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A Journey Through Economic Time: A Firsthand View
A renowned economist presents an accessible, far-reaching history of the century's economics from World War I and the Russian Revolution, through the Depression and Keynesian theory, to colonialism's collapse and the rise of the Third World.
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First published January 1, 1994
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About the author
John Kenneth Galbraith
205 books508 followersJohn Kenneth Galbraith was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism and democratic socialism. His books on economic topics were bestsellers in the 1950s and 1960s. A prolific author, he produced four dozen books & over a 1000 articles on many subjects. Among his most famous works was his economics trilogy: American Capitalism (1952), The Affluent Society (1958) & The New Industrial State (1967). He taught at Harvard University for many years. He was active in politics, serving in the administrations of Franklin Roosevelt, Harry Truman, John Kennedy, and Lyndon Johnson. He served as US Ambassador to India under John F. Kennedy.
He received the Presidential Medal of Freedom twice: one in 1946 from President Truman, and another in 2000 from President Clinton. He was also awarded the Order of Canada in 1997, and in 2001, the Padma Vibhushan, India's second highest civilian award, for strengthening ties between India and the USA.
He received the Presidential Medal of Freedom twice: one in 1946 from President Truman, and another in 2000 from President Clinton. He was also awarded the Order of Canada in 1997, and in 2001, the Padma Vibhushan, India's second highest civilian award, for strengthening ties between India and the USA.
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July 31, 2009
The late John Kenneth Galbraith was one of the best-known economists of the twentieth century, not because of his brilliance as a theorist, but because of his influence on events and his unusually (especially for an economist) felicitous writing style. Among other thing he was a coiner of phrases: the expression “conventional wisdom” came from him, and he named the “affluent society” and the “new industrial state.” He played many roles in government. During World War II he was involved in the Office of Price Administration, he headed a postwar survey of the effects of strategic bombing on Germany and Japan, and later had a strong influence on JFK, a former student of his at Harvard, and on LBJ too, especially on the formulation of the War on Poverty—until he got on LBJ’s shit list for opposing the War in Vietnam. Under JFK Galbraith served as ambassador to India. Later, he advised and wrote speeches for Eugene McCarthy in 1968, and did the same in 1972 for Senator McGovern. A Harvard professor, he wrote about 30 books, this one while in his 80s.
Examples of his clever (and often tart and sometimes prescient) words:
—“Prestigious stupidity can be a controlling fact in economic life.”
—“As with Ronald Reagan a half century on, innocence forgave error.”
—“Tragedy can be quietly enjoyed when nothing is being lost but money.”
—“The world of high finance can be understood only when it is recognized that the greatest admiration is accorded those who are paving the way for the greatest catastrophe.”
Galbraith never forgot his origins: a small farm in rural Canada. Throughout his career he championed the disadvantaged: became a primary advocate of government intervention to compensate for the machine-like amorality of the market system, which prefers efficiency to people. His best-known books are: The Great Crash, 1929, The Affluent Society, The New Industrial State (he considered this his best), The Age of Uncertainty, and The Anatomy of Power.
SUMMARYSUMMARY
In A Journey through Economic Time, Galbraith took a walk through the economics of the twentieth century. The historical background is well known, so I’ll confine myself to highlighting the observations I found most interesting, some of which fly in the face of the “conventional history.”
*WWI, not WWII, as Watershed—Galbraith: “The First World War was, indeed, rightly called the Great War; World War II was its last battle.” Why? Because before WWI Europe was politically dominated by the landed aristocracy; WWI (in which the aristocrats collectively displayed their incredible incompetence) diminished their power and led to the modern mass (fascist and democratic) societies.
*Rise of USA—WWI also vaulted the USA into prominence if not dominance. For example, gold flows from Europe during the war made the USA—and particularly New York City—the world’s new financial center.
