Kenneth Galbraith The Public Purpose

John Kenneth Galbraith; The Public Purpose

Economics and the Public Purpose, published in 1973, completed the Galbraithian system. It restated his basic hypotheses about industrial society and expanded in particular on two themes.

First, it stressed the significance of the dual economy which obtains in modern industrial societies, a dual economy made up of a 'planning system' (the powerful corporate sector able to dominate) but also of a 'market system' (the world of small, passive, competitive buyers and sellers, still operating as if in the textbook model of perfect competition). The two sectors are, in the USA, approximately equal in size (each representing about 50 % of GNP generated in the domestic private sector). They are not, however, approximately equal in power; and to prevent the strong from bullying the weak Galbraith is eager to recommend public support to the small firm (say, in the form of research and development done on its behalf in government laboratories), together with support to positions of weakness located within the market system itself (notably via support to unionisation, includ­ing that of migrant workers; via minimum wage laws to defend those unable to unite for mutual protection; and via the imposition of maximum hours of employment so as to prevent self-exploitation, including that of the owner-entrepreneur and his family).

Secondly, it drew attention to 'bureaucratic symbiosis' (the phenomenon whereby the goals, ideology and even personnel of the technostructure interact symbiotically with the goals, id­eology and personnel of the civil service; so that, for instance, the expansion of defence ministries results from an expansion of weapons suppliers, and both monoliths collude, in the USA as in the USSR, in order to attain organisational objectives). Arguing that the executive is abnormally dependent on bureaucratic advice, Galbraith emphasized that the check on organisational power must be exercised by the legislative branch of government: it, he contended, is less likely to be the prisoner of bureaucratic truths, pre-digested fictions and organisational inertia, especially after it has come to be dominated by the radical wing of the Democratic Party.

Here once again Galbraith's assertions, with respect to both themes, are subject to challenge. Regarding the dual economy, it is perhaps unhelpful to treat businesses as either weak or strong rather than falling into a continuous spectrum; and it is certainly misleading to lump together, within the market system, both the Harley Street specialist and the Chinese waiter. Also, Galbraith underestimates the dynamism of small business: many important new ideas (despite the advent of the large organisation, with its unquestioned superiority in glamorous areas such as computers, space exploration and atomic energy) in fact originate in the small firm, and are likely increasingly to do so in some future 'post-industrial' service society where the demand for a personal contribution encourages the (flexible) individual rather than the (inflexible) organisation. If, moreover, small business is dynamic, then Galbraith's proposals to buttress positions of weakness within the market system are to be regarded with some caution: neither minimum wage laws (which he admits would lead to the loss of some jobs) nor the imposition of maximum hours of self-employment would assist the weak in their on-going struggle with the strong.

Regarding 'bureaucratic symbiosis', while one welcomes any attempt to prevent bureaucracies public and private from agree­ing upon, say, an aggressive foreign policy principally to improve promotion-prospects and enhance their own social status, it is not clear that such a phenomenon will be overcome by an increase in the power of the State. If anything, it suggests a need for more decentralisation and less concentration in both public and private sectors.