20 Questions: John Kenneth Galbraith

John Kenneth Galbraith--author of "The Affluent Society" and "The New Industrial State," novelist and John Kennedy's Ambassador to India--has been associated with liberal economic policies longer than most liberal politicians. Because he isn't shuttling to Washington very often these days, Warren Kalbacker met with him at his mansion on Harvard's faculty row. Kalbacker reports: "This guy knows about the affluent society from primary sources. He possesses an enormous and good-natured self-confidence that is not entirely attributable to his great height. He also serves a good sherry."

1.

[Q] Playboy: As a prominent economist, you're often asked for your opinions. Is it easy for you to snow most journalists?

[A] Galbraith: There's no question that an economist can do a great snow job on a journalist. This comes from journalists' assuming that economists have knowledge they don't. So they'll accept the forecasts of economists even when there's no reason to believe these predictions bear any relation to what will happen.

Economics is something like religion: Nobody knows what will happen in the hereafter. So people turn to economists as they would to a priestly council. A great many private economists give their estimate of the future simply because they're asked. Forecasts by economists in public office are always what the Administration needs: less inflation, more employment, an expanding economy.

2.

[Q] Playboy: Is crystal-ball gazing the biggest pitfall of your profession?

[A] Galbraith: The biggest pitfall is responding to establishment applause. Economists are attracted to Washington by the big oak desks and the thoughtfully wasted space. That's not in the best tradition of any subject or science. Similarly, economists who work for banks or corporations are very much under the influence of the people of those enterprises. They tell them what they want to hear.

I read a few months ago of an economist who left the Ford Motor Company because he didn't agree with proposals to restrict imports of automobiles. Everyone was surprised that he would show that measure of integrity. An economist who responds to public applause or who becomes an organization man is not being faithful to his profession.

3.

[Q] Playboy: What advice would you give to economists who sit behind those big oak desks or collect their pay checks from business organizations?

[A] Galbraith: We all surrender some part of our personality to organization. Even the Harvard professor is in some degree subordinate to the organizational pressures of the university. Of course, the discipline is much greater for a member of a corporation. Still greater for somebody in the State Department.

The important thing is not so much the organizational pressures as the need to be aware of them. What's devastating is the number of people who find organization ideas superior to their own. They surrender and they enjoy it.

When I was appointed Ambassador to India by President Kennedy, John Steinbeck wrote me a letter, urging me not to accept. He argued that although I wouldn't find myself pressed to defend the State Department's line, I might actually enjoy doing so, because it saves one from thinking for oneself. Tolstoy says somewhere that the greatest pleasure of joining a regiment is that it takes over all life from the individual.

4.

[Q] Playboy: With a conservative in the White House and "supply-side" economists buying tickets to Washington, isn't this a lonely time to be a liberal?

[A] Galbraith: Certainly not. My generally liberal views are the conventional wisdom of the time. That's a phrase that I was responsible for coining and therefore I use with some freedom. I have never doubted that my answers were right. I wouldn't offer them otherwise.

The great misfortune for Arthur Laffer and supply-side economics is that he has an idea that is being tried. If an economist has an idea that won't work, nothing can be worse than having it tried.

5.

[Q] Playboy: Voters in many states have moved to limit the taxing powers of government and its public services. Can you offer a better proposition?

[A] Galbraith: Yes. It is not possible to run a modern economy without some kind of price and income policy. In the past few years, we have been preventing inflation by the use of monetary and fiscal policy. This creates unemployment during times of recession. I would substitute income and price restraints that allow you to run the economy much closer to full employment.

Most economists are tied to textbooks that emphasize the free market, and therefore a very large part of the profession is unwilling to accept the idea of direct intervention on wages and corporate prices. This has been a powerful influence against a policy I regard as not only necessary but inevitable.

I should add one other thing. I do feel that in the United States, we've probably relied too much on the personal-property tax. I have long felt, in contrast with many of my liberal friends, that we should make much greater use of indirect taxes. We should have much higher taxes on upper-end consumption: expensive automobiles, clothing, meals. No one can complain that this kind of taxation is damaging to incentives. It's hard for someone who has to pay more for a Rolls-Royce to assert hardship.

6.

[Q] Playboy: A few years ago, The Harvard Lampoon presented you with a pink Cadillac. Did you enjoy that experience of upper-end consumption?

[A] Galbraith: I kept it for a year to show gratitude. But it was a bit large and wouldn't fit into my driveway, so I made a present of it to the public-television station here in Boston, which auctioned it off for a very large sum. It was a Cadillac Eldorado convertible and production of them had stopped, so it had become a classic. I think it brought far more at auction than what the students had paid for it.

7.

[Q] Playboy: Did you find that self-promotion was crucial in advancing your career? And perhaps also a little vanity?

[A] Galbraith: Unquestionably. Nobody can overlook my great height. But I've always been tempted to speak well of my own work. I suspect other people may have noticed that. And it's not that you should avoid vanity. That's impossible. The important thing is to be aware of it and laugh at it and on occasion invite other people to laugh at it as well. Then vanity isn't quite so objectionable.

8.

[Q] Playboy: Would you have a drink with Milton Friedman? Or isn't it possible for a liberal to drink with a conservative?

