The Virtues of Their Defects and the Defects of their Virtues:
Reflections on John Kenneth Galbraith and Thorstein Veblen

by Doug Dowd

From Michael Keaney (ed.,) Economics with a Public Purpose: Essays in Honour of John Kenneth Galbraith (Routledge, 2000)

As Veblen’s readers will remember, the phrasing found in the above title was one of his favourites; and, as readers of both Veblen and Galbraith will know, both Veblen’s style and content loom large among the fish swimming through Galbraith’s efforts: To the limited degree that Galbraith may be seen as anyone’s disciple, he was — discreetly — Veblen’s.

Perhaps uniquely among economists, Veblen and Galbraith are seen as entertaining, with humour as the main device of the entertainment.¹ That humour in turn is largely a matter of their witty turns ofphrase. Veblen’s humour is frequently ironic, often harshly so, although it often feathers into whimsy, Galbraith’s humour is more often whimsical than ironic.²

Veblen and Galbraith have been among the best-informed as well as the most entertaining economists of their time; and both have reached the widest of audiences for economics in their own day. That is a virtue they share.

Their mutual defect is a function of the qualities of that same virtue. We may begin by assuming that for both the habitual use of irony and whimsy signifies something more than a stylistic quirk. Their particular forms of humour (occurring in their typically intricate sentences) also allow one to infer that the resulting confusion among their readers is not entirely unintentional.

Insofar as potential allies are as likely as potential enemies to be confused by what amounts to camouflage, however, such techniques are far from an ideal educational technique. This is not to say that humour should be excluded from serious social analysis — of course not. The problem here is that Veblen was celebrated at least as much for his wit as for the import of his analyses, and Galbraith seems to be known principally for his wit and charm.

Among the predictable consequences of their styles is another and telling similarity: those who may be counted among their admirers, supporters, of ‘followers’ represent substantially diverse views concerning both analysis and public policy.³

Humour is desirable as a pleasant accompaniment to serious analysis, but beyond a certain point it serves to blur an analytical focus (especially  when embedded in complicated sentences). That is so even for readers who are already substantially well-informed concerning the matters under discussion.⁴

That said, this essay will ultimately be concerned more with content than with style, and it will be argued that Veblen’s choice and treatment of content were and remain more suited to past or present needs than Galbraith’s. Veblen is never complacent, Galbraith often has been; Veblen’s reach is radically comprehensive, and is thus more illuminating not just about the past but as well for the future than does Galbraith’s.

There is something else to be noted, which helps to understand the similarities in their writing styles: the way they wrote bore more than a casual relationship to their respective fears — and thus to their respective virtues and defects.⁵

Fears? That both Veblen and Galbraith may be seen as having muddied their analyses with protective coloration and convoluted sentences is not my interpretation alone. Thus, Max Lerner, a strong supporter of Veblen, had this to say in the excellent introduction to his selections from Veblen’s writings:

there was passion in everything Veblen  wrote. [But] it was the passion of a man whose sense of reality was so shattering that he had to turn aside from it and fashion for himself a mask of mockery and indirection. That mask was Thorstein Veblen’s style, as it was his life. (Lerner [1948:49])⁶

On this matter of fear (which he calls ‘caution’) we are able to have Galbraith speak for himself. One occasion when he did so was in a letter to the Monthly Review; one of many they received and printed on the occasion of the 50th Anniversary of their ‘independent socialist magazine’ (founded in 1949 by Leo Huberman and Paul Sweezy).

It was at Harvard in the years of the Great Depression that I first came to know Paul Sweezy. He was a dominant figure in our young community; no one took a stronger position on the then obvious and extremely painful failure of the system. To repeat, his was the dominant voice. Mine, that of an intrinsically more cautious figure, was much less influential. Paul was the evident leader. This leadership then became evident in the Monthly Review of which he was founder, editor, and permanent guide. I have been a reader for all these years; I have not always agreed — again the Galbraith caution — but I have always been informed. Accordingly my pleasure in sending my warm congratulations on this anniversary. (Galbraith [1999:65])⁷

The analysis that now follows will conclude by contrasting the works and impact of both Galbraith and Veblen, not always favourably, with a concluding discussion of Robert A Brady. Brady knew Veblen when both were in New York in the 1920s, and knew Galbraith when both were in Berkeley in the 1930s. Like Veblen, Brady was much influenced by and a friendly critic of Marx; like Galbraith, he was much influenced by Veblen. Unlike Veblen and Galbraith, Brady was always fearlessly straightforward in his work.

Language as an obstacle course

We begin with a marvellous and representative quote from Veblen on the US. slave trade. Drenched in irony, its sly chuckles (as so often for him) are proportionate to the seriousness of the matter at hand:

But even though it may have been distasteful to one and another of its New England men of affairs, and though there was always a suspicion of moral obliquity attached to the slave-trade, yet it had the good fortune to be drawn into the service of the greater good...Perhaps also it was, in some part, in this early pursuit of gain in this moral penumbra that American business enterprise learned how not to let its right hand know what its left hand is doing; and there is always something to be done that is best done with the left hand. (Veblen [1923:171n])

And here is the opening paragraph of Galbraith’s American Capitalism, his cheerful analysis concerning the power of the giant corporation in the United States:

It is told that such are the aerodynamics and wing-loading of the bumblebee that, in principle, it cannot fly. It does, and the knowledge that it defies the august authority of Isaac Newton and Orville Wright must keep the bee in constant fear of a crack-up. One can assume, in addition, that it is apprehensive of the matriarchy to which it is subject, for this is known to be an oppressive form of government. The bumblebee is a successful but an insecure insect.

Galbraith goes on to note that this is a condition comparable to that of the US. economy, whose

present organization and management are also in defiance of the rules — rules that derive their ultimate authority from men of such Newtonian stature as Bentham, Ricardo, and Adam Smith Nevertheless, there are occasions — the decade following World War II was an example — when it works, and quite brilliantly. (Galbraith [1952:1])

Despite which, Galbraith adds, the fact that the economy nevertheless flourished

has caused men to suppose that all must end in a terrible smash. And, as with the bee...this also leads to apprehension and insecurity.

That opening chapter is entitled ‘The Insecurity of Illusion’, And the stated intent of the book and its concept of countervailing power was to show that, as with the bumblebee that such concerns ‘can be kept inoperative’. When we return to a discussion of this and others of his works, it will be seen just how ‘operative’, even intensified, such concerns came to be for the economy, if not for the bumblebee.
As we now begin to examine and compare the content of Veblen and Galbraith, we shall see more generally how the stylistic means of both Veblen and Galbraith served to blunt, obfuscate, or enfeeble the meanings of their analyses, allowing amusement, confusion, or tranquility to mute deepened understanding

The socioeconomy of the United States

Galbraith and Veblen tended to focus on very much the same social processes and relationships, if also with some major differences; in this essay we shall be concerned only with their analyses of the US. economy, concerning which both wrote more than on any other subject.⁸

They wrote many articles and reviews (some of which have been collected
as books); here we shall examine only their major books. Veblen wrote two books dealing directly with the US. economy: The Theory of Business Enterprise (1904) and Absentee Ownership: Business Enterprise in Recent Times (1923); Galbraith’s major works were American Capitalism: The Concept of Countervailing Power (1952), The Affluent Society (1958) and The New Industrial State (1967).⁹

Two additional prefatory notes should be made: (1) though both Veblen and Galbraith were of course thoroughly trained in mainstream economic theory, neither adapted that theory to their own writings (except, in some sense for Galbraith, Keynesian theory — itself no longer in the ‘mainstream’ ); (2) in his time, Veblen was probably more familiar than any other US. economist with Marx’s works. Although very much the ‘friendly critic of Marx’,¹⁰ Marx’s socioeconomic (though not his political) analyses were often integrated into Veblen’s — however much his writing style and choice of vocabulary (e.g. ‘underlying population’ rather than ‘working class’) permitted most of his readers to be unaware of that influence.

