6 John Kenneth Galbraith's new industrial state 40 years later

In the middle years of the twentieth century, John Kenneth Galbraith ¹ developed a profound vision of the U.S. economy: both how it worked in practice and how he hoped it would be in the future. I will consider this Galbraithian vision of U.S. capitalism, which he termed “the new industrial state,” in his book of that title published in 1967. I will also outline key aspects of this vision which were developed in two earlier major, popular, influential works: American Capitalism: The Concept of Countervailing Power, first published in 1952; and The Affluent Society, first published in 1958. Taken together, ² these three books present a view of the dynamic, important parts of U.S. society being dominated by big business, big government, and to a slightly lesser extent, big labor. These three large sectors, big business, big government, and big labor, could to some extent balance, control, and countervail the power of the other two. They had helped guide the U.S. economy through the relatively prosperous post World War II years with rising standards of living for the average U.S. worker. Galbraith hoped/expected to see continuously rising living standards for the average worker. He felt that limitations of the system, such as its neglect of environmental and aesthetic values, could be overcome through appropriate reforms. In a sense, the industrial state could conceivably be transcended, or put in its place, as a technical aspect to society, but subservient to broader non-economic goals, needs, and purposes. ³