A friend who hoards his newspapers for years has just passed on to me an interview by Roy Hattersley with JK Galbraith in the latter’s 90th year (1998)
The article is headlined “Sage of the Century”* and there is no doubt that, after Keynes’s death, Galbraith was the pre-eminent economist of the second half twentieth century. He got most things right (including opposition to the Vietnam War) and many of the issues raised in the interview are as relevant today as they were a quarter of a century ago. Indeed, having ignored his views provides a good explanation as to why we are now in our present dire predicament.
The following quotes (in italics) are from the article;
To The Affluent Society we owe the prediction of “private affluence and public squalor.” Which we can see all around us, in spades after the Margaret Thatcher inspired dominance of the inadequately regulated market since 1979.
Galbraith’s first success was his analysis of “The Great Crash” of 1929. In 1998 he predicted: “A sump will surely happen again, sooner or later. . .they are a normal feature of the market.”
Well, it did happen again, in 2008 and we are still paying for the consequences. Keynes was in favour of “animal spirits,” but I think he had in mind investors in the “real economy” rather than manipulators of the financial markets, allowed to over-reach themselves by Mrs Thatcher’s Big Bang.
“The poor are politically emasculated. They don’t vote so they don’t have a strong expression in Congress or the White House.”
Or in Parliament or 10 Downing Street. ID cards are hardly likely to encourage them. PR to make voting more meaningful might. This is not just a matter of justice, ethics or morality (or,as the Tories might try to ridicule it; “wokeness.” ) In the Culture of Contentment [Galbraith] predicted that “unless the poor’s needs were met. . . the ghettos would explode.”
In The Good Society Galbraith wrote that: ” the basic need is to accept the principle that the more equitable distribution of income must be a fundamental tenet of modern public policy and to this end progressive taxation is central.” Yet as we approach an election the Tories will tempt us with further tax cuts and Labour dare not remonstrate. Dare we Liberal Democrats?
“Legal equality . . .is essential in a liberal democracy. But freedom needs to be more than that. There are social freedoms that depend on purchasing power. Thus freedom in sum is increased by redistribution. Equality and freedom go hand in hand.”
Finally, the article introduces “the malign influence of the military establishment,” to which one might add, the armaments industry. “They have a special appeal, the traditional identification with patriotic causes even when there is no perceptible enemy.”
And if there is, the likes of Rishi Sunak don’t hesitate to grasp the straw.
I wonder how much of the above wisdom will find itself into our Liberal Democrat manifesto for the coming election.
*Quotations from The Guardian, October 17 1998
* Peter Wrigley is a member of Spen Valley Liberal Democrats and blogs as keynesianliberal.blogspot.com
Follow @LibDemVoice on Twitter
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
These Labour and Conservative fundraising emails look very similar
Welsh Lib Dems call for improvements to Heart of Wales line
Parachuting in a Starmer Stooge?
Being a citizen of the UK means a lot to me
New rules for dog owners in Shropshire are now in force
Common Good Fund 2024
Roland
cim
Mary Fulton
Jim Dapre
14 Comments
Keynes was the greatest economist of the 20th century and maybe of all time. It is a shame we abandoned his ideas during the Coalition government years.
However I am wondering what we do now. During the Coalition years we should have taken advantage of the low interest rates in order to borrow to invest.
Today interest rates are higher. There is no doubt that we have a public sector funding crises and we should be spending a lot more to fix that. With higher interest rates, borrowing to invest will be more expensive.
We could remove interest rate setting from the Bank of England. Maybe interest rates are too high? But no one seems to want to take a chance with that policy.
At a time of a cost of living crises it is harder to put up taxes. We should put up taxes for those who can afford to pay more, ie the rich. But that won’t raise that much revenue.
I am looking forward to the general election and electing a non-Tory government. However once elected I do not have much hope for it.
As liberals as Peter Wrigley points out we need to accept “that the more equitable distribution of income must be a fundamental tenet of modern public policy and to this end progressive taxation is central” and “Equality and freedom go hand in hand”.
I expect our manifesto to keep our commitment to spend £150 billion investment in our green policies.
Geoffrey Payne,
Like you I do not have much hope that a Labour Government will sort out the public sector funding crisis as it doesn’t plan to invest over the next Parliament or fund increased public spending from tax increases. The Labour Party talk of increasing economic growth but they don’t have the policies to achieve pre-2008 growth levels over the next five years
The government will also need to spend money to help those with health issues back into a position where they are fit enough to work.
Thank you for a lively article!
Like all great economists, Mr. Keynes clearly stated that economics cannot realistically and honestly be separated from its social consequences.
Currently powerful, fashionable and route-to-power neoliberal austerity fraudulently obscures/denies this truth in order to make the very rich even richer to the cost of an increasing proportion of our fellow citizens, their children and grandchildren.