Galbraith, although he notes Marx’s political impact, seems not to have taken Marx’s economic analysis seriously. He does comment systematically on Marx (e.g. in short chapters in his The Age of Uncertainty and in The Affluent Society) with some respect; but Marxian analysis does not intrude in his work.

In consequence, and although both Veblen and Galbraith were consistently critical of US. capitalism, they were so with a qualitative difference. Galbraith may be seen as a sophisticated instance of New Deal liberalism at its best and most comprehensive; Veblen is consistently disdainful of the prospect of ‘reforming’ capitalism, if also vague as to what might take its place.11

We begin with Veblen, and the matter of competition. The earliest clear voice for an unfettered capitalist society was of course that of Adam Smith — not because he saw businessmen as benevolent; on the contrary, he saw them as

an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it. (Smith [1776: 215])

Nonetheless, Smith advocated a political economy absent of institutional controls of State or church over businessmen. Instead, and to transform the particular ‘private vice’ of businessmen into social well-being, Smith famously depended on ‘the invisible hand’ of market competition.

For competition to serve that benign purpose, however, Smith (and in principle, if not in practice, those who see themselves as following in his footsteps) assume economic structures such that all individual firms are literally insignificant in their own markets; that is, powerless, ‘takers’ rather than ‘makers’ of market conditions. Tell that to AT&T, GM, GE, IBM, Microsoft, et al.

As the eighteenth century ended, such a hope could be seen as realistic; as Veblen was writing The Theory of Business Enterprise harsher realities had prevailed. Half a century later, when Galbraith wrote American Capitalism, an economist who still believed in the benign rule of market competition as providing economic safeguards had to be bewitched by ideology, not responding to facts.¹²

For most of this century, not competition but rivalry has characterised the relationships among corporate giants, within and between sectors and nations; as a trend, acquisitions and mergers among and between them (within and between nations) is always accelerating, in number and dollar value.¹³

Unlike the ‘market competition’ of economic theory, however, market rivalry produces higher not lower overall costs and prices. They are the consequence of advertising, packaging, trivial product variation and policies of deliberate obsolescence that vastly increases the kinds and volume of waste, much assisted by their essential bedmate, consumerism. And instead of Smithian ‘normal profits’,¹⁴ in today’s corporate world, ‘normal’ profits would be those that economists used to classify as ‘excess’ and that are worrisome unless they are always rising.

Modern production at the plant level is of course generally always — more efficient; but the endless variations on the product itself and other costs noted above yield socioeconomic inefficiency and waste — much of it destructive — that might well be seen by Adam Smith as being at least on a par with that produced by the socio-political-economic corruption of his own day (and what Ricardo saw as the power-earned ‘rents’ of his own day).¹⁵

Already in 1904 Veblen had perceived continuous and always increasing waste as the inexorable outcome of the then existing and emerging structures and policies of business, both of which he saw as having taken root by the 1870s — that is, when modern industrial technologies had begun to take root. And he foresaw those roots as producing not only massive waste but other senseless or deadly consequences as the century unrolled: as noted, militarism, institutionalised irrationality and, although he did not call it so, a society frozen in its adolescence moving towards infantilisation.

After a prolonged analysis that gives central importance to the growth and importance of big business and its manifold powers,¹⁶ Veblen closes The Theory of Business Enterprise by asking: ‘What can be done to save civilized mankind from the vulgarization and disintegration wrought by the machine industry?’ And he goes on to posit that

this is a question, not of what is conceivably, ideally, idyllically possible for the business community to do if they will take thought and act advisedly and concertedly toward a chosen cultural outcome, but of what is the probable cultural outcome to be achieved through business traffic carried on for business ends, not for cultural ends. It is a question not of what ought to be done, but of what is to take place. (Veblen [1904: 377])

And he adds that the rule of corporate power, in order to avoid ’the malady’ and ‘the evil consequence’ of competition, has created

so comprehensive and rigorous a coalition of business concerns as shall wholly exclude competition, even in the face of any conceivable amount of new capital seeking investment. (Veblen [1904:44])

Throughout The Theory of Business Enterprise, and carried further in his Instinct of Workmanship (1914), Veblen puts forth his strong belief that left to itself the ‘natural outcome’ of industrial (as distinct from industrial capitalist) development would be tendencies towards ‘matter-of-fact’ attitudes, deepened democracy and widespread economic well-being. In these respects his views were both similar to and quite different from Marx’s. The major difference was that where Marx was optimistic regarding the response of the working class to capitalism, Veblen saw ’the natural outcome’ as forestalled in a business — that is capitalist — society, under the influence of imaginative business power cum nationalism and the irrational tendencies it would stimulate.

Thus, in the closing chapter of The Theory of Business Enterprise Veblen goes beyond the economic system per se to describe the main features of the likely ‘cultural’ outcome of this ‘businesslike society’, as regards (1) education (382 ff.),¹⁷ (2) the press, periodicals, and advertising (384 ff.), and among other matters, (3) politics and foreign policy: ‘...the direct cultural value of a warlike business policy is unequivocal’ (391 ff.). It is not a pretty picture; we need only to look around us today to perceive its evolution and meaning for our own world. But he also believed that business power would ultimately become self-destructive, used against its own self-interest. Thus he put forth the then unique argument that

insofar as the aggressive politics and the aristocratic ideals currently furthered by the business community are worked out freely, their logical outcome is an abatement of those cultural features that distinguish modern times from what went before, including a decline of business enterprise itself. (Veblen [1904: 399–400])

For Veblen, the main elements of that ‘decline’ would culminate in what later came to be called fascism. He pursued the argument subsequently and in further detail as regards both Japan and Germany,¹⁸ is effectively (and uniquely) anticipating their descent into massive repression and militaristic expansion by a decade or more. He saw that lingering feudal institutions in both countries could be brought back to a vigorous existence to serve a ‘warlike business policy’ in modern clothing; no less important, he saw that such institutions would at the same time contain and defang the always more restive’ underlying population’.¹⁹

Veblen also reasoned that in the same process the irrationalities necessarily associated with such a new society — even though organised business was its precipitating element — thus might well do in business itself

It seems possible to say this much, that the full dominion of business enterprise is necessarily a transitory dominion. It stands to lose in the end whether the one or the other of the two divergent cultural tendencies wins, because it is incompatible with the ascendance of either. (Veblen [1904: 400])

So it became, in both Japan and Germany (and Italy),²⁰ until they were brought back into the capitalist orbit after their military defeat.

