barriomulas.com - Capitalism and Planned Economics

Followers of the 'free world' have always been critical of planned economies. Galbraith unearths the planned nature of modern capitalism, equating the bureaucratic appendages of modern corporations with government agencies.

First there is the issue of technology. "The needs of the consumer must be anticipated - by months of by years." "If men use picks and shovels," states Galbraith, "they can be called out on the same morning that the decision is taken to do the job.... When specifications are raised to modern superhighway standards and heavy machinery is introduced, the market no longer works as well. Engineers, draftsmen, drainage experts and those who arrange the elimination of trees, grass, parkland, streams and other environmental amenities may not be readily available..." Increased technology leads to an increase in the need to plan.

A second issue is price controls. "Competitors of General Motors," for sample "are especially unlikely to initiate price reductions that might provoke further and retributive price-cutting." Oil companies, though enjoying exceptionally high windfalls wouldn't dare initiate a price battle. There is a sort of silent agreement between all parties in the form of an informal price control. Free market proponents claim that companies would not be allowed to artificially maintain high prices because a new addition to the industry could easily step in, offer lower priced goods, and obligate the larger players to regulate the prices. This is not absolutely true for large corporations have the ability to suffer certain losses in the name of outlasting the competition. "Everybody knows that the survivor of such a contest would not be the aggressor but General Motors. Thus do size and small numbers of competitors lead to market regulation."

"The modern large Western corporation and the modern apparatus of socialist planning are variant accommodations o the same need," notes Galbraith. Galbraith even notes that "the organization of the Soviet firm is far simpler than that of its American counterpart."