[A] Galbraith: Milton Friedman and I have been friends all our lives. He occasionally gets annoyed with me, as he did a few months ago. I said how good it was that the British government was suffering all the hardships associated with his economic designs, how much better that the British should be enduring them than the Americans.

Right or wrong, I've always believed in maintaining civil communications with civil people with whom I disagree. William F. Buckley and Milton Friedman come to mind. They're both eminently civil people. If someone were violently hostile, I wouldn't maintain that communication.

9.

[Q] Playboy: Is it hard to admit mistakes?

[A] Galbraith: I've made mistakes. Lots of them. But I've always comforted myself with Winston Churchill's words: "I have often had to eat my words and I have found them a wholesome diet."

There are many things I would have done better. When I was running price control in World War Two, I did that with a kind of stiff-necked obstinancy that aroused the antipathy of the maximum number of people with whom I did business. If I were doing that again, I would be much more mellow. And in my books, there are obvious mistakes that I would correct.

10.

[Q] Playboy: Does deficit financing play any role in your personal monetary policy?

[A] Galbraith: No. I've never been in debt in my life. I've never been short of money. Whenever I've had a book coming out, I've gone to considerable lengths to make sure that the revenue would not accrue unnecessarily to the publisher.

11.

[Q] Playboy: So you pay your credit-card balance in full every month?

[A] Galbraith: I don't use credit cards. I pay by check. One of the great advantages of being well known is that people accept your checks. And I think I should usually have about $100 in my pocket.

12.

[Q] Playboy: Are you good with figures or do you rely on a calculator?

[A] Galbraith: Well, I have a very good sense of magnitude. That's something I learned as a graduate student in California. You've always got to keep the general scale in mind. For example, if you're cutting the income tax, you're not going to make it up by increasing the revenues from Customs duties. The first is large. The second is insignificant.

But although I don't carry one around, I always have a calculator on my desk. I consider the small calculator one of the few modern inventions that I cherish.

13.

[Q] Playboy: You've commented on Proposition 13 and Proposition Two and a Half. Have you ever been propositioned?

[A] Galbraith: I thought I had a delightful possibility in London a few months ago. I was walking back to my hotel after the theater and this tall, well-dressed, very respectable-looking woman stopped me and said, "Pardon me, are you Australian?" I told her I was not. "How good," she replied. And then she walked away. That's the closest approach I've had at my age. To my regret.

14.

[Q] Playboy: Do economists have groupies?

[A] Galbraith: That's not a word that's in wide use in the profession. But many of my friends over the years have been women, and when I think of calling somebody for lunch or dinner, on the whole I'm more likely to think of my woman friends than I am of men. I would also have to answer that I've been married to the same woman now for nearly 45 years and she has the reputation of being singularly beautiful.

15.

[Q] Playboy: Do you consider yourself one of the best and the brightest?

[A] Galbraith: It's an exercise in incredible immodesty for me to answer that. Oh, I suppose I've never written anything without saying to myself, "Well, that's certainly going to be persuasive." But the likelihood is that one will always exaggerate one's influence.

16.

[Q] Playboy: Have you figured out who really runs America?

[A] Galbraith: There's no simple answer. The Constitution divides power among the executive, the legislature and the courts. That's no negligible thing. But the corporate establishment does much to set public opinion. In the United States, public expression is strongly correlated to income. The voice of one New York banker complaining about his oppression at the hands of the Government is the equivalent of hundreds or thousands of welfare mothers in the Bronx. The voices of affluence and the corporate position are much louder and are regularly mistaken for the voice of the masses.

17.

[Q] Playboy: Many wealthy foreigners see the United States as capitalism's last great hope. They're investing in American businesses and real estate. Are they putting their money in the right place?

[A] Galbraith: I've already made some adverse comments about economists who make predictions and I'm certainly not going to join that community. But I've always taken it for granted that the system survives because it yields to accommodation and to patching up.

18.

[Q] Playboy: Economics has been called a science. Are you saying that it's a kind of service profession?

[A] Galbraith: One of the great errors in economics is the desire of economists to believe that because Adam Smith said something in the 18th Century it must still be true. Smith was a practical man. He would be the first to recognize that the world and institutions with which he dealt have changed very much.

A science such as physics or chemistry has a subject matter that does not change. Knowledge in those fields changes only as more information is brought to bear. In economics, the subject matter itself constantly changes. In my own lifetime, we've had considerable development of the great corporations, trade unions and services of the state. Anybody who made up his mind about economics 40 years ago is bound to be obsolete now.

19.

[Q] Playboy: You served as an Ambassador during the Kennedy Administration. Do you long for a return to "Camelot"?

[A] Galbraith: During that period, the Government of the United States was tinged with a certain excitement. The Government was a force for the good and without wanting to use the term Camelot, I hope that excitement might not be dead.

20.

[Q] Playboy: Every man is said to have his price. Can you name yours?

[A] Galbraith: About two weeks ago, an automobile company offered me an enormous sum of money, $200,000 or $300,000, if I would endorse its automobile. I declined on the simple ground that I didn't want to have my name and my views for sale. I would still have declined if it had doubled the price.