*Versailles—John Maynard Keynes became famous because of the ineptitude of the leaders (the “Big Four”) in forging the Treaty of Versailles. A member of the British team, he quit in a huff and went home to write The Economic Consequences of the Peace—which caused a sensation. Keynes: “It is an extraordinary fact that the fundamental economic problems of a Europe starving and disintegrating before their eyes, was the one question in which it was not possible to arouse interest in the Council of Four.” Woodrow Wilson he described as “this blind and deaf Don Quixote,” and Lloyd George (British Prime Minister) as, “this goat-footed bard, this half-human visitor to our age from the hag-ridden magic and enchanted woods of Celtic antiquity.” That Keynes’ economic analysis turned out to be correct greatly boosted his credibility during the Depression.
*Crash of 29—Galbraith was something of an expert on the Crash of 29; the book he wrote about it in the 1950s is still in print. He attributed the catastrophic crash to greed/speculative fever/incompetence. Galbraith: “Most people, living in modest circumstances as they do, have a magnified impression of the intelligence of those who live in intimate association with large sums of money. This is an unusually erroneous belief. [Such money men:] are, in fact, the instrument not of their own intelligence but of their illusions.” And: “It was hard to believe that such a commonplace group had been the [Wall Street:] heroes of the time.”
*The Great Depression—Galbraith made several interesting observations about the Depression. First, it was World War II, and not FDR’s initiatives, that ended the Depression, and second that in spite of the fact that Keynes wrote directly to FDR and also published the letter in the New York Times, FDR and his top advisors tended to resist Keynesian economics; it was the younger guys in the administration (like Galbraith) who embraced Keynes wholeheartedly and pushed public spending to increase employment and to boost “aggregate demand.” Third, the real economic miracles of the Depression occurred not in the USA but in Hitler’s Germany and in Sweden. That’s because both were Keynesian without knowing anything about Keynes: the governments took charge of their economies, controlling the money supplies and sometimes prices, for example, and using public expenditures to put the unemployed back to work (that’s how the German autobahns were built). The Swedes were exemplary because they recovered economically without spending heavily on the military. Galbraith: “In a just world, reference would not be to the Keynesian but to the Swedish revolution.”
*World War II—Interesting observations about WWII: the Nazi’s economic miracle backfired, because at the start of WWII they were at full production and had no excess capacity for expansion. (Conversely, the Depression helped the USA, which had enormous unused capacity). Further, Hitler had a blitzkrieg mentality: Germany dashes into a country and quickly subdues it without expending many resources: because of this mindset, Germany (unlike Great Britain, USSR and USA) did not fully dedicate its economy to war production until 1944—too late. Why? Galbraith: “In Germany there was no [democracy-style:] communication between people and the state; the government, in consequence, was more circumspect in imposing sacrifice. This was one of the previously unperceived disadvantages of dictatorship.” Interestingly, Galbraith’s study of American and British strategic bombing of Germany showed that it had very little effect on the outcome of the war: in fact, in some cases it increased production by forcing the Nazis to reorganize and become more ingenious in their methods, and by strengthening their position in calling for “Total War.”
*Aftermath—Galbraith pointed out that most people, including economists, assumed that after the war the Depression would resume. Instead, prosperity followed in the USA because of the enormous pent-up demand for consumer goods, along with the pent-up savings to buy them. What also happened: after the war, the citizenry expected the government to continue taking responsibility for the health of the economy. No longer would business cycles be able rise and fall unimpeded, like acts of nature. If the economy was sliding down, the government was expected to step in—for example, by increasing public spending. If the economy was overheating, the government was also expected to step in—for example, by tightening the supply of money (making it more expensive for businesses and consumers to borrow money). This is so much taken for granted by now that in politics, the president and his party tend to live or die based on the country’s economic performance—“It’s the economy, stupid.” The immediate postwar period also saw one of the most enlightened initiatives in the history of mankind—the Marshall Plan. It was a classical win-win action long before “win-win” became the buzz. Galbraith: “In economics, as, one trusts, in larger life, it is possible to do well by doing good.” Another result of the war: the end of colonial empires. But in this case not, Galbraith pointed out, mainly because of the European magnanimity, but rather because the colonies were no longer economically profitable.
*Since Then—On more recent history, Galbraith offered some interesting tidbits:
—Tax cuts—Ironically, it was the liberal JFK who first opted for a big tax cut for the middle class versus spending more to help the underclass. The conservatives have been calling for such tax cuts ever since—ad nauseum.
