01 May 2006  What Do YOU Think?

Who Will Cast a Longer Shadow on the 21st Century: Friedman or Galbraith?

Both of these economists greatly influenced the political economics of the twentieth century. But what of this century? Which set of views will most shape the policies of governments and our way of life?

 

Summing Up

Like all good discussion topics, this month's issue split respondents nearly equally, with a slight nod to the notion that Milton Friedman's views will have a bigger impact on us in the twenty-first century than those of John Kenneth Galbraith.

Margie Parikh commented that "I see the twenty-first century as the epoch-making era of playing fields becoming more level and opening markets, reducing government control, and spreading lifestyles and products of different cultures from all over the world. In this context, Friedman seems more influential." Ashutosh Tiwari added: "I think Friedman will cast the longer shadow . . . the expansion of markets has speeded up the process of globalization . . . the corporate power of multinationals has not been as dominant as Galbraith had envisioned."

In contrast, several respondents pointed to the influence of future global challenges on their responses. Sudip Bose put it this way: "Venerated works of Milton Friedman have influenced government policies. . . . But, his shadow will be relentlessly chased primarily by global climatic concerns and then perhaps by human development issues. . . ." Stever Robbins expanded on this idea: "With regard to national security, pollution, energy policy, education, global warming, and other commons issues, it's hard to see how individual self-interest can add up to the community-wide base we need to remain a competitive nation in the twenty-first century."

But I was struck by the number of respondents who suggested that the ideas of both Friedman and Galbraith had relevance, perhaps at different times and in different places. Henry Kwok wrote, "They brought to us two perspectives—the need for freedom to choose and the need for the government to provide an order to the economy. We cannot live with one without the other." Kamal Gupta noted that, "in the case of an economy that is coming out of poverty, like India . . . [the ideas of Galbraith] would provide for a faster redistribution of wealth. But once the economy reaches a certain threshold . . . the state should move to minimize its involvement." Gaurav Goel opined, "I think Galbraith will be more relevant in the first half of this century. . . . For markets to act in coherence with society, it is necessary for government to put some checks in place. . . . Friedman's view may be more applicable in economically uniform societies. I hope that the later part of this century will be more suitable for Friedman's views." Ruth Rama was more succinct: "Friedman will prevail in the U.S.; Galbraith will prevail in Europe."

These comments emphasize the influence of context on the continuing importance of the views of these two influential figures of the past century. How are the issues we will face in this century different from those of the twentieth century? Will they require more or less attention to common as well as individual needs? Will they best be addressed by individuals free to choose, communities (represented by governments) interested in influencing choice, or a combination of both? What do you think?

Original Article

With the death of John Kenneth Galbraith on April 29, it is perhaps appropriate to reflect about the influence of two economists, Galbraith and Milton Friedman, described by Time magazine in 1975 as the modern world's most important economists along with John Maynard Keynes and Adam Smith. There were remarkable similarities between them. Both strongly influenced government policy. Both wrote prolifically, and for a broader audience than just theoretical economists. Both, of course, lived to see the age of ninety and then some. And despite their sharply contrasting views of political economics (Friedman regarded Galbraith as a socialist), the Friedman's occasionally vacationed with the Galbraith's at the latter's Vermont farm, according to biographer Richard Parker.

Galbraith, in his book The Affluent Society, argued for the importance of fiscal policy in influencing the allocation of resources between rich and poor. This was to be done through the maintenance of a progressive tax system to insure that the wealthy provided their proportionate share of funding to enable government to channel funds to such endeavors as the environment, support for the poor, and the development of the arts. The objective was to create a society that would provide a better standard of living for all.

Friedman, on the other hand, in a book Free to Choose, advocated a minimalist role for government, relying instead on lower tax rates to provide the wherewithal for Americans to decide for themselves how they wished to live and spend their increased take-home pay. In another work coauthored with Anna Jacobson Schwartz, The Monetary History of the United States, he had earlier argued, however, for a significant government role in managing monetary policy to guard against the booms and busts that characterized the early part of the twentieth century. According to this thesis, by regulating the supply of money, governments could have an immediate and important impact on such things as interest rates, inflation, and general economic prosperity.

