• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Outline and critically assess J K Galbraiths argument that it is not the market but a planning system that drives many capitalist economies

Extracts from this document...

Introduction

Outline and critically assess J.K.Galbraith's arguments that it is not 'the market', but a 'planning system' of large corporations that drives many capitalist economies. Over the past 30-40 years the world has seen a significant rise in the number of TNC's that operate and it is safe to say that they are very important to many economies as they dominate their business environment. Anyone who disagrees should consider the following facts; * 1/4 to ? of all world production is controlled by TNC's * The biggest 500 large corporations control 70% of world trade and 80% of all overseas investment (FDI) * The total combined revenue of the biggest 200 corporations is greater than the combined revenues of the 182 national economies that make up 80% of world population. * The combined profits of just two of the biggest automobiles companies in the world (General Motors and Ford) surpass the GDP of all of Sub-Saharan Africa. * In the early 1970's there were just 7000 TNC's whilst now there are almost 8 times as much with 53,000 TNC's (quote) Neo-classical economics (i.e. traditional textbook economics) views capitalism as a market system with government intervention where necessary (most often when markets fail). ...read more.

Middle

......US defence industry example As mentioned above the planning system also includes the government. This is because there are certain things that even very large firms cannot plan or regulate, so the government will step in to complete the overall planning process. Large corporations cannot control the size of the economy, so the government have the power to control aggregate demand (total spending in the economy). Large firms also cannot control inflation; this is another job for the government to complete. Lastly, large firms can train but they cannot educate workers, so the government supply the skilled persons they need through university funded education. Galbraith believed that these large corporations were not run by managers of the firms as it is popularly believed and so the term technostructure was coined. This term refers to a group of highly skilled technicians which Galbraith believed were the real puppet masters of large corporations. Accountants, economists, marketers, lawyers, scientists, engineers and lobbyists all belong to a technostructure. Galbraith held that the technostructure had considerable power over the company's "decisional and directional process" as managers had to consult the technostructure before making any decisions about the company's future. ...read more.

Conclusion

of the world's population are now surviving on $2 a day or less. 1/2 of the earth's forests have been entirely destroyed, and 1/2 of the world's rivers are in a dire state due to contamination and depletion (www.wikipedia.org). They are often referred to as sadistic psychopaths not caring about anything and anyone but how have TNC's and MNC's gained so much power and affluence you ask; well many governments have removed trade barriers however in the process have also failed to balance this with creating rules and guidelines to prevent the mistreatment of the environment and neighbouring communities. Some may say that guidelines are adhered to however in realty these guidelines are usually 'weak and un-enforced'. In a nutshell Galbraith states that the long-established system of supply and demand has been replaced by corporate planning by firms, using techniques like advertising. Although it has been argued against this belief, the evidence in support of it is overwhelming and if he can be criticised it will be for not delving deep enough into the power of large firms over aspects such as culture and human interactions. In my opinion Galbraith was a giant, both literally (at 6ft 8) and metaphorically in the world of economics and his views will stay with us for decades to come. http://www.halexandria.org/dward318.htm http://www.economictheories.org/2008/08/galbraith-power-of-technostructure.html http://en.wikipedia.org/wiki/Edsel http://www.guardian.co.uk/world/2004/jul/15/usa.iraq Exacerbate ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Markets & Managing the Economy section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Markets & Managing the Economy essays

  1. Peer reviewed

    Outline the argument for and against smoking ban

    4 star(s)

    However smoking can have a small benefit on society in small way. The tax on cigarettes is enormous, around 400-500%, and if someone smokes cigarettes for most of their life and does not claim on the NHS for a smoking related cause, the government has greatly benefited out of their habit by increased tax revenue.

  2. Markets - why they fail.

    Control over outlets - so competitors cannot get their products to the market Government may allow a monopoly to exist because: Alone they are productively efficient because of economies of scale Industry is dangerous and can only allow for one firm e.g.

  1. What are the major economic functions of government in transition economies? Should government play ...

    or costly to establish a close link between payments and receipts of such goods1. Examples of public goods and services are: flood-control dams, pavements, national defense, police and fire protection. There is a problem in transition economies in relation to state provision of this type goods and services.

  2. Micro economics environment - Government intervention

    The restrictive trade practise act 1976 is concerned with agreements between persons or companies that could limit their freedom to operate independently. The resale price act 1976 covers attempts to impose minimum prices at which goods can be resold. The competion act 1980 deals with anti competitive practise.

  1. " Discuss the argument that privatisation and deregulation of electricity supply in a number ...

    supply in electricity market together with global warming also plays as a role, with more unpredictable weather in the UK has led to massive surges in the demand for power. An inadequate supply which can not respond to an increase in demand is a result of blackouts .

  2. Whatever economic system a country adopts, there is always a role for the government ...

    The phenomenon of externalities is universal. Since our society has become more densely populated and as the volume of production of energy and other material increases, negative spillover effects will be generated. This is where governments come in. Government regulations are designed to control externalities like air and water pollution, hazardous wastes, unsafe drugs and etc.

  1. 'Although corporate pricing decisions are influenced by many different factors, fundamentally prices will reflect ...

    Since the perfectly competitive firm is a small part of the industry, that firm has no control over the price of the product. This means that each firm in the industry is a price-taker - the firm takes price as given as something that is determined outside the individual firm.

  2. What Are The Effects Of Tescos Oligopolistic Market Structure, On Both Consumers And Producers?

    The figures in the chart include 52 weeks/12 months of turnover for both sides of the business as this provides the best comparative. Including 60 weeks of non-UK and Ireland sales the figures to 24 February 2007 were: * Revenue: �46,600 million * Profit for year: �2,478 million * Basic

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work