New Ideas in the Tradition of Galbraith
New Directions in Modern Economics series
Edited by Blandine Laperche, James K. Galbraith and Dimitri Uzunidis
Chapter 5: Is Capitalism Still Galbraithian?
Guy Caire 1. INTRODUCTION Let us take a definition of capitalism which could be regarded as consensual: A capitalist system requires (1) that the means of production are the object of individual appropriation; (2) that the regulation of the economy is decentralized, i.e. the equilibrium between production and consumption is not established once and for all by planned decisions, but progressively, on the market; (3) that employers and employees are segregated so that some have only their ability to work – their labour force – while the others own the means of production, hence the relationship called wage-earning; (4) that the predominant motive is the making of profits; (5) that, since resources are not allocated in accordance with a plan, prices fluctuate on each partial market, and even throughout the economy, which in the language of polemics is called capitalist anarchy. As regulation is not centralized, product prices inevitably fluctuate on the market according to supply and demand. It is understandable that the general level of prices should fluctuate on the market according to excessive or insufficient global demand and that, accordingly, crises should occur from time to time (on a regular or non regular basis). (Aron 1962, pp. 111–12) However, one of the unquestionable characteristics of the capitalist system is that it is constantly changing. Marx1 had already noted that; he distinguished three successive historical stages in the development of the capitalist production process: ‘(a) simple cooperation, where workers are gathered together in a workshop in which division of labour...
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