Worldly Wise:2. After a lifetime on the left, J. K. Galbraith is still loud in his championship of liberalism and just as strident about his own abilities. Tim Cornwell reports

Most economists, whatever their political persuasion, could only dream of being John Kenneth Galbraith. The scion of Scottish settlers in Southern Ontario, he shrugged off the dry formulae and figures of his calling to become a kind of 1960s glamour puss who toured India with Jackie Onassis. Adviser to presidents, best-selling author, writer of letters from J. K. G to J. F. K, he revels in his own enormous ego. "Galbraith's First Law," says an embroidered pillow, lodged on a bookshelf in his Cambridge, Massachusetts sitting room: "modesty is a vastly overrated virtue."

Forty years after the publication of his hugely influential book, The Affluent Society, and nearly 20 years after he completed his memoirs, the press still come calling for the wit and vim of J. K. Galbraith. Curiously,it is often the television teams, whose vapid coverage of the news he has long affected to despise. Most recently, the 89-year-old economist and author of The Great Crash, among a slew of other books, was fielding inquiries on the fall-out from the Asian stock slump.

For the record, Galbraith declines to make any prediction for the economic future - because only the wrong ones are remembered, he says. He contents himself with warning that the United States is undergoing "extreme stock market speculation", with far more mutual funds than there is "intelligence to manage them". "Cycles of euphoria and recession are a feature of capitalism, and have been for hundreds of years. We should be fully aware of the dangers of economic difficulties that may not be confined to Malaysia."

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In 1958 the publication of The Affluent Society secured Galbraith's place as one of the titans of American economics, albeit from an unapologetically liberal perspective. On its publication, he recalls in his memoirs, it was received by Time magazine as "a well-written but vague essay with the air of worried dinner-table conversation". Other reviews were ecstatic. Galbraith still regards the general theme of that book as the key legacy of his work: "that in a modern country, particularly the US,we have a higher standard of private consumption than we do of public goods," he says. "We have clean houses and dirty streets. We have expensive televisions and poor schools. Recreation and education, particularly, on which the poor depend, are much more meagre than that available in the private sector to the rich."

The disparity reflects "the inescapable tendency of countries, as they grow rich, to become more negligent of the poor," he continues. "The poor become a voting minority, and the rich and the affluent come increasingly to attribute their good fortune to the superior character of intelligence ... the consequence of that is the terrible situation in our cities, the disgrace to our country."

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J. K. Galbraith, it appears, is no longer required reading in the mass market. My local bookstore carries neither The Affluent Society nor The New Industrial State. The staff were faintly embarrassed by their absence, but the truth is his approach is no longer terribly fashionable. As he entered his retirement, as an "abiding liberal", the era of Big Government,of sanctioned state spending on public services, was declared over, first by Republican president Ronald Reagan, then by the Democrats, most recently by new Labour. "Liberal", in America, became a dirty word for Republicans and an embarrassment to centrist Democrats. The Democrats' fear of being seen as "soft", a fear Galbraith denounced in military and foreign policy in the 1960s, now appears to extend to social and economic policy.

Since the early 1980s the affluent have seemed, if anything, less inclined to help the poor than ever, and the gap between rich and poor in America has grown considerably.

But what has survived the Reagan and Thatcher era, Galbraith insists, is the "liberal conscience". Liberalism has a "plausible social concern", he says, while the right digs for "implausible justification" for policies that reward corporations and the rich. "The liberals still have a strong voice, a strong intellectual voice, and there's still a reflection of the liberal conscience." Conservatives have struggled to invent the notion that social progress is the result of rewarding the affluent, he says, with "so-called supply side economics. The basic Reagan doctrine was that if you feed the horse enough oats, some will pass through the road to the sparrows."

Galbraith himself is a piece of living history, and has every right to be looking back. He no longer keeps count of the number of books he has published (about 30) or the honorary degrees he has collected (about 50). The economist in him seems to take second place to the writer. "I get nervously disturbed unless I do some writing every day," he says. "And my wife (Kitty, they have been married 60 years) would find me intolerable if I didn't." His latest book is a collection of his letters to President John F. Kennedy. His next, provisionally titled Name Dropping, describes the political figures he encountered in a career that first took him to Washington in the early days of Roosevelt's administration.

