Michael Keany - Galbraith and the State

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© 2001 Michael Keaney, selection and editorial matter; individual chapters,the contributors

5 The role of the state in thegood society

Michael Keaney

In his landmark work of political philosophy, Politics and Vision , Sheldon Wolinidentified the essential ideological shift which both accompanied and facilitated

Western civilisation’s passage to modernity: the supplanting of the political bythe economic (Wolin, 1960:195–285). It was a phenomenon most keenlyappreciated by Karl Marx, whose theoretical construct of the ‘base’ (the socialrelations of production) essentially determined the nature of the ‘superstructure’(state and civil society). The ascendancy of the economic continues even today,as governments routinely acknowledge the perceived verity that success in otheraspects of life is dependent upon economic growth and prosperity—‘It’s theeconomy, stupid!’ Bill Clinton’s 1992 presidential campaign slogan merely statedwhat the leaders of the two major opposing political economic systems of thetwentieth century had believed since the Russian Revolution of 1917. Yet, asC.Douglas Lummis highlights, economic development, under whatever politicalguise, has brought about the often savage uprooting of old ways and customs inthe name of progress (Lummis, 1996:50ff). Tony Blair’s mantra of ‘modernisation’ is simply more of the same: justifying fundamental change in thename of irreversible, inevitable ‘progress’. Economic development and growthare promoted as and perceived to be of absolute necessity in humanity’s pursuitof happiness. Surrounding this central tenet is a pot pourri of rationalisations(ranging from the elaborate to the downright crude) for why this should be.

Among the most elaborate of these, of course, is neo-classical economic theory.This is what mostly passes for ‘economics’ today, whether in the teaching of university and college students or in the ‘understanding’, interpretation andforecasting of economic phenomena by professional economists. Resting uponsome simple assumptions concerning human nature and from there proceeding by logical deduction, economists have constructed models of ‘human’ behaviourwhose mathematical complexity belies their intellectually impoverished origins.Most often these are of little practical consequence—a feature satirised by JohnKenneth Galbraith in his novel A Tenured Professor.

Never forget, dear boy, that academic distinction in economics is not to behad from giving a clear account of how the world works. Keynes knewthat; had he made his General Theory completely comprehensible, it would




have been ignored. Economists value most the colleague whom they moststruggle to understand. The pride they feel in eventually succeeding leadsto admiration for the man who set them so difficult a task. And anyonewho cannot be understood at all will be especially admired. All will want togive the impression that they have penetrated his mystification. Thisaccords him a standing above all others.

Galbraith (1990:50) To useThorstein Veblen’s phrase, this ‘trained incapacity’ either to understandor communicate beyond academia is most useful for those who might otherwise be challenged over the nature and function of the present economic system. The basic emphasis upon efficiency at the deliberate expense of all else serves tomagnify the specific (in many cases minutely so) whilst ignoring the broaderlandscape, and therefore the consequences, which are designated with the epithet,

‘externality’. ‘External to what?’ one may ask, and with good reason.The convenient removal of troublesome variables from social scientists’ models

can have serious practical consequences, now more than ever on a global scale.The irony of this, of course, is that those who once decried the Utopian project asfundamentally inhumane in its execution are themselves implicated in thecatastrophe that has befallen the former Soviet Union. The visible collapse of Sovietcommunism from 1989 to 1991 precipitated a wave of triumphalism among thepolitical and business classes of the West. Not only had the opposing state-centredpolitical economy of communism been shown to be utterly bankrupt, but now‘free-market’ capitalism could flourish throughout the world. As the theoreticalmodels dictated, so would actuality reveal the infallibility of market solutions. Thusteams of ‘experts’ from the West headed east to make disciples of all nations,installing the ‘core institutions’ of capitalism, to use the revealing phrase of JeffreyD.Sachs, Lacking any theory or even nominal concept of institutional adjustment,these wise men instigated the now notorious policy of shock therapy, whereby allthat was solid melted to air, all that was sacred became profane, and all in a mannermost reminiscent of the Bolsheviks’ wresting of power in 1917. The consequencesof this, as with those of ‘War Communism’, were predictable:

Institutional adjustment by means of ‘implementing the model’ is incapableof effectively resolving problems, either in analytic or behavioural terms.The past cannot be abandoned; habitual beliefs and behaviours cannotcomprehensively be overturned without inducing chaotic, wholly desperateconditions of disrapport, discontinuity and disruption in the flow of realincome. Maximum dislocation is foreshadowed.

Tool (1995:198) But by externalising all considerations of efficiency extraneous to the contract between buyer and seller, such matters registered only after the painfully slowrecognition of the damage wrought by the technical wizards of Western socialscience. Even as late as 1996, Richard Layard and John Parker could publish a




book entitled The Coming Russian Boom. And no, the authors were not employing a variant of long-wave analysis. Nor did ‘boom’ designate a violent explosion, althoughthat might have conveyed a more accurate sense of the economic meltdown thatfollowed. Speaking of his novel, The Triumph, Galbraith has remarked that

only in fiction could one extract full value from the highly trained, profoundly

certain, deeply solemn foreign policy experts who, aided by all the availableintelligence, proceed from wrong assumption to disastrous result.

Galbraith (1981:521) One could easily substite the word ‘foreign’ with ‘economic’ with respect to theregrettably wholly factual episode of shock therapy.

Nevertheless, not content with having participated in the laying waste of vastquantities of physical and human capital, global finance capital is attempting to

institute its own shock therapy through such vehicles as the World TradeOrganization (WTO) and the Multilateral Agreement on Investment Despite theapparent disarray of the neo-liberal agenda, following the’Battle of Seattle’ inNovember 1999, it is unlikely that this spells the end of the push towards theuntrammelled commodification of all that may conceivably be bought and sold. As James O’Connor puts it, and not too strongly, the goal of a more perfectmarket society serves only to reveal, ever more clearly, the ‘fundamentallypsychotic nature of the neoliberal model’. Just as in the former Soviet Union, thepathogenesis is evident:

The Utopian neoliberal model of world capitalism (like the tragic Emma Bovary) first builds castles in the air (neoliberal economic theory), then triesto live in them (the subordination of all social relations to exchange relations).

O’Connor (2000:2) Perhaps the essence of the problem facing economic advisers in the formercommunist bloc was their totally inadequate concept of the state. Reared, forthe most part, on an almost biblical tenet emphasising the desirability andeminent practicability of laissez faire, the trained incapacity of conventionaleconomists became all too evident in the shock therapy debacle. Thepractitioners of ‘positive’ economics came unstuck in their efforts to apply theexplicitly normative policies in pursuit of the ideal ‘endpoint’—that which theyimagined true capitalism to be.

