Galbraith: The Affluent Society & Other Writings, 1952-1967: American Capitalism / The Great Crash, 1929 / The Affluent Society / The New Industrial State

Incisive and original, John Kenneth Galbraith wrote with an eloquence that burst the conventions of his discipline and won a readership none of his fellow economists could match. This Library of America volume, the first devoted to economics, gathers four of his key early works, the books that established him as one of the leading public intellectuals of the last century. In American Capitalism , Galbraith exposes with great panache the myth of American free-market competition. The idea that an impersonal market sets prices and wages, and maintains balance between supply and demand, remained so vital in American economic thought, Galbraith argued, because oligopolistic American businessmen never acknowledged their collective power. Also overlooked was the way that groups such as unions and regulatory agencies react to large oligopolies by exerting countervailing power—a concept that was the book’s lasting contribution. The Great Crash, 1929 offers a gripping account of the most legendary (and thus misunderstood) financial collapse in American history, as well as an inquiry into why it led to sustained depression. Galbraith posits five reasons: unusually high income inequality; a bad, overleveraged corporate structure; an unsound banking system; unbalanced foreign trade; and, finally, “the poor state of economic intelligence.” His account is a trenchant analysis of the 1929 crisis and a cautionary tale of ignorance and hubris among stock-market players; not surprisingly, the book was again a bestseller in the wake of the 2008 economic collapse. In The Affluent Society , the book that introduced the phrase “the conventional wisdom” into the American lexicon, Galbraith takes on a shibboleth of free-market conservatives and Keynesian liberals alike: the paramount importance of production. For Galbraith, the American mania for production continued even in an era of unprecedented affluence, when the basic needs of all but an impoverished minority had easily been met. Thus the creation of new and spurious needs through advertising—leading to skyrocketing consumer debt, and eventually a private sector that is glutted at the expense of a starved public sector. The New Industrial State stands as the most developed exposition of Galbraith’s major themes. Examining the giant postwar corporations, Galbraith argued that the “technostructure” necessary for such vast organizations—comprising specialists in operations, marketing, and R&D—is primarily concerned with reducing risk, not with maximizing profits; it perpetuates stability through “the planning system.” The book concludes with a prescient analysis of the “educational and scientific estate,” which prefigures the “information economy” that has emerged since the book was published. LIBRARY OF AMERICA is an independent nonprofit cultural organization founded in 1979 to preserve our nation’s literary heritage by publishing, and keeping permanently in print, America’s best and most significant writing. The Library of America series includes more than 300 volumes to date, authoritative editions that average 1,000 pages in length, feature cloth covers, sewn bindings, and ribbon markers, and are printed on premium acid-free paper that will last for centuries. Cover Title Copyright AMERICAN CAPITALISM: The Concept of Countervailing Power Dedication Contents Introduction to the Transaction Edition CHAPTER I: The Insecurity of Illusion CHAPTER II: The Foundations of the Faith CHAPTER III: The Problem of Power CHAPTER IV: The Abandonment of the Model CHAPTER V: The Ogre of Economic Power CHAPTER VI: The Depression Psychosis CHAPTER VII: The Economics of Technical Development CHAPTER VIII: The Unseemly Economics of Opulence CHAPTER IX: The Theory of Countervailing Power CHAPTER X: Countervatling Power and the State CHAPTER XI: The Case of Agriculture CHAPTER XII: The Role of Decentralized Decision CHAPTER XIII: The Role of Centralized Decision CHAPTER XIV: The Problem of Restraint THE GREATS CRASH, 1929 Dedication CONTENTS INTRODUCTION: The View from the Nineties A Note on Sources CHAPTER I: “Vision and Boundless Hope and Optimism” CHAPTER II: Something Should Be Done? CHAPTER III: In Goldman, Sachs We Trust CHAPTER IV: The Twilight of Illusion CHAPTER V: The Crash CHAPTER VI: Things Become More Serious CHAPTER VII: Aftermath I CHAPTER VIII: Aftermath II CHAPTER IX: Cause and Consequence THE AFFLUENT SOCIETY Dedication CONCENTS Introduction to the Fortieth Anniversary Edition 1 The Affluent Society 2 The Concept of the Conventional Wisdom 3 Economics and the Tradition of Despair 4 The Uncertain Reassurance 5 The American Mood 6 The Marxian Pall 7 Inequality 8 