Veblen’s analysis of 1904 was updated in 1923 in his Absentee Ownership. In the intervening two decades, the United States had adopted and adapted the ‘technology of physics and chemistry’ that had been developed most fully in Germany, had moved toward becoming a modern state, had filled out the overseas expansions begun around the turn of the century in the Caribbean and the Pacific Ocean, had participated in the First World War — and was actively taking more than a few steps towards fulfilling Veblen’s expectations about the ‘cultural’ consequences foreseen in the earlier book.

How does Galbraith compare? His first major scrutiny of the US. economy, whose title accords with its analysis, was his American Capitalism: The Concept of Countervailing Power, from which we have quoted earlier, and will comment on below. That work and his later The New Industrial State (1967) have very much the same focus as Veblen’s Theory of Business Enterprise and Absentee 0wnership although with substantially different analyses.

Galbraith’s book concerning the United States, The Affluent Society (1958), and written roughly midway between the two just cited, combines a brisk history of economic ideas (with more political than economic commentary on Marx) its main concern, the coexistence of ‘private affluence and public squalor’. That book will be discussed briefly, following the discussion of American Capitalism and The New Industrial State.

Galbraith’s American Capitalism took it for granted that giant corporations, not small-scale enterprises, were the characteristic form of business organisation in 1952. Its thesis is contained in its subtitle: The Concept of Countervailing Power.

As was seen in the earlier quotations from this book, the ‘bumblebee’ is his amusing metaphor for the US. economy; and it is the relationships of ‘countervailing power’, despite the absence of Smithian competition, that enable our ‘economic bumblebee’ to fly — indeed, ’brilliantly’.²¹ The argument is put forth succinctly in Chapter IX:

...private economic power is held in check by the countervailing power of those who are subject to it. The first begets the second. The long trend toward concentration of industrial enterprise in the hands of a relatively few firms has brought into existence not only strong sellers, as economists have supposed, but also strong buyers as they have failed to see...In the typical modern market of few sellers, the active restraint is provided not by competitors but from the other side of the market by strong buyers. (Galbraith [1952:111–12])²²

In his Introduction to the 1993 edition, despite that ‘much has, indeed changed since the 1950s’, Galbraith puts forth an apt summary of the constituent elements of his original analysis. In addition to providing a thumbnail statement of his position, the long quote that follows is noteworthy because he sees that earlier argument as still holding:

The core thesis that an established and effective answer to economic power is the building of countervailing power is, indeed, still valid. There is still the great supermarket chain as the answer to the market power of the big food companies. And to that of other producers. The trade union remains an equalising force in the labour markets. And cooperatives do survive. But one cannot doubt that, over all, the role of exploitive market power, that of the monopoly or trust with which countervailing power contends, has, for other reasons, also diminished. International competition — in fashionable modern reference, the globalisation of markets — has been a central factor. [And a bit later, he adds] More subtle, but I think more important, has been the progressive bureaucratisation, as perhaps it may called, of the great industrial enterprise. Once the great firm was respected and feared for its external power, now very often it is the victim of its own internal weakness. We now know that we may have less to fear from corporate power than from corporate incompetence.

Competition and bureaucratic weakness have, in their turn, had a notable effect on the trade union, the classic example of countervailing power. To put the matter bluntly, strong trade unions require strong employers. Nothing so weakens a union as an employer who cannot afford to pay and is closing plants or going entirely out of business. This is what, in these last decades, has driven the unions into the shadows. Countervailing power, the raison detre of the trade union, requires that there be a power to countervail. (Galbraith [1993: ix — x])  

There are numerous assertions in those sentences; here we attempt to examine only those concerning (1) ‘trade unions as an equalising force’, and (2) the centrality of globalisation in diminishing the exploitive market power of giant companies, together with the role of ‘corporate incompetence’ in the weakening of unions — ‘driving them into the shadows’. One cannot adequately explore the contentions of either the original book or the later Introduction in a brief statement; what can be done here is to suggest the areas of analytical weakness of the concept of countervailing power, while also noting some broader questions that connect with it.

Trade unions

Quite apart from any other considerations regarding trade unions (some of which will be dealt with below), by the time this book was originally written (1952) it should already have been clear that U.S. unions (aptly termed ‘business unions’), however essential they were and remain for protecting and advancing the well-being of workers, could not be counted upon to represent others than themselves.

Thus, and although there has been (and usually would be) a beneficial ‘trickle down’ effect from strong unions to weaker unions and even to those not unionised as regards working conditions and the ‘social wage’ (pensions and health care, most importantly), there are also associated negative effects.

Some of what is meant here was revealed in the outcome of the strike of the United Auto Workers against GM in 1948. The leader of the UAW was then Walter Reuther, not irrelevantly for the point to be made here, among the most honest and trusted of all union leaders at that time or since. One of the demands of the union — this in a time of justly feared inflation — was for pay increases (among other matters) without associated increases in car prices. However, in the strike settlement a key element was the ‘invention’ of the ‘COLA’ — a cost of living adjustment for inflation — which soon became common in such agreements. Pleasing though that may have been for the union then (and still), a moment’s reflection suggests the consequent high probability of intensified tendencies towards inflation, unaccompanied by any such protection for the rest of the population.

That is, ’countervailing power’, even — perhaps especially — at its best would tend to place the strongest workers and the strongest companies in a coalition against the rest of the population — unintended and uneasy though such an effect may have been by for labour and/or business.

The social impact of such an arrangement (apart from other influences) has been to add social lopsidedness. Desirable though it is to see organised industrial wage workers with comfortable incomes, their ‘countervailing power’ has contributed to a larger consequence; it has been one of the several levers for widening the income gap between the top one-fifth — to say nothing of the top 10, 5, and 1 percent — and the bottom three-fifths (with the remaining fifth pondering its fate) — a gap that has widened always more when the 1950s are compared with any decade (except the 1960s) to the present.

Globalisation and market power

Writing in the 1950s, as Galbraith was, one could be excused for not foreseeing what the globalisation that spread and deepened after the 1970s would mean. But the Introduction from which we quoted above was written in 1993. By that time the giant companies in the 1950s, whether of United States, Japan and Germany or elsewhere, had become giant transnational corporations (TNCs).

Doubtless there is considerable rivalry (and some market competition) between these giants that roam the globe. Doubtless, too, many of their high echelon managers and CEOs have tremulous moments and enduring periods of fear and worry about the power, ongoing moves, and possible plans of their rivals.

But to see that justifiable nervousness and its accompanying practices as translating into a source of assurance/insurance and ultimately of well-being for most of the people even of the major economic powers, let alone for those of the ‘emerging’ and weakest societies; to see ’exploitive market power’ as taking its toll merely or mostly in prices and globalisation and as normally having a benign effect in those respects — to see that and not the much else soon to be noted, is to be analytically astigmatic a characteristic Galbraith frequently identifies among mainstream economists, seeing the mote in their eyes, as he might put it, but not the beam in his own.

Part of the ‘much else’ has to do with the weakening of organised labour in the powerful countries — not just the United States, but also in Britain, France, Germany, Italy and elsewhere. What does not seem to be noticed in Galbraith’s mention of the ‘shadows’ into which unions have fallen is that not only unions have been weakened in that process: the broader politics that organised labour might have created or supported have also fallen into those shadows. But such ‘shadows’ are a euphemism for what has occurred, whether the focus is the United States, Britain, Germany, Italy, or elsewhere.

