The New Industrial State, Part 3 to the Life & Works of
John Kenneth Galbraith
Galbraith thought, as so many did in the 1970s, that everything was run by five or six hundred companies, and the "technostructure."
"... technical change is the product of the matchless ingenuity of the small man forced by competition to employ his wits to better his neighbour. Unhappily, it is a fiction. Technical development has long since become the preserve of the scientist and the engineer." (Galbraith.)A British economic authority of long standing, Professor John Jewkes, in his review of The New Industrial State, concluded that the facts on which Galbraith based his arguments were incorrect. Jewkes was of the view that Galbraith "merely repeats his unfounded assertions and dogmatically dismisses anyone who presumes to differ from him ..."6 In Friedman on Galbraith there is a reference to Sir Frank S. McFadzean; it was McFadzean's view that Galbraith displayed a "remarkable naivety as to how a business really operates ... [these monopolistic] events and markets ... exist only ... in the imagination of Professor Galbraith. ... a leap [not to] be justified by any objective analysis." G. C. Allen, a professor of Political Economy at University College, London ('47-'67) questions not only Galbraith's "facts" but also his methods. Allen did not think it quite proper for a "conversationalist" to give an "idiosyncratic interpretation of orthodox doctrine in order to give force to his own arguments." And while his lectures were full of interest and fire, Galbraith misled people.
"... he [Galbraith] put forward as if they were novel and heretical various propositions about industrial society which have been accepted as commonplaces by many economists for several decades. ... The notion that the economic history of modern times shows a steady progression from highly competitive markets to monopoly is remote from the truth. The industrial system is much more complicated and intricate than it appears in his version of it. And the solution of the problems created by economic growth and advanced technology cannot be found within the confines of his own ideology."7
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