On reading Galbraith (The New Industrial State) I wonder what people on this list regard as 'capitalism'. Galbraith said that 'the ownership of production' is not where economic power lies anymore (ie not with the shareholders or single entrepreneurs). Rather, he asserted it was with the 'technostructure' of large corporations (management).
The large corporations can now decide what is produced to a large extent, and manipulate the 'market' through by changing the level of 'supply' for instance.
So what is 'capitalism' these days. . . and is the 'profit' motive supreme today, or do corporations simply look at 'growth' and 'power'?
See quotations from Galbraith below. Brenda Rosser
John Kenneth Galbraith wrote in 'The New Industrial State' (published 1967) page 12 "Power in the modern industrial society resides with the large producing organisations - the large corporations. So, far from being safely and resignedly subordinate to the market, as the neoclassical argument holds, they FIX PRICES and go on extensively to accommodate the consumer to THEIR needs. And they also obtain from the state such further action as is needed to ensure a benign and stable environment for their operations.
[THIS IS NOT THE DYNAMICS OF A MARKET ECONOMY. Note that corporations are busy determining WHAT we buy - such as fridges, cars etc with inbuilt obsolescence. Note also George W Bush kowtowing to the oil companies in his energy policy to the disadvantage of the development of solar and wind power etc]
page 116: "When the case of democratic socialism began to emerge in the closing decades of the [19th Century], the capitalist entrepreneur was still in authority. The firm was small enough and the state of technology simple enough so that he could wield substantial power of decision. The belief that his power could be exercised instead by a parliament or by its directly responsible agent was not an idle dream. Certainly a public body could supersede the capitalist's power to set prices and wages and therewith his power to exploit the consumer and the wage-earner.
The misfortune of democratic socialism has been the misfortune of the capitalist. when the latter could no longer control, democratic socialism was no longer an alternative. the technical complexity, planning and associated scale of operations that took power from the capitalist entrepreneur and lodged it with the technostructure, removed it also from the reach of social control.
In nearly all of the non-Communist world, socialism, meaning public ownership of industrial enterprises, is a spent slogan. Like promises to enforce the antitrust laws in the United States, it is no longer a political programme but an overture to nostalgia. The choice being between success without social control and social control without success, democratic socialism no longer seems worth the struggle. there have been few more important consequences of the take-over by the technostructure."
The 'technostructure' is defined as something distinct from the individual 'entrepreneur'. On page 85-86 Galbraith defines the technostructure as "consisting of 'management' ('a collective and imperfectly defined entity). In the large corporation it embraces chairman, president, those vice presidents with important staff or departmental responsibility, occupants of other major staff positions and, perhaps, division or department heads not included above."
Galbraith suggests that 'public ownership may be required in those industries such as housing and rail transport where an effective technostructure does not develop."
Galbraith says that to change the situation (to give power back to individual capitalists, and government bodies from this 'technostructure') would entail rejection of advanced technology itself (in many instances).
I heard on the radio the other day that 'small business' in Australia currently represents 40% of the economy in this country. So I guess there must be some sort of 'market' but perhaps many of those small businesses are servicing large corporations too (and not really having much of a say about the prices recieved for their goods and services...like that of the farmer who is at the mercy of the oligopoly supermarket chains etc).
Brenda Rosser
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