I think it was the speech that your Governor Stevenson made in that big football stadium" -- it was actually, I think, baseball -- "in Los Angeles." I had written the speech, so I said to him, "Well, what did you think of that speech?" He said, "Well, of course, it wasn't a speech you would hear in a cultured country like ours."
LAMB: Did you ever talk to Richard Nixon, ever have a conversation with him?
GALBRAITH: No, I never did. He worked for me during the war, but I was in charge of price control and he was in charge of writing my letters on the rationing program. The National Archives a year or two ago dug up the letters that he had written for me, but he was a way down in the lower reaches of the organization, a very young man, and I didn't know him.
LAMB: From time to time it was written that Richard Nixon was a Keynesian.
GALBRAITH: Well, so was Ronald Reagan. Ronald Reagan spent profusely to sustain the economy in the 1980s. He spent on the defense buildup. He spent, by my standards, on the wrong things, but there's no question that he had a sense or his people had a sense that a big government deficit supporting the economy had a benign effect for the people it employed.
LAMB: Did you decide what you felt about government and how people should live and then go find someone to support your thesis or did you study and then decide where you came down?
GALBRAITH: Oh, the latter. I don't think I was terribly dependent on anybody else. I think I was able to make up my mind. I had teachers and I had colleagues and I had discussion, but there was nobody I can think of, really, that I went to and said, "What do you believe? I must believe it myself." Is that what you're asking?
LAMB: What I was really getting at is where did you get the views that you have, at what point in your life, and who influenced you?
GALBRAITH: I'm a product of the whole development of economic subject matter. Certainly one of the most influential books I ever read was Adam Smith's "Wealth of Nations." It's an enormously important book. John Stuart Mill, the whole classical tradition. The first major course I had in economics was the economics of Alfred Marshall, the great figure of neoclassical economics. It was out of that whole current of thought, culminating in some ways with Keynes, that I derived my economic education and my economic thought, such as it is.
LAMB: Where are you living today?
GALBRAITH: Cambridge.
LAMB: Cambridge, Massachusetts. Do you do any teaching?
GALBRAITH: No, I retired a long while ago, but I give a lecture every other week somewhere or other. We live just adjacent to the university, and that means at Harvard that you retire and do pretty much the same work for somewhat less money.
LAMB: How big a family do you have?
GALBRAITH: I have three sons. I have one son who's a lawyer here in Washington where we're talking, a very distinguished litigation lawyer with the great firm of Williams and Connolly. My middle son Peter is now ambassador in Croatia, one of the more difficult and demanding spots in the foreign service. My youngest son James Galbraith has followed in the family tradition. He's an economist at the University of Texas at the LBJ School.
LAMB: How would you access this country at this stage in its life?
GALBRAITH: You'll have to make that question more specific.
LAMB: Did it turn out in the year 1994 the way you thought it would? Is this democracy working? Is government working?
GALBRAITH: Yes and no. The growth in income, the growth in well-being has been enormous in my lifetime. No question about that. On the whole, government, including the Congress, is much better than when I first knew it in the 1930s and 1940s. The Congress is enormously better than it was then, in spite of all the criticism that is now leveled at it. On the other hand, there is the problem of our great cities and the problem of the desolate mass of people who live without hope in New York, Los Angeles, Chicago. This is something which distresses me very much. I see that as a really great problem, the really great problem of our time.
LAMB: What's the solution?
GALBRAITH: Well, I'm going to write a book about that. I have a book about half written called "The Good Society," which, among other things, deals at length with the problem of the great cities. I'll say just one or two small things. I put enormous emphasis on education. I think we under invest in the education in our great cities. We need a much stronger school system. I read in the New York Times that we might be cutting back on the education budget. Well, there may be a few superfluous bureaucrats in education, but education is the great escape from poverty.

If we look around the world, there's no good literate population that is poor, and there's no illiterate, uneducated population that is anything but poor. Then I'm in favor of a solid safety net for people. I don't think a rich country like ours can allow people to starve or to have the total absence of freedom which comes from a total absence of money. I don't think we should continue to denigrate people who have to live on welfare. One of our most unkind tendencies is to assume that they are somehow defective. They're unfortunate but they're not defective. I would like to see a much kinder policy.
LAMB: You tell us in the book that you were born in 1908.
GALBRAITH: That's right.
LAMB: Since 1908, who do you think has been the most effective politician that you've watched?
GALBRAITH: Oh, Franklin D. Roosevelt. No question, yes. I was closer to Kennedy, much closer to Kennedy. I loved John F. Kennedy, but Franklin D. Roosevelt was certainly the great political figure of this century.
LAMB: What made him so good?
GALBRAITH: Well, a combination of enormous political skill, a great capacity to communicate with the American people -- those fireside chats were just an enormous source of strength -- plus an inner intelligence in which he identified himself with the United States and was the great proponent of American well-being. This went over the whole field. It even extended to his vision of the western United States that was partly covered with trees -- the Soil Conservation Service, the Civilian Conservation Corps. To some extent civil rights, but that was certainly not his strongest point. There were weakness there. But go back to what I said before. FDR identified himself with the republic and the republic with him, and he gave his whole life to the combined force of his own personality and that of the country.
LAMB: We're out of time. This is what the book looks like. The author, John Kenneth Galbraith, "A Journey Through Economic Time: A Firsthand View." Thank you very much, sir.
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