—Negative income tax—Also ironically, it was none other than king liberal Hubert Humphrey who killed the so-called negative income tax, a scheme that in effect would have attacked poverty by providing a guaranteed income for every American. This idea had been gaining momentum during the Sixties, but according to Galbraith, Humphrey killed it for political reasons in 1972.
—Carter’s advisers—Galbraith was very hard on Carter’s advisers, feeling that they gave him bad advice. Galbraith: “Carter, not surprisingly, was soundly defeated for re-election. The economists who guided him emerged with undisturbed reputations.” A case in point: excessive de-regulation. Galbraith considered de-regulation of the airlines, for example, to be a dismal failure.
—Reaganomics—Galbraith conceded that Reagan was very successful in achieving his primary goal: to make his constituency (the rich) richer. Of course, he claimed (pretended?) that some of the goodies would “trickle down” to the poor. However, his daft “supply side” economics failed, leading to recession and H. W. Bush’s failure to be re-elected in spite of the successful First Gulf War. Galbraith: “It was a principle tenet of Reagan policy that, with any reasonable luck, the long run in this, as in many other matters—a prominent case being threats to the environment—would not come.” Galbraith also found it amusing that arch-conservative Reagan, nominally so in favor of balancing the budget and so against government spending, should have built up the biggest deficit in US history. Galbraith: “Nothing so distinguished President Reagan from his predecessors than his commitment to deficit financing.” Reagan also presided over the US transition from world’s number one creditor nation to number one debtor nation. But he was cute with a quip.
As for the future, Galbraith saw two major economic conflicts:
*Nation States vs. Globalism—The world is increasingly interdependent, and this is fundamentally good, since it breaks down barriers between countries and peoples and eases us toward “one world;” but at the same time, this tendency toward globalism weakens the internal economic control of individual nation-states at the very time when citizens are demanding that their governments exert more and more control over economic matters. This tension will not go away any time soon.
*Haves vs. Have-nots—In the USA, the economic gap between the “comfortable class” and the underclass is widening, as is the economic gap between developed and developing nations. Galbraith considered this immoral and unjust. It also yielded unpleasant social consequences such as rotten inner cities, high crime rates, etc. in the USA and political instability in developing countries. More than that, Galbraith believed that the unfair distribution of wealth and income actually exacerbates the swings of business cycles, so that it makes practical economic sense to diminish these disparities. How exacerbates? Because in shaky times the wealthy can sit on their resources without hurting their standard of living, and by sitting on their resources they reduce, just when these may be most needed, some combination of investment and “aggregate demand.” Furthermore, according to Galbraith many of the wealthy simply don’t care if their actions create problems for the less fortunate, in effect saying, “That’s their problem.”
This book is a very entertaining and informative read. There’s never any question whose side Galbraith is on, but there’s also no question that he knows how to put one word after another. Stylistically, he reminds me, with his tart clarity, of Somerset Maugham.
Examples of his clever (and often tart and sometimes prescient) words:
—“Prestigious stupidity can be a controlling fact in economic life.”
—“As with Ronald Reagan a half century on, innocence forgave error.”
—“Tragedy can be quietly enjoyed when nothing is being lost but money.”
—“The world of high finance can be understood only when it is recognized that the greatest admiration is accorded those who are paving the way for the greatest catastrophe.”
Galbraith never forgot his origins: a small farm in rural Canada. Throughout his career he championed the disadvantaged: became a primary advocate of government intervention to compensate for the machine-like amorality of the market system, which prefers efficiency to people. His best-known books are: The Great Crash, 1929, The Affluent Society, The New Industrial State (he considered this his best), The Age of Uncertainty, and The Anatomy of Power.
SUMMARYSUMMARY
In A Journey through Economic Time, Galbraith took a walk through the economics of the twentieth century. The historical background is well known, so I’ll confine myself to highlighting the observations I found most interesting, some of which fly in the face of the “conventional history.”