Ron Stanfield correctly notes that conventional economic theory ‘is severelylimited by the lack of a well-defined theory of the state as an endogenous variable’(Stanfield, 1991:765). His subsequent observation that ‘classical liberalism insistsupon a sharp separation of social authority into the political and economic realms’(1991:775) is equally true. Nevertheless, it is also the case that this theoreticaldemarcation is as responsible for the inadequacy of neoclassical economic theoryvis à vis the state as it is for the inadequacies of the modern state (Dugger,1992:245–6). The corporate welfare subsidies and other transfer payments made




by the state in support of the military-industrial complex, and now the growing prison-industrial complex, somehow escape the opprobrium attached to thosegeared towards the alleviation of individuals’ economic hardship—witness thestrident attacks made by certain political standard bearers, most prominentlyNewt Gingrich, on the legacy of Lyndon Johnson’s Great Society programme.But having posited an artificial demarcation of the economic and the political,

classical liberalism is able to justify such state activism in the name of order,domestic and international. Thus in essence it reverts to a position not dissimilarto that of the conservative, if only more vigorously ideological because of itsconception of property.

Of course the normative premise of classical liberal theory helps to mask thereality of the capitalist state. The fictitious demarcation of the economic and thepolitical elides the fundamental truth of the modern state, which is its functionalsymbiosis with the capitalist system. The nature of the state’s functions may

change significantly over time, as captured by the social structure of accumulation(SSA) theory first articulated by David M.Gordon (see Kotz et al., 1994). Baranand Sweezy (1966:67) argued that ‘to lay special emphasis on the role of the statein the present stage of monopoly capitalism may only mislead people intoassuming that it was of negligible importance in the earlier history of capitalism’.This is most certainly an important qualification. But it is especially relevant inthis time of globalising ‘free markets’ to emphasise just how the relationship between the state and economy continues to evolve. As the system demands it,so does the state grow in response to crisis:

Capitalist production has become more interdependent—more dependenton science and technology, labor functions more specialized, and thedivision of labor more extensive. Consequently, the monopoly sector (andto a much lesser degree the competitive sector) requires increasing numbersof technical and administrative workers. It also requires increasing amountsof infrastructure (physical overhead capital)—transportation,communication, R&D, education, and other facilities. In short, themonopoly sector requires more and more social investment in relation toprivate capital… The costs of social investment…are not borne bymonopoly capital but rather are socialized and fall on the state.

Increasing interdependency in production also dictates greateroutlays on social consumption (or social variable capital)—for example,insurance against sickness, old age, economic insecurity, public housing;state-f inanced suburban development; recreational faci l i t ies.Unquestionably, monopoly sector growth depends on the continuousexpansion of social investment and social consumption projects that inpart or in whole indirectly increase productivity from the standpoint of monopoly capital. In short, monopoly capital socializes more and morecosts of production.

O’Connor (1973:24)




Some interpret the continuing wave of privatisation that has followed the Thatcherperiod as evidence of the ‘shrinking’ of the state. This, I argue, is incorrect Whathas happened is a fundamental change in the nature of the state sector, asgovernments have retreated from the direct ownership and administration of keyindustries. Not only that, but, largely following the British lead, they have begun totransfer ownership of assets and the administration of service provision to private

enterprises. Basic utilities, social services, even air traffic control, are all fair gamefor monopoly capital, subject to state ‘regulation’. As a result some authors speakof the ‘managerial state’ (e.g. Clarke and Newman, 1998). This does not representa diminution of state activity, however. Rather, it is the manifestation of the ever-deeper entwining of the state and monopoly sectors, with the state acting asregulator, legitimising the new regime whilst facilitating accumulation, and themonopoly sector taking over either the ownership or administration of formerly‘public’ assets and earning income from these, while costs, as much as possible, are

socialised. The so-called shrinkage of the state is, in fact, merely the continuing expansion of capitalism as it commodifies that which was previously regarded aspart of the commons. In this the state has been monopoly capital’s willing, andsometimes leading, accomplice. The central importance of the state to the capitalisteconomic system was recognised, in a moment of clarity unfettered by fashionableideology, by the World Bank. Its World Development Report of 1997 highlighteda ‘crisis of state effectiveness’, and emphasised the need for effective state action tofacilitate economic development and growth (see Panitch, 1998). So much forclassical liberal theory, then.

The question remains: what of the state? Marx foresaw its withering away,while libertarians of the Right actively pursue its containment, if not in certaincases outright extinction. But this hardly seems realisable, let alone desirable.

The point is not to abolish the state, which administers the division of social labor, because if the state were abolished, so would be the division of labor. The point is rather to make the state democratic, and especially toobliterate the distinction between mind and manual labor, thinking anddoing, that is reproduced in the capitalist state, with the representative branch doing the thinking (lawmaking), the bureaucracy doing the doing (law implementation).

O’Connor (1998:310) In Britain’s Westminster Parliament even the latter would be something of a progressive development, as the legislature is most commonly employed as a rubber stamp for the executive, which imposes its will upon representatives bymeans of an ever-tightening system of control. But there is no doubt thatdemocratising the bureaucracy, the Civil Service, is a goal in need of publicassertion and debate, and has been so for many years.

The problem arises from the fact that the civil service sees itself as being above the party battle, with a political position of its own to defend against




all-comers, including incoming governments armed with their philosophyand programme.

Civil service policy—and there is no other way to describe it—is anamalgam of views that have been developed over a long period. It drawssome of its force from a deep commitment to the benefits of continuity anda fear that adversary politics may lead to sharp reversals by incoming

governments of policies devised by their predecessors, which the civilservice played a great part in developing… Thus, when the senior civilservants see a new government come into power with a policy that goesoutside that consensus, there is anxiety at the possible effect upon theirown policy. Plans are laid that seek to contain this new surge of politicalpower and divert ministerial energies into safer channels that do not disturbthe even flow of established Whitehall policy.

Benn (1981:50–1)

There is little reason to doubt the validity of this analysis twenty years later. Themarked continuities between the ‘modernising’ Blair administration and its tiredpredecessor must originate not only in the singular lack of radicalism attached tothe present Labour Government, but as much in the institutionalised consensusthat was embedded during eighteen years of relentless Thatcherism. Thus pre-election pledges concerning the renationalisation of the national railway network,the retention of air traffic control under state ownership, the repeal of stringentasylum and immigration laws, and a freedom of information Act of Parliament,to name but four, have all undergone a curious revision. While the latter proposalhas been greatly diluted as civil servants have proceeded upon its ‘formulation’,the former policy areas have seen the continuation, if not the intensification, of the prior Conservative programme.

The scale of the task before any advocates of democratic reform is immense.The forces arrayed against public accountability are formidable, and are set to become more so. This is not to say that change is not possible—events in Seattleclearly showed otherwise. Nevertheless, it will require sustained vigilance andeffort. Part of that effort will involve the identification of potential commoninterests across traditional, sometimes adversarial, boundaries. Not the least of these is the shared opposition of radical and conservative critics to the rampantcommodification entailed in the neo-liberal agenda. In Britain, this sort of approach is perhaps best personified by Tony Benn, whose consistently eloquentdefence of Parliamentary prerogative belies the corporate media’s portrayal of a dangerous fanatic. In the United States, the Jeffersonian tradition similarlymarries radical democracy to the nurturance of both individual and community.