Galbraith advocated the state's involvement in insuring the defense of the country, education for all, a just society, support for the arts and environment, and most important, a minimum standard of living. Friedman, on the other hand, while advocating a strong government role in maintaining a strong defense and the enforcement of antitrust laws, placed his primary bets on the individual. According to a friend, Ben Stein, "Professor Friedman and his wife stood up for the glory of the rights and choices of the individual. From the individual, not from the state, came creativity, progress, freedom, prosperity. From the state came oppression and stagnation." One illustration of this philosophy was contained in an article written for the New York Times Magazine in which Friedman opposed corporate philanthropy, arguing that corporations should let individual investors choose how to spend or give away their money.

One can argue that both of these economists had an important influence on the political economics of the twentieth century. But what of this century? Which set of views will most shape the policies of governments and our way of life? Or have both served their purpose, only to be forgotten? If so, will we have to relearn them at a later time? What do you think?

To learn more:

Richard Parker, John Kenneth Galbraith: His Life, His Politics, His Economics (New York: Farrar, Straus, and Giroux, 2005)

John Kenneth Galbraith, The Affluent Society (Boston: Houghton-Mifflin, 1958)

Milton and Rose Friedman, Free to Choose (New York: Harcourt, Brace, Jovanovich, 1980)

Milton Friedman and Anna Jacobson Schwartz, The Monetary History of the United States, 1867-1960 (Princeton: Princeton University Press, 1971)

Ben Stein, "On Milton's Friedman's Birthday, We Get the Present: Him," The New York Times, December 4, 2005, p. BU4.

Milton Friedman, "A Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits," New York Times Magazine, September 13, 1970, pg. SM17.

Comments

    • Sumit Mittal
    • Senior Manager, BCCL

    Galbraith beyond a doubt would have lasting influence on public policy. You call it Socialism or you call it Welfare state, the fact is that the limitations of laissez faire have become obvious and the government clearly has a very central role to play. Be it ensuring law enforcement, assuring the poor of some basic necessities, disaster recovery, and so on. The capitalist motive of profit cannot assure any of these.

    We do not live in an ideal society and the middle path is the only answer. This had been proven as much in the failure of Soviet Russia as in the lasting Japanese recession.

     
     
     
    • Ramesh Dorairaj
    • General Manager, MindTree Consulting

    Friedman established, in economic terms, the moral ground for the individual and the business enterprise. Galbraith persisted in relativism and the relative good of the government over business; and order over individuality. Both showcased success stories, and dismissed failures as the result of dilution from their stated. In some ways, both veered away from evidential based empiricism, and were consumed by their own hypothesis. To that extent, their contribution, nevertheless immense, stands diminished.

     
     
     
    • Tahir Litt
    • Graduating Student in BA Business Management, De Montfort University, Leicester, England

    Respected peers and fellow industrialist, both the authors of this debate are credible in today's contemporary business environment.

    Friedman, for the reason the free markets reduces poverty when fairly utilized, such in the EU. One only has to look at economic data with concern to employment, GDP, crime, and so forth. Friedman's argument that governments must not intervene is incorrect due to the fact of human greed.

    In short these great philosophical ideologies of both good authors are correct and incorrect. But we have to accept one. Of course, I could spend a good deal of time deeply criticizing these writers.

    Please, if anyone wants to debate this issue, I am willing in the interest of knowledge.

     
     
     
    • Howard J. Bartlett (HBS MBA '82)
    • Contracts Manager, Siemens Power Generation, Inc.

    Friedman concentrated on the cause and effect that explained data and predicted outcomes; Galbraith sought to foment the effects by deliberate excitation of causes. If the "long shadow" is from a towering and serendipitous effect, I think the nod goes to Friedman. I believe those who oppose my conclusion and laud Galbraith will do so because of their own politics; I'll not deny them that right, just request that they admit it. But even they also must admit that the mechanics of monetarism are alive and well in the operation of the Fed and on the six o'clock news in a way that was not imagined by Galbraith and most others four decades ago when Friedman championed them.

    Friedman's ideas were found to be true in the cauldron of cause and effect; Galbraith's ideas were not about the collective veracity of individual actors in an economy, but about an agenda of compelling others to agree with his grand vision in order to make the political economy turn out as he thought best.

    The unprincipled advocacy of one camp over the other tends to revolve around the political impacts that proponents wish to evoke, not economic realities. For purity in statements of what is true, not what is wished, surely the Veritas nod should go to Friedman.

