Table of Contents

Innovation, Evolution and Economic Change

Innovation, Evolution and Economic Change

New Ideas in the Tradition of Galbraith

New Directions in Modern Economics series

Edited by Blandine Laperche, James K. Galbraith and Dimitri Uzunidis

The book begins with a penetrating analysis of the main features of today’s capitalism and in particular the conflict between shareholders and managers. It moves on to focus on the consequences of globalization in the decision-making processes of large corporations and represents an important step in the development of a theory of fraud and corruption within corporations. In the final part, the authors address and explore the consequences of the domination of influential groups over major social and political decisions, on the blurred boundaries between the public and the private sectors and its consequences in the fields of technological regulation and the evolution of public services. In so doing, the authors question the meaning and power of democracy in today’s society.

Chapter 3: The End of Capitalism. J.K. Galbraith versus K. Marx and J.A. Schumpeter

Sophie Boutillier

Subjects: economics and finance, economic psychology, economics of innovation, history of economic thought, innovation and technology, economics of innovation

Extract

3. The end of capitalism: J.K. Galbraith versus K. Marx and J.A. Schumpeter Sophie Boutillier 1. INTRODUCTION Is capitalism mortal? Is capitalism soluble in bureaucracy? Will private property and free enterprise be questioned by the growth of big firms and the increasing weight of the public sector in the economies of the major industrialized countries? What is the nature of the links between state and big firms? How do the decisions made by big firms impact on the economic policies of the industrial nations? According to the patterns of historical materialism, is the socialist mode of production bound to take the place of the capitalist mode, the latter being overcome by its own inconsistencies and contradictions (downward trend of the rate of profit, and increase in the organic composition of capital)? The questions are clearly put, but the answers are not so clear. The problematics of the (probable?) end of capitalism (or the disappearance of investment opportunities), however, is not new. The British classical economists of the early nineteenth century had already questioned themselves about the disappearance of investment opportunities, a situation that eventually led to what in the 1960–70 decade was called the ‘zero growth’. Later, Marx analyses the destabilizing effects of the industrial revolution: rural depopulation, poverty of the working class, harsh competition between entrepreneurs, substitution of work by capital, etc. Is capitalism doomed? At the beginning of the twentieth century, Schumpeter follows in Marx’s footsteps. In his 1942 work Capitalism, Socialism and Democracy, he writes, without...

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