The World Economy Since the Wars: Long View

I have not shrunk we just have invited the tallest economists in North America to speak it is fourth inaugural address President Franklin Roosevelt said we have learned that we cannot live alone at peace that our own well-being is dependent on the well-being of other nations far away we have learned to be citizens of the world members of the human community it's a pleasure for me to welcome all of you citizens of this University community and of the world to the opening lecture of the 1992 Institute on world affairs Iowa State University has had a long history of being active and involved as an International University and that tradition continues today nearly 10 percent of our students are from other parts of the world our faculty and students are involved in exchange and development programs throughout the world and increasingly our graduates find themselves in positions that involve international trade and relations the economic political and social fabric of our world is changing every day we each have a responsibility as citizens of the world to be active participants in this change we need to keep abreast of new developments to help the people of other countries understand and adapt to new ways of doing things and help our students prepare for the new world they will be entering when they leave us just last month I had the opportunity to visit one area of the world that's undergoing tumultuous and remarkable change Eastern Europe particularly Czechoslovakia and the Ukraine that visit was part of two programs we have undertaken to help the new leaders in these newly free nations with the task of converting their economies to the free enterprise system it's a monumental task that they have but one that holds tremendous potential for the people of those nations and ultimately all of us I believe each of us can take pride in the fact that Iowa State University is playing a leadership role in this part of the world just as it as it has done for decades throughout the world our goal has been and remains to help people improve the standard of their lives and their living the Institute on world affairs is an important part of our international efforts this is its 27th year the students faculty and staff who have organized this year's Institute have put together what I think is a remarkable and outstanding program and it includes tonight's keynote speaker the internationally known and respected economist John Kenneth Galbraith we're all delighted that he could be with us and we are looking forward to his remarks I would like to note for the record that Carl flops a distinguished member of our economics faculty once filled in for dr. Galbraith at Harvard University well dr. Galbraith served as ambassador of India I have also informed that Earl heady yet another member of our economics faculty very distinguished member of our economics faculty did similar duty at Harvard for professor Galbraith I'm also told that dr. Fox is here with us tonight is he in the audience welcome sir I hope he lectures as well for you thank you all for coming it shows your commitment as citizens of a world community and as citizens of the human community welcome thank you welcome my name is ven and in German and I'm the chairman of the Institute on world affairs it has been my pleasure to serve a second year as the chairman of this very fine Institute I also serve as director of arts lectures and entertainment for government of the student body and this evening I'd like to introduce to you John Kenneth Galbraith the economist but before I introduce dr. Galbraith I'm reminded of a quotation from John Maynard Keynes end of laissez-faire and I think it's important for all of us this evening to keep this in mind as our university as our County as our state and as our nation and certainly as our world faces transition the important thing for government is not to do things which individuals are doing already and to do them a little better or a little worse but to do the things which at present are not done at all it is such a great honor for me to introduce to you the Greater Iowa State University community John Kenneth Galbraith he's the Paul M Warburg professor of economics emeritus at Harvard University a Canadian by birth he studied at the Ontario Agricultural College the University of California the University of Cambridge he's taught at California Princeton and the University of Cambridge as well as for the most of his life at Harvard professor Galbraith was deputy administrator of the office of Price Administration in the early 1940s and was principal organizer of the wartime system of price control which he headed until 1943 he held several public offices in the State Department and elsewhere and was awarded the Medal of Freedom by President Truman he's a former editor of Fortune magazine Galbraith served on the campaign staff of Adlai Stevenson in 1952 and 1956 and was the chairman of the Economic Advisory Committee of the Democratic Advisory Council from 1956 to 1960 an early supporter of John F Kennedy he served on Kennedy's 1960 convention staff and was US ambassador to India from 1961 to 1963 from its earliest days he was active in opposition to our Vietnam involvement and had a leading role in the 1968 convention as a floor manager for Eugene McCarthy whose name helped put in nomination calibrates most recent books are a history of economics economics in perspective capitalism communism and coexistence which echo exult over his third not other well remembered titles include the anatomy of power his memoir a life in our times the affluent society and ambassador's journal the new industrial state and the age of uncertainty all of which have been widely translated and most recently the culture of contentment he is well known to readers of The New Yorker the New York Times The Book Review book world and other journals for his articles and book reviews ladies and gentlemen it gives me