Page last updated at 04:36 UTC, Thursday, 05 September 2019 PH
With so much requirements to look at empirical evidence as a pre-requisite to arriving at policy recommendations and decisions in the realm of economics, I was relieved that we had two of the most outstanding authors on economics at that time for our professors in the subject of Economic Development. As our major professor in the second year course on this topic during the school year 1960 to 1961, we had none other than the famous John Kenneth Galbraith who wrote dozens of books explaining economics in the most lucid way to the lay person, avoiding the gobbledygook of some economists. Professor Galbraith passed away in 2006 at the ripe old age of 97 after teaching for half a century at Harvard. He became my role model of an effective communicator, both in writing and in the classroom. He always spiced his lectures with wit and humor. Among his most quoted remarks were “The only function of economic forecasting is to make astrology look respectable.” Or “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy, that is, the search for a superior moral justification for selfishness.” And still more, “Under capitalism, man exploits man. Under communism, it’s just the opposite.” Understandably, he did not sit well with his colleagues in the faculty who were die-hard empiricists. But I found his gems of wisdom contained especially in his Trilogy (American Capitalism, The Affluent Society and The New Industrial State) of great value in critiquing the excesses of free market capitalism.
Galbraith was a leading proponent of American liberalism. As an economist, he leaned towards post-Keynesian economics from an institutional perspective. His ideas embodied what I would later discover in my subsequent search for the best model in the Philippines, the social market economy perfected by the Germans during the time of Konrad Adenauer. In his own words, “I react pragmatically. When the market works, I’m for that. Where the government is necessary, I’m for that. I’m deeply suspicious of somebody who says ‘I’m in favor of privatization,’ or ‘I’m in favor of public ownership.’ I’m in favor of whatever works in the particular case.” Some others who propose the “social market’ approach to a sustainable and inclusive economy (using today’s language) would summarize Galbraith’s views as follows: “As much market as is possible and as much State as is necessary!” Galbraith rejected the technical analysis and mathematical models of neoclassical economics as being divorced from reality. Following Thorstein Veblen, he believed that economic activities could not be installed into invaluable laws but rather was a complex product of the cultural and political milieu in which it occurs. That is why, I still believe in the superiority of the “political economy” approach used by the founders of economic science in England, without ignoring the contributions of quantitative analysis and empirical testing.
Halfway during the course on Economic Development that he was teaching us, Galbraith was appointed Ambassador to India by President John Kennedy, a position that he occupied from 1961 to 1963. We were doubly fortunate. The one who took his place for the remaining period of the course was the famous Barbara Ward or Lady Jackson who passed away in 1981 after being one of the founders of environmental economics. Long before experts started talking about climate change and environmental deterioration, Barbara Ward was writing and lecturing on sustainable development. In fact, she established the International Institute for Environment and Development and authored one of the pioneering books on the subject with Rene Dubro entitled “Only One Earth.” Lady Jackson earned her Master’s degree from the London School of Economics and was an influential adviser to the Vatican, the UN, and the World Bank. Her major concern was the worldwide threat of poverty among less developed countries. She advocated the transfer of wealth from rich to poor countries and the importance of resource conservation. Much of today’s insights into development economics was contained in the book that she was working on when she lectured to us at Harvard. The book became a best seller and was titled “The Rich Nations and Poor Nations” (1962). (To be continued).