barriomulas.com - On "The New Industrial State"

John Kenneth Galbraith does not fail to amaze me once again with his book "The New Industrial State". After reading "The Affluent Society", Galbraith quickly became one of my favorite economists. Rarely have I seen someone critical of the capitalist system without considering themselves socialist. Many of those critical of capitalist economics are too easily swept away by utopianism and Marxist views. Galbraith maintains independence from the traditional ideological left.

Galbraith starts his critique of the capitalist system by stating "Eighty years ago the corporation was still confined to those industries... where, it seemed, production had to be on a large scale. Now it also sells groceries, mill grain, publishes newspapers and provides public entertainment." I'm not sure how well such a critique applies to modern society, for many companies seek to outsource and subcontract much of their services. In fact, some of our most renown corporations don't sell any product at all. They simply purchase pre-manufactured goods set to their customization, brand it, and market it.

Another observation concerns ownership. Most corporations these days operate independently from the actual owners. While previous business entities were owned by a small number of wealthy families, today's corporation is characterized by a board of directors and an independent management. "The men who now run the large corporations own no appreciable share of the enterprise," notes Galbraith.

Proponents of free market capitalism state that the "sovereign consumer who, through the market, issues the instructions that bend the productive mechanism to his ultimate will." While this statement has a sort of democratic essence about it, I feel it necessary to note that some are more consumer than others. Economists such as Ludwig Von Mises hail the democratic potential of consumerism equating a dollar spend with a vote casted, some of us have the wealth to "vote" thousands of more times than others.

Also, the word "sovereign consumer" is quite contradictory. Consumers have been subjected to manipulative marketing, guerrilla advertising, addictive additives, and profound market research meant to hijack the psychological. Aside from such perpendicular controls, producers and marketers can also obligate consumers to purchase goods at their outlets by utilizing aggressive tactics to squeeze out competitors. There are many areas of the industrial world where citizens have no choice but to purchase fast food or shop at a mega department store to tend to their needs.