pleasure to introduce to you John Kenneth Galbraith what I must tell you my pleasure mr. president my distinguished introducer my friends my pleasure and being back at Iowa State University back here in Ames I've been many times before has always been my pride but I do not hold any degree in economics all they only in agricultural economics and for some years first on the 60 years I've been the only member of the Harvard faculty with the first degree in animal husbandry it also must must say my very great pleasure in these engineering arrangements difficult as they have been for my predecessors here in office I've told many times fast off perhaps once before my many visits to aims of an occasion in the early 1960s the large gathering in Washington when I was hailed into the president presence of general DeGaulle who said to me professor what is your philosophy of your vast height I had written this in a memoir there's nothing so legitimate as plagiarizing yourself so I said well well my president we taller men are taller than anybody else they're far more closely watched therefore our behavior is better I didn't I didn't interject there Menken's HL Mencken's famous definition of a conscience they're sure you all know that a conscience is that inner voice that tells you someone might be looking our behavior is better there forward more therefore I'd be on beat we're more closely watched therefore our behavior is better and therefore the world instinctively trust Paul men General de Gaulle said menifee and then in a great rolling voice which I cannot imitate he said but there is one thing you have forgotten the small men must be treated without mercy I'm particularly pleased that the opportunity you've given me to engulf indulgence some observations that I have been working on in these last weeks and months in which with the good judgment that I have always exercised I offer now to an Iowa audience knowing that that is a more sympathetic audience and a more intelligent audience that I would expect to find anywhere else with this Republic there comes a time when one should step back and seek to envisage the larger world scene in concentrating on detail we on occasion lose sight of the larger picture when is now we live in a time of marked economic change even of recent and massive revolution this larger view is especially to be soft and I know it here mr. president that one of the lectures that I gave in very recent times in the autumn of 1989 was at the University of Leipzig just before these changes took place and I would like to extend as far as possible the view that it was that lecture in the autumn of 1989 which business which was decisive in the great events I'm alone in eastern Germany but in Eastern Europe that followed as was Gaul the modern economic world is divided into three parts there is their first the poor lands of the planet those variously characterized as the underdeveloped countries the undeveloped countries more optimistically as the developing countries and with intense economic neutrality now called the South there are next the relatively advanced countries which are now emerging to a market system from comprehensive socialism or more commonly called communism these are the countries of Eastern Europe's once hoped once behind the now vanished Iron Curtain and the republics of the former Soviet Union and finally the thirdly there are the fortunate lands those that have escaped from the poverty and stagnation that once without much change affected all of the people of the world until the mere two centuries back this is the world of Western Europe the United States and the english-speaking countries in general and of Japan Taiwan and the other developing lands of the Pacific Basin in looking at the larger world and the present problems I would like to think I do so tonight without the constraints of ideology this is not an age of great intellectual systems those who so believe are in escape from saw those who say there are socialist principles capitalist principles free enterprise principles communist principles I think are all in some measure escaping the pragmatic reality of the time that this is the age of not of systems but of intelligent pragmatism the economic problem must be examined and judged not for its conformance to theoretical pattern not first conformance to theological pattern but as for but for us efficacy at the particular time and in the particular situation and in the particular context I urge against the frequent receipt retreat from thought to a presumed controlling doctrine the poor lands which I mentioned first are the most difficult case they were left with the most when colonization gave way to independence they were left with the most demanding tough task of our time that was putting in place an efficient effective non corrupt and stable democratic government this being the essential basis of economic development than human contentment nothing I repeat nothing so destroys all hope for economic well-being as corrupt and or totalitarian governments concerned not with economic and social progress with with consolidating and holding their own authority this one notes can be the burden of governments us diffic ostensibly of the left and also of the right and nothing do so destroys both people in progress as internal conflict one cites here the sad experience that much of Africa and as I say of the other ex colonial lands there was a major mistake in the process of decolonization which we are still very reluctant to recognize time and effort should have been committed perhaps under the auspices of the new United Nations to helping one's former colonial governments to a stable democratic alternative only those countries that have had a stable Democratic alternative to colonial rule Costa Rica Singapore India a very few others have had a reliable rate of economic develop and an otherwise tolerable existence I screwed here this special case of China which combines a curious