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Leontief Prize

Program from GDAE Leontief Prize Event - March 27, 2000

"Economics and Development in the Twenty-first Century"
Remarks by Kenneth Galbraith on the occasion of his receipt of the Leontief Prize
at Tufts University, on March 27, 2000

The Global Development And Environment Institute presented the Leontief Prize for Advancing the Frontiers of Economic Thought to John Kenneth Galbraith and Amartya Sen. Katherine Galbraith accepted the prize on behalf of her husband, who was not able to be present, and Bill Moomaw, of the Fletcher School, read remarks prepared by Professor Galbraith.

Dear Friends - I am properly appreciative of the miracles of modern medicine. They have already extended my life beyond the few weeks predicted in the absence of heart surgery. But I continue to be largely immobilized by a couple of bad subsequent falls. You will be aware that I have farther to fall than most members of this community.

I regret not being able to receive in person an award named for Wassily Leontief, my old friend and admired colleague, and one of the great figures in world economics. We may never see his like again.

And I particularly miss joining Amartya Sen and you for this discussion of the most important social problem of our time. That is inequality, nationally and in the larger world, and the reasons underlying it. These are rooted partly in economics but even more in the deeper deficiencies of human nature and behavior.

The growing inequality in the United States and in some other fortunate countries is the product of improved economic well-being and the emphasis we place on it as the principal measure of human achievement. As incomes increase and more enjoy them, attention is increasingly concentrated on the well-being of those so favored. Looking at their own situation and improvement, an increasing number are able to conclude that the poverty-stricken, given the better motivation, could do as well. Or they find their minds sited on the enjoyment of their own well-being, and from this two things follow. The political strength of the poor and on behalf of services and income they greatly need gives way to the political strength of the fortunate middle class, and economists, or at least one branch of the profession, comes in with approval of the increased well-being and with arguments against what might help the poor. This particularly prevents any steps toward mitigating the increased inequality, particularly by taxation. Tax initiatives for the affluent are held by one articulate branch of the economics profession to be very important for the general well-being. An argument that I have sometimes made that high marginal rates on the personal income tax inspire effort to maintain after-tax income has never been well received. Better is the response to what I have called the 'horse and sparrow' theory of income distribution and its taxation. If you feed a horse enough oats, some will pass through to the road for the sparrows.

More seriously, perhaps the overall effect of increased well-being is diminished concern for the poor.

The second controlling aspect of the poverty problem is the ability to turn a blind eye to the personal misfortune and disaster of others. We agree that hunger, lack of shelter, lack of medical care and the other deprivations of the poor would be equally painful if suffered by oneself, but from this thought there is a uniform escape. Millions in Africa, for example, are suffering from such deprivation. We cannot doubt that these suffer, as human beings similarly situated, we would suffer. But we have a wonderful capacity to close our minds to this. The pleasant and affluent life allows us to dismiss the execrable suffering of those not so favored.

This we do both locally and comprehensively on the global scale. Such are some of the thoughts that I would convey, as I am sure, indeed, others will, were I with you today. Again, my regret that that is not possible, and my strong encouragement to the efforts of those so favored.

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