James Galbraith

 

James K. Galbraith is author of Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe. He is an elected member
of the Accademia Nazionale dei Lincei, the Italian national academy. 

Recent Articles

The Coming Budget Battle

T he passage of President Clinton's budget, marked by its one-half trillion in deficit reduction, is already restoring respect for the administration. Clinton will be tempted to move on to other issues. The urgent need to make good on health care reform and the generally sour nature of budget discussions will add to this impulse. But the administration should resist the temptation to rush off the playing field, for two reasons. First, there will be a retrospective debate over the budget that may be more important politically than all the arguments leading to its enactment. Second, over the longer run, sad to say, unacceptably slow economic growth remains likely. Since economic growth, not legislative success or failure, will determine the ultimate judgment on Clinton, he needs to prepare ground for the next wave of budget and economic policy reform. Republicans and some deficit "hawks" are already framing the retrospective debate. In a recent New York Review of Books , economist...

How the Economists Got It Wrong

The American Economic Association (AEA) met January 7-9 in Boston, for a millennial program distinguished by its attention to international policy issues, most particularly financial crises (as in Asia) and the failure of the so-called "economic transition" (as in Russia). And yet, in this odd rush to relevance, something was curiously awry. Apart from a panel including former World Bank chief economist Joseph Stiglitz, the meetings featured almost no one with a record of criticizing the institutions that gave us the Asian crisis or the transition failure. Instead, they were dominated--in session after session--by the architects of the present world order, including Yeltsin advisers Andrei Shleifer and Anders Aslund, the International Monetary Fund's Stanley Fischer, and U.S. Treasury Secretary Lawrence Summers. Even the arch-speculator Myron Scholes appeared. Never, perhaps, has such a luminous crowd gathered to discuss so disastrous a set of its own failings...

Watching Greenspan Grow

Greenspan: The Man Behind Money , Justin Martin. Perseus Publishing, 284 pages, $28.00. Maestro: Greenspan's Fed and the American Boom , Bob Woodward. Simon and Schuster, 270 pages, $25.00. For those seeking a personal portrait of America's maximum economic-policy maker, Justin Martin's biography of Alan Greenspan will serve nicely. Informed and sympathetic, Martin traces Greenspan's personal and professional lives: his early days in jazz and objectivism, his roots as an economist in the Conference Board, his participation in the old-style business-cycle studies of Arthur Burns, his ties to five presidents, and his liaisons and enduring friendships with interesting, intelligent, attractive, and loyal women. Greenspan emerges here as observers usually find him: reserved, dispassionate, thoughtful, not very pretentious--an even-tempered professional with a stable inner self, oddly at home in the outsize trappings of the chairman...

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...

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