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Abstract:
Economics is sometimes portrayed as a contest between saltwater and freshwater, between the coastal pseudo-Keynesians and the Great Lakes neo-Walrasians, between the flaws-and-friction model-builders and the free-market hard-liners. As evolutionists know, both habitats are fairly sterile. Evolution occurs in the backwaters, in the mudflats, bogs, lagoons, cypress swamps, and wetlands, in the shadows of perpetually endangered habitat. This essay sketches a personal journey through the backwaters. Intellectually they are my home, as they have been for every other recipient of the Veblen-Commons prize, with just one exception …
Notes
1 My father was born in Iona Station, Ontario, in 1908, a place of which his father reportedly said that it was the greatest center of rail-borne commerce in North America, with trains that went directly East to New York and West to Chicago and San Francisco, and “the only difficulty was, the trains did not stop.”
2 Seat of Agricultural Economics at the University of California, Berkeley.
3 See John Kenneth Galbraith (Citation1952). As a point of filial pride, let me note here that his breakthrough work, The Affluent Society (Citation1958) is dedicated, in part, to me.
4 See the Summary Report of the United States Strategic Bombing Survey (Citation1945 [1987]).
5 Вольное экономическое общество. Originally the Free Economic Society for the Promotion of Agriculture and Husbandry, it is said to have around 250,000 members in Russia today.
6 Lerner’s lecture was a typical introduction to homo economicus and involved the usual exchanges with incredulous freshmen in the front rows. I had no idea, at the time, that Lerner himself was a dissident from neoclassical views.
7 See James K. Galbraith (Citation1999a)
8 My undergraduate thesis (Galbraith Citation1974) was done under the supervision of Marc Roberts and was read by Stanley Hoffmann.
9 Kaldor (Citation1979–80). Kaldor’s family hosted me to many Sunday dinners at home on Adams Road that year.
10 Richard Goodwin (1970) conveys, in my view, a misleading impression of this remarkably original work. To understand what Goodwin was up to, one had to watch him draw and explain his graphs on the blackboard.
11 Pasinetti’s elegant books on economic theory remain in their honored places on my shelves, and Pasinetti himself has shown a magnanimous interest in my work on inequalities, including in 2010 nominating me, successfully, to the seat in the Accademia Nazionale dei Lincei vacated by the death of Paul Samuelson.
12 See Adrian Wood (Citation1975, Citation1978). The tutoring system at Kings College involved a weekly essay and meeting with the tutor and (in my case) just two students, an almost unbelievable luxury as I only later realized.
13 Henry S. Reuss (D-WI) was chairman of the Committee on Banking, Finance and Urban Affairs from 1975 through 1980 and of the Joint Economic Committee (JEC) in 1981–82. I worked for him on-and-off at Banking through graduate school, mostly on monetary policy oversight, and as his Executive Director of the JEC in 1981–1982. Reuss was an enlightened social democrat, intellectually and politically adventurous, deeply expert on international economic affairs, and an erudite and amusing man who was also a conscientious editor of everything I prepared for him.
14 Meetings to draft the Full Employment and Balanced Growth Act of 1978, initially H.R. 50 or Hawkins-Reuss, were held in the office of Rep. Augustus F. Hawkins (D-CA) and included among other veterans of the Employment Act of 1945, Leon Keyserling and Bertram Gross. I was the youngest person present, and the only one with an interest in monetary policy; hence that segment of the drafting fell largely to me. It proved to be the only part of the bill that was not a dead letter on enactment.
15 I was twenty-three years old, installed at a temporary desk in the Chairman’s office when he swept past one day, telling me to come along with him to a meeting. After a quick walk through the tunnels we emerged in the Longworth building, and found ourselves in a room with the entire New York City congressional delegation, including Bella Abzug, Elizabeth Holtzman, Charlie Rangel and other memorable figures of that era. They were deeply troubled by the news that the banks were cutting off New York’s short-term loans and the city might face bankruptcy. Reuss listened for ten or fifteen minutes, and told them, “Don’t worry. My staff will have a plan for you in the morning.” Indeed I did, and the following day it was on the front page of The New York Times. One feature of my plan was that, among other things, the bondholders would need to take part of the hit. This prompted a call from the former Governor of New York, Averell Harriman, and Reuss dispatched me to his Georgetown mansion to give a briefing. I found Harriman in his pajamas, recovering from a broken hip, seated in a small room between some Van Gogh sunflowers (possibly they were roses) and a Degas ballerina. He listened carefully and responded in brief: “I understand completely. Capital must pay as well as labor.”
16 Sid Winter and Richard Nelson did not draw me too deeply into their then-nascent work on the evolutionary theory of the firm, published in 1982, although I recall at one point drafting a memorandum for them suggesting that their adaptive approach to innovation was closer to Lamarck than to Darwin.
17 Perhaps the most comprehensively inquiring mind I ever encountered, Paulo Calmon was a graduate student at Vanderbilt, searching for new approaches to the problem of resource allocation inside state structures, when he came across a microfilmed copy of my PhD thesis, A Theory of the Government Budget Process (Galbraith, James K. Citation1981). He arrived in Austin unannounced and things took off from there. Paulo and I stumbled across the idea of combining cluster analysis on time series with discriminant functions a few years later.
18 These were Robert Weintraub and Robert Auerbach, both Chicago-trained students of Milton Friedman. Auerbach abandoned monetarism when the data could no longer support it and came to the LBJ School around 2001 for the last eighteen years of his life, where we remained the closest friends.
