James Galbraith

James K. Galbraith is the Lloyd M. Bentsen Jr. Chair in government-business relations at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, a senior scholar of the Levy Economics Institute, and chair of the Board of Economists for Peace and Security. His most recent book is The End of Normal: The Great Crisis and the Future of Growth

Recent Articles

The Surrender of Economic Policy

As long as the big choices in macroeconomic policy are off the table, other efforts to raise living standards will not make much difference.

T here is a common ground on economic policy that now stretches, with differences only of degree, from the radical right to Bill Clinton. Across the spectrum, all declare that the main job of government is to help markets work well. On the supply side, government can help, up to a point, by providing education, training, infrastructure, and scientific research--all public goods that markets undervalue. But when it comes to macroeconomic policy, government should do nothing except pursue budget balance, and leave the Federal Reserve alone. To accept a balanced budget and the unchallenged monetary judgment of the Federal Reserve is, by definition, to remove macroeconomics from the political sphere. Thus, the remaining differences between Clinton and the Congress are over details. Should we head for budget balance in seven years, eight, or ten? Should we cut (or impose) this or that environmental regulation? Do Head Start, the AmeriCorps, and technology subsidies justify their cost? And...

The New Dialectic

Modern economic life crosses national boundaries to form a web of intricate association that retards aggressive and regressive nationalism. Trade, investment, enterprise, technology, communications, and travel are today relentlessly transnational. Yet this same globalism undermines the capacity of the nation-state to stabilize its economy. From this paradox comes the first of the dialectics of our time. On the one hand, there is the broad impulse toward closer economic and political association. This is evident in the European Union, the new North American Free Trade Agreement, and a very preliminary economic alliance between the Pacific Asian countries and Australia. Countering this trend are the lingering social and economic responsibilities of the modern state. The provision of medical care, education, housing, and such -- and therewith the budget, taxation, macroeconomic policy and maintenance of employment levels -- are now the duty of individual governments. Thus the dialectic...

Keynes, Einstein, and Scientific Revolution

Economics follows the wrong model of physics. Keynes appreciated that jobs, savings, and growth are all relative.

O ne of the most intriguing and little-noted facts about John Maynard Keynes's masterwork, The General Theory of Employment Interest and Money , concerns the first three words of its title. These are evidently cribbed from Albert Einstein.* Alone that would be only a curiosum; but there is more. The parallels between Keynes's economics and Einstein's relativity theory are deep enough, and evidently intentional enough, to provide a useful framework for thinking about what Keynes meant to do with his scientific revolution. Keynes and Einstein had met. Keynes traveled to Berlin in 1926 to lecture; Einstein attended. Keynes's impressions were not published until 1972: Wordsworth, who had not seen him, wrote of Newton's statue: "The marble index of a mind for ever Voyaging through strange seas of Thought, alone." I, who have seen Einstein, have to record something apparently--perhaps not really different-- that he is "a naughty boy," a naughty Jew-boy, covered with ink, pulling a long nose...

The Joys of Recession

E conomics as a subject matter and, in its more than slightly fragile way, as a science, has two notable features. There is a plausible characteristic of the economy, well supported by both analysis and experience, that gets relatively little mention. And there is a related aspect of the economic system that is wholly proscribed in all reputable thought and discourse. The little-mentioned feature is the possibility, even the probability, of an underemployment equilibrium--an enduring situation of poor performance. The wholly unmentioned fact is that, for a substantial and politically influential section of the population, this is wholly acceptable, even good, and certainly to be preferred to the relevant remedial actions. It is three years and some months since the United States economy slipped into recession, with other countries of the developed world similarly affected. But popular and professional economic attitudes have rejected the notion that this is how the economy should be...

Who's Bashing Tyson?

L aura D'Andrea Tyson's appointment to chair the Council of Economic Advisers received savage treatment from some of her professional colleagues. According to Peter Passell of the New York Times , "jaws dropped" in academe at the announcement. Passell went on to describe Tyson as "trendy" and a "polemicist." And the addition of Princeton's Alan Blinder to the Tyson council found MIT's Paul Krugman celebrating, in print and for attribution, that Blinder would bring to the CEA "necessary analytical skills that Laura Tyson lacks." Is there a serious issue behind these attacks? Trade policy, of course, or so they say. One trade economist suggested to the Times that the Council was now to be "captured by an interest group." William Cline of the Institute for International Economics complained of the exclusion of free traders: "There's a risk a voice will be absent from the table." And Passell summarized the views of others: "Many worry that her lack of ideological commitment to free trade...

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