In the United States, the political weakness of organised labour has been integral to the rightward shift of government and politics at all levels (local, state and federal). In Western Europe, where organised labour historically has also formed itself into left political parties, the tendency is just as pronounced. Thus, as Clinton and the Democratic Party have moved into the Centre here, so have their close or distanced counterparts done so in Europe: Blair, Schroeder, and d’Alema (of Italy) are seen as doubles for Clinton in their own countries, with increasing frequency. In all cases, whatever remains of liberal or left politics is allowing itself or being forced to swallow — in some cases to embrace — conservative socioeconomic policies.²³

That is, the market power of the giants is not to be measured mostly, let alone only, by their ability directly to control prices, jobs, and wages. Nervous they may be about their TNC rivals; but in all countries, most vividly and especially in the United States, they have learned how to arrange that both their narrow and their broader interests will be taken care of — through the direct or indirect purchase and control of the various dimensions of the media (including but going beyond commodity advertising and the direct or indirect purchase of politicians and policies: again, at all levels.

As noted earlier, Galbraith is among the best-informed of economists. Nonetheless, those ugly realities lay outside his vision both in 1952 and in the 1993 Introduction to American Capitalism. Such an oversight is all the more noteworthy, given (a) that his Affluent Society (1958) and his New Industrial State (1967), in their different ways, affirmed that, among other serious matters, the good cheer of the 1952 book was misplaced, and (b) that in two books bracketing the 1993 Introduction — The Culture of Contentment (1992) and The Good Society (1996) — he is clearly more concerned than cheerful about the socioeconomy of the United States, if in what may be seen as a patrician manner.²⁴

The foregoing leaves unmentioned some of the specifics of giant corporations’ always growing influence over governmental policies: sitting at the dangerous centre among the latter are of course those affecting our environment. Most of the harm done there occurs through the normal functioning of the automobile, chemical and petroleum industries. Not only are they the most powerful of industries (in sales and political clout), they also face the most powerful trade unions. Those industries (with little or no resistance — indeed support — from their unions) have shown their ability to weaken past and prevent future interference with what they see as their needs and rights. Along with others, those industries, in order to maintain their ‘health’, have been the major instruments creating not just a culture of contentment’ for the few, but a culture of consumerism for the many and already worrisome levels of danger to our air, water, soil and bodies.²⁵

The ongoing and accelerating consequences of their political and social power include (but are not limited to) the ravaging and already harmful consequences to the environment, here and globally. That kind of power, when set against ‘market power’ and its virtually exclusive emphasis on prices as seen by economists (including Galbraith) is an anachronistic way of viewing the harm already done by the giant corporation to the quality of our physical and social existence, with worse on its way.²⁶

To repeat, it is not that Galbraith has never dealt with matters of power going beyond ‘market’ power, it is how he has dealt with such questions and how, after putting forth a rather ominous analysis, how he manages to conclude with a generally reassuring prospect
That was epitomised in 1967, with The New Industrial State. Having recognised the social question characterised by the contrast between private affluence and public squalor in 1958, Galbraith in the 1967 book sees the Affluent Society (in his ‘Foreword’) as merely ‘a window’ of the ‘house of the industrial state’, and the larger powers possessed by the giant corporations that oversee it.

Early in The New Industrial State he states that he is concerned to show how ‘the forces inducing human effort have changed’:

This assaults the most majestic of all economic assumptions, namely that man in his economic activities is subject to the authority of the market. Instead, we have an economic system which, whatever its formal ideological billing, is in substantial part a planned economy. The initiative in deciding what is to be produced comes not from the sovereign consumer who, through the market, issues the instructions that bend the productive mechanism to his ultimate will. Rather it comes from the great producing organization which reaches forward to control the markets that it is presumed to serve and, beyond, to bend the customer to its needs. And, in so doing, it deeply influences his values and beliefs — including not a few that will be mobilized in resistance to the present argument. (Galbraith [1967:6)]  

The main thesis of that book (which takes the industrial sector as its main focus) is that ‘...the imperatives of technology and organization, not the images of ideology, are what determine the shape of economic society’ (1967:7). Galbraith goes on from there to posit that whatever may have been true in the pastas regards who controls and directs the giant corporations and gives them their direction — mighty personalities such as a Carnegie or a Ford, or financial titans such as J. P. Morgan — control now (the 1960s) and in the future will be in the hands of a ‘technostructure’.

Not that such would be decided upon, by leaders or owners or the State, but that the modern industrial system everywhere does and will require it. Characteristically, Galbraith makes his point whimsically:

The great entrepreneur must, in, fact, be compared in life with the male Apis mellifera. He accomplishes his act of conception as the price of his own extinction. The older entrepreneurs combined firms that were not yet technologically complex. [He goes on to discuss as regards steel, petroleum, tobacco, etc. Then] Technology, with its own dynamic, later added its demands for capital and for specialized talent with need for yet more comprehensive planning. Thus what the entrepreneur created passed inexorably beyond the scope of his authority. He could build. And he could exert influence for a time. But his creation, were it to serve the purposes for which it was brought into being, required his replacement. What the entrepreneur created, only a group of men sharing specialized information could ultimately operate. (Galbraith [1967:88–9])  

That ‘group of men’ constitutes the technostructure. It all sounds reasonable. Veblen also pinned whatever hopes he had on ‘the engineers’ who, he thought, were they to rise to decision making power, could make the best not the worst out of the industrial process. Although Galbraith (to my knowledge) never acknowledges Veblen as an inspiration for his own expectations, one may see that Veblen’s hopes became Galbraith’s expectations.

A closer look at the realities achieved well before 1967, to say nothing of subsequently, shatters both the analysis and the hopes, whether of Veblen or Galbraith. Albert Einstein, in a letter written in 1917 saw considerably more clearly than either when he said: ‘Our entire much-praised technological progress, and civilization generally, could be compared to an axe in the hand of a pathological criminal’.²⁷

If there was any basis for Veblen’s hopes it lay in the twinned hope that the technologists would somehow snatch sufficient power from business.²⁸ Galbraith appears to have believed that the knowledge of the technologists would in itself empower them — perhaps relying on the old saw that ‘knowledge is power’. He and Veblen were both wrong.

That is not, of course, because technology has become less important since the 1960s; on the contrary. Thus, the main tendencies of recent ‘globalisation’ (assisted by the threat or reality of force provided by its also technologically enhanced military blood brother) simply could not have been realised had it not been for recent advances in the technologies of communication, transportation, and the miniaturisation and mobility of productive capital — and it should be added, their ramifications in the media. In their present combinations, such strengths did not coalesce until the 1980s.

Even as Galbraith wrote, the melding of marketing and financial imperatives and possibilities dominated the leadership patterns of the giant corporation; by now, finance has come to rule, with marketing and technological advance still vital — of course — but no longer in the driver’s seat.

Galbraith made it clear that the ‘subordination of belief to industrial necessity and convenience is not in accordance with the greatest vision of man. Nor is it entirely safe’ (1967: 7). Notwithstanding, he found it possible to close his book on this note of good cheer.

