Guest Post: Is UTA's James Galbraith A True Economist?

Tyler Durden's picture

Submitted by Taylor Conant at Economic Policy Journal

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.

of Galbraith's support for Keynesian government intervention rest 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").

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.

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.

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

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.

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DavidC's picture

So, he's not impressed with Galbraith then, do I read that correctly?



Eternal Student's picture

Well, it's kind of mixed, I'd say. He seems to think that not being an Economist is a bad thing. How any one can think that being an Economist is somehow worthy of respect, given the incredibly bad track record, is beyond me.


Withdrawn Sanction's picture


“…How any one can think that being an Economist is somehow worthy of respect given the incredibly bad track record, is beyond me.”  Doubtless it IS beyond you, as is an understanding that people or professions are not monolithic; but hey I get it, stereotypes are so handy.  One doesn’t usually see such intellectual bigotry so nakedly on display.  BTW, it should have been a lower case “e.”    


Eternal Student's picture

Well, considering that nearly the entire field missed calling the Crash of 2008, yes, I'd say it's really clear that there's something quite wrong with the profession. Completely missing the biggest event in their career is the definition of incompetence. That you're so impressed by this inability is something that you might want to wonder about.

For the 18 or so who actually did publish warnings about it, yes, I am impressed by them. But even one of them thinks the world would be better off if all Economists were shot. I agree mostly with him; I'd give those 18 a free pass though. The hell with the others; they are clearly fools, and dangerous ones at that.

sgt_doom's picture

Exactly, and brilliantly said, Eternal Student (and great handle, BTW).

The far more valid and salient question is: how many of those clowns who claim to be heavy-duty economists understand anything?

What they have long been preaching is nothing more than monopoly finance.

And guess what (rhetorical question here)?  It doesn't work but for a select few debt-financed billionaires and trillionaires!

And those who have long been preaching this -- and claim to be economists -- have begun attempting to reinvent themselves.

Far too late for globalist-loving (let's offshore all jobs in America) Paul Krugman, Alan Blinder, Simon Johnson, Jeffrey Sachs, Stiglitz (although I appreciate his recent pronouncements, 'natch!), et al.

If one isn't honest enough, or man enough, or scholarly enough, to admit to the real agenda being pushed by the IMF and World Bank and their associated banksters, then the description "professional economist" simply doesn't cut it.

If a woman claiming to be one, who is a university economics professor and has been a senior fellow at the Peterson Institute (or Toot!) can't even support her filmsy so-called "studies" with actual source data (after repeated calls and correspondence, she could only mail a pathetic graph to me), then these aren't remotely economists we are constantly being subjected to!

Years back, the Bretton Woods Committee, the lobbyist group for the ultra-rich, seeded various universities throughout the country (Harvard, Princeton, UC, University of Michigan, etc., etc.) with various of their lackey economists (anyone who is doubtful of the integrity of any economist, please consult their membership list at


SwapThis's picture

Excellent post Sargent. 

Eternal Student's picture

Thank you. And spot on and briliantly said yourself!

Vecon's picture

Apparently we now live in the world of Mccarthyism, again. Everyone who cares for anything other than some ignorant misinterpreted definition of capitalism (we haven't seen real capitalism in decades) is a comunist.

Here's a definition of sociology:


Sociology is the study of society.[1] It is a social science—a term with which it is sometimes synonymous—that uses various methods of empirical investigation[2] and critical analysis[3] to develop and refine a body of knowledge about human social activity, often with the goal of applying such knowledge to the pursuit of social welfare. Subject matter ranges from the micro level of agency and interaction to the macro level of systems and social structures.[4]

Insiderman's picture

Definitions, too, can be pretty subjective: "Sociology is excited ignorance in the frantic search for a truth that never existed." 

The problem as I see it is we continually try to add utility across individuals.  For example, I have a STRONG negative utility function associated with taking my money and giving it to others.  Depending on my level of income, sociologists would argue that the receiver has a higher utility from the redistributed work product due to the diminishing returns to utility as my income rises.  Therefore, society gains from redistributing my work product.

That completely belies the true purpose of money in a capitalist system; that is, cumulating money in the hands of efficient producers for the greater good of society.  True that I have diminishing returns from personal expenditure of that marginal work product.  However, society has exponentially greater utility from the redeployment of my marginal work product into greater production (moving the long-run supply curve to the right in Econ 1010 terms).  I not only get to keep my marginal utility (albeit diminished), but I engender utility-creating increases in potential output.

mikla's picture


Nice work!

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.

This, of course, is the essence of most social engineering masquerading as rationalized "science" by the ruling elites.  Sometimes they are merely projecting their warped world view; sometimes they are actively stealing whatever they can while distracting you with bullsh*t.  All of the time people and society suffer as a result.

