ABSTRACT
American Capitalism starts with the declaration that the competitive model cannot explain the modus operandi of modern industrialism. Frequently in his writings John Kenneth Galbraith stops to cast an admiring glance at the competitive model, the theory of a free enterprise economy so assiduously constructed by generations of economists. In Socialism, Capitalism and Democracy, Schumpeter depicted the process of industrial concentration as one in which firms built up protective walls around themselves to shield their activities from the depredations of competitive uncertainty. Galbraith contended that "the support of countervailing power has become in modern times perhaps the major domestic peacetime function of the federal government". Galbraith concludes on the note that "The phenomenon of countervailing power does provide a negative justification for leaving authority over production decisions in private hands". Galbraith disposed of the problems of optimum price and volume by asserting their lesser importance as against technological development, fostered by the great corporation.
