John Kenneth Galbraith :: essays research papers

                pot Kenneth GalbraithThe Canadian-born, Berkeley-trained John Kenneth Galbraith has been considered by some as the "Last American Institutionalist". As a result, Galbraith has remained something of a renegade in modern economics - and his change state has been nothing if not provocative. In the 1950s, he presented economics with two tracts that needled the mainstream single developing a theory of price control (which arose out of his wartime commence in the Office of Price Administration) which he argued for as an anti-inflation policy (1952) the second, American Capitalism (1952), which argued that American post-war success arose not out of "getting the prices dependable" in an orthodox sense, but rather of "getting the prices wrong" and allowing industrial concentration to develop. It is a normalula for growth because it enables technical innovation which exponent otherwise n ot been done. However, it can only be regarded as fortunate provided there is a "countervailing power" against potential abuse in the form of trade unions, supplier and consumer organizations and government regulation. Many have since argued the formula for due east Asian success later in the century was based scarce on this combination of oligopolistic power and "countervailing" institutions. It was his smallish 1958 book, The Affluent Society, that earned Galbraith his pop reknown and professional emnity. Although the thesis was not astoundingly new - having long been argued by Veblen, Mitchell and buck - his attack on the myth of "consumer sovereignty" went against the cornerstone of mainstream economics and, in many ways, the culturally hegemonic "American way of life". His New industrial State (1967) expanded on Galbraiths theory of the firm, arguing that the orthodox theories of the abruptly competitive firm fell far short in analytic powe r. Firms, Galbraith claimed, were oligopolistic, autonomous institutions vying for market share (and not profit maximization) which wrested power absent from owners (entrepreneurs/shareholders), regulators and consumers via conventional means (e.g. vertical integration, advertising, product differentiation) and unconventional ones (e.g. bureaucratization, capture of political favor), etc. Naturally, these were themes already well-espoused in the old American Institutionalist literature, but in the 1960s, they had been apparently forgotten in economics. The issue of "political capture" by firms was expanded upon in his 1973 Economics and the Public Purpose. But new themes were added - notably, that of frequent education, the political process and stressing the provision of public goods. Although often not acknowledging it explicitly, many economists have since pursued themes raised by Galbraith.