There remains the twin task of understanding the nature of the state andexecuting its functions in such a way as to be truly accountable to the people, asopposed to the CEOs of the Fortune 500, the Joint Chiefs of Staff, or the foreignpolicy and national security wallahs of the United States, for example.

A theory of the state must account for the inevitable empirical differences instates, geographically and temporally. While states over time and space possess




features common enough to allow for a realistic concept of ‘the state’, a reifiedconception impedes the understanding of the dynamic nature of states, as it doesthat of institutions per se . At the other end of the spectrum, the assumption thatinstitutions instantaneously reflect the conjuncture of power relationships insociety ignores the problem of institutional lag, which particularly applies toconstitutional states: A state apparatus tends to remain intact long after the class

which gave it its original nourishment ceases to perform decisive economicfunctions’ (Horowitz, 1999:238). This problem intensifies as the impact of technological change becomes more readily apparent, with importantramifications for political democracy:

In a period of rapid technical change it is essential that the machinery of government at all levels should be capable of reflecting the desires of thepeople expressed through the ballot box more rapidly than is now the case.

Indeed, it must, if we are to maintain the stability of our society.Benn (1981:67)

Of course, the agility and nature of states’ response to crisis is a function of the jockeying for position among those interests most readily represented by theorgans of state. In Marxist parlance, this will include intra-class conflict as muchas any between capital and labour. In Veblenian terminology, the time lag andother distortions caused by the wholly disproportionate lobbying and interferenceof special interest groups—globalising monopoly capital being the most notable of these—in the political process amounts to nothing less than wilful sabotage.

However, the remoteness of states from their nominally sovereign electorates isas nothing compared to that of the emerging meta-state, whose role in the exerciseof global governance is as yet indeterminate, but nevertheless the subject of powerstruggles involving individuals and collectivities far removed from public scrutiny.However, as no less an authority than the World Bank has acknowledged, thesuccess of the global governance regime is dependent upon the ‘effectiveness’ of states. If we believe that states might still be captured by democratic interests, oreven simply influenced significantly by them, then this represents a good starting point for both theory and practice. Most recently, it is the latter, as manifested atSeattle, that has offered the vital hope to inspire such a project.

As with all social institutions, the task of determining the role of the state isone of reconciling means and ends. The evolutionary, mutually informativenature of these has been most clearly highlighted by John Dewey, though it is animplicit feature of much work undertaken by those employing the methods thatmay be defined broadly as radically institutionalist. The plurality of perspectiveswithin this tradition, while the object of scientistic sneering, is in fact a majorsource of its strength, and not least its contemporary relevance.

John Kenneth Galbraith, by common accord, stands firmly in this institutionalisttradition. Throughout his career, he has undertaken the twin tasks of understanding where we are, and how we might get to where we would like to be given thecircumstances. His most recent work of political economy, The Good Society (1996),




reiterates the themes which have guided his contributions to the debate throughouthis long career, though with a nod to the present political climate.

Before discussing Galbraith’s evolving views of the state and the prospect forprogressive change, this chapter first examines the position of Galbraith’s greatestintellectual forebear, Thorstein Veblen. His influence on Galbraith has, if anything, become more pronounced over the years. Galbraith has, along with

others including Douglas Dowd (1966) and Rick Tilman (1992, 1996), donemuch to enhance Veblen’s reputation among social scientists. While he has beencareful not to retreat into almost despairing cynicism like Veblen ultimately did,Galbraith has become markedly more pessimistic with the passage of time. Whilethe reasons for this will be appraised, the more important task of drawing fromthe more hopeful proposals of his earlier work, including their theoretical basis,will form the basis of the concluding section.

Veblen and the state

Thorstein Veblen did not bequeath much in the way of guidance regarding the roleof the state. He was concerned with the evolution of imperialism and nationalism,and viewed the modern state as ‘a residual form of the predatory dynastic State of early modern times, superficially altered by a suffusion of democratic andparliamentary institutions in recent times’ (Veblen, 1997:398). While many of theclues he did leave suggest that he viewed the state as an instrument of the vestedinterests, subject to their jockeying for position, he did also look more kindly uponthe use of state apparatus to advance a more egalitarian agenda:

It is now not an unusual thing for orthodox Marxists to hold that theimprovement of the conditions of the working classes is a necessary conditionto the advance of the socialistic cause, and that the unionist efforts atamelioration must be furthered as a means toward the socialisticconsummation. It is recognised that the socialistic revolution must be carriedthrough not by an anaemic working class under the pressure of abject privation, but by a body of full-blooded working men gradually gaining strength fromimproved conditions of life. Instead of the revolution being worked out by theleverage of desperate misery, every improvement in working-class conditions isto be counted as a gain for the revolutionary forces. This is a good Darwinism, but it does not belong in the neo-Hegelian Marxism.

Veblen (1990:450) This linkage of means and ends is echoed by Stanfield, who encapsulates the‘radical democratic faith’ as advancing the implementation of ‘the comprehensivesocial democratic program [within] the existing social order yet remain[ing]idealistic with regard to imagining a more desirable future’ (Stanfield, 1991:778).

While it is not universally conceded, the collapse of the Soviet bloc has largelydissipated the idealistic faith in violent, cataclysmic revolution. The fallout of the




momentous events of 1989–1991 has featured most profoundly the unmasking of the poverty of what ‘really existing socialism’ had become. Perhaps mostgalling was the Soviet state, which, contrary to theory, had grown into a colossus,rather than withering away. However, subsequent experience has highlighted thedeep inadequacy of the ‘economics of transition’ administered by Western gurusof the secular theology of free market economics. Parallel to this has been the

realisation that, despite over two decades of New Right anti-statist hegemony inthe Anglo-American sphere (with consequent spillover effects), the state as anentity looms larger than ever before. Irving Louis Horowitz goes so far topronounce: ‘It is my contention that society itself has come to be defined by thestate’ (Horowitz, 1999:17). So, rather than simply wishing it away, ignoring it, orpursuing an ideologically driven programme of state emasculation—itself boundto fail—we must consider what sort of state we would envisage as desirable:

in the name of realism, unpleasant as that name might be, we need tostructure a world that takes seriously the existence of the state, not as a curse upon the poor or a blessing upon them for that matter, but simply asthat agency which has come to dominate our age… Serious critics no longerspeak in big terms about smashing state power; they are content to considerways in which state power can be contained.

