One of the little-celebrated powers of Presidents (and other high government officials) is to listen to their critics with just enough sympathy to ensure their silence.
John Kenneth GalbraithRead
It had been held that the economic system, any capitalist system, found its equilibrium at full employment. Left to itself, it was thus that it came to rest. Idle men and idle plant were an aberration, a wholly temporary failing. Keynes showed that the modern economy could as well find its equilibrium with continuing, serious unemployment. Its perfectly normal tendency was to what economists have since come to call an underemployment equilibrium.
Interpretation
What this quote means
The quote explains that a capitalist economy can stabilize even with persistent unemployment, contradicting the belief that full employment is its natural state.
John Kenneth Galbraith emphasizes a fundamental principle about capitalist economies; traditionally, it was believed that they achieve balance through full employment. However, he argues that a capitalist system can stabilize at a state of underemployment, where significant numbers of people remain jobless, challenging the assumption that idle resources are merely temporary disruptions. This insight reshapes our understanding of economic equilibrium and highlights the complexities of labor markets.
Themes
EconomyCapitalismEmploymentUnemploymentEquilibrium
In practice
Example use cases
Discussing the implications of economic policies in a classroom setting.
More from John Kenneth Galbraith
All quotes →If all else fails, immortality can always be assured by spectacular error.
John Kenneth GalbraithRead
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.
John Kenneth GalbraithRead
All successful revolutions are the kicking in of a rotten door.
John Kenneth GalbraithRead
Money differs from an automobile or mistress in being equally important to those who have it and those who do not.
John Kenneth GalbraithRead
People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.
John Kenneth GalbraithRead
Similar quotes
Passive commerce . . . should thus . . . [compel us] to content ourselves with the first price of our commodities, and to see the profits of our trade snatched from us, to enrich our enemies and persecutors. That unequalled spirit of enterprise . . . an inexhaustible mine of national wealth, would be stifled and lost; and poverty and disgrace would overspread a country, which, with wisdom, might make herself the admiration and envy of the world.
Alexander HamiltonRead
I know firsthand that many employers who comply with other labor standards still hire the undocumented. Many businesses pay the minimum wage and have barely tolerable working conditions because there are sufficient undocumented workers willing to accept those terms. If we care about low-income workers in this country, we need to create pressure to improve their economic condition by reducing the supply of unauthorized workers.
Maria EchavesteRead
Why does a public discussion of economic policy so often show the abysmal ignorance of the participants?
Robert SolowRead
We can fight the global economy with a strong local economy.
Wendell BerryRead
Economics has been incurably growth-oriented and addicted to everybody growing richer, even at the cost of exhaustion of resources and pollution of the environment.
Kenneth E. BouldingRead
A just wage for the worker is the ultimate test of whether any economic system is functioning justly.
Pope John Paul IiRead