The modern large Western corporation and the modern apparatus of socialist planning are variant accommodations to the same need.
Apart from standarisation, industrial business engages in vertical integration, long-term contracts, and monopoly/monopsony in order to eliminate market risk. In the 40 years since Galbrath wrote his book, hedging risk using financial instruments has become a fourth strategy.
It is open to every free-born man to dislike this accommodation.
But he must direct his attack to the cause.
He must not ask that jet aircraft, nuclear power plants or even the modern automobile in its modern volume be produced by firms that are subject to unfixed prices and unmanaged demand.
He must ask, as just noted, that they not be produced.
It's starting to feel like the university is a nice complement to self-schooling.
If I understand correctly, he argues that market power is necessary to protect the organization that produces complex goods. But that does not reduce the overall level of uncertainty, only transfers it to someone else?
Or, requires that individuals behave according to the logic of that organization, not to their own? Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine
Any complex system exists in, and only due to, a meta-system that, to a greater or lesser degree, guides, confines, and controls it. A doo run-run-run, a doo run-run
That is especially true for those of us who end up working in areas other than those for which we trained. And the percentage of such individuals increases with age. If sanity be culturally normative, then by the norms of this culture I claim insanity.
By «defined away axiomatically», are you referring to the models that assume no market power and similar cost structures? Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine
It is also discussed in A Survey of Global Political Economy 2007 by Kees van der Pijl, also available online in full text. It might be a less radio-active site, and has the advantage of being more recent.
I found Hobson to be very clear. In the summer of 1965 I was the graduate reader for a senior level course in 20th Century Britain and The "New Imperialism" was one of the assigned texts. The professor asked who in the class understood and could explain Hobson's thesis. Mine was the only hand to go up. I always waited to see if someone else could answer before raising my own hand, to be fair. But it was summer school, a lot of the class was just there to get what they hoped would be three easy credits and were business, or other liberal arts majors, not history majors. If sanity be culturally normative, then by the norms of this culture I claim insanity.
Um, the argument is the whole of Chapter 3...
Oh.
Maybe I shouldn't feel bad about the fact that I couldn't follow it from a five-line quote of the conclusions, then :-P
Thanks for the summary.
- Jake Ceterum censeo Chicago esse delendam
The trick is to expect Government to behave as if it could be guided by the values and mindsets of a small business...
Rather, that is the trick that campaign managers and RW politicos use to get themselves elected. It appeals directly to the personal experiences and prejudices of small businessmen and those who identify with them. They see no contradiction arising from the totally different behavior of large corporations, which routinely flout all of the cautionary strictures of Adam Smith, as they see large corporations as simply being more successful versions of small businesses, and thus aspirational for them and worthy of defense, even when that puts small businesses out of business.
People such as Karl Rove certainly see this and don't give a damn about the contradictions. Probably most of the adherents to that point of view are less clear on these issues. They just "know" that it is important for "their guys" to win so that the country will be run according to "correct" values. For them it is a problem of preserving their identity regardless of the consequences, those consequences that are now besetting us all. If sanity be culturally normative, then by the norms of this culture I claim insanity.
If one wants to bring about an old-fashioned liberal economic utopia, it will not be industrialised.
Nice outline, but wrong conclusion. Cathedrals, pyramids and other giant projects show that industrial-scale outcomes are possible with other social models.
The fallacy is to assume that it's top-down centralised micromanaged planning, or nothing - in other words that we've exhausted every possible cultural approach to managing big resource extraction and processing projects.
I don't think this is true. In fact the problem now is to invent new kinds of social organisation which mix the sustainability of subsistence cultures with the dynamism and inventiveness of explorer cultures.
I'm not saying it's easy, but I'm also not convinced it's impossible.
No, it's the right conclusion, because, you have to remember that when he was writing "liberal" meant "Manchester liberal" and thus the quote could be rewritten from modern understanding as:
If one wants to bring about that cliche of a glibertarian economic utopia, it will not be industrialised.
We still have some taxes and a few social services, but it hasn't exactly been happy time for neo-Keynesians.
It's true that glibertarian utopias have a habit of imploding, but I'm not sure he's suggesting that.
Er - haven't we had the industrialised cliche glibertarian utopia for the last couple of decades?
Only in Somalia...
ThatBritGuy:
I know it seems odd now, but back when he was writing, "liberal" really did mean something different, much closer to glibertarian than it does now.
Metatone:
After Reagonomics?
