Quotes from John Kenneth Galbraith

There is nothing in economic life so willfully misunderstood as the great speculative episode. T

In practice, the individual or individuals at the top of these institutions are often there because, as happens regularly in great organizations, theirs was mentally the most predictable and, in consequence, bureaucratically the least inimical of the contending talent.

Let the following be one of the unfailing rules by which the individual investor and, needless to say, the pension and other institutional-fund manager are guided: there is the possibility, even the likelihood, of self-approving and extravagantly error-prone behavior on the part of those closely associated with money. Let that also be the continuing lesson of this essay.

Clerks in downtown hotels were said to be asking guests whether they wished the room for sleeping or jumping. Two men jumped hand-in-hand from a high window in the Ritz. They had a joint account.

The consequences of successful action seemed almost as terrible as the consequences of inaction, and they could be more horrible for those who took the action. A bubble can easily be punctured. But to incise it with a needle so that it subsides gradually is a task of no small delicacy.

for the young Louis XV: Philippe II, Duc d'Orléans, was a man who combined a negligible intellect with deeply committed self-indulgence.

The first is the extreme brevity of the financial memory. In consequence, financial disaster is quickly forgotten.

In the modern economy, a slightly bizarre fact, production is now more necessary for the employment it provides than for the goods and services it supplies.

The members of the functional and socially mobilized under class must, in some very real way, be seen as the architects of their own fate. If not, they could be, however marginally, on the conscience of the comfortable. There could be a disturbing feeling, however fleeting, of unease, even guilt.

The rule will often be here reiterated: financial genius is before the fall.

C'é infatti un numero considerevole di persone di cultura convinte che qualsiasi sforzo riuscito per rendere le idee vive, intellegibili e interessanti sia una manifestazione di scarso rigore professionale. E' questa la fortezza dentro la quale regolarmente si rifugiano.

And in unraveling the complex we should always be careful not to overlook the obvious. John Kenneth Galbraith - The Affluent Society.

It is possible to see here again the constants in these matters. Associated with the wealth of the Banque Royale, Law was a genius—intelligence, as ever, derived from association with money. When the wealth dissolved and disappeared, he was a fugitive mercilessly reviled.

Under capitalism, man exploits man. Under communism, it's just the opposite.

La qualifica più comune di chi fa previsioni in campo economico consiste non già nel sapere, ma nel non sapere di non sapere. Il suo grande vantaggio è che tutte le previsioni, giusta o sbagliate che siano, vengono rapidamente dimenticate.

I can measure the motions of bodies," Sir Isaac Newton once observed, "but I cannot measure human folly." Nor could he do so as regards his own. He was to lose

The crash in 1929, however, did have one therapeutic effect: it, somewhat exceptionally, lingered in the financial memory. For the next quarter of a century securities markets were generally orderly and dull. Although this mood lasted longer than usual, financial history was not at an end. The commitment to Schumpeter's mania was soon to be reasserted.

We all agree that pessimism is a mark of superior intellect.

Moreover, regulatory bodies, like the people who comprise them, have a marked life cycle. In youth they are vigorous, aggressive, evangelistic, and even intolerant. Later they mellow, and in old age—after a matter of ten or fifteen years—they become, with some exceptions, either an arm of the industry they are regulating or senile.

Individuals were dangerously captured by belief in their own financial acumen and intelligence and conveyed this error to others.

Leverage was magnificently available

In fact, the Federal Reserve was helpless only because it wanted to be. Had it been determined to do something, it could for example have asked Congress for authority to halt trading on margin by granting the Board the power to set margin requirements. Margins were not low in 1929; a residue of caution had caused most brokers to require customers to put up in cash 45 to 50 per cent of the value of the stocks they were buying. However, this was all the cash numerous of their customers had.

People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich.

Prices driven up by the expectation that they would go up, the expectation realized by the resulting purchases. Then the inevitable reversal of these expectations because of some seemingly damaging event or development or perhaps merely because the supply of intellectually vulnerable buyers was exhausted.