James Galbraith, son of John Kenneth Galbraith, makes the following remarks in the course of a commentary on Chris Hayes’ article on heterodox economics:

Did John Kenneth Galbraith spend “his whole life as an economic dissident”? Absolutely not. My father's early Institutionalism was the mainstream at the time. The child of philosophical pragmatism and scientific Darwinism, Institutionalism linked Veblen, Commons at Wisconsin and Ayres in Texas; it gave us the New Deal and, in particular, Social Security. It was allied to a German-influenced historical economics, which controlled the American Economic Association. The AEA, now a free-trade sect, was formed in the 1890s largely to oppose the free-trade doctrines of 19th century British economics.

Galbraith’s remarks contradict the following statement by Paul Krugman:

Until John Maynard Keynes published The General Theory of Employment, Interest, and Money in 1936, economics—at least in the English-speaking world—was completely dominated by free-market orthodoxy. Heresies would occasionally pop up, but they were always suppressed. Classical economics, wrote Keynes in 1936, ‘conquered England as completely as the Holy Inquisition conquered Spain.’ And classical economics said that the answer to almost all problems was to let the forces of supply and demand do their job.

Who's right? By my reading, Galbraith is by far the more accurate historian of economic thought here. (I would only question his statement that Institutionalism was the American mainstream; I would instead say that it was in the American mainstream, but was not the only mainstream school of thought.) One of the chief architects of the New Deal was the Institutionalist economist Rexford G. Tugwell, a professor at Columbia University, hardly a marginalized or “suppressed” thinker.

I previously criticized Krugman’s statement here. My comments on the Hayes article on heterodox economics are here.