The New Industrial State

Rating:
Summary: The Industrial State circa 1966
Review: Galbraith wrote this book at a time when the corporate world was dominated by large and largely stable corporations, GM, Standard Oil, AT&T, etc. At the time it was arguably plausible that profit was not the main motivation of such large corporations--and judging by their poor management and highly regulated status, it was even more than plausible. It wasn't until MCI, for instance, that AT&T decided to make economic use of all the fiber optic cables it had laid in the ground. Galbraith's basic argument is that profit, in this "new industrial state," is the motivation of neither the corporation nor the individual. For the corporation and its leaders, the primary motivation is to maintain autonomy, to keep the shareholders off their backs, to maintain a minimum level of profitability while pursuing other goals--larger boardrooms, growing sales, promotions, technical vitruosity, etc. The entrepreneur of classical economics is replaced by the "technostructure," which is unmoored from the profit motive and exists more or less in isolation from base economic motives. Likewise for the corporate worker bee, who is guided by more intangible psychological benefits the closer he approaches to the upper reaches of management.

Beneath Galbraith's argument is the assumption that the US and the Soviet are converging, that the motivations of the corporate manager are in degree and not in substance different from that of the Soviet apparatchik. Neither are motivated by profit, and both serve the goals of the "technostructure," over which they exercise no control.

Such a book could not be written today, and for a number of reasons. First, nobody can write as well as Galbraith. Second, Galbraith could never pass himself off as an economist in today's academy. Third, Galbraith performs almost no actual research--it is social theory straight from god's mouth to Galbraith's pen. That said, it has its own charm, especially Galbraith's subtly restrained contempt for what is now called "consumer society."