Capitalism, Socialism, and the Future of the Industrial State

“If we continue to believe that, the floats of the modern industrial system and the public policies that serve these goals are coordinate with all of life, then all of our lives will be in the service of these goals” Professor Galbraith warns in this last of three articles based on his forthcoming book THE NEW INDUSTRIAL STATE, being published this month by Houghton Mifflin. The essays end with a call for energetic political action to assure that society asserts the superior claims of aesthetic over economic goals and of environment over cost.

by JOHN KENNETH GALBRAITH

BY ITS nature the direction of the modern large corporation is a collective, not an individual, function. Decisions are made by groups, not by individuals. That is because technology, planning, and organization all require specialized knowledge. The knowledge of specialists must be combined, and the result is collective authority. It is the authority of amorphous and changing combinations of specialized talent. In this article I want to look a little more broadly at this group authority, to show how it manifests itself not in the firm with capitalist antecedents but in the socialist enterprise. Is it inevitable there? And does it mean that under socialism or Communism one will tend to find the same general structure of organization as in the United States and Western Europe? And where, in this industrial development, arc we headed?

We may agree at the outset that since technology and planning and organization are what accord power to the group as distinct from the individual, the group will have a decisive authority wherever technology, planning, and organization are features of the productive process. This is a technical matter; ideology is not involved. If decisions require the information of several or many people, power will pass to the several or many, whatever the proclaimed form of the system.

In the nonsocialist economies, as the firm develops, it becomes necessary to exclude uninformed authority. This, as I have shown in earlier articles, includes the owners. In the 1920s and 1930s and on into the war years, the first Henry Ford insisted on exercising his authority as the sole owner of the Ford Motor Company. It was disastrous. Losses were enormous; the firm very nearly failed. During the war there was discussion in Washington of having Ford taken over and managed by Studebaker. In the same period, Montgomery Ward suffered somewhat less severely from the similar effort of its chairman. Mr. Sewell Avery. And the creditors of TWA a few years ago made it a condition of their loans that Howard Hughes, the then owner, not exercise his prerogatives as owner. Ford, Avery, and Hughes were not notably stupid men; it was rather that all of these firms had reached the size and technical complexity where group decisionmaking had to be protected from such interference. Capitalism at its highest development requires there be no capitalist interference. One would expect that a public corporation of similar size and complexity would suffer from similar intervention by cabinet members, politicians, or bureaucrats. But if the latter must be excluded, it means that socialism, similarly, must be without social control. Experience bears out this expectation.

The British, who have a superior instinct for administration. have recognized the need for autonomy for the nationalized industries. These were considerably expanded in number by the Attlee government following World War II. A decisive issue was that of parliamentary questions and comment. If these were allowed on the decisions of nationalized industries, ministers would have to be informed of such decisions in advance. Otherwise they would confess ignorance and imply neglect of duty. But important decisions, those which Parliament would be most likely to be concerned with, turn on complex and technical information. So, if the minister were to exercise informed judgment, he would need the help of a technical staff. All this being so, responsibility would be removed from the nationalized firm to the ministry. The cost in delayed decision would also be high. So, only if parliamentary intervention were excluded could the firm, and therein the decision-making specialists, act responsibly on questions requiring specialized information. All important questions do. Coal, electricity, gas, road transport, the airlines, and the other publicly owned industries were, in consequence, all accorded such autonomy.

This autonomy is even more necessary for large decisions than for small. And it is large decisions that we call policy decisions. The choice between molecular and atomic reactions for the generation of electricity is a policy decision. It is also grounded in a variety of scientific, technical, economic, and planning judgments. Only a committee, or more precisely, a complex of committees, can combine the knowledge, training, and experience that such a decision requires. So also with the question of whether the North Atlantic should be flown by American or British aircraft. So, in only slightly less measure, the question of how wage scales are to be revised or the railways rationalized. These are the questions on which Parliament would most expect to be consulted. They are among the ones from which it is most decisively excluded. Some years ago Mr. C. A. R. Cropland, the economist and present Minister of Education in the Wilson government, observed that “the public corporation in Britain has not up to the present been in any real sense accountable to Parliament, whose function has been limited to fitful, fragmentary, and largely ineffective ex post facto criticism.” This is as one would expect.