     
     
     
    • Ajith Fernando
    • Managing Director, Capital Alliance Ltd., Sri Lanka

    I feel that the current trend towards social equity and other such "soft" issues would make Galbraith the more influential economist in the twenty-first century.

     
     
     
    • Michael Pettengill
    • Jack of all trades and engineer

    My first reaction to your question on who was more significant was confirmed by the responses posted so far.

    Friedman's message is more intellectually appealing, while Galbraith's message reflected a reality that people found unappealing. While one can debate the specifics, that is almost irrelevant to the question; clearly Milton Friedman's name casts the longer shadow.

    Reagan and Bush and others invoke Milton Friedman's name to justify a government that only Galbraith spoke of taming. Friedman has decried the economic policies of Bush and his fellow "conservatives" while supporting his hard military policy, a military policy necessitated by Reagan-Bush ignoring Friedman's principles outlined in Free to Choose. So we have lots of people claiming they are adherents of Milton Friedman who advocate big government involving themselves, not just in the lives of their own citizens, but in the lives of citizens around the world.

    Through no fault or desire of Milton Friedman, his long shadow is the decades of war in and around Iraq.

    By the way, I am a fan of Milton Friedman primarily for his excellent, clear writing; I always found Galbraith to be a grind to read.

     
     
     
    • Sudip Bose
    • Sales Executive, Madhya Bharat Papers Ltd.

    Man is ordained to hold a unique position on earth due to his abilities to think and act. This position makes man responsible to climate, flora, and fauna, including fellow human beings. To ignore any one of these responsibilities is to relinquish the very purpose of human life. The late J. K. Galbraith, through his works, persuaded this inclusive maxim. His shadow shall not shorten.

    Venerated works of Milton Friedman have influenced government policies and would continue to do so, especially those of largely free-market economies. But, his shadow will be relentlessly chased primarily by global climatic concerns and then perhaps by human development issues. Despite the failure of such measures as the Kyoto Protocol, a drive to stop environmental degradation will begin in the near future and consequently governmental controls over profit-driven developments will increase. Thus the shadow of Galbraith will be longer than that of Friedman.

     
     
     
    • Gaurav Goel
    • Project Manager, Infosys Technologies

    I think Galbraith will be more relevant in the first half of this century. Markets and the economy are a subset of human societies. Though the market can have a substantial effect on a particular society, all factors that favor the market may not be acceptable to a significant fraction of society. For markets to act in coherence with society, it is necessary for government to put some checks in place. There must be regulatory bodies to ensure that markets are not compromising social harmony and common good for short-term gains.

    Friedman's view may be more applicable in economically uniform societies. I hope that the later part of this century will be more suitable for Friedman's views.

     
     
     
    • John Grether
    • Associate Professor, Northwood University

    Friedman will have the lasting impact as a matter of simple logic. If it were not for the capitalism that Friedman so eloquently defends, Galbraith's quasi-socialistic utopia could never be funded.

     
     
     
    • G. Gargour (HBS MBA '65)
    • CEO, Lenico Group (manufacturing)

    The real strength of the free world is not in its freedoms but in its ability to reach compromise. From that angle, Galbraith (like Keynes before him) would appear to me to be more relevant in the future. Rosy socialism was a mistake and Friedman's great role was to help stop the world from going there. Galbraith's views are more inclusive and require us to look at the social responsibilities of the successful.

    As a foreigner, an HBS graduate, and an admirer of America, I find that we may now be drifting too far to the right. Viva Galbraith.

     
     
     
    • Henry Kwok
    • Partner, STIC, Singapore

    Both Galbraith and Friedman have contributed to the world in their own special ways. They brought us two perspectives—the need for freedom to choose and for the government to provide an order to the economy. We cannot have one without the other. Our business strategies and policies are the result of how we balance the tension between these two needs. My only wish is that they would have collaborated to give us a balanced approach. My vote goes to both.

     
     
     
    • Jaume Ribe
    • Managing Director/Owner, Consultancy Firm

    I place by bets on Friedman, despite the impressive failure of President Reagan who supposedly followed Friedman's policies. Galbraith taught me a lot but he was a Keynesian, and in my modest opinion Keynes was never right: There are no cycles (ask Alan Greenspan). To me, there are better economists than Friedman and Galbraith, such as Paul Krugman.

