James K Galbraith: Gov’ts Must Serve Citizens, Not Corporations and the Rich

The Predator State author argues that industrial policy requires technical capacity to steer investment toward public needs.

Governments need independent scientific and engineering expertise to ensure public investment serves citizens rather than corporate interests, economist James K. Galbraith says, warning that industrial policy cannot succeed through funding announcements alone.

In an interview with Energi Media, the author of The Predator State argued that rebuilding public institutions requires restoring their ability to evaluate projects, guide contractors and pursue objectives beyond financial returns.

“The state has to have its independent ability,” Galbraith said, pointing to engineering, science and evaluation as essential capabilities.

His warning has implications for Canadian debates about energy infrastructure, housing and industrial development, where governments must decide how to direct investment and assess proposals from private companies.

Public expertise matters

Galbraith cited NASA’s relationship with private contractors during the Apollo programme as an example of government maintaining the expertise needed to steer industry toward a defined public objective.

He contrasted that approach with what he described as decades of declining technical capacity inside American government. Reviving industrial policy without addressing that institutional erosion, he argued, leaves policymakers dependent on outside interests.

“The state can’t just appoint a committee of financiers to decide who gets the CHIPS Act subsidies,” he said. “That’ll just get you what the financiers think is right.”

The distinction extends his argument in The Predator State, published in 2008. The book examined how free market rhetoric could accompany government decisions structured to benefit politically connected private interests.

Galbraith said prescription drug coverage under the George W. Bush administration illustrated how a programme could provide social benefits while also rewarding pharmaceutical companies.

Housing and public purpose

Asked about social housing, Galbraith supported bringing some activities into the public domain and administering them to meet public needs.

“You need to take some things into the public domain and administer them for public purpose,” he said.

He linked housing affordability to younger people’s ability to establish households and raise children, arguing that inadequate access to housing, education and health care shapes family decisions.

The interview also examined China’s planning institutions. Galbraith highlighted technical expertise, infrastructure development and the role of provincial and municipal authorities, arguing that planning can coexist with substantial decentralization and private enterprise.

He described China’s investment in electricity infrastructure and transport as part of a strategy for economic stability, while acknowledging its continued heavy use of coal.

Disagreement over Canadian priorities

Galbraith questioned the resources devoted to finance and military spending, arguing that more should support infrastructure and social services. Interviewer Markham Hislop challenged his interpretation of Canada’s response to American pressure.

Galbraith was cautious when asked to assess Prime Minister Mark Carney, saying he had not studied him enough to offer a harsh judgment.

His prescription begins with economic education. Governments need people equipped to study history, compare institutions and question inherited assumptions before they can build alternatives.

For Canada, the interview poses a practical test for industrial strategy: whether governments retain the knowledge and authority to direct investment toward public needs, and whether citizens can hold them accountable for the results.