For most socialists the purpose of socialism is control of productive enterprise by the society. And for democratic socialists this means the legislature. None, or not many, seek socialism so that power can be exercised by an autonomous and untouchable corporation, and yet this is as it must be. It does not matter that the capitalist, the ancient target of the socialist, suffers from the same exclusion and must, like the Rockefellers, Kennedys, and Harrimans, go into politics in order to have power. Not all admit to this change in capitalism. They observe only how little difference nationalization of an industry seems to mean. As A. M. F. Palmer, a socialist commentator, referring to Britain put it a few years ago, “If an intelligent observer from Mars or Venus should come and examine all large contemporary industrial concerns — public or private — as working enterprises, he would notice, I suspect, only their overwhelming sameness.”

One result is that a large number of socialists have come to feel that public corporations are, by their nature, and again in Mr. Crosland’s words, “remote, irresponsible bodies, immune from public scrutiny or democratic control.” And in further consequence, a considerable number have given up the light for public ownership or accord it only lip service. They have agreed, though few have yet recognized it, that democratic socialism, like vintage capitalism, is the natural victim of modern technology and associated organization and planning.

THERE have been experiments with more aggressive public control which serve to show that this is not an alternative. In India and Ceylon, and also in some of the new African countries, public enterprises have not, as in Britain, been accorded autonomy. Here the democratic socialist prerogative has, in effect, been fully asserted. The right to examine budgets and expenditures, to review policies, and in particular, to question management through the responsible minister on all actions of the public corporation has been reserved to the legislature.

And here, as elsewhere, if the minister is to be questioned, he must have knowledge. He cannot plead that he is uninformed without admitting to being a nonentity, a common enough condition in the politics of all countries but one which can never be treated with candor. Technical personnel in these countries are less experienced than in the countries which were industrialized earlier. Organization is less mature. This leads to error, and it further suggests to parliamentarians and civil servants the need for careful review of decisions by higher and presumably wiser authority. India, in particular, as a legacy of colonial administration has an illusion of official omnipotence which extends to highly technical decisions. Moreover, poverty makes nepotism and favoritism in letting contracts both more tempting and more culpable than in the rich country where jobs are more plentiful and business is easier to come by. This also seems to call for further review. Rigid personnel and civil service requirements may prevent the easy constitution and reconstitution of groups with information relevant to changing problems.

The effect in these countries of this denial of autonomy has been exceedingly inefficient operations by the public firms. Delay occasioned by review of decisions has added its special dimensions of cost. In business operations a wrong decision can often be reversed at little cost when the error becomes evident. But the cost of a delayed decision — in terms of men and capital that stand idle awaiting the decision — can never be retrieved.

Social control naturally bears with particular effect on two decisions which are of great popular interest — on the prices to be charged to the public and the wages to be paid to workers. Its effect is to keep prices lower and wages higher than the more authoritarian corporations in the advanced countries would ever allow. This is no good fortune. It eliminates net earnings and therewith this source of savings. The poor country, which most needs capital, is thus denied the source of capital on which the rich countries most rely. In India and Ceylon nearly all publicly owned corporations operate at a loss. The situation is similar in other new countries. (One of the sometime exceptions, it is interesting to notice, is the publicly owned airline. It usually claims for itself an autonomy that other public corporations do not have. One possible reason is that public officials are among the principal clients and sense the personal danger in deriving airline management the requisite autonomy.)