     
     
     
    • Jacoline Loewen
    • Managing Director, Loewen & Partners

    My MBA program began with a debate around Friedman's comment "Business is in the business of business." Since then, I've seen and experienced that debate across a broad range of companies and countries. Friedman asks if shareholders should choose to spend profits on a philanthropies of their own choice or accept a company's allocation of some profits to good charities. Many companies have developed in the market through a focus on philanthropy, such as The Body Shop and green investment funds. It's good business to be seen to be caring: ask Bono, Angelina, and Brad.

    I think Galbraith appeals to people in countries with governments that do not even know what good governance means. It sounds good to have a caring government when all you see around you are a few companies and people with all the wealth. Galbraith was Canadian and his philosophy of government redistribution of wealth can be observed in Canada: free healthcare and education, funding for culture and special interests, as well as funding to support minorities. It makes Canada a safe and lovely place to bring up children. The problem is, the healthcare system is going bust and the old age pension scheme will be empty by the time I reach the age to get back the taxes I've paid into the plan.

    Galbraith's is a kinder philosophy that I think we would all like to see, but Friedman's is probably truer to human nature and therefore more sustainable. In a sophisticated society such as the U.S., Friedman will win since there is enough of the Galbraith philosophy in place to keep the poorest American in wealth as compared to a poor person elsewhere in the world.

     
     
     
    • Ulysses U. Pardey
    • Managing Director, Am-Tech, S.A.

    The basic needs of a population such as safety, health, education, housing, employment, justice, and so on, are always there to be met regardless of how competitive companies or individuals are in providing solutions. We always need a house to live in, whether we have bought it or not.

    I have observed that often the economy is used to numbers as if they were independent of people. The evolution of people's way of life as a solution from generation to generation is based upon better education and awareness without boundaries, what we call today a well-rounded education across disciplines, accessible to both the rich and poor in order to upgrade our society and markets.

    What can help us to better shape our economy is to be properly educated and receptive to understanding who and what we are, where we want to go as a society, and what must happen today to get there tomorrow. People who contribute to this goal will surely help us to improve our quality of life and the legitimacy of our government representatives. Galbraith and Friedman are certainly of great help.

    I think that in the case of an economy that is coming out of poverty, like India, John Kenneth Galbraith is more relevant since his ideas would provide for a faster redistribution of wealth. But once the economy reaches a certain threshold—when the proportion of people below the poverty line sinks to 10 percent and the middle class comprises 40 percent of the population—the state should move to minimize its involvement.

     
     
     
    • M. P. Jayaprakash
    • Senior Executive Officer, IEEMA, Bangalore

    At the risk of making a simplistic prediction as to which of these economic postulates will prevail through the century, my guess is that it will be a combination: more of state and less of individual. There is a direct correlation between individual freedom and growth and prosperity in the U.S. and other western countries. This will encourage other nation-states to follow suit unless the Chinese model continues to be successful in a longer time frame. In the developed countries, the state's intervention may rise in the coming years due to laissez-faire fatigue.

     
     
     
    • Ruth Rama, PhD
    • Research Professor, CSIC, Madrid

    Friedman will prevail in the U.S.; Galbraith will prevail in Europe.

     
     
     
    • Tio
    • Manager, PricewaterhouseCoopers Uganda

    The ideas of Galbraith are rooted in the practical reality that man is by nature selfish and, left to his own devices, will do only that which suits him. Community considerations such as the environment, public education, and health will be of little concern in the race to the top of the cash pile. The tempering hand of government becomes relevant in this respect. The degree of tempering should be the point of contention as we move into the future.

    I believe that both Galbraith and Friedman have made important contributions to political and economic thinking, but neither economist should be viewed as more "right" than the other.

    If you take the position that government should attempt to manage what it should rather than what it can, then Galbraith's institutionalist approach provides too much support for the leaden hand of government.

    But if you take the position that individuals and companies can only operate within a framework deemed acceptable by society at large, then Friedman's individualist approach provides a free hand for the worst excesses of human behavior.

    If free markets are to generate individual and societal wealth, then robust regulation is required to maintain a fair playing field. The $64,000 question is how much regulation, of what kind, and at what time. Now there's a question to keep economists of all types busy for years.

     
     
     
    • David Physick
    • Principle Consultant, Glowinkowski International

    I hope Galbraith prevails. Perhaps Charles Dickens in David Copperfield suggests why: "Annual income twenty pounds, annual expenditure nineteen pounds, nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and sixpence, result misery." Is the free market causing more of the latter? Bankruptcies and repossessions are up in the U.K. Ads on tv are littered with loan offers as is the mail, both virtual and physical. Is the credit mountain on the verge of collapse?

