John Kenneth Galbraith rules!

21 Jun

Originally posted at my blog , while working on the book.

John Kenneth Galbraith has recently written an essay that has been published under the somewhat misleading title “The Economics of Innocent Fraud”.

Dealt with in this essay is how, out of the pecuniary and political pressures and fashions of the time, economics and larger economic and political systems cultivate their own version of truth. This has no necessary relation to reality. No one is especially at fault; what it is convenient to believe is greatly preferred. (Galbraith, 2005, p2)

All of who have some interest in economic and political life should be aware of this, he warns.

The larger part of his essay is devoted to the ‘renaming of the system’ and the disappearance of the name ‘capitalism’ and the use of the expression ‘the market system’ instead.

Reference to a market system is without meaning, erroneous, bland, benign. It emerged from the desire for protection form the unsavoury experience of capitalist power and, as noted, the legacy of Marx, Engels and their devout and exceptionally articulate disciples. No individual firm, no individual capitalist, is now thought to have power; that the market is subject to skilled and comprehensive management is unmentioned even in most economic teaching. Here is the fraud. (Galbraith, p11)

Galbraith also contends that privatization has allowed the private sector to invade what was traditionally the public sphere to the extent that there is no longer a clear dividing line between the two. He cites military privatization in particular, saying that the private sector is now driving defence policy. He also talks of corporate control over the treasury and environmental policy.

The corporate appropriation of public initiative and authority is unpleasantly visible as regards the environmental effect, dangerous as regards military and foreign policy. Wars are, one cannot doubt, a major modern threat to civilized existence, and corporate commitment to weapons procurement and use nurtures and supports this threat. (Galbraith 2005, p52)

Within the limited frame of this essay, he unfortunately does not elaborate on these issues in greater detail. In the context of my research it would be interesting to pursue this line of thinking and investigate the consequences for the privatization of intelligence gathering, the disappearing dividing line between government services and corporate interests, for in stance in defining who ‘the enemy’ is, those who need to be under surveillance, those who need to be fought.

A final word on Galbraith’s work. At the time of writing, the United States and Britain were in a bitter aftermath of the war in Iraq. He calls the accepted programmed death for so many people:  “Human progress dominated by unimaginable cruelty and death.”

Galbraith is not very optimistic about the future, or the chances for change. On the contrary. In the context of excesses like the war against Iraq, he writes:

Damage to the corporate world itself – to the view of corporate achievement and reputation – is always possible. Within the economy there is movement from public acceptance of the corporate system to its being seen as a military threat to all human life. Also there are unemployment and economic discontent, a contributing factor to recession or the more fearsome depression. (Galbraith 2005, p52-53)

I hope to be able to conclude my research on a more positive note.

Galbraith, J.K. (2005), The Economics of Innocent Fraud,  Penguin, London.