John Kenneth Galbraith and "some of his younger colleagues" taught one of the first courses on economic development offered in the United States in the early 1950s. The course was motivated by "... the considerable number of students at Harvard from poor countries who were studying the sophisticated and, for them, often irrelevant models of the modern advanced economy" (Galbraith 1994, 161). Again and again, Galbraith returned to the idea that not everything produced, learned or taught in the developed world had meaning for the developing nations. But when Galbraith attempted to have economic development accepted as an approved field of study for a PhD in economics at Harvard, there was little interest: "... my request was promptly and, in keeping with accepted academic style, rather righteously rejected. As a different field of study, the special economics of the poor countries was held not to exist" (1979, 27).
Galbraith's contributions to the field of economic development were numerous, remain largely ignored and are consistent with (and perhaps inspired by) original institutional economics (OIE). Various similarities of Galbraith's development works with the OIE tradition will be pointed out in the remainder of this article. Three of these similarities should be described now to set the stage for the rest of the discussion.
First, Galbraith, like many of his OIE colleagues, regarded economic development as a historical process and not, like the growth theorists, a goal with a definite end in sight: "More specifically, we must recognize that economic development is a process...." (1962, 12). Second, it was apparent to Galbraith that examining the process of economic development meant examining the entire structure of society and not just some (micro) part. In his words (1962, 5), "[w]e have been enthusiastically and quite capably discussing the parts of the problem; we have paused all too infrequently to inquire whether they fit into a viable whole." If these two points sound familiar, they should. Gunnar Myrdal (1974) defined economic development as occurring in a process with no beginning and no end. For Myrdal (1974, 729), economic development meant "the upward movement of the entire social system." And, while Myrdal's words are quoted here, the similarity to Veblen, Ayres, Gordon and others should also be apparent.
Third, for Galbraith and the OIE tradition, uneven development and poverty were not the result of a shortage of natural resources. More than once, Galbraith dismissed the scarcity of natural resources argument citing numerous counter-examples. These included, among others, the rapid expansion of the economies of Japan and Taiwan (both resource poor) and the relative poverty of West Virginia (a resource rich area). Poverty of individuals and nations resulted from many causes and it was rather silly to assign the blame to a shortage of natural resources. The constraints on the development process were to be found elsewhere--perhaps the shortage was in public administration, access to education and health-care, feudalistic landlords who inhibited the growth of agriculture, inadequate investment, or perhaps a combination of all these factors and more.
In his various writings about economic development, Galbraith addressed nearly all of the major topics generally found in current economic development textbooks (e.g., Cypher and Dietz 1997). The list of these topics is truly impressive and included the definition of economic development, development theory, the role of savings and investment, development planning, the distribution of income, foreign aid, population, migration, colonialism, the role of the state, agricultural versus industrial development, the role of the entrepreneur and the modern corporation, multi-national organizations such as the World Bank and the IMF, technological change, international trade, and investment in human capital. Fortunately, Galbraith was not writing a textbook nor was he addressing his fellow economists. Galbraith's intent was to inform policy-makers and the public--and, yes, probably also to sell some books. The style of his development writings was unmistakably Galbraithian--that is, he did not hide his well-developed sense of history or his equally well-developed sense of humor.
Galbraith's perspectives on economic development were, of course, shaped in part by his experience as Ambassador to India during the Kennedy Administration and described in his all too detailed diary-like book, Ambassador's Journal (1969). His (1962) book on economic development was an edited version of a series of lectures he gave while he served as ambassador. Ambassadors were frequently called upon to give a series of speeches and public presentations without creating a diplomatic crisis. The economic development theme seemed ideal to Galbraith to serve this purpose. Galbraith's international experience was not confined to India and his travels also produced books about Poland and Yugoslavia (1958) and China (1973).
Galbraith approached the economic development problem with a keen understanding of both the economic and political forces shaping the development debate. In addition to the rising expectations of the people of numerous newly independent nations in the post-war environment, there was, of course, the cold war. Development issues in the 1950s and 1960s were almost always debated in the context of the conflicting interests of the Western market-oriented model and the Soviet planning model. In both cases, however, the emphasis was on industrialization as a development model. As always, Galbraith understood that the reality was more complex than the ideology. "I do not argue that the distinction between the planned and the unplanned economy is without meaning. But most of what the professional ideologists say about the distinction is without meaning. Many things must be planned even in those economic systems where the market has a major role" (1962, 34-35). And, Galbraith continued: "To trust to the market is to take an unacceptable risk that nothing, or too little, will happen" (1962, 35).
Galbraith was also acutely aware that economic development was not the highest priority of the Kennedy Administration. Despite considerable rhetoric on the importance of development, the creation of the Peace Corps, and the Alliance for Progress, the Kennedy administration's highest priorities were related directly to the Cold War. The Berlin wall crisis, the Cuban missile crisis, above ground nuclear testing, and the possibility of nuclear...