liberalisation of economic life with a course a continuing authoritarian rule there was another a second error far too much emphasis was placed on industrial investments and development in the early days of the colonial league of decolonization far too little emphasis was placed on human investment commonly called education once it was understood an educated populace is the first requirement for economic progress the institution which I speak here tonight and the schools of this state where once assumed to be the very the prime elements of economic development that essential fact was forgotten instead impressive steel mills large hydroelectric dams glistening Airport ports were too often placed amidst ignorant people I have previously he made the point in this world there is no literate population that is poor and there is no illiterate population that is anything but poor thirdly something which I cannot admit to mention here at Ames there was also in much African develop attempts at development and elsewhere a very grave mishandling of the most essential industry of those countries namely food production agriculture this was sacrificed in a great minute in a number of countries to many countries to urban concerns in the worst cases prices were fixed and kept low as a favored fit as a favor as a presumed favor to the urban masses to the urban proletariat this was ruinous to all it was an error more than incidentally the two countries India and after a bad start China avoided and this in turn accounts for the fact that these countries which once were suffering from a grave shortage of food now are self-sufficient if we are to talk effectively about economic development now and in the years to come there must be much more emphasis on political stability on human investment and as the third batter a sensible agricultural policy these we must recognize are the prime requisites of progress in the worst cases of internal disorder and cruelty we must also have a new an internationally sanctioned procedure for the suspension of sovereignty whereas recently for long years in Lebanon Mozambique Ethiopia now disastrously in Somalia there there must be effective action effective international action were arrests human cruelty and slaughter there must be a United Nations mandate for taking control of countries that cannot protect their own people govern themselves I say this must be a United Nations mandate is not something which I urged the United States to undertake or to see as it's special responsibility but no longer can domestic conflict and the associated starvation and death be protected by sovereign Authority sovereignty must be suspended until peace is restored we take for granted that there should not is not sovereign Authority for one country to attack another we must now come to the conclusion that there must not be sovereign Authority for one country the people of one country to attack and destroy the other people of that country I repeat this is something where there has already been some tentative steps taken by the UN it is not for us to do ourselves but it is for us to urge on the larger international community hurting now to Eastern Europe and the republics of the former Soviet Union one sees here and intensely difficult and in some respects the most dangerous transition in economic history the movement as I said at the outset from comprehensive socialism to the market economy this will also stand is one of the most misguided of recent social actions it has for the moment come close come close to an exchange of a poorly working our economic system for no economic system at all in the early days of this change some I was one pleaded for gradualism I met at that time with Eastern European economist to make this case there should be it should have been a considered release of economic life to the market first should have come services where there is no problem in returning people who do perform services to the market economy and less urgent consumers Goods and as possible although there are some difficulties here agriculture then larger industry when effective efficient alternatives to the price controlled and command economy have been brought in to be including the requisite financial and marketing structures instead there was a sudden plunge toward what was thought to be the capitalist miracle it has turned out to be no miracle instead there has come a period of grave economic deprivation and hardship those who urged this course of action including the International Monetary Fund and I regret to say not a few ideologically motivated scholars from our own country could not have had a better design for giving capitalism and democracy a bad name and from the United States as also from Japan and other countries economic help has not been forthcoming in anything like adequate amounts help that might have eased the transition has not been made available future generations will marvel at how financial assistance which might have saved democracy and saved the market system was committed instead to no longer needed defense expenditures no one should have doubt as to the danger it is the capitalism and democracy having been seen as synonymous with grave hardship there will be escaped into some new form of totalitarian rule I would hear I would hear urge help to the former Soviet republics just as promptly as it can be made as well as to the Eastern European countries and I would urge that this be not conditional on specified economic reforms here above all the case for pragmatic accommodation to changing circumstance perhaps indeed the opportunity has been lost but I hope not the forces containing democracy the forces urging democracy and independence of expression and action they are not slight in our time the modern economy whether it be that of the Soviet Union or the former countries of the Soviet Union or the United States brings into existence as a very practical matter a very large number of people professors