*WWI, not WWII, as Watershed—Galbraith: “The First World War was, indeed, rightly called the Great War; World War II was its last battle.” Why? Because before WWI Europe was politically dominated by the landed aristocracy; WWI (in which the aristocrats collectively displayed their incredible incompetence) diminished their power and led to the modern mass (fascist and democratic) societies.
*Rise of USA—WWI also vaulted the USA into prominence if not dominance. For example, gold flows from Europe during the war made the USA—and particularly New York City—the world’s new financial center.
*Versailles—John Maynard Keynes became famous because of the ineptitude of the leaders (the “Big Four”) in forging the Treaty of Versailles. A member of the British team, he quit in a huff and went home to write The Economic Consequences of the Peace—which caused a sensation. Keynes: “It is an extraordinary fact that the fundamental economic problems of a Europe starving and disintegrating before their eyes, was the one question in which it was not possible to arouse interest in the Council of Four.” Woodrow Wilson he described as “this blind and deaf Don Quixote,” and Lloyd George (British Prime Minister) as, “this goat-footed bard, this half-human visitor to our age from the hag-ridden magic and enchanted woods of Celtic antiquity.” That Keynes’ economic analysis turned out to be correct greatly boosted his credibility during the Depression.
*Crash of 29—Galbraith was something of an expert on the Crash of 29; the book he wrote about it in the 1950s is still in print. He attributed the catastrophic crash to greed/speculative fever/incompetence. Galbraith: “Most people, living in modest circumstances as they do, have a magnified impression of the intelligence of those who live in intimate association with large sums of money. This is an unusually erroneous belief. [Such money men:] are, in fact, the instrument not of their own intelligence but of their illusions.” And: “It was hard to believe that such a commonplace group had been the [Wall Street:] heroes of the time.”
*The Great Depression—Galbraith made several interesting observations about the Depression. First, it was World War II, and not FDR’s initiatives, that ended the Depression, and second that in spite of the fact that Keynes wrote directly to FDR and also published the letter in the New York Times, FDR and his top advisors tended to resist Keynesian economics; it was the younger guys in the administration (like Galbraith) who embraced Keynes wholeheartedly and pushed public spending to increase employment and to boost “aggregate demand.” Third, the real economic miracles of the Depression occurred not in the USA but in Hitler’s Germany and in Sweden. That’s because both were Keynesian without knowing anything about Keynes: the governments took charge of their economies, controlling the money supplies and sometimes prices, for example, and using public expenditures to put the unemployed back to work (that’s how the German autobahns were built). The Swedes were exemplary because they recovered economically without spending heavily on the military. Galbraith: “In a just world, reference would not be to the Keynesian but to the Swedish revolution.”
*World War II—Interesting observations about WWII: the Nazi’s economic miracle backfired, because at the start of WWII they were at full production and had no excess capacity for expansion. (Conversely, the Depression helped the USA, which had enormous unused capacity). Further, Hitler had a blitzkrieg mentality: Germany dashes into a country and quickly subdues it without expending many resources: because of this mindset, Germany (unlike Great Britain, USSR and USA) did not fully dedicate its economy to war production until 1944—too late. Why? Galbraith: “In Germany there was no [democracy-style:] communication between people and the state; the government, in consequence, was more circumspect in imposing sacrifice. This was one of the previously unperceived disadvantages of dictatorship.” Interestingly, Galbraith’s study of American and British strategic bombing of Germany showed that it had very little effect on the outcome of the war: in fact, in some cases it increased production by forcing the Nazis to reorganize and become more ingenious in their methods, and by strengthening their position in calling for “Total War.”
*Aftermath—Galbraith pointed out that most people, including economists, assumed that after the war the Depression would resume. Instead, prosperity followed in the USA because of the enormous pent-up demand for consumer goods, along with the pent-up savings to buy them. What also happened: after the war, the citizenry expected the government to continue taking responsibility for the health of the economy. No longer would business cycles be able rise and fall unimpeded, like acts of nature. If the economy was sliding down, the government was expected to step in—for example, by increasing public spending. If the economy was overheating, the government was also expected to step in—for example, by tightening the supply of money (making it more expensive for businesses and consumers to borrow money). This is so much taken for granted by now that in politics, the president and his party tend to live or die based on the country’s economic performance—“It’s the economy, stupid.” The immediate postwar period also saw one of the most enlightened initiatives in the history of mankind—the Marshall Plan. It was a classical win-win action long before “win-win” became the buzz. Galbraith: “In economics, as, one trusts, in larger life, it is possible to do well by doing good.” Another result of the war: the end of colonial empires. But in this case not, Galbraith pointed out, mainly because of the European magnanimity, but rather because the colonies were no longer economically profitable.
