From James Q. Wilson’s Bureaucracy:
In the revised edition of his book, Galbraith responded to his many critics who argued that he had advanced no persuasive evidence that large corporations had insulated themselves from the market by controlling demand and prices. His response was to “stand on my argument — and appeal … to the evidence of the eye” (p. xv). That “evidence” consisted largely of the fact that corporations spend a lot of money on advertising. He does not trouble himself to ask what, if anything, corporations buy with that expenditure. By the late 1970s American auto manufacturers were buying a declining market share and lower profits. Perhaps if they had doubled their advertising budgets they could have purchased zero market share and bankruptcy.
Wilson rarely indulges in snark, which makes this footnote (p. 135) all the more entertaining — and powerful.
I wonder, though, if the decline of auto manufacturers may in part be blamed on their managers actually believing Galbraith when he said they could effectively control their market through their advertising and monopoly power. Galbraith was, after all, a highly respected member of FDR’s brain trust, a prolific writer, and a recipient of the Medal of Freedom. He was also, like Paul Ehrlich, an intellectual of the Left whose reputation was left unsullied by his failure to correctly predict future developments.
I wonder why there are no Galbraiths or Ehrlichs on the Right. No one on the Right quotes Gramm any more (though I’m not sure he was much quoted even before his predictions of the effects of deregulation on banking were proven so disastrously wrong in 2008.) I’m tempted to snarkily suggest that the reason the Right does not continue to idolize its intellectuals long after their predictions have proven wrong is because the Right has intellectuals to idolize who have actually gotten it right.