John Kenneth Galbraith Quotes

But now, as throughout history, financial capacity and political perspicacity are inversely correlated. Long-run salvation by men of business has never been highly regarded if it means disturbance of orderly life and convenience in the present. So inaction will be advocated in the present even though it means deep trouble in the future. Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound.

There was much that was good about the world of which Coolidge spoke. True, as liberal misanthropes have insisted, the rich were getting richer much faster than the poor were getting less poor. The farmers were unhappy and had been ever since the depression of 1920–21 had cut farm prices sharply but left costs high. Black people in the South and white people in the southern Appalachians continued to dwell in hopeless poverty. Fine old-English houses with high gables, leaded glass, and well-simulated half-timbering were rising in the country club district, while farther in town one encountered the most noisome slums outside the Orient.

In the modern economy, a slightly bizarre fact, production is now more necessary for the employment it provides than for the goods and services it supplies.

When a mood of excitement pervades a market or surrounds an investment prospect, when there is a claim of unique opportunity based on special foresight, all sensible people should circle the wagons; it is the time for caution.

Let it be emphasized once more, and especially to anyone inclined to a personally rewarding skepticism in these matters: for practical purposes, the financial memory should be assumed to last, at a maximum, no more than 20 years. This is normally the time it takes for the recollection of one disaster to be erased and for some variant on previous dementia to come forward to capture the financial mind. It is also the time generally required for a new generation to enter the scene, impressed, as had been its predecessors, with its own innovative genius.

This map by cartographer Herman Moll was commissioned by the South Sea Company. The entire region displayed, with the exception of Brazil, was claimed as the company’s trading territory. Disregarded was the fact that Spain claimed the same territory.

In any case, during the same month reassurance came from still higher authority. Andrew W. Mellon said, “There is no cause for worry. The high tide of prosperity will continue.” Mr. Mellon did not know. Neither did any of the other public figures who then, as since, made similar statements. These are not forecasts; it is not to be supposed that the men who make them are privileged to look farther into the future than the rest. Mr. Mellon was participating in a ritual which, in our society, is thought to be of great value for influencing the course of the business cycle. By affirming solemnly that prosperity will continue, it is believed, one can help insure that prosperity will in fact continue. Especially among businessmen the faith in the efficiency of such incantation is very great.

The only purpose of economic forecasts is to give astrology a better image.

For a long time the New York Stock Exchange looked with suspicion on the investment trusts; only in 1929 was fisting permitted.

specialists. In all speculative episodes there is always an element of pride in discovering what is seemingly new and greatly rewarding in the way of financial instrument or investment opportunity. The individual or institution that does so is thought to be wonderfully ahead of the mob.

There is no major case against life’s enjoyments.

The crash in 1929, however, did have one therapeutic effect: it, somewhat exceptionally, lingered in the financial memory. For the next quarter of a century securities markets were generally orderly and dull. Although this mood lasted longer than usual, financial history was not at an end. The commitment to Schumpeter’s mania was soon to be reasserted.

Under capitalism, man exploits man. Under communism, it's just the opposite.

Yet to suppose that President Hoover was engaged only in organizing further reassurance is to do him a serious injustice. He was also conducting one of the oldest, most important — and, unhappily, one of the least understood — rites in American life. This is the rite of the meeting which is called not to do business but to do no business. It is a rite which is still much practiced in our time. It is worth examining for a moment. Men meet together for many reasons in the course of business. They need to instruct or persuade each other. They must agree on a course of action. They find thinking in public more productive or less painful than thinking in private. But there are at least as many reasons for meetings to transact no business. Meetings are held because men seek companionship or, at a minimum, wish to escape the tedium of solitary duties. They yearn for the prestige which accrues to the man who presides over meetings, and this leads them to convoke assemblages over which they can preside. Finally, there is the meeting which is called not because there is business to be done, but because it is necessary to create the impression that business is being done. Such meetings are more than a substitute for action. They are widely regarded as action.

The more obvious features of the speculative episode are manifestly clear to anyone open to understanding. Some artifact or some development, seemingly new and desirable — tulips in Holland, gold in Louisiana, real estate in Florida, the superb economic designs of Ronald Reagan — captures the financial mind or perhaps, more accurately, what so passes. The price of the object of speculation goes up. Securities,