on 8 September 2001
John Kenneth Galbraith is , as always , lucid and concise - and manages to make the 'dismal science' of economics enjoyable to learn - mainly by ridiculing the way in which economists and governments hold to bizarre and self-serving theories in the face of all the facts.
One good example is Say's Law - which states that if the market is left to find its own equilibrium supply will always equal demand at a point at or near full employment. The classical Liberals held to this theory in the face of the mass unemployment of the great depression - which was only ended by Keynesian demand management which acknowledged that Say's Law was a fantasy.
Yet , as Galbraith points out , much to the ire of neo-Liberal born again free-marketeers , modern economists and governments STILL believe in Say's 'Law', STILL theorize as if the market were a system of free and equal transactions between individuals of equal power - rather than each sector being dominated by a handful of vast corporations.
Another reviewer lambasts Galbraith for not mentioning the theory of comparative advantage - perhaps that was an omission - but if Galbraith were to respond I am sure he would say that the theory of comparative advantage , much like Say's Law , is a theory in the worst sense of the word - a blind faith in a world view which is in constant and complete conflict with reality. For that reason Galbraith spends more time on theories which do broadly , or at last partly , correspond to and explain actual events , such as Keynesianism. Nor is he slow to list their faults - his only fault in this book is not to take apart modern neo-liberalism quite as thoroughly as he destroys classical liberalism.
on 13 February 2003
Galbriath manages to make economics interesting, entertaining, at times even exciting, as well as adding in a healthy dose of common sense often missing. He is clearly setting himself up against the 'aggressively dull' that make up much of the writing and theorising on economics. Whilst he does not cover every element in economics, or at times even every important aspect of economics, he manages to cover economics from Aristotle to the twentieth century in 300 pages, and to provide a mix of detail and overview that is informative and provocative. It sets economics up as a fundamentally political activity, and no doubt that is a difficult concept for many. Equally he emphasises the fundamentally contextual nature of economics and challenges the aspirations of the discipline to being a pure science. Well worth reading, even if you disagree!
on 29 October 2013
A truly excellent history of the dismal science, written beautifully, if not gorgeously. There is a real dry wit to this book.
A sweeping history that makes the key point the economics is a product of its time and context, and thus economists should understand the historical context of the key ideas, and assumedly one can draw the conclusion that you most try and understand if the current historical context corresponds with the one in the past, where an expounded theory comes from.
Starting from the classical period (of history, not economics) and making the remarkable point that economics doesn't really exist until you abolish slavery, and thus have to worry about cost of labour, rather than the ethics of slavery, he explains why the subject only really begins 250 years ago. Also covering why the French think differently about economics, due to their history of revolution and the power of agriculture.
He then goes on to discuss each of the classical economists starting with Smith, and progressing through Malthus, Ricardo etc, ensuring to explain the historical context of each, and how each carefully adapts the theories of the last to a contemporary context. This careful reductionism by the subject into more and more detailed theories as the "grand theories" come into contact with the real world is another strong theme of the book. We also begin to see how the focus of economics begins to move over the Atlantic from Europe to the USA.
After outlining the evolution of classical economics in the 18th and 19th century, and the contest between capital and labour (Marxism) - the final theme that extends through the book - the conflict of ideas, he moves into the 20th century. Here he explains how classical economics became microeconomics, whilst the experiences of the Great Depression and World War II led to the Welfare State (with the aide of the Swedes) and Keynesism and the evolution of macroeconomics. Finally bringing in Friedmann and monetarism as its challenge, and the concept that conflict is now between state and business, not labour and capital. Finally he looks forward discussing some of the issues that may define the future (from his point in the 1980s) - the role of big corporations, international development and globalisation (though this was written before the wide use of the word, so he doesn't use it directly).
Towards the end the book in my opinion becomes over focused on the USA, ignoring for example development economics, the end of the gold standard, the route of Europe (NHS, social democracy etc) or the Cold War (an economic theory war if there ever was one). However this remains a highly readable book on economics and economic theory, explaining all the key ideas and how they involved. A great source for further reading on the subject. It ends in the 1980s, when it was written, but there's plenty of material that covers recent developments in the bookshops, there seems to be much less of real quality that covers all that came before.