Horowitz (1999:17) The best form of containment is democracy. If ‘power is the measure of disequilibrium’ (Horowitz, 1999:236–7), then the power of the state will becontained more effectively as it is countervailed by other forces. Unfortunately,the contemporary state, replete with the residues of the early modern predatorydynastic state and that of the subsequent bourgeois period, retains the classicalliberal separation of the political from the economic. Thus countervailing powertends to reside in the ‘capitalist private sector’ (Stanfield, 1991:776). In fact, thereare times when this power is such that instead of countervailing, the state andcorporate sector enjoy a cordial relationship that at times borders on symbiosis(Galbraith, 1973:160), and increasingly so:

Whatever historical truth there may have been to this conception of civilsociety, it was radically changed by the rationalization of society effected bylate modern capitalism. Civil society now presents itself as a structure of control and discipline rather than as a paradigm of freedom and spontaneity.The contemporary business organization is not only a mechanism foreconomic decisions; it is also a carefully cultivated life-form that is deliberatelyimposed, with varying degrees of severity, on its employees. In the samevein, recent demands for re-schooling society have placed great emphasisupon restoring ‘discipline in the classroom’ and modeling students for life inthe era of high technology. These same trends are evident in the rigors of Protestant fundamentalism and in the reactionary pronouncements of theVatican. In short, civil society now represents structures of power which self-




consciously exercise disciplinary functions that erase the differences betweenstate and society, public and private. How far the revolution has gone may begauged by the parallel efforts of private and public employers to impose drug tests and lie-detector tests on their employees and to insist on securityclearances for numerous employees in both sectors. As a consequence, it becomes increasingly more difficult to discern where the public sector begins

and the private leaves off. From this vantage point, ‘deregulation,’ with itsfaith in market ‘discipline’ and ‘free economic forces,‘ appears less as a policythan as a Freudian slip.

Wolin (1989:27–8) In a passage most reminiscent of the work of John Dewey, Horowitz declares:‘The abuse of democracy is perhaps the soundest argument for broadening thescope of human involvement in political processes’ (Horowitz, 1999:248). What

is not made clear by Horowitz, however, is what qualifies as ‘political’. Theimplication of Horowitz’s statement, confirmed by his other recent works, is thathe retains the classical liberal demarcation of the political and economic, whereasa more radical conception of democracy would extend participation to all aspectsof social life, most especially the economic. We are well-acquainted with themythical mantras intoning against state ownership of the means of productionowing to the inherent inefficiency of all state enterprise. We are also familiar withthe lessons of the Soviet era, including the one about unchecked stateencroachment into all aspects of social life as being detrimental to democraticfreedoms. It is not at all clear how the unchecked encroachment of commercialimperatives into all aspects of social life would provide suitably fertile ground forthese same freedoms. Corporate executives are not commonly noted forenlightened views on free speech, rest breaks, participatory decision making, andthe physical and intellectual health of employees. In the United States, ‘land of the free’, even the ability to visit the lavatory during working hours is contestedterrain (Linder and Nygaard, 1998).

Traditionally, the alternative source of countervailing power has been regardedas the proletariat Marx, however, did not frame his theory of change within theclassical liberal demarcation of political and economic. Rather, his analysis wasfounded upon an essentially economistic conception of history, his ultimate aim being ‘to lay bare the economic law of motion of modern society’ (Marx, 1976:92). While not adhering to the ‘state versus market’ dualism of classical liberalism,seeing the state instead as the instrument of capitalist interests, Marx’s concentrationupon the economic as opposed to the political was consistent with the liberalmainstream’s prioritisation of the economic. But here the consistency ended.

Among liberals…the lack of interest in political action, the conviction thateconomics formed the proper study of mankind and economic activity theproper end, hastened the decline of political theory. For these beliefsencouraged the imposition of economic categories onto political thoughtwith the result that the role and status of political theory came to be usurped




by economic theory. Liberate came to assert not only that economics wasthe most useful form of knowledge for the individual in his pursuit of happiness, but that it also provided the necessary prescriptions for handling the common affairs of society.

Wolin (1960:302)

The major difference between Marx and liberalism, with respect to therelationship between the political and the economic, is that Marx focused uponthe economic in order to effect political change, whereas the classical liberalsadopted an essentially conservative position, believing in the primacy of ‘economic laws’ and their uninhibited unfolding as the means to the good society.This was on the basis of the conditions prevalent in early to mid-nineteenthcentury England (Galbraith, 1993:12–13). Although Marx shared with theliberals a debt to the work of David Ricardo especially, he foresaw the tendency

to monopoly, which became manifest towards the end of the nineteenth century,with the rise to prominence of the large corporation.

Marx’s prediction of the overthrow of capitalism by the proletariat has notenjoyed empirical vindication. Even his followers have had to adapt Marx’stheory in order to provide justification for their actions, as with Lenin’sidentification of the need for a politically aware vanguard to lead the proletariatin revolution. Leninism’s legacy included the hegemony of the communist stateover society, since the position of the vanguard, by definition more insightfulthan the masses, was retained and embedded within Soviet society. If those blessed with greater knowledge deemed it necessary, who were others to challengesuch a state of affairs? They could only be enemies, saboteurs, traitors, or thedeluded requiring psychiatric correction.

All who have sought, and continue to seek, fundamental social change mustgrapple with the problem of identifying the most likely source of radicalism.Marx’s identification of the proletariat never gained currency in the United States,despite the modifications made by his direct followers. Brian Lloyd, a Marxist of a rigorously orthodox kind, views the ‘Bleary political visions…in the texts of the American radical tradition and the histories of that tradition’ as ‘petty bourgeois socialism’ (Lloyd, 1997:15). Others, however, share Rick Tilman’smore generous—and accurate—appraisal of this tradition as one of ‘eclecticism interminology and perspective, method and value’ (Tilman, 1996:227).

Veblen did not believe that the proletariat would be the most likely social forceto press for change. He acknowledged the reformism of the German trade unionsand Social Democrats, crediting that strategy with a greater political realism thanthe determinism of Marx’s Hegelian-influenced philosophy of history.Nevertheless, he also noted the co-opting of labour representatives andorganisations by what he termed the Vested Interests, This was in part due to thetactics employed by the captains of industry and finance, and to the originalpurpose of labour organisations themselves, as ‘not organized for production butfor bargaining’ (Veblen, 1983:97). Veblen did, for a time, view the activities of the Industrial Workers of the World more hopefully. However, it appears that by




1919 his assessment of the most practical (which is not to say likely) source of social change rested upon the emergent engineering profession.

The nature of modern industry meant that the newly ascendant class of workers,the engineers or technicians, potentially were in a uniquely powerful position withrespect to the control of the production and distribution of material wealth. Thegradual estrangement of the ‘captains of industry’ from industry itself, and the

concomitant rise of absentee ownership, meant that those extracting the surpluscreated by the work force of necessity relied upon those with the requisite technicalexpertise to ensure the continuing productivity of business enterprises.

