Friday, June 25, 2010

Is UTA's James Galbraith A True Economist?

It's hard to arrive at that conclusion after listening to an hour long interview/debate on Scott Horton's Antiwar Radio program between Austrian economist Robert Higgs and Keynesian "economist" James Kenneth Galbraith.

Most of Galbraith's support for Keynesian government intervention rests on what he believes one could "reasonably" argue, where the word "reasonable" is always and everywhere a Marxist code-word for "What I think I can get unprincipled people to agree to my stealing without too much fuss."

Furthermore, he puts forth this bizarre notion of "social value" as opposed to economic value as the standard by which he judges whether government expenditure or regulation is worthy of his support (note, there are few, if any, government activities that do not meet the muster of Galbraith's rigid standards). The odd thing about "social value" is it seems completely undefined beyond his personal, arbitrary declarations. This means that other economists and scientists wishing to recreate Galbraith's economic studies and verify they arrive at the same findings as he does are unable to do so. It also means that there is no metric by which one can compare economic value and "social value" in order to judge if, for example, the "social value" gained by a program of mass highway building during the Great Depression outstrips the economic cost of doing so, arriving at a surplus of utility (Galbraith doesn't even make it clear if utility can be derived from "social value").

In other words, economists are individuals who study the production and consumption of scarce resources amongst societies. They refer to marginal utility and subjective value theories in analyzing the choices individuals make in their patterns of production, consumption and exchange to arrive at conclusions about economic efficiency and the economic value of courses of action pursued by the various actors within an economy.

Galbraith does none of these things. In fact, he explicitly discounts the value of studies of economic value, in favor of his "social value" and "social rate of return" on investment. Galbraith, then, is not an economist studying the economy but rather a socialist studying society and how it responds to the various arbitrary dictates of the political elite that have captured it. Yet, "study" is perhaps too kind a word to describe what Galbraith does on an intellectual level, because it implies something academic or scientific in nature when the truth is that Galbraith, as a socialist, is a politician, not a scientist.

In fact, he's much further from a practitioner of science and much closer to a practitioner of divine mysticism. Galbraith is like some kind of self-appointed high priest of the social value cult, the only one able to communicate with the social value gods and return from the holy mount with the latest prophecy. What if someone else wants to go up and have a word with the spirits? Sorry, says Galbraith, they only talk to me. But, I think you're wrong, says you. I'll be the judge of that, says Galbraith.

So, Galbraith is not a true economist but a politician masquerading as one. He's also not much of a historian, which makes his interactions with Higgs (who is a historian, specifically a scholar of economic history) all the more comical. Whereas economics, according to the Austrian school, is a science of deductive logic rather than empirical examination, history is decidedly a study based in and on human experience. That's what history is, or is supposed to be, a record of human events and experience. And yet, it is here where Galbraith's arguments fall flat on their face even harder than in the theoretical arguments department.

Galbraith continually argues for a particular form of enlightened, compassionate, interventionist statism. He supports this imaginary benevolent State on the grounds that "we're better off when the government works efficiently." But how are we off when the government works inefficiently, or worse yet, works in the specific interest of a few against the many? Here, Higgs points out, the record on the matter is clear-- that the State is a predatory nightmare at its worst and a bumbling, idiot buffoon at its best, that history is an almost completely uninterrupted record of it being so and that given that kind of track record, it's a bit naive to hope or expect for the State to ever be anything else in the future given the clear demonstration of its nature in the past.

Galbraith, the non-economist, non-historian's response? "You can point to many failures, but you can also point to some successes" in studying the record of regulators, bold emphasis mine. It seems from Galbraith's imprecise choice of words that even he is aware of the futility of his viewpoint, and yet he holds to it anyway. Even more appallingly, Galbraith observed that the original gold standard in the United States was "controlled to the benefit of the money center banks in New York," and yet, acknowledging this fact of history he supports the Federal Reserve system and the fiat currency monetary regime it controls. But who, then, does Galbraith think controls the Federal Reserve? Apparently not, still, the money center banks of New York.

Another thing Galbraith proves he is not in this debate is a sound legal or ethical philosopher. Perhaps to burnish his "realist" credentials vis-a-vis the incredulous "romantic" idealist Bob Higgs, Galbraith announces to the listeners that "government is not a dirty word to me. Instead, I think of government as a tool."

Oh yes, government is a tool, and a mighty tool at that, much like the swords, clubs, chains, prisons, guns, bombs and tanks that government is after you remove all the fancy, euphemistic governmental-rhetoric. Galbraith lobbed a lot of logical softballs that any sound thinker could've smashed out of the ballpark, but claiming that "government is not a dirty word" as if this brought him and his ideas out of the clouds, planting them firmly on the ground, has got to be one of the more imbecilic moves Galbraith made.

Seeing that the idea of theft and the use of violence to achieve social ends is not a taboo one in Galbraith's mind, one is left to conclude that the only reason Galbraith prefers and advocates for the State's criminality over private criminality is because Galbraith concedes the libertarian point that the State is nothing but a monopoly crime syndicate. And because of its unique monopoly position amongst mafia groups, the State is therefore the the most efficient band of thieves around.

Galbraith is a great many things, for sure. As a man who understands almost nothing about the subjects he regularly opines on, he is undoubtedly a fool, and a self-deluded one at that. As a tool of the State and its beneficiary elites, he has proven himself to be a consistent and able-minded socialist politician. But a historian, an etho-legal philosopher and an economist, James Kenneth Galbraith surely is not.


  1. UTA is UT-Arlington (in the DFW area). Otherwise, it's just UT or UT-Austin.

    Disclaimer: I work for UTA.

  2. Fantastic post. I don't know what a "university" is, I surmise that it must be some kind of institution of faux learning that is somehow immune to free market forces (else, clowns could not get employed there), perhaps by virtue of some monopoly power that results by association with government.

  3. Anon,

    Thank you for the correction. I actually didn't know UTA was the incorrect acronym but I will leave it like that because it makes the title shorter and I think I correctly specified which campus I was referring to in my post. But either way, I appreciate your correction.


    Thank you for your comment. As a graduate of a "university" I have to tell you that after 4 years I am still confused as to what a university is.

    It is somewhat comical to note, however, the following from James Galbraith's curriculum vitae on his personal website:
    Current Position: Lloyd M. Bentsen, Jr. Chair in Government/ Business Relations, Lyndon B. Johnson School of Public Affairs, and Professor, Department of Government, The University of Texas at Austin.

    Govt/Business Relations? Where I'm from, that's called fascism. And the rest of the man's titles include 1.) a socialist warmonger-named school, not of econ but of "Public Affairs" and 2.) professor in the "Department of Government."

    Are you starting to get the picture that Galbraith doesn't do economics but is in fact something of a political functionary, there to give the blessing of an "economist" to this or that hare-brained, predatory, interventionist scheme of the State?

  4. Anon,

    Sorry, I had an earlier edit of this post in which I did refer to Galbraith's school as "University of Texas, Austin" but I removed it from the final version. Doh!

    Thanks again for the catch!

  5. Taylor, did you "graduate" as an "economist"? If not, I suggest you cease and desist blogging, post haste:

  6. BobE,

    I actually did "graduate" as an "economist," but I've never been led to believe that my having done so is what makes me fit to comment on economic issues because I used to argue with a whole bunch of classmates (who also "graduated" as "economists" eventually) who had an impossible time wrapping their head around the simple logic of voluntary vs. involuntary exchanges and their respective roles in the wealth creation process.

    Thought I'd seen everything, but that Kartik piece you linked to really took the cake. Thanks!

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