The poor showing of democratic socialism has, on the whole, been one of the great disappointments of these last years in countries where there has been a concern for industrial development. And the reason rests not with socialism as such, but with the effort to combine socialist industrial management with democracy. It is part of the modern faith that democracy is both good and omnipotent. Like the family, truth, and sound personal hygiene, it is always above doubt. But it cannot be brought to bear on the decisions of the modern large-scale industrial enterprise. By its nature, this is an autarchy of its managers and technicians.

IF AUTONOMY IS necessary for the effective performance by the firm, it should be needed also in the Soviet-type economies. The requirement begins with the need to combine the specialized information of different men. This need, to repeat, cannot be dispensed with by any ideology.

The need for autonomy in the Soviet firm could, however, be somewhat less, for its functions are far fewer than those of an American enterprise of comparable size in a similar industry. That is because many of the planning functions performed by the American or European firm are, in the Soviettype economy, performed by the state. The large American corporation sets its prices, organizes the demand for its products, establishes or negotiates prices for its raw materials and components, takes steps to ensure supply, and establishes or negotiates rates for various categories of trained and specialized employees. In the U.S.S.R. these tasks are all performed by the state planning apparatus. Production and investment targets, which are established by the American firm for itself, are also given to the Soviet firm, though with some flexibility in application, by the state.

In consequence, the organization of the Soviet firm is far simpler than that of its American or British counterpart. There are no comparable sales, merchandising, dealer relations, product planning, procurement planning, or industrial relations departments. Most of the top positions are held by engineers. This is in keeping with the much greater preoccupation of the Soviet Union with technical as distinct from planning functions.

Nonetheless, the Soviet firm sets considerable and increasing store by its autonomy. There are two major sources of outside interference in the Soviet Pinion — the state planning apparatus and the Communist Party.¹ Soviet economic literature recurrently warns against bureaucratic interference with the operations of the firm. As Professor Ely Devons, a noted British authority, concluded in an article in The Listener in 1957:

The Russians have learnt by experience that you cannot have responsible and efficient action at the level of the firm with continuous intervention and instruction from numerous outside authorities. Conflicting instructions from outside give the manager innumerable excuses for failure; waste and inefficiency may result from a serious attempt to run the firm from a distance. Every argument for delegation, decentralization, and devolution used in discussions about business administration in the West is echoed, although in a different jargon, in Russia. And the case for such devolution has been pressed with increasing emphasis as Russian industry has grown and become more complex.

Soviet plant managers, from my own experience, do not hesitate to stress both their need for autonomy and also their past difficulties in this regard. And on the other side, managements, especially those of large firms, have often been condemned for excessive independence — for behaving as “feudal lords” above the law. In the Soviet Union the most important medium of social comment after poetry is the novel; one of the half dozen most discussed works since World War II has been Vladimir Dudintsev’s defense of the small, independent inventor against the mindless bureaucracy of the great metal combinat in his book Not by Bread Alone.

The author’s affections are in close harmony with those of the American who, in the tradition of Brandeis, argues for the genius of the small entrepreneur as against the stolid, unimaginative behavior of the great corporation. Both have more support from humane instinct than reality. Neither sees that modern technology makes essential the machinery for mobilizing specialized knowledge.

It might also be added that Dudintsev’s inventor would never have got the Soviet astronauts into space.

The position of the Communist Party Secretary — the second source of interference — is also predictably difficult. This man enters the plant hierarchy horizontally, as a member of the staff or working force, and is still subject to the external authority of the Party. If he participates as a member of the decision-making group, he naturally becomes responsible for its decisions, and therefore he is no longer the independent agent of the Party. If he does not participate, he no longer knows what is going on. If he is too good a source of information, and here I quote from a distinguished authority, Professor Joseph S. Berliner, “He may be raised in party rank but . . . then he will not be able to

find out what is going on in the plant. Nobody will have any confidence in him.” Professor David Granick, another authority, concludes that the relationship of the party official is “an uneasy compromise.” Given the imperatives of group decision and the group’s need to protect itself from outside intervention, we see that this is the plausible result.