It's amazing society tolerates their nonsense and their demonstrably repeatedly failed central planning.


Cognitive Dissonance's picture

Galbraith is a public keeper of the myth, also known as the public lies. Some are official, some are officially sponsored and some are self appointed. Collectively their job is simply, support and reinforced all our public myths, be they economic, military, social contract/status, religious and so on.

Galbraith is self appointed but also belongs to the officially sponsored category. The keepers of the myth are the most important part of the overall control mechanism because they teach the slaves (you and me) where we fall in the pecking order and the rules for being the best slave we can be. 

lawrence1's picture

Well put.  Most US trained enonomists are apologists for their employe's interests. I recommend reading Ravi Batra who wrote "Greenspan's Fraud" and would welcome suggestions of non-US establishment economists.
And with respect to the author of this critique of Gailbraith, I note on his homepage the offer of a free report recommending a stock owned by Buffet. I guess Gailbraith's viewpoints don't mix well with his stock picks. Sometimes I think Tyler chooses guest posts just to see what happens. But that's just fine, it's the best site around and there is a certain satisfaction in watching intellectual crucifixions considering the almost everything in the mainstream media deserves them.


idle muesli's picture

Ravi Batra, that's not the guy who regularly predicts economic end times?

sgt_doom's picture

What was your opinion of Galbraith's book, The Predator State?

dryam's picture

Here's a clip from April when Schiff took on Galbraith.  The guy is a complete putz.

Carl Marks's picture

Socialism is treasonous because it violates the principles upon which this country was founded and makes a mockery of our Constitutional liberties. Socialists should be tried for treason and suffer the consequences.

Eternal Student's picture

Yeah. Free Market Capitalism has worked out just so well.

Honestly, how much money do you have to lose, directly and through higher taxes, before you get a clue?

My guess is all of it. And even then, you'll still be funding the Corporate Elite through your delusions.


Bay of Pigs's picture

Free Market Capitalism? WTF? Speaking of delusions. Junked.

Eternal Student's picture

I guess you haven't been following what's been going on in the Economy. Yes, the point is that Free Market Capitalism is indeed delusional. Backatcha.

Sespian's picture

A fitting name you have...keep studying and maybe you'll come to understand what free market capitalism is and why we haven't had it here in the US in well over a century.  Best wishes to you freshmen.

ggm's picture

Isn't that always the complaint that practitioners of failed ideologies make?

"If only we had practiced the pure form of ________, it all would have turned out alright."

fearsomepirate's picture

Free market capitalism is like a circle.  A circle is an abstract, mathematical concept that exists nowhere in reality.  But there are things in reality that approximate a circle, and, to the extent they approximate a circle, they act like a circle theoretically would.

So it is with free market capitalism.  To the extent our social order approximates free market capitalism, it produces prosperity and advance.  The less and less like a free market it becomes, the more and more unstable and destructive it gets.  But even a "close" approximation of the free market produces unfathomably more wealth than the many kinds of outright serfdom human history has given us.

Arguing that imperfect capitalism results in problems, therefore we might as well have socialism, is like arguing that imperfectly round gears vibrate, so we might as well make square gears.

fiftybagger's picture

I suggest you move to Zimbabwe and see how that works out for you.


Eternal Student's picture

As opposed to yourself, who is clearly all knowledgeable.

It's funny how the defenders of Goldman-Sachs and the Bankers come out when challenged about their failed belief system.

Free Market Capitalism and Communism are a lot alike. Neither have been tried in practice, both are fundamentally flawed, failed philosophies. And both still have their fuzzy headed advocates after each has failed, with the failure causing incredible destruction to the Economy and people's lives.

Sorry to gore your religion, but how many times does it have to fail before you get a clue?

Eternal Student's picture

This entire financial mess was created by the proponents of the neo-con version of Free Market Capitalism. They've been waving this banner for the past 20+ years, while marching everyone over the cliff.

Sorry, but anyone trying to support the very obviously failed notion of Free Market Capitalism is standing up, supporting and cheering for, Goldman and the neo-con agenda. That is the modern definition of Free Market Capitalism. Some might claim "oh, no, that's not what we mean". Sorry, that doesn't cut it. We got into this mess from the original version of FMC morphing into what it is now. The definition of insanity is doing the same thing over and expecting different results.

Bay of Pigs's picture

WTF are you talking about? Defenders of Goldman Sachs? There isn't anyone doing that around here. Get your head out of the sand smartass.

sgt_doom's picture

You guys keep claiming that "free market capitalism" works, then claim it was stolen by the predatory capitalists and their tools you claim to be "socialists" and then claim the USA doesn't have free market capitalism!