In 1919 Veblen wrote a series of essays for The Dial, which two years laterwere published together as The Engineers and the Price System. This controversialwork is the source of much disagreement between Veblen scholars concerning itssignificance in relation to the rest of Veblen’s published work It appears to expressthe hope, perhaps even going so far as to exhort, that the engineers would

overthrow the system of absentee ownership and instead organise industry onthe basis of need, rather than profit. However, Veblen is always careful to qualifyhis speculations and exhortations with the disclaimer that the engineersthemselves ‘are a scattering lot of fairly contented subalterns, working piecemealunder orders from the deputies of the absentee owners’, while their less skilledcounterparts ‘are bound in rival trade organizations whose sole and self-seeking interest converges on the full dinner-pail’ (Veblen, 1983:151). The less-skilledstrata of the work force were sufficiently content with the status quo, subscribing wholeheartedly to the system of absentee ownership:

the vested rights of absentee ownership are still embedded in the sentimentsof the underlying population, and still continue to be the Palladium of theRepublic…the underlying population are as nearly uninformed on the stateof things as the Guardians of the Vested Interests, including thecommercialized newspapers, can manage to keep them.

Veblen (1983:128, 151) Thus the prospect of any change in the status quo was very dim indeed.

The controversy surrounding The Engineers and the Price System relates, however,to Veblen’s own vision of Utopia. While Donald Stabile (1984:15) argues, on the basis of these essays, that Veblen was ‘the chief ideologue of the New Class of coordinators’, Rick Tilman claims that the ‘ideal’ sketched by Veblen here can best be viewed as ‘an expository device expressing satirical intent, not as a seriousplan for economic reconstruction’ (Tilman, 1996:177). But what if both viewsare, at least in part, correct? What if Veblen did see the most likely source of change coming from the ‘engineers’ and technicians, but thought even this so beyond the bounds of probability that he reverted, in the final analysis, to satire,given the hopelessness of the situation? If there is one characteristic that marksall of Veblen’s writings, it is his keen appreciation of the futility of much of modernsocial life. He could easily alternate between satire and gloom on the basis of hisfine sense of the imbecilic. Gloom appears to have been more pronounced in his




final years, as evidenced by his analysis of Absentee Ownership (1923), and hisgradual retreat from public view until his death in 1929.

Ultimately Veblen seems to have been less concerned with political structuresthan with economic provision. Not unlike Marx, Veblen places economic criteria ahead of the political in his evaluation of the present, and his suggestion of a future:

It is the degree to which the system effectively fulfills the economic lifeprocess of its citizens that is the ultimate test of its quality, not whether itfalls into a particular set of categories in the history of Western politicalthought and behavior.

Tilman (1996:188) But as Wolin and Dewey, among others, have emphasised, fulfilment of theeconomic life process in the long term depends upon the political, if only to

ensure continuous fulfilment. After all, ‘Left to themselves, economic forces donot work out for the best except perhaps for the powerful’ (Galbraith, 1973:xiii).

Galbraith, capitalism and the state

In an oft-quoted passage, Galbraith remarks that Veblen ‘was not a constructivefigure; no alternative economic system and no penetrating reforms are associatedwith his name’ (Galbraith, 1981:30). Despite this, Veblen’s influence upon himhas been profound, with respect to Galbraith’s keen awareness of the ideologicalfunctions of social theory—especially economic theory—and the incisive andinsightful clarity with which he depicts the objects of his study. Phrases like‘conventional wisdom’, ‘convenient social virtue’ and ‘private affluence amidpublic squalor’ would not have so captured the wider public’s imagination had itnot been for their descriptive accuracy. In an important tribute to Galbraith’slifetime contribution, Amartya Sen writes:

In the exercise of richly critical, relevantly pointed, and constantlyquestioning description, it is hard to match Galbraith’s diagnostic skill orthe power and reach of his discriminating observation.

Sen (1999:141) Insight requires an analytical capacity founded upon a theoretical framework,however implicit or ill-formed that may be. But description that is ‘richly critical,relevantly pointed and constantly questioning’ is so because it is informed by a theory that has passed the test of relevance posed by one of Galbraith’s teachersat Berkeley, Leo Rogin:

Ultimately a social scientist must do the same thing a natural scientist does.Both check theory for its truth. But in the social sciences, where referenceis not to a constant external nature but to the everchanging historical




configuration of human affairs, theory which does not orient itself to therequirements of contemporary practice feeds on the bare bones of bygonepractical issues and is destined to be both socially reactionary andscientifically sterile. Differences in values and in perceptions of the historicaldrift of events preclude unanimity in the appraisal of systems of theory. Butcriticism which has proceeded without explicit reference to historically

conditioned practical ends has involved a waste of moral energy.Rogin (1971:13)

One can certainly detect in Galbraith’s work his appreciation of Rogin’sidentification of the institutional lag to which economic theory is susceptible, andwhich can prove to be ideologically convenient But if moral energy is notsomething that Galbraith may reasonably be accused of wasting, perhaps hisprescriptions have sometimes underwhelmed the impact of his powerful

diagnoses. Douglas Dowd, another student of Rogin, believes so:

John Kenneth Galbraith is a witting and witty troublemaker, and though by no means a radical, his troublesomeness, and perhaps even more hisgraceful writing style, have placed him beyond the pale for most of theeconomics profession—despite that…he, like [Adolf] Berle, uses a finemind to underscore problematic areas in the socioeconomy, but movesfrom these troubles, somehow, always to a comforting set of conclusions(and then in his next book, undermines those conclusions and repeats theprocess).

Dowd (1993:123) Certainly, as Stanfield admits elsewhere in this volume, the withdrawal of a pricesand incomes policy as a realistic option by Galbraith in his most recent work of political economy, The Good Society renders the solution to the dilemma of inflationand recession less than comforting simply for not offering any concrete alternative.‘The most that can now be urged is a sense of responsibility on wage-pricenegotiation that reflects the larger public interest’ (Galbraith, 1996:47). This, it will be acknowledged, is not an adequate foundation upon which to build hopes for a better future. But it is reflective of a greater pessimism founded upon an apparentlyrealistic assessment of the political prospect by Galbraith. Ever since the New Rightascendancy of the 1970s onwards, and the ‘Great Capitalist Restoration’ usheredin by the governments of Ronald Reagan and Margaret Thateher (though partiallypre-empted by their immediate predecessors), Galbraith’s prescriptions have become noticeably less sanguine than before. For example, he is much lessconvinced of the willingness, if not the ability, of the scientific and educationalestablishment to combat the pernicious and pervasive influence of the pecuniaryinterest (Galbraith, 1985:xxxiv–v). Indeed, the impact of the Reagan presidencyupon the American, and even international, psyche, perhaps prompted Galbraithto formulate an explicit theory of power, whose centrality of place in Galbraith’swork had not been, prior to this work, as articulately detailed (Galbraith, 1983).




Meanwhile the legacy of the Reagan presidency is such that no comforting solutionfollows the devastating analysis comprising The Culture of Contentment: ‘the prospectis not bright’ (Galbraith, 1992:182).

