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The Study of Man:
Economics for Everybody?
- Abstract
If further evidence is needed that economics remains a difficult subject practiced by men of only moderate literary grace, some examples offered later on in this essay should suffice. All the more praiseworthy, therefore, is the feat of John Kenneth Galbraith, professor of economics at Harvard, in producing in as many years three extraordinarily readable books: American Capitalism, Economics and the Art of Controversy, and The Great Crash. In the first of these, Mr. Galbraith advanced the challenging notion that free competition only poorly describes American markets for goods, labor services, and money. He found a better clue to the understanding of our economic life in the interaction of large, powerful business and labor organizations which limit each other’s power much as the United Automobile Workers narrows General Motors’ freedom to act, and Macy’s prevents the manufacturers of electrical appliances from charging what they might in the absence of Macy’s threat to produce the items itself. The central point which these examples illustrate is simple: the struggle between large units on different sides of the market tends to produce much the same sort of beneficial results as classical competition among hordes of small sellers—low prices, increasing economic efficiency, and wide variety. According to Mr. Galbraith, his colleagues’ pious attachment to anachronistic theory left them unable to explain the tremendous postwar boom, any more than the usual laws of aerodynamics can explain how the bumblebee flies (to use Mr. Galbraith’s own parallel). Thus provocatively stated, his argument convinced many of the intelligent general readers to whom it was addressed, at the same time as it started a continuing controversy with his professional critics.
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