The transformation of Harvard’s economics from one steeped in classical economics to the leader of the Keynesian revolution and conquest of America was denied for decades. Those denials came to an end in the May 16th, 1965 New York Times Book Review insert when John Kenneth Galbraith published a review of the paperback edition of Keynes’ “General Theory”. Galbraith explained straightforwardly that the red baiters and accusations were all true, except one. The professors at Harvard did push Keynesian thought and policies, but Keynesianism was not tied to socialism, communism or Marxism in any way. Galbraith wrote how standard economics was taught by day but Keynesian ideas were discussed outside of class. In other publications, Galbraith explained the unique situation that allowed Keynes’ conquest: the election of 1932.
In the 1932 election, Americans were in the grips of the Great Depression and suffered immense unemployment. Franklin Delano Roosevelt offered to help the common man and fix the economy. The issue of the government being in charge of fixing an economy or responsible for its behavior began with that election and has been the crux of presidential elections since. When Robert Rubin was advising then governor Bill Clinton in 1992, the chief message of the campaign staff was “it’s the economy, stupid”. How does a government fix a dysfunctional or broken economy? While Treasury Secretary Mellon advised President Hoover to liquidate everything as a means of cleansing debts and excess, leftists found a siren’s song in Keynes’ message of borrowing to use government expenditures to spur aggregate demand. One could argue that that approach creates a command economy. Harvard was the hotbed for policy ideas.
Unlike the young students excited by Keynesian policies, Alvin Hansen was a middle aged professor with gravitas and reach. In the words of Galbraith, Hansen:
Proceeded to expound the ideas in books, articles and lectures and to apply them to the American scene. He persuaded his students and younger colleagues that they should not only understand the ideas but win understanding in others and then go out to get action… Hansen’s seminar in the new Graduate School of Public Administration was regularly visited by the Washington policymakers.
Galbraith spends less time mentioning Seymour Harris yet Harris was one of the most prolific writers of Keynesian ideas in the mid 20th century. Harris waited nearly two decades for tenure and suffered a nervous breakdown when he did receive it. Professor Harris was an activist ideologue who spoke before Congress, published copious amounts of articles and published dozens of books. By the time the mid-1950s rolled around, Harris had moved from a self-described dangerous left wing professor to chairman of the economics department at Harvard. His rise from resisted force at Harvard to head of the department matches the rise of Keynesian thought of central control of the economy through governmental means.
Galbraith portrays this all as the virtuous struggle for full employment and social advance. The detractors are far-right Birchers, rubes who see any social advance as subversion, and a small alumni foundation called Veritas that published the tract “Keynes at Harvard”, outlining all of what Galbraith was confirming decades later. Galbraith admits to everything except for the connection to socialism and communism. Galbraith admits that he and his peers lied about their work pushing Keynesian thought, yet in the same breath wants you to believe that he is telling the truth, this time, that the other accusations are false. Trust Galbraith, there is no connection between Keynesian policies and socialism. If socialism is loosely defined as government control of the means of production and redistribution of wealth, then how is Hansen’s work creating Social Security not socialist? What of Galbraith’s pet thoughts? Galbraith was always calling for more spending on public goods.
The Harvard economics department captured American economic thought in the 1930s through their access to FDR and control of the megaphone through book publications, articles and glowing book reviews (often written by coworkers at Harvard) and press coverage. Galbraith only admitted to the lies and covering up of their actions in 1965. It was well after the war was won. It was well after the GOP had learned that tax cuts and federal actions could help the economy and their political prospects. When will the left admit their pro-immigration behavior was to change the political landscape? After Texas turns blue. When will the left admit gay marriage was really to punish non-left citizens into conforming to leftist worldviews? After churches lose their tax exempt status. Like a murderer who commits the perfect crime, the secret will be just too good to resist telling and the political results too worthy of immense gloating.