John Kenneth Galbraith’s son James Galbraith recounts the following story:
I can’t resist telling you that when the Vienna Economics Institute celebrated its centennial, many years ago, they invited, as their keynote speaker, my father [John Kenneth Galbraith]. The leading economists of the Austrian school — including von Hayek and von Haberler — returned for the occasion. And so my father took a moment to reflect on the economic triumphs of the Austrian Republic since the war, which, he said, “would not have been possible without the contribution of these men.” They nodded — briefly — until it dawned on them what he meant. They’d all left the country in the 1930s.
I’m not sure what organization Galbraith is referring to here at the “Vienna Economics Institute”. Anyone have any guesses?
Several things make this a truly disgusting episode. To begin with, Germany and the Continent really recovered at the point when Hayek-friendly economist Ludwig Erhard decontrolled prices in 1948, rejecting John Kenneth Galbraith’s favorite economic nostrum. Then, simply consider what Hayek and Haberler had gone through during the Nazi period — rare among Viennese citizens, they had chosen sides with the Western intellectual tradition and they had chose to take up the fight against the Nazis. Many in that very audience at that moment had not. Galbraith has also been Hayek’s student at the L.S.E. — and he’d gone on to misrepresent and misreport Hayek’s fundamental economics findings in the most unscholarly and snearing tones in some of his own work. Hayek’s own judgment of Galbraith’s personal character was that the man chose his policies and theories not on the basis of their truth or soundness but on the grounds of how they would sell to the public.
A very low character act by a very low character guy.
One final thought. What John Kenneth Galbraith told his son Jammie what had “dawned” on Hayek and Haberler couldn’t possibly “dawned” on these two men — they knew too much of the actual history to have thought any such thing. This was an gross insult, evidently, that Galbraith liked to tell behind the back of Haberler and Hayek.