THEORY: High Noon for Galbraith

According to conventional economic theory, when unemployment is high and factories are running at less than full tilt, prices are not supposed to shoot upward. Increasingly, however, they haveĀ—as indeed they are doing now. That anomaly poses a formidable challenge to economists, and it is the paradox to which John Kenneth Galbraith addresses himself in his latest book: Money: Whence It Came, Where It Went (Houghton Mifflin, $10). His conclusion: "Corporate and union power" is the heavy; it "can defeat efforts to combine high employment with stable prices" regardless of the state...

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