If, on the other hand, the industrial system is only a part, and relatively a diminishing part, of life, there is much less occasion for concern. Aesthetic goals will have pride of place; those who serve them will not be subject to the goals of the industrial system; the industrial system itself will be subordinate to the claims of these dimensions of life. Intellectual preparation will be for its own sake and not for the better service of the industrial system. Men will not be entrapped by the belief that apart from the goals of the industrial system — apart from the production of goods and income by progressively more advanced technical methods — there is nothing more important in life...The industrial system, in contrast with its economic antecedents, is intellectually demanding. It brings into existence, to serve its intellectual and scientific needs, the community that, hopefully, will reject its monopoly of social purpose. (Galbraith [1967: 399])  

A clouded crystal ball, if ever there was one, despite that the industrial sector has in fact statistically diminished as a percentage of GDP. But the other sectors that have expanded as industry has contracted — finance, the media (not least their TV components advertising, you name it — have accompanied, one may say required, a diminution of ‘aesthetic goals’, and of ‘intellectual preparation for its own sake’, along with an enlargement of the ‘entrapment by the belief’ of men (and women and children) that ‘there is nothing more important in life but the production of goods and income by progressively more advanced technical methods’.

That is, in the thirty years or so since 1967, the valuation of economic growth, far from diminishing, has become an icon; concomitantly, the consumerism upon which growth’s vitality becomes always more malignant — as regards (among other matters) astronomical levels of debt, and the spread of adolescent behaviour through all age levels and all sectors of society. Among the many offshoots of that set of developments is its spectacular manifestation in the behaviour of Wall Street, now characterised by the spirit, techniques and mentality of Nintendo games, utterly dominated by frenzied speculation (called, however, ’investment’).

All this goes on with the ‘technostructure’ Galbraith saw and anticipated alive and growing. However, those who sit at its desks — not just engineers and scientists, but also a large percentage of university faculties — are the well paid and calmly acquiescent servants of a basically irrational socioeconomic structure. Nor is it unimportant to note that its main working parts include a gigantic military-industrial (plus, now, a growing prison-industrial) complex: pace, Galbraith.²⁹
The Affluent Society fell between American Capitalism and The New Industrial State. It seems fair to say that the failure of ‘countervailing power’ to allow a good society to evolve was a good part of what occasioned the analysis of this ‘midway’ book, with its concern for the ‘public squalor’ of the United States.³⁰ To which it might be added that the 1967 book was in an important sense a means by which Galbraith’s dashed hopes (as expressed in American Capitalism) could be revived.

A main element of that hope may be found in his repeated emphasis of statements like what follows below, from the chapter entitled ‘The Divorce of Production from Security’.

We have seen that while our productive energies are used to make things of no great urgency — things for which demand must be synthesised at elaborate cost lest they not be wanted — the process of production continues to be of nearly undiminished urgency as a source of income. The income men derive from producing things of slight consequence is of great consequence to them. (Galbraith [1958: 223])

To break that circle of dependence, Galbraith proposes (1) raising unemployment insurance to the level of the weekly wage, (2) providing alternative sources of income, unrelated to (industrial) production, and (3) some form of control over wages and prices to prevent inflation (1958: 224–9).

Quite apart from any other problems with such a programme, it has in fact existed in the European nations noted above: the amounts and eligibility levels of unemployment insurance in those countries, despite differences among them, are all considerably higher and longer than in the United States; there are many alternative sources of income (in health care, education, etc.); inflation, when it has threatened, has been met by wage and price controls. In all those countries, however, economic growth cum consumerism are gaining the kind and degrees of support they have in the United States — and, as, in the United States, such attitudes always strengthen.
Why is that — and other and related matters — so? Like the United States, all those countries are capitalist, if with great differences, including and going beyond those noted above. In the last twenty years or so, however, it may be said that all of them have become more like the United States — Americanised’ — than have become like them.

Thus, they too (even when, as noted earlier, their governments have Labour or Social Democratic pluralities or majorities) are emphasising ‘balanced budgets’ over ‘social balance’, they too are moving or have already arrived at points where they are cutting back on pensions, health care, education, and the like — and they too have made an icon of economic growth; that is, they and we have come to believe that quantitative change will translate into qualitative improvements.³¹

This essay has been both explicitly and implicitly critical of Galbraith’s works. This is not because he is not a man of goodwill and decency; clearly he is both. A reading of his 1996 The Good Society suffices to demonstrate that his goals are both inclusive of all in our society, and — were the appropriate politics to be developed — workable. The problem lies in his analysis and, as has been suggested, the manner in which he puts it forth. But the former is more important than the latter.

For those who sense or believe that something is terribly wrong with our society (and our world) Veblen is more useful. His language all too frequently engenders confusion, but it is a confusion around an analysis that gets closer to the heart of the matter than Galbraith ever does — or, it seems, even seeks to do. The analysis needed is not a reformist but a radical one.

To be sure it is mistaken to seek, let alone to expect, ‘Revolution Now!’ We cannot get from here to a better place in one grand leap — and not only because there is no revolutionary force existent here or elsewhere. But if we are to work for an appropriate schedule of reforms, we cannot do so unless we understand very well just how extensive and interlinked those reforms must be, and how continuous and how much effort their realisation must entail.
In turn, that requires understanding how and why the existing capitalist system works. It is not sufficient to be opposed to the results of that system; it is essential to understand that the system itself is the problem, and that ‘left to itself’ both its characteristics and its results will inexorably continue, if in always changing forms, with society worsening along the way.

Nor is it unimportant as a part of that understanding to include in its focus the damage done by our policies when (a) they are more or less voluntarily adopted by other industrial powers, and (b) through ’force and fraud’ (to adopt Veblen’s outlook) made to work in the’ emerging’ and poorer countries.

Except rarely, Galbraith allows one to forget about conditions outside the United States. Quite apart from whatever else might be wrong with that, it scarcely suits an analysis of the global power in a ‘globalised world economy’, however benign the intentions of the analyst.

In a world whose socioeconomic problems reach from serious to disastrous, within and outside the major powers, it behooves social analysts within those major powers to proffer analyses that face up to those problems; most especially those who live and work in the economically, politically and militarily most powerful nation in history. One who sought to do so, and who had learned much from Veblen, was Robert A. Brady. We now turn very briefly to examine instances of his work; in doing so, substantial differences between his work and that of Veblen and Galbraith will appear — not only in his analyses but in his manner of presenting them.

The scholar as citizen³²

As noted earlier, Brady knew both Veblen and Galbraith, and saw himself as having learned much from Marx, as well as from Veblen. In this he was very similar to the sociologist C. Wright Mills; indeed, in their analyses Veblen, Mills and Brady may be seen as constituting a specifically US. brand of radicalism.³³ Brady’s work was always consistent with that of Veblen, at the same time that it just as frequently went beyond him: in scope, detail and in his specifically radical analysis.

Brady organised and pursued his own analyses around the main themes emphasised by Veblen: technology, social — especially business — power, the nature of our species, irrationality and the grip of the past upon the present, and both more gloomily and more hopefully than Veblen, the lingering bases for a future less calamitous than our past. Marxian economic analysis tends to emphasise capital accumulation as a central process; Brady, though like Veblen influenced by Marx and anti-capitalist in outlook, emphasised power rather than accumulation in his work — as did Veblen. What many see as Brady’s most important work, Business as a System of Power reveals that emphasis in its title. In that work Brady sought to discover the main tendencies — economic, social and political — of the principal industrial capitalist nations: Britain, France, Germany, Italy, Japan and the United States.³⁴

And what were those ‘main tendencies’? They are encapsulated in the chapter headings of Part 3 of the book:

(1) ‘Economic Policies: Monopoly, Protection, Privilege’,

(2) ‘Social Policies: Status, Trusteeship, Harmony’, and

(3) ‘Political Policies: Bureaucracy, Hierarchy, Totalitarianism’.

