JK Galbraith is the grandfather of economists: he has been there for 70 years. His new book The Economics of Innocent Fraud gathers together some important themes. In a slim volume (about two hours read) he claims that the Federal Reserve Bank in setting American interest rates has never had any effect on the economy, and that in a careful study of the economic impact of bombing Germany during the second world war he and his colleagues concluded, in a report suppressed by the Pentagon, that there was no impact at all.
The innocent fraud of the title is perpetrated by corporate managers who claim that they are controlled by shareholders and by politicians who distinguish between the public and private sector. The questions raised by the book concern just how innocent these people are.