In the 1950s and 60s America when through many political,
philosophical and economic changes because of the various outcomes of WWII and
the Great Depression;
In the 40s Keynes stepped away from classical economics and horrified
those against his ideas surrounding state intervention in the markets. Keynes
used the great depression as his prime example of how a world’s economy can
decline. From his analysis he came to the conclusion that the cause of the
decline was ‘small and narrow’ and believed that the solution was also that.
His reasoning for the depression was lower aggregate expenditure contributed to
a decline in income and to employment that was way below average. His answer to
the problem was to keep people employed – even if it meant filling and
refilling holes – government should intervene when the economy slows because
the private sector would not be able to invest enough to keep production steady
and the economy out of a recession.
The greatest philosophical movement to come out of the war
was existentialism, led by the writings of jean-Paul Sartre and Albert Camus. Existentialism
begins with not merely a human subject but the acting, feeling, living human
individual. An individual’s starting point is characterized by what has been
called ‘existential attitude’ or a sense of disorientation and confusion in the
face of an apparently meaningless or absurd world. Kierkegaard proposed that
the individual is solely responsible for giving meaning to life and living
authentically. Kierkegaard, an existentialist of the 20the century, suggested
that the individual, not society or religion, is responsible for giving meaning
to life and living it authentically.
Nihilism, on the other hand, suggests the denial of one or
more putatively meaningful parts of life. It is commonly posed as existential
nihilism which argues that life is without objective meaning, purpose or
intrinsic value.
The new industrial state;
Changes to ideas surrounding economics were still going
strong after Keynes; John Galbraith wrote the new industrial state which
explores the ins and outs of this new economic system sweeping through America
throughout the post war period. The system itself is described as nihilistic
because there is no real point to it or its survival and was also seen to be
technological-bureaucracy.
Galbraith suggests that it is the ‘technostructure’ that
controls everything and that they subordinate the government for their own
progression and self-esteem. ‘Those who run the corporations own no share of enterprise;
they are selected narcissistically by boards that have been chosen by the
owner.’
The innovations and alterations to economics after the
Second World War were great. The most evident was the introduction of
technology into the production of things, increasing and making production of
products easier for corporations. But it became apparent, very soon, that the machines
began replace the manpower that was needed before. Not only that, the machines
had the ablity to replace human intelligence.
With these developments the dynamics of businesses began to
change; at one point the corporation was confined to large scale production
(steel making, petrol refining etc. ). Now corporations sell food, newspapers
and provide entertainment, which was done only by small firms or individual
traders.
The nature of industrial planning;
The 'techno structure', Galbraith emphasised, was based on
the need for planning so that it could survive. But planning was not positively
seen at the time because of the ideological overtones of the Cold War and the
way that communist countries used planning. Conveying an idea of danger, in American
libertarians because they believed planning curtailed liberty. But Galbraith
believed this reaction occurred at the wrong time.
It occurred when an increase in technology and the
accompanying commitment of time and capital were forcing planning on industrial
communities.
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It is the instinct of the conservatives that
economic planning involves the control of individual behaviour. The denial that
we do any planning has helped conceal the fact of such control even from those
who are controlled.
The old method of assuming economic success ( the customer -
by making the offer to buy- obtains the responding action of the firm that
supplies his needs) no longer works. Consumer’s needs must be predicted months
and years in advance and what the consumer wants because when the day comes
they may not be willing to buy the product.
Planning is also vital to control market behaviour -
anticipatory steps to ensure that necessary supply is available at an
appropriate wage or price. As well as planning and making sure that the price
of the means to produce products are cost consistent with the price the firm buys
the product for, not to mention control over what is sold and what is supplied;
The industrial system must replace the market with planning. A corporation must
do what is necessary to make sure that the necessary supply is available at an
appropriate wage or price, which can only be achieved by planning. The concept
of planning emphasises the bureaucratic nature of the system.
The technostructure;
Galbraith outlines
the technostructure in three parts;
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Technology itself, which dispenses the need for
skilled employees.
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Needs the power of a group of people for
planning. They need to understand and manage technology so that the technostructure
runs smoothly.
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Co-ordination of specialised talents, developed
to examine the information required to make decisions.
The ultimate power in decision making is firmly embedded
within groups of a corporation’s hierarchy.
The goals of the industrial system;
Galbraith outlines the goal/objective of the
technostructure, like any organisation is survival. These are the way in which
it achieves that;
1.
The first essential tool for survival is to
preserve the autonomy on which its decision making power depends. This relies on it having secure minimum
earnings; so long as earnings are enough to make payments to stockholders and
provide supply of savings for reinvestment the organisation will survive. If
the earnings are less they will have to appeal to outside suppliers of capital,
reducing the autonomy of the technostructure.
2.
System is social policy. Emphasis on inherently
and functionality independent character. It is the private enterprise system.
It needs to ensure that it is accepted wholly.
3.
The industrial system must achieve the greatest
possible rate of corporate growth as measured in sales. The technostructure is
self-interested. The expansion of output means expansion of the technostructure,
meaning more responsibility, more promotion and compensation. Growth as a goal
is consistent with the personal and economic interest of those who participate
in decisions and direct the enterprise. It is also protection against
contraction. Contraction of output becomes much more painful and damaging as
the techno structure rises. Costs cannot be reduced by laying off workers.
4.
Technological expertise serves the need of its members.
Progressive technology means jobs and promotion for technologists and capacities
for expansion rely on capacity for innovation. Technical innovation that the
firm holds and recruits customers for its existing products and expands to
produce new ones.
The industrial state and the state;
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Qualified man power is decisive for the success
of an industrial state. Much scientific and theological innovation is funded by
or comes from the state
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The state regulates aggregate demand for
products of the industrial system. The state provides wage and price regulation
- without it the industrial system is unstable.
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The industrial system is inseparably associated
with the state; ‘the mature corporation is an arm of the state. And the state
is an instrument of it.’ Though people accept that there is a line between
private sector business and the state. The line between public and private
authority in the industrial system is imaginary - the detestable association of
public and private organisations is normal.
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The increase of unionism drove the state to
dominate business, by encouraging it to adopt roles in the management of
aggregate demand, controlled wages and prices (Keynesianism).
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The government adapted itself to the needs of
the industrial system, but the industrial system was incapable of gaining an alliance
with the state.
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The industrial system comes to influence government
by integrating itself seamlessly with outer functions of government that it
becomes artificial to draw a line between public and private sectors – the technostructure
makes government decisions.