Galbraith's higher education began at the Ontario Agriculture College (now the University of Guelph), where he graduated with distinction in 1931. From a foundation in agricultural economics, he went on to study or teach at Berkeley, Cambridge, Princeton and Harvard. His books include a best-selling novel (The Triumph - a poke a the State Department and anti-communism) and range in subject from a memoir of his Canadian upbringing to a history of Indian painting.

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Having worked briefly for the Roosevelt administration, in the war years Galbraith headed the US office of wartime price control, after which he participated in the Strategic Bombing Survey. His findings that strategic air attacks did not shorten the course of the war so outraged the US military that its friends at Harvard delayed his promotion to professor. He worked for the State Department as administrator of economic affairs in occupied Europe, as an editor of Fortune magazine, and as adviser and speech writer to Democratic candidates and Presidents Kennedy and Lyndon Johnson. Kennedy appointed him ambassador to India. Johnson would provide Galbraith with one of his favourite stories. "Did y'ever think, Ken, that making a speech on ee-conomics," the president asked him, "is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else."

His newest book, Letters To Kennedy, is about as far removed from the familiar tell-all biographies or nutty assassination conspiracies as it is possible to go. In one letter, Ambassador Galbraith teasingly informs the president that Indian leader Jawaharlal Nehru was "deeply in love" with Jackie Kennedy, and "has a picture of himself with J.B.K displayed all by itself in the main entrance hall of his house". Otherwise they are scandal-free. They begin in 1959, with Galbraith, riding high on the reception for The Affluent Society, emerging as an adviser on economics to then Senator Kennedy. They end in November 1963, a week before Kennedy's assassination.

The letters confirm Galbraith's skill as a writer, his abiding contempt for the State Department as an institution and Richard Nixon as a politician, and, in particular, his prescient opposition to American military involvement in Vietnam, even before it had begun. "It is those of us who have worked in the political vineyard and who have committed our hearts most strongly to the political fortunes of the New Frontier who worry most about its bright promise being sunk under the rice fields," he wrote in a telegram on Vietnam policy in 1961. "Keep up the threshold against the commitment of American combat forces," he urged in 1962. "I wonder if those who talk of a ten-year war really know what they are saying in terms of American attitudes."

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Galbraith has been celebrated by himself, and others, for an ego as large as his intellect - an "unduly well-developed view of my own intellectual excellence", as he calls it in his memoirs. "Along with people who like to hear themselves talk," he warns President-elect Kennedy, at the close of a longish epistle in November 1960, "there are, unquestionably, some who are even more inordinately attracted by their own composition. I may be entitled to a gold star in both categories."

For observers of American politics, there is one particular curiosity: Galbraith advising Kennedy to keep the radical right in perspective. The militia and white supremacist groups that inspired Oklahoma City bomber Timothy McVeigh are often presented as a modern American phenomenon; in fact, they were predated by other militant tendencies. There are always about three million Americans, Galbraith observes, ready to follow the demagogue of the moment against law, decency, the Constitution, the Supreme Court, compassion and the rule of reason. "There's always in the American polity a margin just large enough to create concern for their violent heroics - but not enough ever to threaten the system."

America's alliance with Britain, Galbraith told Kennedy, in a 1962 memorandum, "is one of the few substantial and workable alliances in the world". He worried then that it would be lost if Britain got "roped in" to the continent, and urged Kennedy, if he could not oppose Britain joining the EEC, to at least "not shove unnecessarily". In the 1960s and 1970s, he says, "there was in my generation a concern about what was happening with British politics, almost equal to the concern with American politics." British politicians, mostly on the left, were in weekly contact with their US counterparts.

Despite Britain's ever closer bonds with Europe, he says, the alliance has held. "You have a common language, a common literature, a close reciprocal understanding of politics and the political life, and, perhaps most important, a diminishing sense of national identity. There was a time when the British Empire was seen as unique, and the American Republic was seen as unique, and all this has diminished."

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Letters to Kennedy, Harvard University Press.