Those tendencies added up to a coalescing movement towards fascism — ‘capitalism with the gloves off’ — as Brady saw it. As his book was published, fascism had of course emerged formally in Germany, Italy and Japan, and the movement towards it in France had gone far enough before 1939 (when World War II erupted) as to produce what came to be called ‘Vichy France’ — which, as a government, found little trouble in adjusting with the Nazi invasion.³⁵

Of the six nations studied, only Britain and the United States had not succumbed to fascism by 1939 — although there were active fascist movements in both countries, with significant popular, business and other forms of support. But Britain and the United States, among the six, were the ‘have’ rather than the ‘have not’ nations — where what was ‘had’ was some combination of adequate to rich resources at home and abroad, and the absence of any significant Communist movements.³⁶

It has been suggested above that Brady  went ‘beyond’ Veblen in scope and detail. Such was the case with technology, where Brady’s knowledge was on a par with many engineers and his studies of Germany.³⁷As for his fears (in comparison with those of Veblen and Galbraith), they were not for himself but for the future of life on this planet — as epitomised on the title page of The Spirit and Structure of German Fascism (quoting King Lear):

If that the heavens do not their visible spirits
Send quickly down to tame these vile offences
It will come,
Humanity must perforce prey on itself,
Like monsters of the deep.

That book was the first in English to concern itself with Nazi Germany; it remains the best. In 1938, the year after its publication, Brady was ordered to appear before the House Un-American Activities Committee to explain what came to be called his ‘premature anti-fascism’.

Taken together, Brady’s books and articles constitute the most powerful critique by an established academic in the United States, before or since his time. Had there been more professors with his erudition and his political forthrightness, there would be less reason to fear, and more reason to have hope for the future of our species and our planet. Whatever their contributions to our understanding, Veblen and Galbraith fell short of that standard.

Notes

1. From his first book, Veblen ‘gained, a reputation as the Oscar Wilde of economics’,  whether as seen by admirers or critics (Jorgensen and Jorgensen, 1999: 72). The Jorgensen work is more a biography of Veblen the person than the economist — although they give due weight to the latter. return to text

2. Because the focus here is on language, and because we live at a time in which words are systematically used so as to blur their meaning, it is pertinent to clarify key words such as ‘irony’ and ‘whimsical’. Herewith the definitions from Webster’s International Dictionary (1911):
Irony: A sort of humor, ridicule, or light sarcasm, which adopts a mode of speech the intended implication of which is the opposite of the literal sense of the words, as when expressions of praise are used where blame is meant.

Whimsical: Odd, quaint, capricious, fanciful, fantastic. return to text

3. This may be confirmed by a perusal of the Journal of Economic Issues, the ‘institutionalist’ journal seen by most as upholding the Veblenian tradition. Therein, virtually all of the contributors are seen as casual or serious followers of Veblen; and it may be seen that the differences among them are at least as great as the similarities. There is no ‘school of Galbraithians so far as I know, but he has had numerous admirers within and outside of economics, located in all but the far right and far left of the political spectrum. return to text

4. Much of what has been and will be said here concerning Veblen is repetitive of my small book on him (Dowd, 1966). I am as fond as any of Veblen’s humour; deliberately, however, in that book I placed much of his humour in a set of appendices, some examples of which follow below:

It is of the nature of sales-publicity, to promise much and deliver a minimum. Suppresio veri, suggestio falsi. Worked out to its ideal finish, as in the promises and performance of the publicity-agents of the Faith, it should be the high good fortune of the perfect salesman in the secular field also to promise everything and deliver nothing (1923: 321–2)

Many a business man...will rather use wool rather than shoddy at the same price. The officials of a railway commonly prefer to avoid wrecks and manslaughter, even if there is no pecuniary advantage in choosing the human course. (1904:42, note)

Profits is a business proposition; livelihood is not. (1904: 276)

Any politician who succeeds in embroiling his country in a war, however nefarious, becomes a popular hero and is reputed a wise and righteous statesman, at least for the time being Illustrative instances need not, and indeed cannot gracefully, be named; most popular heroes and reputed statesmen belong in this class. (1917:22)

As someone with a taste for slang and aphorism has said it, ‘In the beginning the Captain of Industry set out to do something and in the end he sat down to do somebody’. (1923:113)

...competition as it runs under the rule of this decayed competitive system is chiefly between the business concerns that control production...and the consuming public...; the chief expedients in this businesslike competition being salesmanship and sabotage. Salesmanship...means little other than prevarication, and sabotage means a businesslike curtailment of output. (1923:78)

...in the democratic commonwealth the common man has to be managed rather than driven...And it is pleasanter to be managed than to be driven. Chicane is a more humane art than corporal punishment. (1919a:127)

...there are probably few courts that are in any degree corrupt or biased, so far as touches litigation of this class [involving property]. Efforts to corrupt them would be a work of supererogation, besides being immoral. (1904: 282, note)

All is fair in war and politics. It is a game of force and fraud. There is said to be honor among thieves, but one does not look for such a thing among statesmen. (1923:24)

Representative government means, chiefly, representation of business interests...It seldom happens, if at all, that the government of a civilized nation will persist in a course of action detrimental or not ostensibly subservient to the interests of the more conspicuous body of the community’s business men. The degree in which a government fails to adapt its policy to these business exigencies is the measure of its senility. (l904:286–7) return to text

5. Although, in my view, their fears were differently based. Veblen, more radical than Galbraith, had reason to be nervous about his ability to get and keep an academic position. From the time he began to write and his last years, the United States was beset by anti-radicalism — from the years of its imperialist expansion at the turn of the century, into and beyond World War I and the ‘red scare’ that followed it. Galbraith has never had reason to fear anti-radicalism, for he is not a radical. Rather, it has seemed to me, he has very much sought the broad popularity lie has achieved. return to text

6. As will be seen when later we examine Robert A. Brady’s work, his views of reality were, if anything, more ‘shattering’ than Veblen’s, but they led him to become more rather than less outspoken. return to text

7. It is both interesting and relevant to note that during World War II Galbraith and Sweezy worked together for a while (along with Paul Baran and Chandler Morse) as economists for the Office of Strategic Services (predecessor of the CIA). Based in London, their function was to evaluate the impact of Allied bombing on the German economy. (It is my understanding that the report’s conclusion was that the physical damage done by the bombing was offset to a substantial degree by the stiffening of resistance which the bombing of cities occasioned — most dramatically, the ‘firing of Dresden’. The latter, as some will know, was the focus of Kurt Vonnegut’s Slaughterhouse Five. The novelist was a U.S. prisoner-of-war in Dresden during its fire-bombing.) return to text

8. Veblen’s analyses of developments outside the United States (e.g., his Imperial Germany and the Industrial Revolution (1915) and The Nature of Peace (1917) were more numerous and, in my view, probed more deeply than Galbraith’s (e.g. the latter’s The Nature of Mass Poverty (1979)). Similarly, and although both were frequently concerned with human nature, Veblen (especially in his The Instinct of Workmanship (1914)) may be seen as having made more penetrating and lasting contributions than one finds in Galbraith’s many comments on our species. And although both were ongoing critics of mainstream economics, again the more profound arguments were made by Veblen (collected in The Place of Science in Modern Civilization (1919a)) when compared with, say, Galbraith’s Economics in Perspective (1987) or his Economics and the Public Purpose (1973). return to text