students notably students lawyers journalists artists managers self-confessed statesmen all of whom are very difficult to keep quiet that is the general nature of the advanced economic society so that democracy is not something that is entirely a matter of right it is in substantial measure of matter of necessity but I would still like to see once this election is over a strong move to shift some of our no longer relevant defense expenditure in a substantial amount to the easing of the transition of those who once justified it in the Cold War I turn now to the fortunate countries of the world including our own we too have economic problems they are central to any consistent and compelling discussion let us also have them in perspective admittedly they are small compared with those I have just a number ated but there are two that are extremely extremely under discussion and one of them is very important the smaller problem seemingly urgent in Europe but if worldwide concern involves capital movements currency relationships and the marked instability in the foreign exchanges this I think will be recalled one day as a relatively minor blip in the larger economic history of our time it owes much to the belief that where money is involved the issues must be decisively important and that the individuals associated with money are both economically powerful and decisively intelligent in fact monetary matters can be derivative and in themselves passive the great financial operator and sometimes financial genius is often merely a mentally adaptable passenger on the great ship of larger circumstance the circumstance is that monetary goals stable exchange rates stable prices can be achieved only after there is an alignment of internal social and economic policies including in particular fiscal budget and employment policy as long as between countries these things are individually variant and is now often radically so stable exchange rates are quite impossible in Europe a common unit of exchange is superficially a very attractive idea that it can come before a unification of the internal controlling circumstances the internal controlling policies will stand as one of the major economic miscalculations of the age the broad trust toward closer economic relations and to economic unification well I think continued modern capitalism with its massive trade extensive capital movements which I've mentioned and with its transnational corporation enterprises the transnational corporation is by its nature and in comparison with one-time feudal in peasant agriculture our early industrialism it is an international system from it comes the basic trust to a civilized internationalism and it comes thus despite the fact that regressive nationalism regressive nationalism I repeat still Accords a greatly welcome voice to the politically articulate and the mentally bereft as this great economic trust the sees there could one day be the unity and domestic policies that will allow stability in exchanges and in Europe and perhaps even between Europe and the United States and North America a common medium of exchange the result of the premature effort the consequences of which have been so recently evident in Europe will stand as the minor historical blip that I have already mentioned I've always had my mind diverted when I come to the point in the lecture when I need a glass of water and I think how civilized you are here in Ames and giving water without a chunk of ice two or three years ago several years ago I was lecturing in nearby Indiana all Indiana Illinois Iowa are all closely associated and they New England mind I assured the platform of the southern states than who de março I mentioned who halfway through but decided that he lengthy discourse call for a glass of water and it came up tinkling with ice and he said reacted with great anger and said don't you all know that ice water is very bad for the vocal cords the audience at their silent sharing with me I think the real pleasure in knowing what ice water might do the far more serious matter of prison concern is the current depression in economic activity this is now persisted here in the United States for two long years and some months and while we must accept our role as it's to the origin such depression is now a painful fact in the other english-speaking countries and is a threat to the industrially developed world as a whole we must as an exercise in common everyday caution and a good sense except in the larger world the proposition that Keynes articulated the modern economy does not necessarily find its equilibrium at high performance and full employment it is perfectly possible for it to enter upon and stabilize itself at an underemployment under performance equilibrium after two long years this possibility must at least at a minimum be recognized and we must at a minimum be cautious in the continued use of the word recession which him carries in it the implication that there must be a prompt or eventual recovery perhaps we are more accurate and I would urge we are if we speak of depressed conditions as having an enduring tendency in any case we should be very much concerned with the flood of metaphors that we now see describing the economic situation I ran into one a few months ago the so-called chamber pop theory of the recession steep downside flat bottom steep upside and this metaphor held that we were at the bottom of a chamber pot recession very inelegant among how this day there must also be reflection as to the causes of this continuing depressed situation they notably here in the united states include the speculative spurge the 1980s the mergers and acquisitions leveraged buyout mania that left corporations with the heavy burden of debt and what under which they now struggle and which they service at the expense of new investment there was also the real property boom and collapse with its counterpart in other countries including Canada and notably in Japan from this real