     
     
     
    • Anonymous

    Nobody disputes that capitalism has been victorious over socialism. So why would anyone dispute that Friedman has been, and will continue to be, more influential than Galbraith?

     
     
     
    • Shlomo Maital
    • Academic Director, Technion Institute of Management, Tel Aviv

    Ken Galbraith's ideas are so unfashionable they will soon be back in fashion as the dark side of globalization increasingly reveals itself, in America and elsewhere. He coined dozens of wonderful phrases. "Under capitalism, man exploits man. Under communism, it's just the opposite." Galbraith was no socialist. But he did believe the excesses of free markets had to be curbed and regulated. I wonder how many free-market ideologues would swallow unregulated penicillin. "If you feed enough oats to the horse, some will pass through to feed the sparrows." Galbraith debunked trickle-down economics. How long will American capitalism foster billionaires on the theory that the crumbs that fall from their table can feed the poor?

    Galbraith, in The New Industrial State (1967), was the first to see that it is intelligence that is the modern driver of wealth, not land or capital. Why then is America doing its best to keep intelligence out of its borders (by denying visas to foreign students it once welcomed), and ruin intelligence within its borders by fostering mediocrity in education ("No Child Left Behind," Bush calls it)?

     
     
     
    • Robert L. Browning II
    • Regional Economist, U.S. Army Corps of Engineers

    I read Free to Choose during my senior year in high school, and essentially "became" Milton Friedman for a presentation on that book. Most of the audience was lost on monetary policy, but became seriously engaged at a throwaway comment in the book, that decried government licensing of plumbers. In taking the author's position, I noted that a license does not impart a minimum quality of work, but created an artificial barrier to a relatively uncomplicated field. Plumbing isn't heart surgery.

    Many people in the audience took exception to the comment, believing that a government-issued license is an endorsement that certain minimum quality has been achieved, which a consumer can take as a form of quality assurance.

    I asked the audience to raise their hands if they had obtained a driver's license. The response was practically unanimous. I then asked if the license in their hands was a government endorsement that their driving was of a sufficient quality to warrant such an approval. The twittering and chuckling in the audience indicated that this was clearly not the case.

    Economists are such a clever lot. I credit Mr. Friedman and Robert Heilbroner for putting me on this path.

     
     
     
    • Chris Meisenzahl
    • MBA Student

    While I like much of what Friedman has stated, I would prefer to see more mention of the great work done by economists such as Von Mises, Rothbard, Thomas Sowell, and Walter Williams.

     
     
     
    • Anonymous

    Given the increased disparity in the U.S. between the haves and the have-nots, I would hope that Galbraith's view prevails. The environment, especially, needs protection, which will only come about with concerted government effort, not just individual good intentions.

     
     
     
    • Nari Kannan
    • CEO, Ajira Technologies, Inc

    Milton Friedman is right in the sense that his ideas are more practical and realistic. J.K. Galbraith's ideas are good in an ideal world! A minimalist government always ensures optimum use of resources as well as encouraging competition, innovation, and overall win for consumers. Galbraith's ideas about government stepping in and taking care of the poor sounds good in theory but never work in practice. The failure of communism and socialism can all be laid at the feet of this flawed thinking. When government gets out of the way and keeps its hands off, competition, innovation, and extensive job creation explode, benefiting even the poorest of the poor, not by handouts but by genuinely worthwhile jobs.

    The best example is the telecommunications industry in India! For about fifty years central planning did nothing. Ten years of liberalization suddenly made even the government-owned BSNL totally responsive and efficient.

    It's not just the ideas. The only thing that matters to the poor is implementation and reality. That's the only thing that affects them.

     
     
     
    • Anonymous

    Friedman by a long shot. Galbraith's advocacy of sandcastles and free lunches was a form of wishful thinking at the expense of self-reliance and responsibility for oneself.

