New industrial state

A striking development of our time has been the rise of the great business corporation. A small number of these giants, five or six hundred in all, now account for about two-thirds of all industrial activity in the United States. Similarly in Europe. They use highly sophisticated technology and highly specialized manpower. They supply themselves with the capital they use in massive amount; in their direction they are responsible not to their owners but internally to themselves. In their comprehensively organized world the role of the individual businessman has been reduced and that of the state much expanded. Motivation to effort has changed; the simple pursuit of personal gain does not explain the behaviour of the modern organization man. The market has declined as a guiding influence in economic life. It has been extensively replaced by planned decision as to what will be produced, at what prices and for whom.

In this book, Professor Galbraith shows the relation of these changes, and many more, to each other and to ourselves. And he knits them into a consistent and complete view of the modern industrial society. No such society, capitalist or communist, he shows, is immune to the effects of modern industrial develop ment. He considers its promise and peril and, in the final chapters, gives his view of how we should be guided if we are to realize the promise and minimize the peril.

The New Industrial State has taken Professor Galbraith ten years (except for the time he spent as U.S. Ambassador to India) to write and it has already provoked lively discussion, since in his 1966 B.B.C. Reith Lectures the author drew his material from certain chapters in the book. The Times, in a leading article about the lectures, called them "a splendid tour de force" and feared only that the case might "dazzle too much". The Economist had reservations but blessed the argument for its "unconventional wisdom" and for being "aglow with inimitable with Phrases from Professor Galbraith's earlier books have made their way into the language and have altered our view of economic and social life. To "affluence", "the conventional wisdom" and "countervailing power" this book adds, among others, "the Techno structure", "the Revised Sequence" and "the Educational and Scientific Estate". The Techno structure changes our view of who runs the modern industrial enterprise; for the owners and managers it substitutes the complex of specialists and technicians who in fact exercise the decisive power. The Revised Sequence alters our view of the way the economic system itself is guided. Once the consumer was seen as exercising his sovereign choice market and thus instructing business firms on what to produce. Here we see the large business firms reaching forward to control markets and arrange the consumer behaviour that serves their needs. And increasingly the large business firm wins the climate of belief, and therewith the public policy, that serves the goals of its planning. We see the Educational and Scientific Estate replacing the waning power of the unions as a political force. Government in the industrial state, Professor Galbraith holds, can only be understood in light of the needs and goals of modern large-scale organization. And similarly the prospect for trade unions, political parties, education and Indeed, only as we see the goals of the industrial the larger culture itself. of subordinating too much of life to their service. system in a cool, clear light will we avoid the danger Only then will we exploit the opportunities inherent in well-being.

This will stand, we think, as Professor Galbraith's most important book. It is professional and penetrating. But, as with the other work of this most literate of economists, while it breaks much new ground for the initiated it also communicates easily and spiritedly with the concerned layman and citizen. The New Industrial State will be the talk of this year and the subject of solid study for many years to come.