On Galbraith – what could have been

I am reading the biography of John Kenneth Galbraith, the Canadian-born economist that went on to be one of the best known economists of the 20th century.

Anyway, early on in his career he was given the job of siting a large number of manufacturing plants for the build up to World War II. These were massive manufacturing plants employing as many as 20,000 people. Check it out:

The Army-Navy Munitions Board sent [Galbraith] a list of four dozen proposed plant sites, …. in the industrial Northeast, Wilmington, Pittsburgh and Cleveland.

Galbraith quickly formulated their guidelines into a memorandum. Henceforth, plant locations would, wherever possible, favor the South and other regions with high unemployment.

He had a specific policy to the “decentralization of industry”.

His New Deal background and thinking had made him predisposed to using government funding and activity to stimulate economic development outside of the already developed industrial heartland.

Not so in Canada , we are told by Donald Savoie in his recent book, where during the war CD Howe had virtually the entire production of the Canadian military complex set up in Ontario.

So, in the US, a Canadian-born economist was using government spending to drive economic development out of the industrial heartland and stimulate regional development while in Canada, our CD Howe was centralizing government military spending in Ontario.

What a peach. Thanks a bunch. Tell you what, in the 21st century, you can keep the modern CD Howe’s – we’ll take the JK Galbraiths.

As for Galbraith, in a previous blog I lifted a passage from Savoie:

Savoie recounts how John Kenneth Galbraith, one of the most admired economists of the 20th century, visited New Brunswick and expressed curiousity as to why economic development did not occur in the Maritime provinces in the 20th century. “The region, he pointed out, is strategically located between western Europe and New England and the eastern seaboard of the United States. How could it be, he wondered, that economic activity simply jumped over the Maritimes, to the eastern seaboard of the United States and on to the edges of western Europe and to Central Canada? Why could the region not take advantage of its strategic geographical location?

Oh, Johnny boy, Johnny boy, it’s taken decades but me thinks we are beginning to figure this.

With a little luck and a gazillion more blogs, we’ll start electing politicians that ‘get it’ too.