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

Test the Limit

Two components of economic growth—productivity and the supply of labor—are growing faster than conventional economists acknowledge. The danger is that lowered expectations could become self-fulfilling. See " Why We Can Go Faster ," by Barry Bluestone and Bennett Harrison I t has been amusing to watch the natural rate of unemployment come down. Two years ago, the community of respectable economists held—though with exceptions including Robert Eisner of Northwestern, Ray Fair at Yale, Harvard's James Medoff, and myself—that 6 percent unemployment was as low as the economy could go without triggering inflation. This meant, in turn, that sustainable economic growth could proceed only at the long-term rate of labor force growth plus the average rate of improvement of the productivity of labor in the recent past, for a growth speed limit of, at the highest, 2.5 percent. Any at tempt to push gross domestic product (GDP) growth any higher would be inflationary, or so we were constantly told...

The Money Artist

Lawrence Weschler's Boggs: A Comedy Of Values 12.02.99 | reviewed by James K. Galbraith Modern economists make bad historians, as a rule. The problem is that a simple-minded metaphor—supply and demand—with its deep yet subtle political commitment to laissez-faire, controls their thought. The market is supposed to rule. Therefore it does. Whatever happened, the market did it. Even when it did not. In this way, economists have screwed up many historical topics. Two decades ago, Robert Fogel and Stanley Engerman reinterpreted slavery as a free market institution—and therefore substantially benign—to raucous applause from a few economists but no one else. Lately Claudia Goldin and her followers have been offering tidy tales of technology (demand) and education (supply) to account for changing inequality in mid-century America. These tales leave out the Depression, the New Deal, even World War II. Quite a few economists working on the recent rise in inequality entertain similar views...

A New Picture of The American Economy

What really ails the American economy? Many economists blame stalled productivity—without understanding it. A new analysis suggests that prosperity depends on success in key industries significant in international trade.

We have long supposed and have been frequently told that America's economic troubles stem from our declining productivity growth. Yet the basis for this belief is now eroding. Early in 1991 we learned that during the 1980s our manufacturing productivity grew at 3.6 per cent per year, an "unbelievable revival" in the words of The New York Times . And this revival is as mysterious, as opaque to economic science, as the decline that it seems to have superseded. If the gloomy consensus is now giving way, it is certainly not to optimism, but to confusion. Most economists had accepted the fact of productivity decline without ever having settled the question of how and why it happened. Around the presumed fact of decline, and despite the acknowledged dissensus as to its cause, liberal economists in particular built a core of policy doctrine. They now must face the question whether that policy doctrine stands independent of the changing evidence about productivity or falls victim to it...

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