19 U.S. Congress (Citation1981), see especially James K. Galbraith, Stephen S. Cohen and John Zysman, “Credit Policy and Industrial Policy in France,” pp. 6–35. Other parts of the study were prepared by Andrew Martin of Harvard (Sweden), Catharine Hill, later President of Vassar, (Great Britain), and the late Richard Medley (Germany), who went on to co-found The International Economy and then to help George Soros engineer the crash of sterling in 1992.
20 See James Galbraith (Citation2008 and Citation1999b).
21 See James Galbraith, Douglas Dacy, and Bobby R. Inman (Citation2004).
22 James Tobin, Wassily Leontief and Lawrence Klein appeared together before the Joint Economic Committee on January 19, 1982. Reuss had instructed me to gather up Nobel-prize winners, and the caption on the front-page New York Times photograph read, “Nobelists Denounce Reagan Economic Program” or words to that effect. No reference to an accompanying article appeared with the photograph, because there was no such article.
23 In particular, the Republican staff director at the time, Bruce Bartlett, an able and fearless person with whom I’ve enjoyed a cordial friendship ever since those days. The major figures on the Democratic staff included Richard F. Kaufman, Bill Buechner, Mary Eccles, Deborah Matz, Kent Hughes, Paul Manchester and David Smith. Our Congressmen besides Reuss were Richard Bolling, Gillis Long, Lee Hamilton, Parren Mitchell, and Frederick Richmond, the last a colorful cad who went to prison in the middle of that term. Our Senators were Lloyd Bentsen, Bill Proxmire, Ted Kennedy, and Paul Sarbanes. I now hold the Bentsen Chair at the LBJ School of Public Affairs, a testimony in part to Bentsen’s generosity of spirit. On receiving the chair, former Congressman Ken Bentsen conveyed an instruction from his uncle: “I don’t want to read about your work in any letter. I only want to read about it in the newspaper.”
24 Clarence Ayres, Wendell Gordon and Ray Marshall all enjoyed the honor of the Veblen-Commons prize. Marshall was one of the important forces that drew me to Texas in 1985 and remained active at the LBJ School into the 2000s. However the Economics Department had abandoned Institutionalism by the mid-1980s. My experiences on Capitol Hill, refined in Texas, formed the basis of my first book, Balancing Acts: Technology, Finance and the American Future (Citation1989). The subtitle now appears prophetic. My early Texas years were also graced by a collaboration with Veblen-Commons prize winner Robert L. Heilbroner on several late editions of his textbook, The Economic Problem.
25 Lord Skidelsky had come to Austin to present the second volume of his biography of Keynes to the faculty seminar on British Studies. After getting his hint later that day, I went to the library and pulled out all references to Einstein in Keynes’s collected writings; the result was a paper, “Keynes, Einstein and Scientific Revolution” (Galbraith, James K. Citation1994). This work makes an appearance also in another project of that time, a Post Keynesian textbook on Macroeconomics co-authored with William Darity, Jr.
26 Peter Albin’s work at the time pioneered the application of simulations of cellular automata to economic theory (Albin Citation1998). A discussion with him at one of the Levy Institute conferences in the mid-1990s convinced me that we were on to something worthwhile; in gratitude I dedicated Inequality and Industrial Change to him.
27 Specifically, Lu Jiaqing and Wenjie Zhang, Pedro Conceição, Junmo Kim, Hyunsub Kum and Jaehee Choi, Vidal Garza, Enrique Garcilazo, Lyudmila Krytynskaia, Deepshikha RoyChowdhury, Hamid Ali, Daniel Munevar, Laura Spagnolo and Delfina Rossi, Béatrice Halbach, Aleksandra Malinowski and Amin Shams, plus an American contingent including Maureen Berner, Amy Calistri and Travis Hale.
28 James K. Galbraith and Lu Jiaqing (Citation1999). The major illustration of the technique is in James K. Galbraith, Created Unequal, New York: Basic Books, 1998.
29 This approach has yielded scores of papers and a half-dozen books, including James K. Galbraith and Maureen Berner (Citation2001), James K. Galbraith (Citation2012), and James K. Galbraith (Citation2016a). A key reference is James K. Galbraith, Pedro Conceição and Peter Bradford (Citation2001). The work of the University of Texas Inequality Project is on-line at http://utip.lbj.utexas.edu and in an archive at the Social Science Research Network.
30 A paper with Daniel Munevar explored parallels with Minsky, who had greatly encouraged my work on Created Unequal.
31 This complaint features in my inaugural Tobin-Godley Lecture at the Eastern Economic Association in 2018, published as James K. Galbraith, “A Global Macroeconomics—Yes Macroeconomics, Dammit—of inequality and income distribution” (Citation2019a).
32 James K. Galbraith and Jing Chen (Citation2011, Citation2012a, Citation2012b). Many of our joint ideas are explained in accessible terms in Galbraith (Citation2014).
33 On the role of fraud, William K. Black (2005) has been a major influence.
34 See James K. Galbraith (Citation2019c), in a festschrift for Grzegorz Kolodko, champion of “New Pragmatism.”
Additional information
Notes on contributors
James K. Galbraith
James K. Galbraith holds the Lloyd M. Bentsen, Jr. Chair in Government-Business Relations at the LBJ School of Public Affairs, The University of Texas at Austin. He is a member of the Accademia Nazionale dei Lincei, a recipient of the Leontief Prize, a former President of the Association for Evolutionary Economics and a former chair of Economists for Peace and Security. The following is his lecture on receiving the Veblen-Commons Award, presented at the Association for Evolutionary Economics, San Diego, January 3, 2020