- Hardcover: 334 pages
- Publisher: Houghton Mifflin (T); First Edition edition (September 1973)
- Language: English
- ISBN-10: 0395172063
- ISBN-13: 978-0395172063
- Product Dimensions: 9 x 6.1 x 1.4 inches
- Shipping Weight: 1.4 pounds
- Average Customer Review: 5.0 out of 5 stars See all reviews (4 customer reviews)
- Amazon Best Sellers Rank: #1,986,578 in Books (See Top 100 in Books)
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Economics and the Public Purpose Hardcover – September, 1973
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JKG wrote this in the Affluent Society : "Nothing counts so heavily against a man as to be found attacking the values of the public at large and seeking to substitute his own. Technically, his crime is arrogance. Actually, it is ignorance of the rules. In any case, he is automatically removed from the game." I'm not sure if he was 'seeking to substitute his own' ideas, but he gave an option for emancipation - to free oneselve from persuasive grasp of big business. So I guess Economics and the Public Purpose broke the rules by enlightening the readship to this option, and it is now destined to be left in the care of a few university libraries and the occasional footnote.
Tragic. It's a really good book.
For strangers to Galbraith's views, it is necessary to understand that he was first and foremost a student of what was, rather than idealized systems. Hence, many of his critics, faced with a dualistic world view, will accuse him of favoring a command economy, on the grounds that he was critical of the pretensions of capitalist economies. I hope readers will immediately see the error of this way of thinking: a clear-sighted analysis of a system that embraces the whole of a society's transactions cannot possibly be reduced to a dualistic judgment.
Second, Galbraith was an institutionalist. While orthodox schools of economics tend to emphasize the inherent, automatic nature of all economic transactions regardless of the nature of the agents, institutionalists such as T. Veblen, J. Commons, C. Ayres, and Galbraith identify the economic agents--viz., institutions in the society--as the decisive factor. Galbraith frequently aroused a lot of ire by pointing out the shortcomings of a social science (economics) being dominated by political demagogues, although he preferred to say this using dry wit.
In this book, he unites several concepts into an explanatory system.Read more ›
He wrote in the Foreword to this 1973 book, "This book is in descent, the last in the line, from two earlier volumes---'The Affluent Society' and 'The New Industrial State.' There are also some genes, though not many, from ... 'American Capitalism.' ... The earlier volumes were centrally concerned with the world of the great corporations... There is also the world of the farmer, repairman, retailer, small manufacturer... This book seeks to bring them fully into the scene... This (book also) gives the first elements of the international scene."
He begins with the observation that not only does General Motors exist to serve the public, but "General Motors also serves itself." (Pg. 3) He asserts that no innovation of importance originates with the individual farmer.Read more ›
Galbraith comments, "the imagery of choice ... means that this choosing - this decision to purchase this product, reject that - is what, when aggregated, controls the economic system. And if choice by the public is the source of power, the organisations that comprise the economic system cannot have power. They are merely instruments in the ultimate service of that choice." So if the consumer has the power, she, not the firm, is to blame for the firm's products or results (e.g. pollution). In theory, the market uses power for the public good; in fact, large corporations use this power for their own purposes.
He sums up, "economics ... also serves the controlling economic interest." Mainstream economics is a system of ideas that diverts all attacks into channels that are safely futile
In analysing the US economy, Galbraith oddly distinguishes what he calls the `planning system' from the market system. The `planning system' is composed of the thousand giant firms that run the show. The market system is composed of the roughly twelve millions of small businesses.
What does the US economic system produce? "Unequal development, inequality, frivolous and erratic innovation, environmental assault, indifference to personality, power over the state, inflation, failure in inter-industry coordination are part of the system.Read more ›