The New Industrial State

The New Industrial State

The New Industrial State

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The New Industrial State is a 1967 (2nd, revised, edition in 1972) book by John Kenneth Galbraith. In it, Galbraith asserts that within the industrial sectors of modern capitalist societies, the traditional mechanism of supply and demand is supplanted by the planning of large corporations, using techniques such as advertising and, where necessary, vertical integration.

The book followed Galbraith's 1966 series of BBC - a series of six radio broadcasts, also titled , in which he explored the economics of production and the effect large corporations could have over the state.

Galbraith argues that this is made necessary by the long-term planning required for production processes involving advanced technology (and that these same technological challenges were answered with similar types of planning in Soviet societies) which involve substantial additional risk. One of the results of this is, according to Galbraith, that perfect competition as generally understood in classical economic theory is no longer a useful explanation of the industrial sector (although it is still useful in sectors of the economy that are still dominated by small firms).

Galbraith argues that the "industrial system" - by which he means the (in general terms) the companies which control around two-thirds of output in key sectors of the economy are practically controlled by a technostructure rather than share holders and do not act to maximise profit (as that involves the risk of failure) but...
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