So, it seems likely that the Soviet resolution of the problem of authority in the industrial enterprise is not so different from that in the West. Like that of the shareholder in the United States or Britain, the authority of the people and party is celebrated in public ritual. They are pictured as paramount, as the stockholder is with us. But in practice, as with us, extensive and increasing power of final decision is vested in the enterprise.

The trend to decentralization, so called, in the Soviet and other Eastern European countries reflects this growing autonomy. It accords to the firm greater authority over prices, individual wage rates, production targets, investment, and other uses of its earnings. Among the more eager or anxious friends of the price system in the United States, this trend has been widely hailed as reflecting a return to the market. The celebration is premature. The large Soviet firm is not being made subject to uncontrolled prices, unmanaged demand, or to the market prices for its labor or raw materials. Given the level of technology, the related commitment of time and capital, this would no more be possible in the U.S.S.R. than in the United States. The Soviet firm through decentralization is being given some of the planning functions that Western corporations have long performed. This reflects the need of the Soviet firm to have more of the instruments for successful operation under its own authority. There is no tendency for the Soviet and the Western systems to converge under the authority of the market. Both have outgrown that. What exists is a very important convergence to the same form of planning under the authority of the business firm. I want now to reflect on the meaning of this development — on the question, Where does all this lead?

For some of these consequences — the effect on government, education, urban life, the prospect for leisure and toil, the future of the unions, the evolution of what I have called the educational and scientific estate, and the effect of fewer workers and more educators on politics — I must refer the reader to The New Industrial State, to be published this month. But though I cannot be exhaustive, I must sketch some broad conclusions here.

In the latter part of the last century and the early decades of this, no subject was more discussed than the future of capitalism. Economists, men of unspecific wisdom, political philosophers, knowledgeable ecclesiastics, and George Bernard Shaw all contributed their personal revelation. All agreed that the economic system was in a state of development and in time would transform itself into something hopefully better but certainly different. Socialists drew strength from the belief that theirs was the plausible next step in the natural process of change.

Now the future of the modern industrial economy is not much discussed. The prospect for agriculture is still subject to debate; it is assumed to be in a process of transition. So are the chances for the small businessman. But General Motors is an ultimate achievement. One does not wonder where he is going if he has already arrived. That there will be no further change in institutions that are themselves a result of such vast change is highly implausible. The future of the modern industrial system is not discussed, partly because of the influence it exercises over our belief. We agree that unions, the churches, airplanes, and the Congress lack absolute perfection. The modern corporation, however, is a perfected structure. So it has won exemption from speculation as to how it might be improved.

Additionally, to consider its future is to fix attention on where it already is. Among the least attractive phrases in the American business lexicon are planning, government control, and socialism. To consider the chance for these in the future is to bring home the extent to which they are already a fact. The government influences industrial prices and wages, regulates demand, supplies the decisive factor of production, which is trained manpower, underwrites much technology, and provides the markets for products of highest technical sophistication. In the formally planned economies of Eastern Europe, the role of the state is not startlingly different. And these things have arrived, at a minimum with the acquiescence, and at a maximum at the demand, of private enterprise itself.

The next step will be a general recognition of the convergent tendencies of modern industrial systems, even though differently billed as socialism or capitalism. And we must also assume that this is a good thing. In time it will dispose of the notion of inevitable conflict based on irreconcilable difference. This difference is still cherished by the ideologists on both sides. To Marxists, the evolution here described, and most notably the replacement of capitalist power by that of technical organization, is unacceptable. Marx did not foresee it, and Marx has always been required by his disciples to have had the supernatural power of foreseeing everything for all time — although some alterations are allowed on occasion in what he is thought to have seen. And ideologists in the West who speak for the unbridgeable gulf that divides the free from the Communist world are protected by a similar theology, supported in many cases by a rather proud immunity to intellectual influences. But these positions can survive the evidence only for a time. Men lose their resistance when they realize that they are coming to look retarded or old-fashioned. Vanity is a great force for intellectual modernization.

