New Ideas in the Tradition of Galbraith
New Directions in Modern Economics series
Edited by Blandine Laperche, James K. Galbraith and Dimitri Uzunidis
Chapter 4: The Power of Large Companies
Marlyse Pouchol 1. INTRODUCTION * In his major works: The New Industrial State (NIS) (1967) followed by Economics and the Public Purpose (E&PP) (1973), Galbraith undertakes an ‘emancipation of [the] belief[s]’ (E&PP, p. 223) conveyed by ‘neoclassical economics’. He suggests that neoclassical economics might consist of an economic science that serves the views of large industrial and financial groups. These groups he classifies as: ‘the planning sector’, or more often ‘the planning system’, because of the organizational requirements to which they are subjected. He consequently does not hesitate to ask such questions as: ‘Is it not possible that economics also serves the purposes of organisation?’ (E&PP, p. 4). A more recent book: The Culture of Contentment (CC) (1992) underlines this collusion even more clearly: ‘Finally, the great enterprise – the large modern corporation – is extensively under the protection of conventional economic education’ (CC, p. 76). Consequently, it is not surprising that the relations between Galbraith and the most prominent economists have been tense. For Solow, notably, who was very critical of The New Industrial State when it was published, ‘serious’ economists cannot be content with a literary approach that isolates the phenomenon of large companies to exaggerate their power. Such an approach is not scientific and one should consider that ‘Professor Galbraith is essentially a moralist’ (quoted by Frobert 2003, p. 74). The controversy between Galbraith and Solow thus brings into play the status of the economist as much as the object of economics as a...
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