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Synopsis :

Part I (00:35:59)
In a speech on Inflation and the Modern Economic Order, economist and writer John Kenneth Galbraith notes that inflation is one of the causes of food and other shortages. He says that international monetary stability depends on the stability of prices within the trading countries. In the past, countries suffered from inflation but succeeded in putting an end to it. Today there is a deeper problem which involves the special position of the United States. Price stability in the US is important and the purchasing power of the dollar has to be stable. Previously, we hoped for income levels in which  people needed to work less hard and have more leisure time. There were  concerns about the unfair treatment of Third World countries in trading terms. The poorest countries sold goods cheaply and bought at a high price. There were also hopes for a classless society. We have made progress on all these matters. But to our surprise, new problems have arisen like the decline of the work ethic. The speaker feels that restoration of price stability is important in all parts of the world. He outlines a list of policies to check inflation. Industrial countries should reduce their reliance on the Central Bank's monetary policy which has failed to arrest inflation. Countries should recognise that there is no hope of reducing the consumption patterns of people of average income or less. There has to be positive curtailment amongst the rich. There must be equitable restraint on trade union and white collar incomes. It is also important to control prices. There must be a balancing mechanism in fiscal policy and all modern economies must have a means to deal with specific micro-economic situations.

Part 2 (00:33:57)
In a speech on Inflation and the Modern Economic Order, economist and writer John Kenneth Galbraith notes that the modern industrial economy needs human energy and intelligence in order to work properly. He then answers questions from the floor. These include questions on the need for better distribution of income between the average and above average in society, the development of new sources of energy, concerns about the risks associated with nuclear reactors and measures to stabilise prices of oil. Other questions revolve around the need for coordination between government departments with the proliferation of government agencies, the reluctance to invest and produce during a recession, whether inflation can be controlled without changes in the political system, the feasibility of restoring some form of international gold standard, the monetary  discipline that can come with such a  restoration and the difficulty of using gold as a reserve asset. Professor Galbraith is not optimistic about the persuasive power of economists to change policies as people are slow to respond to economists' recommendations. He has very little hope that economists can persuade a country like the United States about policies. However he is optimistic about the persuasive power of circumstances and is encouraged that in the absence of altenatives, circumstances will force politicians to go along the lines suggested by the economists. Circumstances will carry the persuasive messages which economists fail to carry.