Top-down, central planning-oriented economist John Kenneth Galbraith, the very definition of the latter half of Virginia Postrel's terminology of dynamists and stasists, passed away on Saturday at age 97, UPI reports:

CAMBRIDGE, Apr. 29 (UPI) — John Kenneth Galbraith, whose popular books made him one of the most famous economists in the United States, died Saturday at 97.

Galbraith's son confirmed his father's death at a hospital in Cambridge, Massa., where he lived, The New York Times reported.

In addition to his years as a Harvard professor and his books, Galbraith served as an adviser to Democratic political candidates and presidents -- notably Adlai Stevenson and John F. Kennedy. Kennedy named him ambassador to India.

In books like "The Affluent Society" and "The New Industrial State," Galbraith argued that large corporations -- because of their size and ability to plan -- were not governed by the free market.

Galbraith was born on a farm in Dunwich Township, Ontario, and studied at Ontario Agricultural College before transferring to the University of Toronto. He received a doctorate from the University of California at Berkeley in 1934 and was hired by Harvard the same year as an instructor.

After a brief stint at Princeton, Galbraith spent the World War II years and immediate post-war period in a series of government jobs and a stretch at Fortune Magazine. He returned to Harvard in 1949.

A breezy 1999 Reason review of one of Galbraith's more recent books provides a pretty good capsule summary of his life and worldview:

There's a right way to be wrong and a wrong way to be wrong. Some supporters of big, intrusive government manage to be witty, erudite, and tolerant of opposing views. If we must have statists, they're the ones to have. Alas, too many others are crabby, smug, and dogmatic--the kind who'd serve as the bad guys in an Ayn Rand novel.

John Kenneth Galbraith is of the first type, a sterling model of how to err in style. At the age of 91, he can look back on a rewarding life as a university professor, political adviser, ambassador to India, and debating partner of such conservatives as William F. Buckley Jr. Though he's seldom been right, he's always been a gentleman.

* * *

Although Galbraith is wrong in the right way, he is still wrong. He acknowledges JFK's health problems and extramarital affairs but dismisses them as irrelevant to his presidency. Many historians would disagree. Before his 1961 summit with Khrushchev, JFK took medications that may have impaired his judgment. And his personal misbehavior constituted a wild security risk, exposing him to tacit blackmail by J. Edgar Hoover. He may have been just as charming as Galbraith describes, but charm is no excuse for recklessness.

There is a quaint frozen-in-time quality to Galbraith's thought--sort of Austin Powers without the bad teeth and mojo. Looking at Great Society welfare programs, he maintains that the solution to poverty is simply to give money to poor people, without necessarily expecting them to do work. In the decades since LBJ's War on Poverty, all but the staunchest statists have surrendered to reality and abandoned such notions. Oddly, Galbraith vents inordinate anger about America's effort to defeat Soviet communism in the Cold War. Austin--I mean, Mr. Galbraith...we won.

This past February, former Federal Reserve Board economist Arnold Kling called Galbraith "the quintessential statist":

If we were literally stuck on 1968, then Galbraith's The New Industrial State would still be on the best-seller list. In that work, Galbraith correctly pointed out that bureaucratic organizations are averse to risk and uncertainty. However, nearly every other major thesis in his book was wrong. Yet his view of the economy, like much of the conventional wisdom of 1968, has remained embedded in the folk beliefs of the Left.

For Galbraith, the concept of an entrepreneur was a quaint myth. As he saw it, all of the important economic activity takes place within giant corporations. Their challenge is to manage large capital investments in complex projects, like a nuclear power plant or a new passenger jet. This in turn requires a thick bureaucracy, which Galbraith dubbed the "technostructure."

Propositions that followed from this thesis include:

-- The United States is not really a market economy, but a planned economy.
-- Wages and prices are artificial, so that the government is right to intervene to control them.
-- Because we are a planned economy, the ideology of free enterprise serves only to "starve" the public sector, which could invest resources more wisely.
-- Consumers are passively manipulated by the "technostructure" into serving the needs of big corporations, rather than the other way around.
-- The classical economic concept of competitive struggle is an anachronism, because firms control their environment and are immune to competitive pressure.

The Internet Revival

The death of the entrepreneur was greatly exaggerated. Over the past two decades, the strength of entrepreneurialism has been unmistakable. The economy has been much more dynamic than Galbraith would have predicted. Many of the industrial giants, which in Galbraith's view were self-perpetuating, have fallen. The steel companies, chemical firms, and aerospace firms of yesteryear have shrunk, with most of them merged out of existence. On the other hand, companies like Microsoft, Intel, and Wal-Mart, which were not part of the economic landscape in 1968, are now more important than the old industrial base.

More important, the Internet has brought about the revival of the entrepreneur. Mixing metaphors with abandon, the Net has fostered a Free Agent Nation, in which an Army of Davids representing The Long Tail is operating Under the Radar.

Galbraith will be wildly praised in the coming weeks by an ideologically similar legacy media, seemingly equally resistant to change. In terms of his long life and center stage career, he certainly deserves it.

And not coincidentally, as outmoded as Galbraith's actual theories were, long before he passed away, they will be taught widely in the academy for decades to come. As Alvin Toffler notes in Revolutionary Wealth, the rate of change moves at radically different speeds these days: for entrepreneurs--and business in general--change moves much faster than Galbraith could have ever predicted. For government, traditional media and schools, change comes at a much, much slower pace--sometimes, seemingly, never at all.

Update: Orrin Judd dubs Galbraith the Anti-Jane Jacobs.

Another Update: Pajamas has more reaction from the Blogosphere