It's amazing, really, because in the 1960's Galbraith was ready to pronounce neoclassical marginalist economics dead. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
The fallacy is to assume that it's top-down centralised micromanaged planning, or nothing - in other words that we've exhausted every possible cultural approach to managing big resource extraction and processing projects. I don't think this is true. In fact the problem now is to invent new kinds of social organisation which mix the sustainability of subsistence cultures with the dynamism and inventiveness of explorer cultures. I'm not saying it's easy, but I'm also not convinced it's impossible.
I would be very interested in reading about any possible models you might have in mind. ... all progress depends on the unreasonable mensch.(apologies to G.B. Shaw)
Nice outline, but wrong conclusion. Cathedrals, pyramids and other giant projects show that industrial-scale outcomes are possible with other social models. The fallacy is to assume that it's top-down centralised micromanaged planning, or nothing - in other words that we've exhausted every possible cultural approach to managing big resource extraction and processing projects.
That doesn't mean large structures can't evolve without markets or centralised planning. Historic non-Western cities prove that point - cities may be supported by trade, but they're not necessarily defined by it.
I think the push away from industrialisation is more complicated. It's a mixture of opportunism, social snobbery, class war and a desire to emasculate unions, and an understanding that capital is much better at making more capital when it doesn't have to deal with real things in the real world.
But there's a more basic metaphor. The only real currencies in economics are physical commodities and trust.
If you build a hyper-competitive system where no one can trust anyone else, sooner or later - completely unexpectedly - trust evaporates, and the system implodes in a spectacular display of fiscal paranoia.
If you're running out of physical commodities at the same time - that's also not a good thing.
Just so, what I'd like to see is a more distributive model for energy generation (which makes sense if you need multiple 'small' green generators --solar/wind--as opposed to one big ole nuclear reactor or coal burning / oil burning power plant). In fact, moving to a more conceptual plane, the distributive model is part and parcel of what drives the open source movement. A great essay that delineates some of this is the Cathedral & the Bazaar, documenting, among other things the 'subversive' Linux author's working method. The lead graph is a pretty compelling argument for a completely different approach to 'centralized' software development.
Linus Torvalds's style of development--release early and often, delegate everything you can, be open to the point of promiscuity--came as a surprise. No quiet, reverent cathedral-building here--rather, the Linux community seemed to resemble a great babbling bazaar of differing agendas and approaches (aptly symbolized by the Linux archive sites, who'd take submissions from anyone) out of which a coherent and stable system could seemingly emerge only by a succession of miracles.
I wanted to find a low priced green e-vehicle that would get me from a-b with a decent speed and decent range and wouldn't cost me a fortune.
Zap car came immediately to mind, but after doing some research and test driving I wasn't happy: 11,000 MSRP for a car that advertises 45 mph, but barely runs 35 with the wind at it's back, and on steep uphill grades was even slower. Worse the range couldn't even let my wife do a roundtrip to our daughter's highschool and back (about 60 miles). It was a deal breaker. So I started hunting around. What I found was a veritable ecosystem of garage mechanics building their own e-vehicles by gutting light weight Hondas or VW bugs and filling them with standard batteries. For about $8000 I could find a ride that was notably cheaper, faster and further than the Zap vehicle. Or I could build my own. Once the basic engineering principles are mastered and the parts obtained (and most good junk yards and auto supply stores would have what you need) an e-vehicle can be converted or built from scratch for easily $10,000. One that is cheaper than Zap, goes further and is faster. So why does the centralized manufacturer suffer by comparison to the home hobbyist?
A couple of explanations are possible. A big one: the main cost of the vehicles is offset initially by effectively reusing a chassis. Labor and other overhead is absorbed by the person working on his own conversion or doing a kit. A lot of the same thing goes on in the bazaar model of software development. The labor turns out to be something of a labor of love; not many millions were initially made by the intellectual tinkerers who put together Linux; and yet, in terms of value, it's pretty staggering to think of the value of the Linux OS now. What corporations want to do is lock in that future value by centralizing the development of their 'product'--in point of fact the ONLY way they can think of safeguarding their 'product' is through a centralized process. That's ultimately why Linus's methodology was subversive. He didn't bother to safeguard anything. He left it wide open. I think we can make that same shift in terms of agri-business and energy production. Perhaps even big ticket items like home building (earth ships) or autos (re-vamped e-vehicles), but it will take the 'risk' of foregoing a guaranteed profit. And a lot of tinkering by cooperative communities, no doubt :-)
