It is essential, indeed mandatory, for his case to establish that the particular order of magnitude and the particular pattern of diversification of internal structure which characterizes the contemporary corporate conglomerate in the United States reflect the imperatives of modern technology and industrial planning. They are genuinely and tenaciously held, for otherwise they would constitute a very poor ideology. An objection could easily be raised against this Procrustean solution: Rather than acting as if monopoly power does not really matter or going all the way to an economy with centrally determined prices. More particularly I want to thank my good friend Stanley Sheinbaum for urging me to engage in this venture and Richard Parker of Magdalen College, Oxford, for his valuable comments and suggestions. Seventh, there is a carry-over from the goals of the technostructure to generally accepted social goals. Are there historically feasible alternatives to paternalistic capitalism? To begin with, it is strongly associated in the Western world with the concept of personal freedom, with distrust of central authority, and with democratic institutions, although in fact no one has established the necessary logical as against merely historical connections among these phenomena. It is in this connection that monopoly capitalism comes into its own.
Minnesota Archive Editions uses digital technology to make long-unavailable books once again accessible, and are published unaltered from the original University of Minnesota Press editions. Thus encroachments upon the surplus by wage 29 For in strict Marxist terms all increases in productivity are appropriated by the capitalists, since the working class earns just enough to subsist. Power has, in fact, passed to what anyone in search of novelty might be justified in calling a new factor of production. One may disagree with it and yet find the book a worthwhile stimulant for reflection. If this be so, it might be argued that profit maximization does not have much to do with the stockholders' reward.
. Furthermore, we cannot ignore the fact that the large U. Unfortunately, Baran and Sweezy don't make this sufficiently clear. I find much of the Neo-Marxist argument valid, but discuss one truly major disagreement in the following chapter. A losing battle with the Air Force for responsibility for missile program development taught the Army that its extensive in-house capabilities and technical independence were a distinct disadvantage. The first is a donothing policy.
Mishan, The Costs of Economic Growth, is reprinted by permission of Granada Publishing Limited, London, and Praeger Publishers, Inc. Next, we subtract this minimum social cost from the actual social cost of the society under investigation. Its power will not be peculiar to what in the cadenzas of ideology is called the free enterprise or capitalist system. Indeed, the two systems tend to converge, not on the middle- ground of a plan-and-market symbiosis, but in their common totalitarianism. Technically, but only technically, the market mechanism still allocates resources to uses. Nor would the producer be worse off, since he would be compensated for his loss of profits. Recognition of the need for the articulation of social priorities in the domain of public action unavoidably leads to consideration of the emergent properties of society—to a view of society which streses its organic or systemic character.
Each of them has some factual basis. It goes without saying that radical redistribution policies would tend to come in conflict with the very institutional basis of market capitalism. Nothing less will do than an economy-wide structure of indirect taxes designed to transform private marginal costs into social marginal costs. The nation, a product of the French Revolution, gave a new twist to the concept of sovereignty. And the pattern of household demands for final products along with the pattern of factor supplies is directly dependent upon the initial distribution of wealth.
The government itself, of course, must own or control some property, if it is to perform its functions; but public ownership is commensurate to these functions, which are limited to the enactment and enforcement of the rules of the game. And with technical and scientific advance. This faith that a market economy is a necessary or a sufficient condition for a free society is itself a strong source of ideological bias. Or, alternatively, to adopt some model of a capitalist economy with prices determined by a central authority—in the Lange fashion. In fairness to Baran and Sweezy, one should say that they do not develop a universal definition of social waste, as I have attempted to do here.
Households, in contrast with firms, engage only in exchange processes. The conclusions are not too surprising. Characteristically, in any contemporary capitalist economy, monopoly power is unevenly spread, and intervention is called for. No government in the West can underestimate with impunity the capability of the Establishment to strike back when its interests are at stake. The scheme is completed by identifying the position or the state of rest of the participating units households and firms with an optimal state—that is, with a state in which some index utility for the households, profit for the firms is maximized subject to certain constraints. I am not suggesting that the prevalent beliefs are not genuinely held. The natural but not the only extension of the model is to assume that he himself is to be the judge.
He then considers the Neo-Marxist view that the economy can best be understood as monopoly capitalism, and the technocratic interpretation of society proposed by J. A good example at the international level is the havoc that resulted in the Western world as a result of Richard Nixon's camouflaged and punitive devaluation of the dollar in 1971. A process not too dissimilar to this has been characteristic of the labor unions. To each combination corresponds a profit the difference between receipts and outlays. To use Schumpeter's felicitous distinction, neoclassical economics is concerned with the administrative rather than the creative aspects of the economic process.
In market capitalism, firms are controlled by an entrepreneur, who is either the owner or assumed to represent the owners of the net assets assets minus liabilities of the firm. And this would seem to contradict the notion that the overall strategy of the firm is profit-maximizing. Analytically, there was no room for an explanation of unemployment as a persistent or equilibrium feature of the market economy. The search for a type of society in which social planning —the conscious pursuit of articulated societal goals without domination by some establishment, be it of the bureaucratic or of any other type—can be realized leads to the concept of a regionally decentralized, socialist society. This apparat is a specialized organization performing a service which is best summed up by the word command.