estate boom especially here in the United States came weakness in the banking system that negated central bank efforts to expand bank borrowing and associated economic activity we're now seeing as often before that monetary policy while it can have an effect on inflation is nearly useless against deflation and depression one cites here another metaphor which happens to be highly relevant there is a great difference between pulling on a string and shoving on a string finally in the years of the 1980s there was a major transfer of income from the poor to the rich the upper 1% of American families captured 70 percent of the growth in average family income in the years from nineteen 77 to 1988 the share going to the poor in those years actually declined income going to the rich is not reliably spent it may be saved and at a time of investment uncertainty savings in the caution of that time are not reliably spent by investment a reasonably equitable distribution of income we all I think recognized to be socially just and a contributions of political tranquillity a reasonably equitable distribution of income is also economically functional as I speak just two days to go we are waiting the outcome of the election the next administration of whatever party and I don't in any way to evening this evening declare my own preference you will never guess that the next administration of whatever party has only one major choice mr. policy that is either to allow the underemployment equilibrium to stand with the Baron hope the time will sell more secure or it can move aggressively to reduce unemployment and renew economic growth for the latter result there is only one sure course of action that is to set aside for the time concern as to the deficit in the federal budget and by government action and expenditure puts people to work our roads our bridges schools railroads urban transport airports and our housing stock particularly our housing stock in the great cities are all in poor and sometimes even dangerous condition and the more immediately our states and localities are spreading fear and hardship by curtailing essential services including notably for education and welfare support to the poor the only way to break the depressive equilibrium that does not depend on theoretical formulation although admittedly it would take time is to move strongly on these needs there is much talk in these days for example of tax reduction or a reduction in the capital gains tax these have only a theoretical relationship to job creation what we must have is must do is forgo theory and have policies that we know are creative of employment I might make a personal note here I was two weeks ago I was down making this argument to this House Budget Committee I once calculated that I had in my life spent just under a year before congressional committees and well is in one of the unfair situations of life before a congressional committee because everybody is at you and you have no real comeback except very occasionally the opportunity suggests it's allows itself and that day it did I spoke against reduction of the the febrile discussion of tax reduction congressman McMillan of Charlotte North Carolina otherwise quite nice man I guess when it came his turn to question me as ranking Republican but I know a political consultant will comment there said to me professor Galbraith you used the word febrile I meant feverish tax reduction fevers concerned for tax reduction or advocacy he said you use the word febrile and I've had that look my staff look that up in the dictionary and I don't think it means what you say it means and that was one of those rare occasions when you get your own back I said well congressman I must tell you that I'm an advisor on English usage to the American Heritage Dictionary and if that dictionary is wrong I'll have it corrected in the next week the policy I've just cited will increase the public deficit and the public debt in the short run attitudes which have now the policy I've decided will increase the public deficit and the public debt in the short run attitudes which have now reached almost paranoid proportions these attitudes must for the time being Nord when prosperity returns the deficit must be reduced among the heirs of the 1980s was the running of a large such deficit when a supporting effect to the economy was not needed all countries must have a discipline if I have a disciplined will to adjust taxation and expenditure to the prevailing economic condition for now we're ready to repeat the deficit must be accepted the economic activity and employment so provided is the only sure design for dealing with the depressive equilibrium that does not depend as I said on fragile theory it goes directly to the deeper we needed result but we can we must be willing we must have the maturity in the discipline when good times return to stop the deficit financing and reduce the public debt we can currently really realize some gain in employment from a shift of the expenditure from military to civilian employment employment expenditure and exotic weaponry which is now devoid of any justification it's a very inefficient way of creating jobs I would also urge as has one or two of the candidates and increase the taxes on the barrier bridge this does not seriously reduce aggregate demand and has it benign social effect nothing so enhances social tranquility as the knowledge that the very rich are suffering a little bit too maybe this is the fugitive thought the resulting effort to maintain after-tax income by the very affluent could have an affirmative incentive effect struggling to maintain the affluence standard of living by struggling to increase after-tax income certainly this is probable and erstwhile at the erstwhile supply-side argument that the rich need the incentive effect of more income nothing I must say really disturbs me so much is the notion that has developed in the 1980s that the rich needed the spur of more income