Highly recommended for all economics students, and those more broadly interested in the history of industrialisation.
on 27 February 2010
This is a good, readable short history of economics, written in Galbraith's delightful style.
There is much erudite interpretation of economists, possibly excessively influencing your understanding of them. For example, of Ricardo:
"From the demanding exercise in understanding that [Ricardo] imposes, the reader can emerge with some freedom as to what he chooses to believe."
Malthus turns out to be a real economist, rather than a shreeking prophet, and his position alongside Ricardo is described. Negative opinion of Ricardo abounds, rather scornful of his explanations of profit. Galbraith is sly and amusing (as ever) about putting down Ricardo on account of his style:
"As others have noted, Ricardo managed in his later writing to soften positions that were originally very hard, and this has greatly helped many who have sought to find in him what they wished to believe."
However there is no mention of the theory of comparative advantage, which is odd.
There is more detail in the Penguin History of Economics, yet I prefer Galbraith, especially his discussion of the problems with Keynesianism and also the cant against monopoly; Galbraith is very clear about what modern corporations amount to, with their size, advertising and market and political power. In fact the later chapters in general are very gripping - about the post-war period, encompassing welfare, Keynesianism and its problems, the monopolistic corporation and the West's senile industries. That the book dates from the mid 1980s is actually a special perspective that I found particularly interesting.
The last chapter looking into the future from the mid 1980s is about Japan and suggests all sorts of Japanese institutions and approaches will be taken up - the opposite happened probably.
on 13 January 2009
This is the history book to read for leisure and independent knowledge but not for a school exam. The quality of writing is superb and Galbraith's passion for his subject is so manifest and arresting. Best of all he shows up a lot of the nonsense paraded as facts and orthodox economic theory. Galbraith is the John Keating (Dead Poets Society) kind of teacher who will challenge you to think rather than regurgitate the standard doctrine. What a joy!
on 16 February 2010
J.K.Galbraith's whirlwind tour of the history of economics is an excellent introduction to the subject. Full of his trademark wit and encyclopedic knowledge it takes the reader on a journey from the Ancient world to the mid 1980's when the book was originally published.
At the center of Galbraith's book is the proposition that the Economy and Economic ideas are firmly grounded in their time and place. And more than that, one should be aware of the context that economic thinkers worked within and consider whether their theories reflect universal experience or are peculiarly advantageous to the milieu they were formed within. For example, would Adam Smith have written a book singing the praises of free trade if he had not lived in a country that was poised, albeit precociously, to benefit from such a regime? And even if had wrote it in entirely different circumstances, for instance late eighteenth century Russia or Spain, would it have had anything like the influence there that it did in fact have in Britain?
Galbraith is an entertaining companion through the history of Economics, starting with concepts such as usury and slavery, through to the north Italian republics leading onto the Physiocrats in France and then Britain's Adam Smith, Thomas Malthus and David Ricardo and beyond. His reading of Marx is reasoned and reasonable, on List and the other Germans he is a little spartan. Moving into the twentieth century the focus of the book moves to the United States, the Crash of 1929 and the following Depression are covered in detail along with the British economist Keynes thinking on how to extricate the Economy from the pro-longed slump.
After the World War Two I would have expected his focus to zoom out, as it were, and take into its stride issues such as Developmental Economics in the newly independent countries of the Third World as well as the earlier stages of what would now be called Globalization. Alas not, the narrative strongly sticks to the American experience covering figures such as Friedman with sharp wit, the theory bound and "fundamentalist" economists with wry bemusement, and the rise of the large corporation in some detail. While this is interesting it is not the whole story. Even with regard to the American experience there seems to be significant holes in the story, for instance the Nixon administration coming of the gold standard in the early 1970's that is generally regarded as a crucial event on the path to Neo-Liberalism.
Still, even with the Amero-centrism of the later parts of the book it is still an entertaining and enlightening read that I'd have no problem recommending to anyone who is interested in Economics and History.
on 5 October 2008
I really enjoyed reading this book, I was glad it was chosen as part of my reading list. I found it incredibly interesting and easy to read. Although it was a necessary for me to read part of my course it is one of the books I will keep and go back to. Not just for students also for those who have a slight interest in the history and development of Economics. It will make you want to find out more.