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Judge, Jury, And Economist
The Keynesians vs. the entrepreneurs


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Kevin D. Williamson
A wicked joke attributed to George Stigler goes: “All great economists are tall — the only exceptions are Milton Friedman and John Kenneth Galbraith.” The diminutive Friedman grows ever larger. The NBA-sized Galbraith is a fading figure: He is survived by his trademark phrase, “the conventional wisdom,” and some remember that there was a book called The Affluent Society, others that he served as ambassador to India and as the butt of many jokes made by the founder of this magazine. William F. Buckley Jr. was mistaken to have described him as “the most influential U.S. intellectual of the 20th century,” but then he was generous to his friends, among whom Galbraith was a cherished one. Galbraith did not end his career as a public intellectual impressively, descending into self-caricature when he sniffed to WFB that “there is not one member of the faculty of Harvard University who is pro-Bush” and presented that demonstrably untrue datum as though it were a devastating argument, apparently having forgotten his friend’s endlessly quoted declaration that he would rather be governed by the first 2,000 names in the Boston telephone directory than by the 2,000 members of the Harvard faculty. 
 
Galbraith has suffered ignominies, among them being dismissed as a “media personality” and “celebrity economist” by Paul Krugman, a media personality and celebrity economist. I suspect that there is an element of sibling rivalry in Krugman’s viciousness. Galbraith was treated by the best people as the intellectual heir to John Maynard Keynes, and Krugman — Nobel laureate, recipient of the John Bates Clark medal — does hack work for the New York Times while Robert Reich plays an economist on television. The memory of Keynes’s authority must be a wistful thing for 21st-century economists, inasmuch as none of them has as much command over public affairs as do a half dozen leering buffoons on television.
 
Both Keynes and Galbraith are thought by their admirers to have offered correctives to capitalism. But it is difficult to separate their ideas about capitalism, which were economic ideas, from their ideas about capitalists, which were largely moral and aesthetic. Each was marked in his way by an aristocratic revulsion from the trading classes and the grubby, advantage-seeking business of business. Keynes dreamed of a world in which we transcended scarcity, and Galbraith believed we had arrived there. Each contributed in his own way to the current progressive misreading of our economic troubles, inasmuch as their intellectual heirs see our current straits as being the product not of malinvestment but of sin.
 
But for progressives, sin is a matter of taste. Keynes’s tastes were complicated, and not just in the usual Bloomsbury way. Though he disliked hereditary wealth, his work contains an echo of the old gentry’s disdain for trade. A remarkable feature of it is its lightly concealed contempt for businessmen, a contempt that Galbraith shared and made even less effort to conceal in his own pronouncements. Keynes, in The Economic Consequences of the Peace, describes businessmen as a pitiable class, terrified by the rise of socialism, irresolute, and largely incapable of controlling their own destinies. Far from being profiteers, as the socialists charged, entrepreneurs could not help becoming wealthy during economic booms
 
whether they wish it or desire it or not. If prices are continually rising, every trader who has purchased stock or owns property and plant inevitably makes profits. By directing hatred against this class, therefore, the European Governments are carrying a step further the fatal process which the subtle mind of Lenin had consciously conceived. The profiteers are a consequence and not a cause of rising prices. . . . We are thus faced in Europe with the spectacle of an extraordinary weakness on the part of the great capitalist class, which has emerged from the industrial triumphs of the nineteenth century, and seemed a very few years ago our all-powerful master. The terror and personal timidity of the individuals of this class is now so great, their confidence in their place in society and their necessity to the social organism so diminished, that they are the easy victims of intimidation.
 
Crises, especially crises of confidence, have their uses. It was not many years later that Keynes was writing to Pres. Franklin D. Roosevelt to offer advice on yoking that same diminished class of businessmen:
 
Businessmen have a different set of delusions from politicians, and need, therefore, different handling. They are, however, much milder than politicians, at the same time allured and terrified by the glare of publicity, easily persuaded to be “patriots,” perplexed, bemused, indeed terrified, yet only too anxious to take a cheerful view, vain perhaps but very unsure of themselves, pathetically responsive to a kind word. You could do anything you liked with them, if you would treat them (even the big ones), not as wolves and tigers, but as domestic animals by nature, even though they have been badly brought up and not trained as you would wish. It is a mistake to think that they are more immoral than politicians. If you work them into the surly, obstinate, terrified mood, of which domestic animals, wrongly handled, are so capable, the nation’s burdens will not get carried to market.
 

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