     
     
     
    • Deepak Alse
    • Product Technology Prime, Wipro Technologies

    I am a student of the "Situational and Systems Oriented" school of economics, if such a school exists! Friedman's individual-centered approach and Galbraith's "governance as benevolence" approach are excellent mechanisms for understanding two diverse perspectives to economics. A rapidly changing world needs a new economic perspective that looks at the situational aspects (e.g., behavioral economics) within a systems orientation. Such an approach can cater to the balancing of economic disparities around the world. Capitalism is individual centered and socialism is centered on governments, but neither of these has the ability to solve the broad range of economic issues the world will face, such as energy-ecological issues and how technological change has an impact on society. The future will force us to move from theories to patterns.

     
     
     
    • Stever Robbins
    • CEO, The Stever Robbins Company

    I have no economics background other than my fifteen-year-old MBA, so can't comment in detail on Friedman or Galbraith's positions.

    I feel very comfortable, however, in taking the position that maximizing the benefit to the individual does not necessarily address critical issues of need to the community.

    The Tragedy of the Commons is the well-known example of why self-interest and self-allocation of resources among players who are acting rationally in their own self-interest can lead to collapse.

    With regard to national security, pollution, energy policy, education, global warming, and other commons issues, it's hard to see how individual self-interest can add up to the community-wide base we need to remain a competitive nation in the twenty-first century.

     
     
     
    • Anonymous

    If we are to attribute influence, then we have the wrong men in Friedman and Galbraith. Friedman has derived his thinking outside of narrow monetary theory from Robert Nozick's political philosophy, and Galbraith took his from John Rawls. It is these two who will contest the twenty-first century. And even if one looks to economists for powerful political economy, neither Galbraith nor Friedman really compare to Friedrich Hayek, who was the outstanding synthesizer of philosophy, political theory, and economics of the last one hundred years.

     
     
     
    • Ellis Baxter
    • CEO, Ellis Baxter Designs Inc.

    One has made policy work; the other had some false ideas of what government should do. And we will be paying that price for some time. Government as a social instrument has failed again and again. While I am not a fan of central banks in general, Milton Friedman has a clear view of the core problems.

    The core answer is that we must deploy more reasons to go to work and work harder, not deploy some additional tax system that would make the world equal. It is not now and never will be.

     
     
     
    • Professor Eduardo H. Passalacqua
    • Independent Consultant

    I think Galbraith will take precedence in the long run. Many of his witticisms will also hold true for years to come. However, and much to my regret, I think Friedman's revolution is here to stay, though in a much watered-down form.

     
     
     
    • Charlie Cullinane

    Having lived long enough to see how inept the government is at guiding an economy, I have to put my money on Milton Friedman. The methods John Kenneth Galbraith professed lead to bureaucracy and waste. The government cannot truly reflect what the individual citizen needs or wants. The government is just not efficient enough to lead an economy.

    Let the marketplace determine what the citizens want and will pay for. Defense, education, and healthcare need strong governmental input, but industry does not. The government is much too influenced by lobbies and self-serving bureaucrats to make realistic, effective decisions. My vote goes to Dr. Friedman.

     
     
     
    • W. Robert Needham
    • Professor, University of Waterloo

    Galbraith because of social egalitarian concerns.

     
     
     
    • Shann Turnbull (HBS MBA '63)
    • Principal, International Institute for Self-Governance

    There is little doubt in my mind that both Galbraith and Friedman will have an important impact on policy development in the current century but in a way that they and their supporters may not expect.

    This arises from the prospect of a new framework being accepted on how a political economy should be designed to make the world a better place.

    The opposing concerns of Galbraith and Friedman provide arguments for adopting a more appropriate framework by showing how their different approaches to equity, efficiency, and choice can be accommodated together in the most effective manner. Galbraith and Friedman have provided the shoulders of giants for revealing and accepting a more appropriate political economy.

    The increasing complexity of society is revealing the ineffectiveness, inefficiencies, and inappropriateness of the dominant command and control architecture found in the public and private sectors. This architecture is not found in nature. Nature creates and manages complexity through nested networks of almost self-governing components that reduce complexity at local levels while introducing a diversity of compounding complexity overall as found in living things.

    The imperative for the acceptance of network governance is the limited capacity of humans to receive, process, and transmit data to and from others directly or indirectly through technological devices. Data communicated by markets can be so lean and specialized that resources become allocated inappropriately while data communicated in command and control hierarchies can create information overload, biases, errors, and omissions.

    The use of hierarchy or markets to allocate resources as supported respectively by Galbraith and Friedman is reaching its use-by date with an increasing complex society. A change to network governance as found in nature would seem inevitable. So while the policies of both Galbraith and Friedman would become irrelevant their concerns would live on.