*Since Then—On more recent history, Galbraith offered some interesting tidbits:
—Tax cuts—Ironically, it was the liberal JFK who first opted for a big tax cut for the middle class versus spending more to help the underclass. The conservatives have been calling for such tax cuts ever since—ad nauseum.
—Negative income tax—Also ironically, it was none other than king liberal Hubert Humphrey who killed the so-called negative income tax, a scheme that in effect would have attacked poverty by providing a guaranteed income for every American. This idea had been gaining momentum during the Sixties, but according to Galbraith, Humphrey killed it for political reasons in 1972.
—Carter’s advisers—Galbraith was very hard on Carter’s advisers, feeling that they gave him bad advice. Galbraith: “Carter, not surprisingly, was soundly defeated for re-election. The economists who guided him emerged with undisturbed reputations.” A case in point: excessive de-regulation. Galbraith considered de-regulation of the airlines, for example, to be a dismal failure.
—Reaganomics—Galbraith conceded that Reagan was very successful in achieving his primary goal: to make his constituency (the rich) richer. Of course, he claimed (pretended?) that some of the goodies would “trickle down” to the poor. However, his daft “supply side” economics failed, leading to recession and H. W. Bush’s failure to be re-elected in spite of the successful First Gulf War. Galbraith: “It was a principle tenet of Reagan policy that, with any reasonable luck, the long run in this, as in many other matters—a prominent case being threats to the environment—would not come.” Galbraith also found it amusing that arch-conservative Reagan, nominally so in favor of balancing the budget and so against government spending, should have built up the biggest deficit in US history. Galbraith: “Nothing so distinguished President Reagan from his predecessors than his commitment to deficit financing.” Reagan also presided over the US transition from world’s number one creditor nation to number one debtor nation. But he was cute with a quip.
As for the future, Galbraith saw two major economic conflicts:
*Nation States vs. Globalism—The world is increasingly interdependent, and this is fundamentally good, since it breaks down barriers between countries and peoples and eases us toward “one world;” but at the same time, this tendency toward globalism weakens the internal economic control of individual nation-states at the very time when citizens are demanding that their governments exert more and more control over economic matters. This tension will not go away any time soon.
*Haves vs. Have-nots—In the USA, the economic gap between the “comfortable class” and the underclass is widening, as is the economic gap between developed and developing nations. Galbraith considered this immoral and unjust. It also yielded unpleasant social consequences such as rotten inner cities, high crime rates, etc. in the USA and political instability in developing countries. More than that, Galbraith believed that the unfair distribution of wealth and income actually exacerbates the swings of business cycles, so that it makes practical economic sense to diminish these disparities. How exacerbates? Because in shaky times the wealthy can sit on their resources without hurting their standard of living, and by sitting on their resources they reduce, just when these may be most needed, some combination of investment and “aggregate demand.” Furthermore, according to Galbraith many of the wealthy simply don’t care if their actions create problems for the less fortunate, in effect saying, “That’s their problem.”
This book is a very entertaining and informative read. There’s never any question whose side Galbraith is on, but there’s also no question that he knows how to put one word after another. Stylistically, he reminds me, with his tart clarity, of Somerset Maugham.
August 13, 2023
The book's title suggests a journey from the beginning of history, but it is really a memoir of Galbraith's own career, and his view of economics from the First World War through the early 1990s. Galbraith had a part in much of that economic history, and in government, from World War II until the 1990s. He was a Keynsian economist, and thus out of fashion from the 1970s on, but A Journey Through Economic Time makes a strong case that state intervention in the economy is often a necessity, and that regulation of corporations is a must.
