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 15: Galbraith and Institutionalist Analysis: An Assessment Based on the US Military–Industrial System Transformations in the 1990s

Luc Mampaey and Claude Serfati

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

Extract

Luc Mampaey and Claude Serfati 1. INTRODUCTION John Kenneth Galbraith’s interest in defence issues has remained remarkably constant throughout his life, and covers three different realms. As a decisive figure in American economic policy, he was in charge of the operational control of prices during the Second World War, and in the closing months of the Second World War, as a head of the US Strategic Bombing Survey, he developed a critique of the air campaign against Germany. This critique was based on two economic principles, the validity of which was demonstrated in Vietnam, Kosovo, and twice in recent years in Iraq (Galbraith 2004). As a concerned citizen, he was one of the founding trustees of Economists Against the Arms Race (ECAAR),1 with the goal of contributing to drastic cuts in military budgets. As an academic, he studied the Department of Defense ‘as the most highly developed planning system in the planning system’ (1979, p. 321). This chapter will focus on this last aspect of Galbraith’s activity. It deals with the contribution of John Kenneth Galbraith’s analysis to the understanding of the institutional shaping and economic role of the US Military–Industrial System (MIS), traditionally called the ‘Complex’ since Eisenhower’s 1961 farewell speech. The structure of the chapter is as follows. Galbraithian institutionalism makes a valuable contribution to an understanding of the growing role of managers in relation to technological development, and the close relation between the public and private sectors, in particular the powerful tendency of the Complex...

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