There has never been a free market, but plenty of free lunches for all those debt-financed billionaires and trillionaires.

Miles Kendig's picture

Just because you have most likely never seen free markets in action is no reason to deride them...  One of the issues under discussion in the article is the potential that economics is nothing more than a theocracy that underpins what amounts to a form of faith based governance.

MichiganMilitiaMan's picture

Hey Eternal Student; I don't know! Where is the proof that ZIRP, QE, and "inflating the economy" to a solution" has worked out just so well .  How much of your wealth/savings has to be destroyed (and future for that matter), before you get a clue.  And at the end of it, all you will have done is financed a handful of corporate and political elites thievery of the lower and middle classes. Backatchaaaaaaaaaaaa.

Eternal Student's picture

Sorry, I don't support Bernake's policies one bit, and am of the opinion that they will lead to worse disaster over the long term.

sgt_doom's picture

What you obviously fail to comprehend, MMM, is the trillions of dollars worth of loans upon layered loans upon layered loans, brought to you by the controllers of those credit derivatives which creates a continuum of economic meltdowns and wealth transfers.

fearsomepirate's picture

Wake me when we try free market capitalism.

Bearster's picture

Uh, where in the world, exactly, do you think free market capitalism is being practiced?

Irredeemable paper money, central banks, high taxation, overweening regulation, antitrust, minimum wage, labor law, unlimited product liability doctrine, TBTF, FDIC, the welfare state, institutionalized reverse discrimination... these are NOT the hallmarks of free market capitalism.

But you knew that.

Uncle Remus's picture

Socialism is treasonous because it violates the principles upon which this country was founded and makes a mockery of our Constitutional liberties.


[V]iolat[ing] the principles upon which this country was founded and mak[ing] a mockery of our Constitutional liberties [is treason]? Ruh roh.

Remington IV's picture

Krugman , is that you ???

SayTabserb's picture

I was thinking that Galbraith and Krugman should form a cult, called the Nonrealist School.

Charley's picture

"'Galbraith's support for Keynesian government intervention rest 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.'" -- Conant

"I am not a marxist." --Karl Marx

(Trans. Don't blame Prof Galbraith's insipid arguments for Keynesianism on Marx. Keynes had only distaste for Marx, and the sentiment would have been returned in kind)

Charley's picture

In fact, Keynes had a fondness for Hayek, as I recall. Which did not, on that account, make him a follower of Hayek.

BumpSkool's picture

"the truth is that Galbraith, as a socialist, is a politician, not a scientist"


....and economists are ??? (scientists? ... don't make me laugh)and anyway ... why should the banal "scientism" of provable empiricism be considered high art?



AnAnonymous's picture

Old trick. Old trick. The guy points fingers because he does not want fingers to be pointed at him.

No difference between economists, all wings.

Gully Foyle's picture


"No difference between economists, all wings."

Maybe next season Penn and Teller will have an economist episode of BULLSHIT!

lolmaster's picture

this article reflects nothing but a foolish naivety on behalf of the author. the role of all professional "economists" is nothing more than to be clever socialists and PR managers for the state, as anyone who practices real economics would quickly get a job that adds value to society. in fact "economists" have done more damage to the world than all the worst dictators and murderers in history combined, and through much more nefarious and cold-blooded methods. Marx himself (who incidentally first posed the "Jewish question") has done more damage than a thousand thousand Hitlers

mikla's picture


(Although I must admit I enjoyed the article, and I agree with its fundamental assertions that Galbraith, like most professional economists, is a charlatan that hurts people.)

lolmaster's picture

furthermore the author is ignorant of austrian economics, which thoroughly rejects "scientism." 


Galbraith is nothing but a mini-Marx, having done maybe 1/10th a Hitler's worth of damage to society.

BumpSkool's picture

so instead of PR managers "for the state" ... let's do away with the state!

(and who was it who advocated that??)

sgt_doom's picture

I would partially agree with your assessment, lolmaster, but differ in that in the Western Hemisphere there have been a very limited number of true economists.

Certainly, Michael Hudson is probably the most brilliant economist living, and Galbraith, Steven Keen, R. T. Naylor, Ravi Batra, and a small number of others actually practise economics per se.

Nassim Taleb brings a fine understanding of global finance and fundamental econ to the table.

But the aforementioned, along with one of the greatest economics thinkers of all time, Thorstein Veblen, act exactly the opposite of your "damage" opinion.


Apostate's picture

I listened to the interview. Jimmy G is slipping... he's wasn't nearly as insane as is accustomed to.

My question is... why is he even debating an Austrian? I thought Austrians were supposed to be fringe lunatics who bark at the moon and don't believe in math?

How could such a respected professor deign to speak with such rabble?