and the four needed the spur of their own poverty the show was a shocking argument comparable to the one that goes back to my Canadian background also very agricultural in its implication the theory that if you feed the horse enough folks something will pass through to the road for the sparrows in the longer run the course of action I have just outlined will increase public wealth there there are both the things built and the expansive effects on economic output in general the Japanese have recently announced such a program in the order of 70 billions of annual expenditure of expenditure in Canada conservative governments have left it let it be known that it is thinking along these lines in any case I come back to the main point there is nothing else of equally certain effect in the great sweep of modern capitalism there is a further course which we experienced which was which is inevitable and which we sometimes despair that is the movement of older established labor intensive industries from the old countries to the new this has been history for a hundred and fifty years and more it has seen the movement of such industry old and new from Britain to France into Germany an arm to the United States and then on to Japan and to the Pacific Basin countries and this movement continues on to Thailand Malaysia and with potentially perhaps the greatest of consequence to India the basis of this movement is clear mass industry is constantly in pursuit of a fresh and eager labor force eagerly in escape from the impressions of primitive peasant agriculture that industry that is moving on from the older stolid bureaucracies to the leaner fresher often more innovative managed of the new countries I think one saw that whole contrast with particular clarity when President Bush took the leaders of the heads of our three automobile company companies on that rather unfortunate tour of Japan probably the most disastrous jingle journey since the Fourth Crusade this movement is a fixed source of concern and even despair in the older countries there can be no question that for some it is a cause of dislocation and hardship it must be recognized however that it is one of the great and inescapable international features of modern capitalism it does not leave the older countries including our own bereft there are the higher ranges of Technology the higher requirements of good design the higher requirements of entertainment and of Education these all remain with the older countries they all remain with us it is important however that this great process be understood and not be the occasion for ill-considered preventive or protective action but to see that there is a broad international division of labor in the modern economic world and let us accept that this is inescapable a current and practical manifestation of this division of labor we presently see in the discussion of NAFTA the North American Free Trade Agreement I think this should go forward we will lose some lower wage industrial employment to Mexico the gains and more pleasant and sophisticated employments will be compensation and overall the effects will not be all that noticeable the effects of international trade negotiations are much discussed there is always great excitement ex-post there is very often very little change post facto it is the broad controlling current that counts that current sleeps the advanced economic world into ever closer Association I think it is that we should welcome always in a lecture of this sort one should at some point say in conclusion that gives the audience the hope however fragile that it is coming to an end in conclusion when I say again how delighted I am to be here in Ames to be back with old friends and on the whole how pleased I am with you as an audience if I were speaking back in Cambridge by this time an hour having passed people would be looking at their watches giving every indication of wanting to be someplace else you have shown every indication of the tension I love you very much I didn't get the question so you'll repeat it oh yes but you mean as as regards trait changes absolutely if there are alternative job opportunities it's relatively easy if there are no alternative job opportunities is this a really great hardship so the very center of the policy of minimize of any policy that minimizes hardship is to have a high level of employment and a high range of job opportunities that's absolutely central there's specific things can be done job retraining things of that sort but those are not other and they're not unimportant but they're not they're small that's compared with having a good work in the economy what you can do that is much easier than what you can do in the kind of depressed circumstances I've been talking about you'll come up here and repeat the question over the microphone your ears are better than mine the person the percentage change of the tax increase that would seem reasonably bite on the part of the prospective Clinton administration am I to assume that your question well Clinton is talking about 31 to 36 percent but no one else is talking about anything else I'll go along with that but I think I put a little farther as I said somebody proposes that for over two hundred thousand dollars I think anybody that has that income should have his after-tax income reduced enough so that he has really to work hard to maintain his standard of living do you think the family farm is still viable well here I have a terrible confession to make which I only the most sterling of honesty and my character forces me to admit that through a long life I've never awakened in the morning without a certain feeling of satisfaction that I don't have to follow a reluctant team or a noisy tractor across the barren field all day I you see before you the prime example of a refugee from the family farm whether other people have a more durable character or not I simply don't know but they that there is an escape well let me go back and say