Economic Security 9 The Paramount Position of Production 10 The Imperatives of Consumer Demand 11 The Dependence Effect 12 The Vested Interest in Output 13 The Bill Collector Cometh 14 Inflation 15 The Monetary Illusion 16 Production and Price Stability 17 The Theory of Social Balance 18 The Investment Balance 19 The Transition 20 The Divorce of Production from Security 21 The Redress of Balance 22 The Position of Poverty 23 Labor, Leisure and the New Class 24 On Security and Survival Afterword THE NEW INDUSTRIAL STATE Dedication Acknowledgments CONTENTS Foreword to the Third Edition I Change and the Planning System II The Imperatives of Technology III The Nature of Industrial Planning IV Planning and the Supply of Capital V Capital and Power VI The Technostructure VIl The Corporation VIII The Entrepreneur and the Technostructure IX A Digression on the Firm under Socialism X The Approved Contradiction XI The General Theory of Motivation XII Motivation in Perspective XIII Motivation and the Technostructure XIV The Principle of Consistency XV The Goals of the Planning System XVI Prices in the Planning System XVII Prices in the Planning System (Continued) XVIII The Management of Specific Demand XIX The Revised Sequence XX The Regulation of Aggregate Demand XXI The Nature of Employment and Unemployment XXII The Control of the Wage-Price Spiral XXIII The Planning System and the Union I XXIV The Planning System and the Union II: The Mimisterial Union XXV The Educational and Scientific Estate XXVI The Planning System and the State I XXVII The Planning System and the State II XXVIII A Further Summary XXIX The Planning System and the Arms Race XXX The Further Dimensions XXXI The Planning Lacunae XXXII Of Toil XXXIII Education and Emancipation XXXIV The Political Lead XXXV The Future of the Planning System An Addendum on Economic Method and the Nature of Social Argument APPENDIX From The Affluent Society, first edition 1958 The Illusion of National Security CHRONOLOGY & NOTE ON THE TEXTS & NOTES & INDEX Chronology Note on the Texts Notes Index Incisive and original, John Kenneth Galbraith wrote with an eloquence that burst the conventions of his discipline and won a readership none of his fellow economists could match. This Library of America volume, the first devoted to economics, gathers four of his key early works, the books that established him as one of the leading public intellectuals of the last century. In American Capitalism, Galbraith exposes with great panache the myth of American free-market competition. The idea that an impersonal market sets prices and wages, and maintains balance between supply and demand, remained so vital in American economic thought, Galbraith argued, because oligopolistic American businessmen never acknowledged their collective power. Also overlooked was the way that groups such as unions and regulatory agencies react to large oligopolies by exerting countervailing powera concept that was the books lasting contribution. The Great Crash, 1929 offers a gripping account of the most legendary (and thus misunderstood) financial collapse in American history, as well as an inquiry into why it led to sustained depression. Galbraith posits five reasons: unusually high income inequality; a bad, overleveraged corporate structure; an unsound banking system; unbalanced foreign trade; and, finally, the poor state of economic intelligence. His account is a trenchant analysis of the 1929 crisis and a cautionary tale of ignorance and hubris among stock-market players; not surprisingly, the book was again a bestseller in the wake of the 2008 economic collapse. In The Affluent Society , the book that introduced the phrase the conventional wisdom into the American lexicon, Galbraith takes on a shibboleth of free-market conservatives and Keynesian liberals alike: the paramount importance of production. For Galbraith, the American mania for production continued even in an era of unprecedented affluence, when the basic needs of all but an impoverished minority had easily been met. Thus the creation of new and spurious needs through advertisingleading to skyrocketing consumer debt, and eventually a private sector that is glutted at the expense of a starved public sector. The New Industrial State stands as the most developed exposition of Galbraiths major themes. Examining the giant postwar corporations, Galbraith argued that the technostructure necessary for such vast organizationscomprising specialists in operations, marketing, and Research & Developmentis primarily concerned with reducing risk, not with maximizing profits; it perpetuates stability through the planning system. The book concludes with a prescient analysis of the educational and scientific estate, which prefigures the information economy that has emerged since the book was published.