     
     
     
    • Ashutosh Tiwari
    • Business Development Officer, IFC-SEDF Dhaka, Bangladesh

    I think Friedman, the Nobel Prize laureate of the two, will cast a longer shadow for three reasons.

    First, expansion of markets has speeded up the process of globalization. This has meant that even in countries that historically had controlling governments, market concerns, and the attendant notions of individual freedom now command attention in ways unimaginable in the 1970s.

    Second, the corporate power of multinationals has not been as dominant as Galbraith had envisioned. If anything, multinationals today have a variety of non-customer constituencies (NGOs, labor unions, environmental activists, media, etc.) that they have to continue to satisfy on a range of issues. Besides, as we have seen in the tech sector, even start-ups can disrupt any big company's dominance.

    And third, in the training of professional economists, at least in the U.S., some of Friedman's papers are still assigned, while Galbraith's papers and books are politely passed over. As more and more finance ministers and their assistants outside of the U.S. tend to be, for better or worse, U.S.-trained PhD economists or the equivalent, Friedman's influence is likely to grow even more in times ahead.

     
     
     
    • Sunil Unni
    • CEO - Business Development & CED, Kores India Limited

    Both Galbraith and Friedman have contributed immensely to the world of economics, but Galbraith certainly stands taller (also literally) and will cast a longer shadow.

    Friedman's libertarian and free-market economic policies could unshackle controlled economies to the extent of deriving strategic advantages in the globalization era.

    But sustained economic growth entails equitable distribution of wealth that can perhaps be achieved through state involvement in key areas such as education, health, support of the arts, environment, defense, etc. The individualistic and monetarist policies of Friedman do not address these areas. Therefore, Galbraith's Veblen socio-logistic economic theories are here to stay.

    Taxpayers' funds and state-articulated fiscal policies influencing the allocation of these funds between the rich and poor are also here to stay.

     
     
     
    • George
    • Hong Kong

    With full respect to Mr. Galbraith, I believe that Mr. Friedman will cast a longer shadow in the twenty-first century.

     
     
     
    • Akhil Aggarwal
    • Sr. Programmer/Telecom Business Analyst, IBM Corp.

    The greatness of the two celebrated economists lies in the accuracy and logical reasoning of the two most pertinent elements for a nation to stand strong.

    John Kenneth Galbraith said, "Few people at the beginning of the nineteenth century needed an adman to tell them what they wanted." This statement held true for a long time and may still be relevant in some degree. But the preaching is over and society is on its own now. If the need for a centralized body of a democratic nature is the key to stability, then believing in survival-of-the-fittest kinds of theories is great for individuals.

    Galbraith was not a socialist and neither is Friedman. Both conceived of, envisioned, and "ideated" towards development. The absolute relevance of both these contrasting views will enable us, the fortunate generation, to have the best of both persuasions.

    Both views hold true: (1) The social responsibility of a corporation is to make a profit, and (2) the social responsibility of a corporation is to be investor friendly. We've had our share of adman-talk and fared well by amicably combining the two views.

     
     
     
    • Harry Tucci
    • Marketing Analyst, Aegon USA

    In a way, I think a blend of the two models will evolve over the course of the twenty-first century. For the most part, society will reject Galbraith's wealth transfer models as too "socialist," yet they will agree with him that there is an economic role the government must actively play when it comes to protecting strategic national issues.

     
     
     
    • Margie Parikh
    • Lecturer, Gujarat University

    For Professor Heskett to have us compare these two giants, the relative length of shadow can be determined by conjecturing what context characterizes the twenty-first century that would receive one economist's ideology as more influential than the other's.

    I see twenty-first century as the epoch-making era of playing fields becoming more level and opening markets, reducing government control, and spreading lifestyles and products of different cultures from all over the world.

    In this context, Friedman seems more influential. We see international trade restrictions coming down and making products cheaper as well as varied. When cheaper Chinese products invaded Indian markets, consumers got more options and Indian industry was pushed to become more. This brought prices down and improved customer service—something not seen in the absence of competition. Reliance's entry into petrol vending has affected the hegemony of Indian government oil companies. This is similar to Friedman's argument about how licensing actually protects doctors' higher fees.

    If we must compare, then in my opinion Friedman's shadow will linger longer.