9. Galbraith has, of course, written other books concerned with the United States alone, most recently and notably, The Anatomy of Power (1983), The Culture of Contentment (1992), and The Good Society (1996), to which some reference will be made; but they have been less noted than those previously mentioned. return to text

10. As in his lengthy two-part essay ‘The Socialist Economics of Karl Marx’, in The Place of Science in Modern Civilization. return to text

11. In his many articles (collected in books such as The Vested Interests and the Common Man) Veblen seems to lean towards (if not actually to propose) something like what in Britain was called ‘guild socialism’ (a highly decentralised worker-controlled system). But his general attitude seems well represented by the comment related in the Jorgensens’ book: ‘When questioned as to what he would put in place of the old, rotten, social structure, he remarked that no one asked what should be used as a replacement for cancer or a wart on the nose’. The authors are quoting a letter of Veblen’s adopted daughter, Becky Veblen Meyers (Jorgensen and Jorgensen, 1999: 184–5). return to text

12. It is worth interjecting here that whether in Smith’s hopes or those pinned on the abstract models of the ‘pure (or perfect) competition’ of mainstream economics, even were competition to be the reality rather than just the ideology of economists, the consequences would be anything but ‘benign’. Nor need we speculate on that question: The product markets most closely approximating such models existed for some time in the US. economy in much of the nineteenth and the early part of the twentieth centuries, most importantly in staple agriculture (grains, tobacco, cotton, etc.), in bituminous coal, and in cotton textiles. The consequences, for all concerned — farmers, coal miners and operators, and textile workers and owners and, finally, the economy — were disastrous, as they were also for the natural resources involved and the larger environment. In all cases, farmers, workers, owners, and/or governmental agencies organised to end market competition and replace it by some combination of big agriculture plus farmer/business-pressured governmental regulation and subsidies, and/or one variety or another of giant corporate ownership and control (as when small
coal mines came under the ownership of large chemical or steel companies). return to text

13. The first spectacular rush of mergers occurred in the years 1897–1905, during which over 5,000 firms came to be owned by 318 corporations. There were ‘ripples’ of mergers in the 1920s and then again (somewhat higher waves) in the 1930s. Then, in the late 1960s and early 1970s, the numbers and asset values of mergers exploded beyond belief; and those numbers doubled in the 1980s: the largest merger was that of 1984, when Standard Oil bought up Gulf Oil, at $13.4 billion Peanuts, compared with the 1990s: already by 1998, with more on their way, there had been 125,000 global mergers and acquisitions, totalling over $1.6 trillion Among the latter, Daimler-Chrysler ($40 billion), Exxon-Mobil ($83 billion), Travelers (having just merged with Salomon Smith Barney joined Citibank ($73 billion) to become Citigroup BP-Amoco ($55 billion) — and so on (see Fortune’s ‘Global 500’, August 2, 1999). Those deals (and many more like them) were international as well as inter-sectoral. When, as is increasingly rare, there is an anti-trust suit, it is on behalf of rivalrous companies, not of consumers. A convenient source for this (as well as much other useful material) is Richard Du Boff, Accumulation and Power (1989). return to text

14. Defined as total revenue equalling total costs (including the ‘return to capital’ that equals the ‘natural rate of interest’,  itself competitively determined. return to text

15. For an introductory discussion of contemporary waste, see my Waste of Nations (Dowd, 1989: Chap. 3). return to text

16. And doing so in ways that anticipate the analytical advances and broadening of the Marxian framework by Antonio Gramsci in the years (and in the fascist prison) of Mussolini. Most pertinent here is Gramsci s notion of ‘the ideological hegemony of the bourgeoisie’, Like Galbraith and Veblen, Gramsci disguised his ideas with a terminology mixing convolution with euphemism. In his case, however, it was because all his writings were first going through the hands of the prison censor. Thus, ‘bourgeoisie’ — not ‘capitalist’, ‘hegemony’ — not ‘the dominance of our concepts of reality, tastes, morality, customs, and political principles’ (Gramsci’s extension of Marx’s famous epigram: ‘The ruling ideas of any era are the ideas of its ruling class’). An excellent introduction to Gramsci’s works is Quintin Hoare and G. N. Smith, eds., Selections from the Prison Notebooks of Antonio Gramcsi (1971). return to text

17. Subsequently Veblen developed the ideas of those few pages into what became The Higher Learning in America: A Memorandum on the Conduct of Universities by Businessmen (completed in 1908, but not published until 1918). His original subtitle was ‘A Study in Total Depravity’. return to text

18. See ‘The Opportunity of Japan’, originally an article in The New Republic, June, 1917 (reprinted in Essays in Our Changing Order (1934)), and Imperial Germany (1915). Consonant with Veblen’s expectations, big business in Germany was among those supporting what became German fascism; as also, by the end of the 1930s some of those supporters turned to opposition (e.g., as with Thyssen, the major steel company and — among others — as is better-known, more than a few members of the German General Staff, also early supporters of Hitler). return to text

19. Writing twenty years ago, the late Bertram Gross, in his Friendly Fascism: The New Face of  Power in America (1980), pondered what he saw as the very real possibilities that the combination of economic (most especially those of consumerism political, and sociocultural tendencies in the United States could carry us to another form of the irrational society — if, probably, without the need for jackboots and gas ovens. return to text

20. The new social formation of fascism appeared first in 1922, in Italy. Veblen seems not to have written anything concerning Italy, before or after Mussolini. He was fluent in French and German and the Scandinavian languages, but not in Italian. Be that as it may, except for two articles (one in 1925, the other in 1927) and his translation of The Laxdaela Saga from the Icelandic (1925), Veblen ceased writing after Absentee Ownership — probably, it is thought, because he had come to despair of any reversal of what he saw as the increasingly irrational tendencies of the early 1920s. See, for example, his article ‘Dementia Praecox’, published in 1922 (in Veblen, 1934: 437–50), as well as the general tone of Absentee Ownership. return to text

21. American Capitalism was published first in 1952; subsequently it has been republished several times. I am using the Transaction Publishers edition of 1993 wherein the pagination is the same, though with a different introduction (1993: ix–xi). return to text

22. As Galbraith surely knows (and as he now and then indicates that element among mainstream economists who spent some time doing empirical research in addition to (or instead of) thinking abstractly, did, after World War II, develop an analytical framework that dealt with ‘strong buyers’. Thus, in what was already the most important of ‘market structures’, those where a few sellers dominated the industry (as in autos, steel, petroleum and much else) — termed ‘oligopoly — it was seen that there could similarly be a few buyers — ‘oligopsony’ — and that the market outcome would be notably different than that with only few sellers or only few buyers. But in none of that literature was it assumed that the benefits of such bargaining among the powerful would be turned to the benefit of the ultimate consumer. ‘Countervailing power’ there was, but not with the essentially benign effects anticipated by Galbraith. Joe S. Bain, Jr, of the University of California (Berkeley) was one of the major participants of that work (and, while a graduate student, I was his research assistant). See his Industrial Organization (1968). return to text