The modern planned economy requires that the state underwrite its more sophisticated and risky technology. The weapons competition provides the rationale for much of this underwriting at the present time. This competition depends, in its turn, on the notion of irreconcilable hostility based on irreconcilable difference between economic systems. But the fact is convergence. The conclusion follows and by no especially elaborate chain of reasoning.

The difference between economic systems, from which the assumption of hostility and conflict derives, does not exist. What exists is an image adhered to on both sides that serves the underwriting of technology. And very obviously, there are other ways of underwriting technology.

To bring the weapons competition to an end will not be easy. But it contributes to this goal, one trusts, to realize that the economic premises on which it rests are not real. None of this disposes of different attitudes on intellectual and cultural freedom and the First Amendment. I set rather high store by these. But these have been thought to be partially derivative of the economic systems.

PRIVATE enterprise has anciently been so described because it was subordinate to the market and those in command derived their power from the ownership of private property. The modern corporation is no longer subordinate to the market; those who guide it no longer depend on ownership for their authority. They must have autonomy within a framework of goals. But this allows them to work intimately with the public bureaucracy and, indeed, to perform tasks for the bureaucracy that it cannot do, or cannot do as well, for itself. In consequence, for tasks of technical sophistication, there is a close fusion, as we have seen, of the modern industrial system with the state. As I have earlier observed, the line that now divides public from socalled private organization in military procurement, space exploration, and atomic energy is so indistinct as to be nearly imperceptible. Men move easily across the line. Technicians from government and corporations work constantly together. On retirement, admirals and generals and high civil servants go more or less automatically to government-related industries. One close and experienced observer, Professor Murray L. Weidenbaum, a former employee of Boeing, has called this the “seminationalized” branch of the economy.

He is speaking of firms which do all or a large share of their business with the government. But most large firms do a substantial share of their business with the state. And they are as dependent on the state as the weapons firms for the other supports to their planning. It requires no great exercise of imagination to suppose that the mature Corporation, as it develops, will eventually become a part of the larger administrative complex with the state. In time the line between the two will largely disappear. Men will marvel at the thin line that once caused people to refer to General Electric, Westinghouse, or Boeing as private business.

Although this recognition will not be universally welcomed, it will be healthy. And if the mature corporation is recognized to be part of the state or some penumbra of the state, it cannot plead its inherently private character, or its subordination to the market, as cover for the pursuit of goals of primary interest to its own guiding organization. It can be expected to accept public goals in matters of aesthetics, health and safety, and general social tranquillity that are not inconsistent with its survival. The public bureaucracy has an unquestioned tendency to pursue its own goals and reflect its own interest and convenience. But it cannot plead this as a right. So with the corporation as its essentially public character comes to be accepted.

Other changes can be imagined. As the public character of the mature corporation comes to be recognized, attention will doubtless focus on the position of the shareholder. This is already anomalous. A shareholder is a passive and functionless figure, remarkable only in his capacity to participate, without effort or even, given the planning, without risk, in the gains of the growth by which the directing organization now measures its success. No grant of feudal privilege in history ever equaled, for effortless return, that of the American grandparent who thoughtfully endowed his descendants with a thousand shares each of General Motors and IBM. But I do not need to pursue these matters here. Questions of equity as between the accidentally rich have their own special expertise.

Some will insist that the world of the modern large firm is not the whole economy. At the opposite pole from General Motors and Standard Oil is the world of the independent shopkeeper, farmer, shoe repairman, bookmaker, narcotics peddler, pizza merchant, streetwalker, and owner of the car and dog laundry. Here prices are not controlled. Here the consumer is sovereign. Here pecuniary motivation is unimpaired. Here technology is simple, and there is no research or development to make it otherwise. Here there are no government contracts; independence from the state, the narcotics trade and prostitution possibly apart, is a reality. But one should cherish his critics and protect them where possible from foolish error. The tendency of the great corporation in the modern industrial system to become part of the administrative complex of the state cannot be refuted by appeal to the contrary tendencies of the miniscule enterprise.