Dowd’s remark that Galbraith is ‘by no means a radical’ is deserving,perhaps, of qualification. Galbraith’s historical association with theDemocratic Party, and his participation in Americans for Democratic Action

and the presidential campaigns of Adlai Stevenson, John F.Kennedy, Lyndon Johnson, Eugene McCarthy and George McGovern, as well as his stint as U.S. Ambassador to India, would suggest a mind at ease with the essential core of the U.S. political economy (McGovern far less so). Despite his involvement inthe political mainstream, his has been a voice of criticism from within. He became an outspoken opponent of the Vietnam War, and, prior to that,advised President Kennedy against a recurrent ‘adventurism’ in Americanforeign policy (Galbraith, 1998b: 64). He later satirised the U.S. foreign policy

establishment in his novel, The Triumph (1968). But with the New Rightascendancy and its ultimate hegemony over Western political and economicdiscourse, Galbraith’s voice has become ever more marginal, with respect tothe corridors of power. Consequentially, in recent years Galbraith has begun to bear similarity to Veblen more closely than he might himself have wished,although he retains some hope that the ideas he propagates may yet bear fruit.Though Galbraith may yet consider himself an abiding liberal, as opposed toan arriviste radical, the words of John Dewey strike a telling, Rogin-esque, noteof truth, especially today:

If radicalism be defined as perception of need for radical change, thentoday any liberalism which is not also radicalism is irrelevant and doomed.

Dewey in Hickman and Alexander (1998:325) Without ignoring the immensity of the task facing any who would wish toradically redress the distribution of income and power within the industrialisedcountries, and beyond these to include the impoverished ‘transition’ economiesand the plundered, debt-ridden less developed countries, we require a reaffirmation of ends coupled with a ruthless criticism of all that exists so that wemight identify realistic means. Realistic here does not mean a timid acceptance of ‘the Third Way’ or some such programme defined mostly on the basis of what itis not. Rather, it is the honest appraisal of the available instruments of progressivechange, themselves thoroughly consistent with the nobility of the ends thussought In other words, instead of falling into the fatal trap of ends justifying themeans, we retain Dewey’s idea of ‘ends-in-view’, acknowledging the mutuallyinformative relationship means have with ends. Both must be subject toreconstruction, in a manner consonant with Rogin’s test of validity, lest they become scientifically sterile and/or socially reactionary.

‘Ends’ are not necessarily fulfillments or consummations. They may bemere closures, abrupt cessations, as a railway line may by force of




external conditions come to an end, although the end does not fulfillantecedent activities.

Dewey (1958:269) And even where fulfilment or consummation is achieved, there are always othergoals ready to take their place. History is not an unfolding process directed

towards some pre-determined final end. The ends we strive towards areprovisional, and ought to be consistent with the values we seek to promote andembed within the fabric of social life.

Eschewing any sort of determinism, Galbraith has instead engaged in‘theoretically informed but concrete study of institutions as they are, motivated bythe quest not for the highest level of generality but for historically contingentanswers to questions concerning what might be done to design an economy moreconducive to fairness, well-being, and freedom’ (Bowles and Edwards, 1989:50).

In so doing he has employed what Stanfield (1996:62) has termed the ‘criticalhistorical method’. It bears a marked resemblance to Deweyan empirical naturalism(see Boisvert, 1998:35–45). Accordingly, central to Galbraith’s analysis of thepolitical economy of late modern capitalism has been the role of the state.

This was not always the case, however. In American Capitalism (1952) Galbraithdeclared that the success of the U.S. economy would depend upon governmentpolicies only in time of war or under threat of war (Galbraith, 1993:105). It is notclear whether this was intended as a satirical barb aimed at hysterical anti-NewDealers, written as it was at a time of equally hysterical anti-communism at homeand protracted conflict in Korea. Regardless, the extent to which Americancapitalism depended upon the state’s role in creating conditions favourable toaccumulation subsequently became much clearer.

In The Affluent Society (1958), Galbraith highlighted the evident contradictionsunderlying popular conceptions of government spending as wasteful and privateinvestment as inherently wealth-creating. According to conventional wisdom,vacuum cleaners for clean homes are good, street cleaners for better publichygiene are bad (Galbraith, 1998a:109). Yet increased private production andconsumption leads to heavier burdens being placed upon public services. Theconsequences of such an unmitigated trend are, to say the least, troublesome.‘Failure to keep public services in minimal relation to private production and useof goods is a cause of social disorder or impairs economic performance’ (1998a:193). While Galbraith’s main focus in The Affluent Society was upon thediminishing returns of private investment as opposed to the appreciably largerpotential return on public investment, the pathological dilemma of the capitaliststate that was later examined in such devastating detail by O’Connor (1973) washere identified. Of particular concern to Galbraith was the privatisation of humancapital and the socialisation of the investment necessary to its development. Without a properly funded education system, the calibre of employees required by corporations and the state to administer the ever more complex apparatus of modern social life would fail to keep pace with technological development Theresult would be further stagnation and waste (Galbraith, 1998a:200–8).




orderly process of accumulation. The World Bank (1997) and the propagators of the ‘Third Way’ (Blair and Schroeder, 1999; Giddens, 1998) are reasserting theimportance of regulatory frameworks which would facilitate economic growthand prosperity. The power elite is becoming reacquainted with truths whoseveracity did not lessen during the 1970s:

Many have noted that regulatory agencies tend to become the instruments,even the puppets, of the industries they are supposed to regulate. This wesee to be normal.

Galbraith (1973:218)

Given the deep dependence of the planning system on the state and thenature of its motivational relationship to the state, i.e., its identificationwith public goals and the adaptation of these to its needs, the planning

system will not long be regarded as something apart from governmentRather it will increasingly be seen as part of a much larger complex whichembraces both the planning system and the state.

Galbraith (1985:406) What has changed since the 1960s has been the steady globalisation of theworld political economy. In part this has been driven by technologicaladvance, facilitating the extended reach of a system dependent upon growthfor its very survival. Related to this has been the parallel development of anideology of globalism, which asserts the superiority of the political economicmodel of the ‘Washington consensus’ (Pieper and Taylor, 1998) as a meansof ensuring ever-greater accumulation by U.S. corporations. Naturally thisimperialism-by-any-other-name does not go unchallenged, as the leaders of the European Union, Japan and now China seek to protect their perceivedinterests. The Islamic countries represent a singular challenge to U.S.hegemony (see Huntington, 1996). Efforts to promote global stability—onterms favourable to the powerful—have foundered at present, following theBattle of Seattle in November 1999. This is not to say that there will be nosuch attempts in the future. The nature and substance of any future regime of global governance will be the subject of heated debate and not entirely visiblepower struggle for the foreseeable future.

Given this uncertainty faced by an as yet fragmentary global technostructure,the present may offer the greatest opportunity since the 1970s for the developmentand propagation of an alternative, democratic agenda. As Galbraith (1985:175)states, ‘The first requisite for survival by the technostructure is that it preservethe autonomy on which its decision-making power depends’ In the more insulatedregime of the 1960s, this it accomplished via its transcendence of the state andcorporate sectors. The ideology of globalism is intended to facilitate thereplication of this system on a global scale. Integral to its future success is thecooperation and participation of compliant states. As yet this is far from assured.The uncertainty surrounding the role of the state renders it more vulnerable to




efforts to harness its power for the good of society, as opposed to that of capital.The question remains, what kind of state should we be seeking to reconstruct?