The latest food bank data demonstrates this.
Why is such data not broadcast as the stock market is?
Might it be that Mr. Keynes has been backgrounded by neoliberalism and the like, because he showed how economics could be rationalised, clarified and used, to honestly benefit the whole of a society?
As usual an excellent contribution and restatement of true radical Liberalism by Peter Wrigley has brightened my day.
It would be interesting to have had J.K. Galbraith’s view on the news this afternoon that the Royal Mail (unwisely privatised during the Coalition) is about to be sold off to a Czech billionaire. Reminds one of a quote by Tony Benn (son of a one time Liberal Whip) who joked about the Benson & Hedges Coronation.
The price of everything and the value of nothing.
Thank you for your comments. I’m disappointed that there ae not many more as I firmly believe that these are the issues we should be debating rather than the peripheral nonsense that passes for much of the political discussion in the media, and especially in PMQs
Yes, Geoffrey Payne, we did betray Keynes in the Coalition years, and Beveridge as well, in spite of anguished wails from the social-liberal wing of the party. I see in today’s Guardian that it is Sir (!) Danny alexander’s birthday today (52). It is alleged that he was even keener on “savage cuts” than the Tories. But that was the fashion: so were Labour. Read page six of their manifesto for that election. No fewer than seven references to “hard choices” (their version of savage cuts.)
Yes Michael B.G. we need more money to bring the public services up to scratch. But don’t let the Tories and press deceive you: we are a very rich society, but only around average in the proportion of GDP the government takes in tax. We just need to honest about the kind of society we’d like to live in and recognise that we need to pay for it.
That’s why Steve Trevethan has a point when he says we should publish daily figures on food bank usage as well as stock exchange prices (as Ken Livingstone did with unemployment figures, much to Margaret Thatcher’s annoyance). We should not stand to meekly by and let the Right dominate the news and the debate. We have a much better story to tell if we had the courage to tell it.
I actually went to a series of 5 lectures by JK Galbraith. A very tall man with huge hands.
His big policy success was the New Deal which he created with FDR. This took the US out of recession and saved the nation pre WW 2. A key part of this was public investment in the infrastructure. He believed in government debt to finance the future. I’m not sure that he would have been anti austerity just pro investment.
The coalition government did in fact borrow lots of money. And we do have a weak economy which I don’t believe would support much higher taxation. Somehow we need to become more efficient healthier and perhaps work harder.
Putting aside the Coalition’s rhetoric of state austerity to rectify Labour losing control of public finances, in reality the Coalition were perfectly happy to run/preside over very large deficits. Good Keynesian economics.
As a nation we vote for the cheapest and get what we pay for.
Yes, Peter Wrigley, thank you for the article and your comment – we do indeed need more discussion in our party of how we can challenge the next Government to implement the sort of policies we support to relieve poverty, produce sufficient funds for the NHS and social care, and raise the general standard of living for everyone. I would like to know if colleagues think we should engage with Gordon Brown, who has published a paper called Partnership to End Poverty (so Tuesday’s Guardian reports), and is suggesting, in an article drawing out the miseries of poverty in Britain today (headline ‘My £3 bn plan for a generation that has known only poverty’) for instance ‘social impact bonds, whose funding is frontloaded by foundations and corporate investors’. We could recommend to him our own proposals, and perhaps combine our persuasive impacts on the guarded indifference of the Labour Party at present?
Thank you Catherine Pindar: that sounds a constructive way forward. Labour politicians “in power” or anticipating it are very sniffy about co-operation with others (I understand that Blunkett and Straw scuppered any hopes of a coalition with us in2010) but “post power” they may see the advantages or”progressive realism.” in co-opertain with others
The poor don’t vote. A slight exaggeration perhaps, but another reason for Compulsory Voting as here in Australia. Unfortunately we do not have a box for ‘none of the above’ which I believe we should have. Though a supporter of a more proportionate voting system, perhaps there is a greater case for beginning reform of the of the process by introducing compulsory voting . Not sure it would initially be popular, but the electorate would soon get used to it.
Thanks for replying positively, Peter (though actually it’s Katharine) about possibly co-operating with Gordon Brown in influencing Labour to give tackling poverty some priority. I suspect the Labour leadership may not pay much attention to Brown’s activism, but our proposals may build a stronger case. I am told (not having yet had time to read Brown’s report) that he may be thinking primarily of Partnership between charities and corporate donors rather than government action, but as he is asking Jeremy Hunt to raise some funds from the banks, as we also recommend, we should surely get in touch.
Katharine Pindar: sorry for getting your name wrong – carelessness has been just one of my weaknesses all my life. I agree that Gordon Brown’s initiative is interesting and it would be a positive move to go into discussions with him on how to get it implemented