He was a Keynesian in some ways, but an Institutionalist at heart.
So when he makes these criticisms he's coming from a theoretical background that is in a lot of ways more similar to Hayek than to Keynes and the monetarists. He is looking at trends in corporate power and behavior as the explanation for these issues. And he is looking at the Keynesians as people who are talking about different stuff.
So my guess for how this came about is that he's not an insider chastising his fellow Keynesians for naiveté. He's an outsider in a dying theoretical tradition taking a potshot. And the RESTAT editors rightfully called B.S. (or he realized it was B.S. before it got too far along).
Tuesday, August 20, 2013
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J.K. Galbraith was really part of the American Old Institutionalist tradition, while J.M. Keynes was a student of Alfred Marshall. Perhaps this might be mean, but it's not quite surprising that J.K. Galbraith would make a remark that isn't quite in line with J.M. Keynes's formulations. (IIRC, the Old Institutionalists were heavily opposed to any use of mathematics in economics full-stop, while the Cambridge School under Alfred Marshall wasn't opposed to the use of mathematics per se.)
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