The good state

The question has already been answered in part earlier in the chapter.O’Connor’s call for the democratisation of the state contrasts somewhat withGalbraith’s more pessimistic view of recent events. Because of what he obviouslyregards as the rather regressive turn taken during the Reagan-Thatcher era,resulting in the embedding of a ‘culture of contentment’, Galbraith’s assessmentof the political prospect is noticeably bleaker than it was at the time of his writing The New Industrial State. Then it seemed possible that the skills required by thetechnostructure, necessitating the expansion of higher education and scientific

research, would lead to the unintended promotion of humanistic ideas supposedlyenshrined in liberal education. In a manner analogous to the more traditionalMarxist analysis of capitalism, the technostructure would be sowing the seeds of its own transformation, if not exactly destruction, because it would come, at leastin part, to reflect the values of the scientific and educational estate (Galbraith,1985:389). Reflecting this conviction, more detailed and ambitious proposals forprogressive reform were discussed in Economics and the Public Purpose (1973). TheseGalbraith has subsequently scaled down in response to his gloomier appraisal of the political climate.

Today the pragmatist in Galbraith appears to have the upper hand over hisradical aspect. It could be said that he has always been a pragmatist, however; itis simply a measure of how circumstances have changed that what passes forpragmatism today is far less ambitious now than it was two or three decades ago.Then again, compared with the conventional wisdom of the present, Galbraith’spruned manifesto is still manifestly more radical than anything the advocates of the ‘Third Way’ are proposing. Nevertheless, there is something to be said forunabashed advocacy, regardless of the likely opposition. Arguing for policies thatwould promote equality, Marc Tool (1996:121) writes:

…it is probable that large segments of the ‘conservative’ politicalcommunity would vigorously oppose these proposals. That opposition is,politically speaking, of interest and importance, but it should not bepermitted to compromise the fundamental argument being made to ‘chooseequality’. The latter’s credibility does not derive from its ‘politicalcorrectness’. The inquiry task is to make arguments and proposals that willstimulate public discussion and social action.

In The Good Society, Galbraith, whilst acknowledging the bleaker prospects forradical change in the 1990s, figuratively draws a line in the sand by identifying the most basic elements of any society that would wish to be recognised as ‘good’.Fundamentally, this requires that there be a progressive redistribution of income




and power to enable the enfranchisement of those presently excluded from fullerparticipation in both the manufacture and enjoyment of the fruits of social life.

The distribution of income in the modern economy derives ultimately fromthe distribution of power. This, in turn, is both a cause and a consequenceof the way income is shared. Power serves the acquisition of income; income

accords power over the pecuniary reward of others.Galbraith (1996:65)

This process of cumulative causation which has been allowed to work morefreely during the last two decades, resulting in an ever greater polarisation of richand poor, must, Galbraith asserts, be addressed. How this is to be accomplished,and the extent to which that accomplishment favours the desired end, dependsupon the state. Advocates of the ‘Third Way’ are correct in their argument that

there can be no return to the old-style interventionism that typified post-1945social democracy. The very notion of ‘interventionism’ connotes technocratictinkering with a system or organism that is otherwise, when fully functional,quite acceptable. It is also premised on the idea that the state is somehowindependent of the economic system, which is palpably fictitious. But this iswhere democrats and Third Wayers must part company, for the latter, inaccepting the importance of the state as an integral economic actor, define ‘old-style interventionism’ as comprising non-means-tested social welfare benefits andthe bailing out of ‘lame duck’ industries through nationalisation. Corporatewelfare, on the other hand, is to be more liberally distributed than ever, and via euphemistic ‘public private partnerships’, provide yet more lucrativeopportunities for private accumulation whilst the public picks up the tab in termsof poorer services or more expensive charges (Coates and Brown, 1999:51).

It is not at all clear that Galbraith has ever advocated what is now caricaturedas ‘old-style interventionism’. Certainly, his previous advocacy of publicownership has been noted by many, of whom most are disapproving. It ought to be emphasised that he never advocated the kind of nationalisation typified inBritain by the failed corporate model of Herbert Morrison. As with O’Connor’s(1973:10, n3) clear delineation of state from public, Galbraith has no illusionsabout the benignity of state power:

public ownership is not a promising solution for privately exercised powerif the state itself is the instrument of such power… All organization excludesinterference from outside or above; its goals are those which serve theinterest of its members. This is the behavior of an organization before it istaken over by the state; it will be its behavior after it has been taken over.This will be especially certain if its operations are technical in characterand its power is derived from more or less exclusively possessedinformation.

Galbraith (1973:219)




Foreign policy, the nuclear industry and now, more recently fashionable,monetary policy are all examples of areas where state control is in no wise ‘public’.

Nevertheless, ‘[i]n the good society there is, must be, a large role for the state,and especially on behalf of the less fortunate of the community’ (Galbraith,1996:30). While today this premises Galbraith’s argument for progressivetaxation, almost three decades ago it was the basis of a far more radical proposal

that is presently gathering support among many whose views could not normally be described as homogeneous. The Galbraithian formulation of the basic incomeas part of a general prices and incomes policy would not necessarily meet withthe approval of other advocates, but it does represent an interesting point of departure for further debate. (For a good survey of the libertarian, feminist andsocialist arguments for a guaranteed income, see Jordan, 1985.)

Galbraith’s original proposal rested on the preceding analysis of the moderneconomy as comprising two sectors, the planning system (monopoly capital) and

the market system (small, competing firms). The latter is dependent on theformer. Wages in the planning system are generally higher than those earned inthe market system. Given the subsequent haemorrhaging of employment as a result of corporate downsizing, it is now even more correct to aver that ‘theplanning system is a club to which only a minority of workers belong’ (Galbraith,1973:262). A guaranteed income for the market system would be ‘modestly below what can be earned in the planning system’, while for those who cannotfind employment it would be modestly lower again, but sufficient to support anadequate standard of living by comparison with the rest of the working population. In other words, ‘adequacy’ is defined in relative, as opposed to strictlyabsolute, terms.

One important aspect of Galbraith’s proposal of a guaranteed income is itssetting of ‘a limit to involuntary self-exploitation’ by the self-employed. In Britain,the crude promotion of ‘entrepreneurship’ as an eminently desirable and practicalfacet of social life in recent years masks the intention of governments to reduceunemployment figures and thereby reduce the social security bill. Thisprivatisation of costs previously socialised by the planning system is onlytemporary, however. The generous subsidies and supports offered to businessstart-ups already reduces the intended saving (if indeed any is preserved, giventhe pitifully low income supports remaining after the Great CapitalistRestoration). The relatively indiscriminate nature of government assistancemeans that there is little guidance as to what sorts of business start-ups should bepreferred. As a result a proliferation of small enterprises threatens all competing for a dwindling share of an—at best—static market There is

a superabundance of cheap labor [which] encourages the setting up of small business…thus produc[ing] ‘overcrowding’ in the competitive sector…Finally, because of the economically depressed condition of competitiveindustries, small businessmen and farmers (as well as workers) are forcedto depend more and more on the state for material survival, indirectly inthe form of fair-trade laws and similar protective legislation, directly in the




form of loan guarantees, farm subsidies, and similar programs. Outlays onsuch indirect and direct state programs are also forms of social expense.