THE two questions most asked about an economic system are whether it serves man’s physical needs and whether it is consistent with his liberty and general happiness. There is little doubt as to the ability of the modern industrial system to supplv man with goods — it is able to manage consumer demand only because it supplies it so abundantly. Wants would not be subject to management or manipulation had they not been first dulled by sufficiency. In the United States, as in other advanced countries, there are many poor people. But they are not to be found within the part of the economy with which we are here concerned. That these articles do not deal with poverty does not mean, incidentally, that I am unaware of its existence.

The prospect for liberty is far more interesting. It has always been imagined, especially by conservatives, that to associate all, or a large part, of economic activity with the state is to endanger freedom. The individual in one way or another will be sacrificed to the convenience of the political and economic power so conjoined. As the modern industrial system evolves into a penumbra of the state, the question of its relation to liberty thus arises in urgent form. In recent years in the Soviet Union and in the Soviet-type economies, there has been a poorly concealed conflict between the state and the intellectuals. It has been between those who speak for the needs of the state and its disciplines, as economic planner and producer of goods, and those who assert the higher claims of intellectual and artistic expression. Is this a warning to us?

The instinct which warns of dangers in this association of economic and public power is quite sound. Unhappily, those who warn look in the wrong place. They have feared that the state might reach out and destroy the vigorous moneymaking entrepreneur. They have not noticed that, all the while, the successors to this vintage hero have been uniting themselves ever more closely with the state and rejoicing in the result. With equal enthusiasm, they have been accepting drastic abridgement of their own freedom. This is partly the price of organized activity. But they were also losing freedom in the precise pattern of classical expectation. The officers of Republic Aviation, which does all of its business with the United States government, are no more likely in public to speak critically of some nonsense perpetrated by the Air Force than is the head of a Soviet combined of the ministry to which he reports. No Ford executive will ever fight Washington as did Henry I. No head of Montgomery Ward will ever again breathe defiance of a President as did Sewell Avery in the age of Roosevelt. Manners may be involved here. But most would state the truth: “Too much is now at stake!”

But the problem is not the freedom of the businessman. It can be laid down as a general rule that those who speak most of liberty least use what they have. The businessman who praises it most is a disciplined organization man. The retired general who now lectures on the threat of Communist regimentation was invariably a martinet who relished an existence in accordance with military regulations. The Secretary of State who speaks most feelingly of the free world most admires the fine conformity of his own thought.

The greater danger is in the subordination of belief to the needs of the modern industrial system. As this persuades us on the goods we buy, and as it persuades us on the public policies that are necessary for its planning, so it also accommodates us to its goals and values. These are that technology is always good; that economic growth is always good; that firms must always expand; that consumption of goods is the principal source of happiness; that idleness is wicked; and that nothing should interfere with the priority we accord to technology, growth, and increased consumption.

If we continue to believe that the goals of the modern industrial system and the public policies that serve these goals are coordinate with all of life, then all of our lives will be in the service of these goals. What is consistent with these ends we shall have or be allowed; all else will be off limits. Our wants will be managed in accordance with the needs of the industrial system; the state in civilian and military policy will be heavily influenced by industrial need; education will be adapted to similar need; the discipline required by the industrial system will be the conventional morality of the community. All other goals will be made to seem precious, unimportant, or antisocial. We will be the mentally indentured servants of the industrial system. This will be the benign servitude of the household retainer who is taught to love her master and mistress and believe that their interests are her own. But it is not exactly freedom.