Those who feel that the free market is a God-given thing that should be left alone, and not a man-made process that needs tweaking and maintenance probably won't appreciate the book, but they offer dogma instead of thought.
In the world of the multinational corporation, Galbraith sees two communities: the comfortable and the impoverished. The world is run by the comfortable; the impoverished are ignored as much as possible.
Those who feel that the free market is a God-given thing that should be left alone, and not a man-made process that needs tweaking and maintenance probably won't appreciate the book, but they offer dogma instead of thought.
In the world of the multinational corporation, Galbraith sees two communities: the comfortable and the impoverished. The world is run by the comfortable; the impoverished are ignored as much as possible.
It is the nature of the comfortable community that it takes a protective, short-run view of its own position. It must be noted again that there is no substantive measure to relieve poverty or improve the lives and ensure the calming upward mobility of the underclass that does not require action by the state, although there is both oratory and seemingly sophisticated argument to the contrary. The purpose of the latter is not to produce results but to relieve those who are more privileged of adverse conscience and cost.
September 8, 2022
A very interesting mixture of economic history and autobiography. Galbraith retraces 20th century economic history through his lens of young school boy, student, Economist and acomplished policy maker. The book is very well written (as usual for Galbraith's books) and quite funny at times. Galbraith mixes his hot takes as an insider (FDR and Kennedy Years) and his sharp analysis as an academic. Very nice book.
November 18, 2025
Kanadensisk-amerikansk nationalekonom, som i denna lättlästa memoar lyckas följa 1900-talets ekonomiska utveckling, 1914-1992. Han var Keynesian, eller kanske ännu mer beundrare av svensk ekonomi på 1930-talet när den stora depressionen pågick.
Det är intressant, i synnerhet hans personliga inblickar i 1920-30-talen, och även senare när han rest runt i världen och begrundat olika länders ekonomi. Det blir en snabb påminnelse om 1900-talet som helhet.
Det är intressant, i synnerhet hans personliga inblickar i 1920-30-talen, och även senare när han rest runt i världen och begrundat olika länders ekonomi. Det blir en snabb påminnelse om 1900-talet som helhet.
June 4, 2019
self-serving at times but interesting.
February 6, 2009
JKG is a good writer with a wealth of experience in government and academics. He is reasonably modest, given his access to power and notable contribution to public discourse (e.g., coining the phrase "conventional wisdom" years ago). For me, he is highly persuasive in defense of what might be called more 'liberal' (in the modern sense) economic policy. He points out well that we too seldom ask how fiscal, monetary or other policies affect folks on the bottom of the economic ladder; how we freak out at the thought of money going to people for no work unless they're already rich; how we take as a given that everyone will pursue his own economic interest but ignore how this principle applies to CEO's; how we are lulled by 'conventional wisdom.' (For this latter point, he makes an interesting case that superior air capability has done little for a military force.) I found this book an interesting, if casual, read, but I have two complaints: (1) He is unduly hard on, and uncharacteristically unfair to, Ronald Reagan, accusing him of deliberately seeking to protect the interests of the wealthy elite, and (2) he seems to believe that people would do all the same jobs, and work just as hard, if income were "equitably distributed." I find (2) very hard to believe, unless I am quite unlike the virtuous masses: I would never choose chemical engineering over poetry if income were not in question!
June 18, 2013
Hopefully Galbraith was not as pompous in person as his writing style - that aside, he provides a first-hand glimpse of major economic decisions and their effects in the 20th century from someone who was "at the table." His analysis of Ronal Reagan's achievements is devastatingly on target.
September 6, 2015
JKG lets his social philosophy override his objectivity in economic analysis, but he's a great writer and this book presents a fantastic view of political/economic history from WW1 to 1994 from the liberal/Keynesian point of view.
February 24, 2009
Remarkably accessible book, given the subject and the position of the author.
Very relevant as well in today's financial crisis.
Very relevant as well in today's financial crisis.
June 5, 2014
I've read from Chapter 22 to the end. Started with the Reagan Achievement. I would call it the Reagan disaster. The demise of the United States may be traced back to Nixon and Reagan.
Displaying 1 - 10 of 10 reviews