23. Thus, a report of August 2, 1999, in the New York Times, under the headline ‘A Ragged Rip in Schroeder’s Party Is Becoming All Too Public’, with the internal headline ‘The Socialists, turning centrist, infuriate their left’. After noting the ‘increasingly harsh struggle that has erupted between Mr Schroeder, in his tailored Brioni suits, and workers who feel their party has abandoned them’ the report goes on to declare that ‘Mr Schroeder, after some hesitation, has decided to take the Social Democrats sharply toward the right...’.Later in the same report, a paper published jointly by Mr Schroeder and Tony Blair is recalled, ‘... in which they attempted to map out the essence of the Third Way — a Clintonian updating of Social Democratic values that attempts to place political movements formerly regarded as of the left firmly in the center of the political spectrum of modern societies’. The article closes with the assertion of Mr Schroeder that ‘the benefits of his action would be clear by 2002, when the next federal elections are to be held’. What kinds of benefits and to whom they would accrue were not specified. return to text

24. Thus, and after noting the diverse problems and inequalities associated with the ‘culture of contentment’ of the United States, where — among other grim realities — about 20 percent of the population lives in conditions ranging from substantial comfort to obscene luxury while the other four-fifths live in conditions ranging from adequate to desperate, he takes the following position: But the [“contented”] people responsible cannot be condemned; a whole community cannot usefully be blamed or excoriated. The author of an essay such as this must, in some measure, use the method of the anthropologist, not that of the economist or political theorist. Examining the tribal rites of strange and different peoples, those, say, of a distant island n in Polynesia, the scholar finds practices and ceremonials that, on occasion, seem personally distasteful and sometimes socially abhorrent. They are to be observed but not censured; one does not effectively censure an established pattern of life...This is the case with the political economy of contentment with which I here deal...it is not a proper subject for indignation nor is it one in which reform can be seriously expected. (Galbraith 1992:11)  

Even though Galbraith was born in Canada, the United States (in which he has lived and worked most of his life) is not quite Polynesia for him, nor is he an anthropologist — nor, it may be added, does 20 percent equal ‘a whole community’. As he points out in this same book, he has been among the contented few. As for the large majority of the population, perhaps they might be more likely than he to be ‘indignant’, especially in these years, when ‘private affluence’ has risen (or descended) to the obscene, while ‘public squalor’ both deepens and spreads, the triumphalism of American capitalism to the contrary notwithstanding. return to text

25. Nor is it without significance that the greatest legislative progress towards environmental safety measures (inadequate though they may have been) was accomplished in the years of Richard Nixon’s presidency. Whether with respect to clean air and water, occupational health and safety, pesticides, or other matters, a comparison between, say, the legislative status quo in these respects in 1980 with that of 1999, using words carefully, is frightening — made more so when one contemplates the probable legislative deterioration that awaits. return to text

26. The reference here is to the accepted needs of industries noted (among others) for always achieving more of the same: more autos per capita here and elsewhere, more use of petrochemicals in their various dangerous consequences (to the air, the soil, the water, inter alia).< return to text

27. As quoted in Albert Einstein: A Biography, Albert Folsing (1997), and noted in ‘The Contradictory Genius’ by Alan Lightman, New York Review of Books, 10 April 1997. return to text

28. Veblen’s views in these respects are most efficiently viewed in a collection of his essays entitled The Engineers and The Price System (1921). return to text

29. As for the role of academics in all this, I am reminded of an incident in which I was present about 50 years ago, as it compares with today. At that time, I had just joined the faculties of both the School of Business Administration and the Department of Economics at the University of California (Berkeley). At a faculty meeting of the business school, where about 25 were present, a motion was put forth. and voted upon that dealt with whether or not we should accept a corporate donation that would establish a Chair in its name. The vote against was 24 to 1, made after an outcry at the undue influence our acceptance would allow. It is safe to say that today the same motion would pass by the same ratio — if, that is, it were deemed necessary even to ask. return to text

30. Noteworthy in this connection is that such ‘squalor’ in Western Europe (Italy, Germany, France, and Britain, to say nothing of the Holland and the Scandinavian countries) was on balance considerably less than in the United States, even though their per capita GNP’s then were just as considerably lower than ours. That is, the access of the average inhabitants of those countries to health care, education and a comfortable old age — inadequate though it may have been then — was better than their counterparts in the United States. The gap in such matters widened after 1958, as economic expansion accelerated both in those countries and in the United States. return to text

31. How the peoples of the United States or elsewhere were ‘buffaloed’ into accepting (consciously or not) such notions is a complex matter unable to be fitted into this already long essay. Suffice it to say that Veblen, in his first book, The Theory of the Leisure Class (1899), and subsequently — pointed to the tendency of ‘the underlying population’ to emulate rather than to overthrow (as Marx had expected) those richer and more powerful than themselves. In doing so, he identified one of the major elements in whatever a fuller explanation would supply. return to text

32. I studied with (and ultimately was a colleague) of Brady at Berkeley; it was in his classes that I was introduced to Veblen’s work. Brady is considerably less well-known than either Veblen or Galbraith, very possibly because he was both less ‘entertaining’ and more radical than they were. He produced a substantial corpus of books and articles; hoping to expand his readership, I wrote an essay concerning him: ‘Against Decadence: The Work of Robert A. Brady (1901–63)’ (Dowd, 1994). Much of what follows is based on that essay. return to text

33. I sought to make that argument as regards Veblen and Mills in the essay ‘Thorstein Veblen and C. Wright Mills: Social Science and Social Criticism’ (Dowd, 1964). What was said of them in that essay applies equally well to Brady. A major difference between Brady and them (as well as almost everyone else) is that, though from a farm family (in eastern Washington), his father had been a (white) slave — sold into de facto slavery after the Civil War, when hundreds of thousands of widows faced desperate conditions at the same time that black slavery had been ended. His father escaped slavery but never the bitterness that it implanted in him. There can be no doubt that this affected young Brady (and his siblings, four of whom committed suicide). return to text

34. See Brady (1943). The book’s story, of course, ends with its publication. It is good to report that it was republished by Transaction Publishers in 2000. return to text

35. In addition to the countries enumerated, Spain, Portugal and Hungary were also fascist. return to text

36. That there were such tendencies in the United States is illustrated by the creation in 1933 of the National Recovery Administration. ‘Recovery’ was seen to be made possible by what was called ‘self-government in business’, wherein the largest firms in each industry (of about 850 industries) would devise a ‘code of authority’ which set prices, geographic market quotas, and the like which had to be abided by for all firms in the industry. And those who did not? They would have committed a crime, to be tried and punished through federal courts. In 1934, a delegation arrived from Nazi Germany to study that innovation, for adoption at home. The NRA was headed by Hugh Johnson, General of the US. Army; one was supposed to shop only at stores displaying the ‘Blue Eagle’ of the NRA. The original idea for that programme was put forth in 1928 by the then head of General Electric. return to text

37. As can be seen, for example, in his Ph.D. dissertation, ‘Industrial standardization’ (1919), ‘Planning and technology’ (1950 and Organization, Automation, and Society (1961) and his two books on Germany, The Rationalization Movement in German Industry (1933) and The Spirit and Structure of German Fascism (1937). return to text

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June 24, 2003