If, on the other hand, the industrial system is seen to be only a part, and as we grow wealthier, a diminishing part, of life, there is much less occasion for concern. Aesthetic goals will have pride of place; those who serve them will not be subject to the goals of the industrial system; the industrial system itself will be subordinate to the claims of larger dimensions of life. Intellectual preparation will be for its own sake and not merely for the better service to the industrial system. Men will not be entrapped by the belief that apart from the production of goods and income by progressively more advanced technical methods there is nothing much in life. Then, over time, we may come to see industrial society as a technical arrangement for providing convenient goods and services in adequate volume. Those who rise through its hierarchy will so see themselves. And the public consequences will be in keeping. For if economic goals are the only goals of the society, the goals of the industrial system will dominate the state. If industrial goals are not the only goals, other purposes will be pursued.

Central among these other purposes is the aesthetic dimension of life. It is outside the scope of the modern industrial system. And that is why the industrial system tends to dismiss aesthetic considerations as precious and impractical and to condemn their proponents as “aesthetes.”

The conflict arises in three forms. First and simply, there is the conflict between beauty and industrial efficiency. It is cheaper to have power lines march across the fields; to have highways take the most direct route through countryside or villages or towns or cities; or to allow jet aircraft to ignore the tranquillity of those below; or to pour industrial refuse into the air or into the water.

Next, there is a conflict between the artist and organization. Scientists and engineers can specialize; artists cannot. Accordingly, the organization which accommodates the specialist, though right for the engineer or scientist, is wrong for the artist. The artist does badly as an organization man; the organization does badly by the artist. So the artist tends to stand outside the modern industrial system; and it responds, naturally enough, by minimizing the importance of the aesthetic concerns it cannot easily embrace.

Finally, some important forms of artistic expression require a framework of order. This is notably true of structural and landscape architecture and urban design. It is order rather than the intrinsic merit of their buildings which accounts for the charm of Georgetown or Bloomsbury or Haussman’s boulevards. Not even the Taj Mahal would be terribly attractive between two gasoline stations and surrounded by neon signs. Individuals, nevertheless, could have served better their economic interest by rejecting Haussman’s designs or by getting a Shell franchise adjacent to the Taj.

The need is to subordinate economic to aesthetic goals — to sacrifice efficiency, including the efficiency of organization, to beauty. Nor must there be any nonsense about beauty paying in the long run. It need not pay. The requisite order will also require strong action by the state. Because of the abdication of this function in the interest of economic goals, no city, some noncommercial capitals apart, built since the Industrial Revolution attracts any particular admiration. And millions flock to admire ancient and medieval cities where, as a matter of course, such order was provided. The liberalism which allowed every individual and every entrepreneur to build as he wished was faster, more adaptable, and more efficient, and accommodated site better to need, than anything that could be provided under a “controlled” environment. But the aesthetic effect was at best undistinguished, and more often it was ghastly.

The change in goals and values which is here required is aided by the fact that the modern industrial system is intellectually demanding. It brings into existence, to serve its technical and scientific and other intellectual needs, a very large community of educated men and women. Hopefully this community will, in turn, reject the monopoly of social purpose by the industrial system.

But the rewards of time and understanding can also be hastened and enlarged by energetic political action. It is through the state that the society must assert the superior claims of aesthetic over economic goals and particularly of environment over cost. It is to the state that we must look for freedom of individual choice as to toil; for a balance between liberal education and the technical training that primarily serves the industrial system; and it is for the state to reject images of international politics that underwrite technology but at the price of unacceptable danger. If the state is to serve these ends, the scientific and educational estate and the larger intellectual community must be aware of their power and their opportunity and they must use them. There is no one else.

The threeATLANTICessays onTHE NEW INDUSTRIAL STATEby Professor John Kenneth Galbraith hare been combined into a single reprint. For an individual free copy or the price of bulk copies, write to the Reprint Department, 8 Arlington Street, Boston, Mass., 02116.

1. I have drawn here not only on the vast literature of Soviet planning but on fairly extensive firsthand observation, in the spring of 1959 and more briefly in the summer of 1964. I am extensively grateful to Soviet economists and plant managers for help and hospitality.↩