O’Connor (1973:30) Needless to say, such irresponsible use of nominally public funds to finance theaspirations of individuals who have no social obligation other than to succeed in

the private accumulation of capital is not the result of any truly democraticdecision making process. And in the unlikely event that even a small proportionof such beneficiaries achieve ‘success’, through ‘hard work’ which woulddoubtless be ‘all their own’, they will be free to do as they will with their surplus.This includes relocating production to more hospitable climes, should the relativecost of domestic labour prove to be too inhibiting of accumulation. Meanwhile,unprofitable but socially necessary work remains to be done, starved of thenecessary investment by both private and state sectors.

Basic income, even as part of a general prices and incomes policy, will not, of itself, result in a fairer and more efficient economic system, when the logic of thatsystem continues to dictate pathologies endemic to itself. The first task of analternative economic strategy must be to define exactly what sort of values oughtto be promoted by and embedded in a reconstructed political economy. Thisgoes to the heart of debates between critics of orthodoxy and those who wouldemphasise efficiency at the expense of fairness, their conceptions based upon a false dichotomy of the two (Atkinson, 1995). As Galbraith and many others haveconvincingly argued, narrow economic efficiency at the expense of equityeventually rebounds upon itself, as the logic of ceteris paribus renders institutionsever more imbecilic and, therefore, inefficient

The social value theory of Marc Tool, drawing deeply from the legacy of JohnDewey, rejects this conventional formulation, positing instead a definition of theeconomy as the servant of the people, and not vice versa.

In short, the instrumental definition of the economy emphasizes lives andlivelihoods. The economy is evaluated on its ability to reproduce liveswithout disrupting them. The economy is not instrumentally valid if itdestroys the natural habitat of human life, undermines vital relationshipsof community or family life, distorts personalities, or unnecessarilyrepresses individual freedom and development

Stanfield and Stanfield (1995:211–12) In order to achieve this, the positive role of democratic government must bereasserted. While the Great Capitalist Restoration has brought about the shrinking of government, partly in response to conservatives’ original concerns aboutoverload and governability (Parsons, 1982), state power has increased. This processis accelerating, as governments grant independence to central bankers, as privatisedutilities become subject to regulation, as state-administered institutions of educationand training promote commercially driven criteria at the expense of the pedagogic,as public services become profit-generating income streams for private investors,




and those that are not become ever more compliant to rules and performancestandards whose formulation and monitoring are the province of the government-appointed ‘expert’, as opposed to the end users themselves.

Democratising the state is only half the political task that awaits those whowould seek to bring about the good society. Nevertheless, it would go a significantway towards accomplishing the similar democratisation of the nominally private

sector of the economy. The whole concept of private property requiresreconstruction to take fuller account of the public consequences of its ownershipand use. Such a reconstruction would do much to embed the values of democracyand community, subject as these are to the relentless pressures of commodification. The consequences of that process going unchecked would bean incalculable diminution and devaluation of social (and therefore human) life,as in the process of commodifying all things so that they may be subject to therules of market exchange, we render ourselves mere commodities.

As Robert Prasch and Falguni Sheth (2000) clearly demonstrate, this is preciselywhat becomes of our children in a system of school vouchers. As certain schoolsacquire the reputation of ‘good’, placements become valuable commodities. Theschools’ managers (as opposed to teachers) therefore have discretionary power overwhose children ought to be accepted. Calculations are made on the basis of pasttest results and social background (where monied equals aspirational), which become price analogues in the cost-benefit analysis conducted by school managerstowards the end of maintaining and enhancing their schools’ reputation. That suchinvidious comparison should be so institutionalised by the state, at the beginning of life, is not something that should be tolerated in the least. Nothing more clearlyrepresents the very antithesis of the good society.

In the words of Galbraith (1996:139): ‘The decisive step toward a good societyis to make democracy genuine, inclusive’. The democratic principles adumbrated by Tool (1998), very much in the spirit of Dewey (1954), offer an excellent basisfor achieving such an end. Of particular importance in rendering the state sectortruly public is the democratisation of the policy-making process. It is not enoughthat there should be far wider voter participation in elections, although that wouldcertainly help. As with Tony Benn’s proposals for civil service reform, Tool(1998:24) asserts that ‘a viable democratic system reflects a problem-solving approach of successive approximations’ The very culture of the state must bereformed in order to effect lasting progressive change. It may take some time tooccur, but the ruthless imposition of a single agenda is bound to become a tiredeffort at self-justification, as with the eighteen years of Conservative rule inBritain, or indeed any monistic political system. The reenergised and slightlyaltered trajectory of that agenda under ‘New Labour’ nevertheless reflects theentrenchment of unaccountable private interests within the state apparatus.

So, too, must the culture of society be reconstructed in order to reassert theplace of politics in social life. Instead of politics being a poor second to thedemands of a capitalists’ economy, decisions that impact upon the welfare—socialand material—of the community should be open not only to popular scrutiny, butas much to popular participation. Such is true public ownership.




Galbraith and the democratic prospect

The ambiguity of the state within the present flux resulting from globalisationrepresents a unique opportunity for the formulation and advocacy of democratic alternatives to the neo-liberal agenda of globalism. The ‘Battle of Seattle’ showed that international elites are increasingly vulnerable to popular

protest, which once again manifested at the January 2000 annual Davosconvocation of the disingenuously titled World Economic Forum.Organisations like Greenpeace mount effective international campaigns againstcorporations and governments alike in seeking to prevent wilful environmentaldamage, as with Royal Dutch Shell’s failed attempt to dispose of the Brent Sparoil rig at sea in 1995. Widespread opposition to biotechnology firm Monsanto’saggressive promotion of genetically modified seed crops resulted in thecompany’s climbdown on this issue and ultimate retreat, involving the change

of its name to Pharmacia.None of the above marks the end of the agendas driving the thwarted goals of

monopoly capital. But it does show what can be accomplished when both thethinking and the doing of progressive civil society are united in rejecting theprerogatives of monopoly capital. It is indicative of what would happen shouldthere be the fulfilment of James O’Connor’s desire

to make social movements self-aware that what they have in common is thedemand to sublate local direct democracy, liberal democratic politicalforms, and bureaucracy into a new and unknown third term; that is to putdemocratic content into the democratic forms (or procedures) of the bourgeois liberal state.

O’Connor (1998:310) The ideas promulgated by Galbraith throughout his long career offer, at the veryleast, a useful launch pad for continuing scholarship and activism aimed at thereconstruction of the good society served by a good state.

References

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