we talk of compulsion we talk of oppression probably the greatest form of oppression is that which an individual can inflict on himself on a farm but there should be an escape from that should not surprise this on the other hand I share with you the hope that there will be durable souls who will still continue to provide us with food what no problem Jason thank you for your theory of atonement dr. Galbraith and the second part of the question is Jason now that's a very distinguished argument that belongs to of two friends of mine long since passed professor Edward Chamberlain at Harvard and professor John Robinson of Cambridge authors respectively it's the theory of monopolistic competition the theory of imperfect the theory of imperfect competition perfect competition first one was the I guess just monopolistic competition they were older contemporaries of mine but to the best of my knowledge I was know made no contribution whatever beyond reading the books now I have to ask you to repeat that question when Governor Clinton refers to high wage jobs what kind of jobs is he referring to and what strategy does he have to attain these jobs is that the question I assume that he is talking about his hope for jobs in the area of higher technology the arts entertainment the area of areas of employment which are based on skill high skills education and competence in the sciences engineering in the arts I don't know that he has been terribly specific on that the if I'm not why maybe you should get in touch with him directly I hasten to say that I am NOT a spokesman for either presidential candidate I I look upon the election with an ax purely detached and scientific can the deficit be paid by simply printing money and we'll get you a question when the government borrows an invoice from the Federal Reserve from the bank's there is some expansion than in the money's in the hand to hand money supply but that is dependent on other factors you don't go in the modern economy you don't go out and go to work for any money nobody should suggest I would urge anybody to do that what what is the future relationship of Japan in the United States well I I don't regard this as necessarily an unhappy one we don't look always on the favorable side of development one of the federal economic change but one of the favorable elements of economic change is the internationalization of economic life and the reduction in consequence of the political tensions I I would hope that in the next 50 years is in the 50 years since World War two almost we would have have continued to have a close and friendly economic association I think that that is I've been much in Japan I think that is the wish of the Japanese too and I think this comes not because we're more tolerant or better than in the past but because it is in part a no growth but the economic relationship hard for somebody who was employed in Tennessee and Toyota to be strongly anti Japanese of course we have one more question you have to understand that a lecture is essentially a totalitarian exercise we have we have some questions afterwards to give a slightly fraudulent aspect into my two more questions allow me to rephrase your question perhaps what you're really saying is in the light of the transition of the world economy and the rise of the Pacific Rim where these countries are by and large not democratic Republic's how do we how do we explain the growth of these economies is that what you're really saying or how do we explain the rise of these economies am I so what you're really asking for is a general explanation of the relationship between the social structure and the economy dr. Galbraith well as repaired that question is a very good one but I think in the original form it was good to they I go back to something I said in the lecture that we think of we think of democracy as a human right and it certainly is but it also is in substantial measure a cause of economic development because it brings the effort and participation of the largest possible number of people and it is also the result of economic development as I indicated in my lecture because democracy because economic development brings into existence simply more people than can be kept quiet this is so that I see a very close association and the countries of the Pacific Rim South Korea Taiwan Singapore Hong Kong none of them qualifies as a perfect democracy not even South Korea but they all have been moving in that direction very strongly you all you go to any one of them was no great sense that you're moving into a an authoritarian state and the movement in that direction in Malaysia and Thailand as they industrialized as to say so I cited a certain measure of economic determination here there is a strong association between economic development and certainly stable democracy your question is I believe in global economic well it's a very large question but I must say that I'm very good one I do not see any I'm not committed to the notion of political or economic cycles I think to accept that there is movement to democracy and then movement away that there is a movement to economic well-being and then and then an automatic movement back is a confession of weakness that I'm not prepared to me and I've spent a certain number of part of my life in India I'm going there week after next I think that India is one of the moving forces on the on the world economic scene that has been held back part by for government policy and an excessive control of the Indian economic structure there was an India a deep feeling of fear that they were exchanging American British colonialism for that of American corporations I think that fear is now diminished they have seen that we in this world we have much more to fear this is a point I urge you all to remember this is a world in which we have fun or the fear from corporate and confidence than we have from corporate power and that that is something that is being realized increasingly in India