ABSTRACT

The thought model presented in this chapter draws primarily on John Kenneth Galbraith and secondarily on Robert Keohane. Before presenting the multi-centric organizational model, the chapter discusses the institutionalist critiques of the dominant thinking in economics and political science by Thorstein Veblen, Karl Polanyi, Piero Sraffa, Robert Keohane, and Galbraith. Veblen directly challenged the realistic usefulness of the abstract neoclassical market model. The market model approach does not take into account changing historical conditions, neither does it analytically pay any attention to the social, cultural, and political conditions in which it is embedded. The market model relies on supply and demand to determine relative values, while the cost of production model relies on production costs plus the outcome of the distribution power struggle between labor and capital to determine relative values. Galbraith firmly believed that the institutional changes that have occurred in twentieth-century capitalism, especially corporate concentration, have made the conventional market model an obsolete analytical tool.