James Galbraith's THE PREDATOR STATE in Reuters

Galbraith takes on the predator
Fri Jul 25, 2008 10:59am EDT

NEW YORK (Reuters) - Like father, Like son. In his new book, "The Predator State," James Galbraith does justice to the late John Kenneth Galbraith's tradition of flipping conventional wisdom on its head -- and offering bold prescriptions for a more socially just economy.

He attempts to do so, in large part, by revisiting key moments in U.S. economic history and casting them in a radically new light: one that gets away from an inherent faith in the market and allows for some measure of planning on the part of government.

James Galbraith acknowledges the intellectual appeal of the conservative notion that unfettered markets produce optimal economic results. But he argues theory has failed to find any grounding in practice.

Yet while conservatives have long discarded their own ideology in the real world, its principles still imprison liberal economists and policy-makers, preventing them from offering constructive alternatives, he says.

In one fell swoop Galbraith questions the effectiveness of monetary policy, derides strict adherence to balanced budgets and sets out to debunk what he sees as the myth that America's economic might has its roots in free trade.

"My aim, in this exercise, is to free up the liberal mind," writes Galbraith, a professor of economics and public policy at the University of Texas at Austin.

Galbraith traces the success of the American economy over the years to public institutions like Social Security, Medicare and public education, which date back to the New Deal of the 1930s.

"In a properly designed system," he says, "planning and markets do not contradict each other."

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