GALBRAITH'S PARADIGM: A CASE STUDY
IN SCIENTIFIC REVOLUTION
Mark Steven Waldman
A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
Mark Steven Waldman
TO MY FAMILY
My Supervisory Committee, who taught me a great deal;
Dr. Irving Goffman, a good friend; Vinod, for inspiration;
Terry Boronsy, of Houghton Mifflin, for sending me reviews;
my friends for their tolerance; John Kenneth Galbraith and
Paul A. Samuelson for advice and assistance.
TABLE OF CONTENTS
I. INTRODUCTION................................. 1
The Problem................................ 2
Method of Analysis ....................... 3
Organization of the Study................. 5
II. METHODOLOGY AND BACKGROUND.................. 6
Methodology: Thomas Kuhn's Theory
of the History of Science.............. 6
Introduction .......................... 6
The Paradigm Concept .................. 7
Normal Science........................ 13
Scientific Revolutions................ 16
A Note on Scientific Progress.......... 20
Background: Kuhn's Concepts in the
Economic Literature................... 22
III. THE COMMON ELEMENTS: THE GALBRAITHIAN
Method of Analysis....................... 34
The Paradigm Concept: A Review........... 36
The Puzzles .............................. 38
Galbraith's Mode of Presentation......... 41
The Common Elements: The Galbraithian
The First Element: Technology......... 46
The Second Element: Organization..... 51
The Third Element: Power.............. 60
Technology, Organization, Power:
IV. GALBRAITH'S PARADIGM........................ 74
Introduction. ............................ 74
The Paradigm............................... 74
The Three Common Elements in
Galbraith's Paradigm................... 76
The Paradigm and the Puzzle-Views.......... 79
The Paradigm's Logical Characteristics.... 85
V. SUMMARY AND CONCLUSION........................ 97
Further Thoughts ..... .................... 103
BIOGRAPHICAL SKETCH .................................. 112
Abstract of Dissertation Presented to the Graduate
Council of the University of Florida in Partial
Fulfillment of the Requirements for the
Degree of Doctor of Philosophy
GALBRAITH'S PARADIGM: A CASE STUDY
IN SCIENTIFIC REVOLUTION
Mark Steven Waldman
Chairman: J. Ronnie Davis
Major Department: Economics
John Kenneth Galbraith's recent book, Economics and
the Public Purpose, is a deliberate attempt to change the
way people view economic phenomena and economics. Thomas
Kuhn's new approach to the history of science offers the
historian of thought a tool for the evaluation of such an
attempt. Kuhn's theory focuses on just such shifts in the
way phenomena are viewed as the primary mode of scientific
progress. His important paradigm concept as refined in the
second edition of his book, The Structure of Scientific
Revolutions, can be rigorously described and thus applied
to cases where new views of economic phenomena are allegedly
The literature in economics which applies Kuhn's theory
is sparse. This study attempts to use this approach to
analyze a particularly well-suited work in order both to
articulate the theory and ascertain whether Galbraith has
developed a paradigm which can serve as an alternative to
the traditional one in economic science.
Since any paradigm in Economics and the Public
Purpose would be utilized consistently in all problems
viewed.in the book the text was analyzed carefully for
elements which appear in each puzzle Galbraith discusses.
The analysis yielded three such elements: technology,
organization and power. Galbraith's paradigm must
therefore contain these elements-in the same manner as
they appear in the book.
A formulation of Galbraith's paradigm may thus be
built out of the three common elements. That formulation
is then tested against both the necessary logical
characteristics of a paradigm and also in the manner of
its use as described by Kuhn. The study concludes that
Galbraith has developed a paradigm, that the paradigm
meets the test of Kuhn's criteria for both characteristics
and use, and therefore that Galbraith has fulfilled one
of the necessary conditions for the beginning of a
scientific revolution in economic science.
Historians of economic thought have for some time been
interested not only in the succession of particular doctrines
in economic science but also in the reasons why particular
ones are developed, come to be accepted, and then lose
adherents and disappear. The relations between cognitive
elements in economics and the sociological nature of the
community of economic scholars offer the historian of thought
a rich area for research. Many valuable insights into the
history and current practice of economic science may be
gained by such study.
Economics has had a remarkably uniform history; since
the time of Adam Smith it has been dominated, though not
completely, by a single way of viewing'economic phenomena.
Despite the seemingly great differences between the
political economic analysis of two hundred years ago and the
sophisticated quantitative analysis of contemporary economics
a common underlying gestalt unites the old and the new
practitioners of economic science.
The decade of the 1970's has brought with it a set of
crises in the economic relationships between the industri-
alized and the less developed nations, and within individual
nations. These crises have so far proven intractable with
respect to the traditional and widely used tools of economic
policy. While the reasons for this are not yet clear it seems
certain that during the remainder of the decade significant
changes will be made in economic policy and the underlying
theories. Despite recognition and implementation lags the
challenge of events usually proves decisive in economics.
John Kenneth Galbraith has recently published his
general theory of the economic system and his overview of a
program of reform in his latest book, Economics and the
Public Purpose (Galbraith, 1973a). The book is in direct
descent from two of his earlier and quite popular works,
The Affluent Society (Galbraith, 1971a) and The New
Industrial State (Galbraith, 1971b). In this work Galbraith
attempts to change the way his readers view economic
phenomena and economics; referring constantly to the power
of events Galbraith summarizes and then picks apart
traditional economics as a counterpart to the presentation
of his own views.
Galbraith is noted for the timeliness of his publica-
tions, and this book is no exception. It comes at a time
when both the United States and the rest of the industri-
alized nations are undergoing the stresses which result
from changes in the structural relationships in national and
international economic systems. The role of economics in
the formulation of public policy has been such that there is
particular pressure on the scientific community to develop
pragmatic and effective policies to deal with the causes of
The effort being made by the community of economists to
deal with these problems is apparent from even a cursory
reading of professional journals and periodicals dealing
with economic issues. Thus any new.way of viewing economic
problems is potentially more effective at this particular
time than would be the case if economists and the society in
general were satisfied with the performance of the economy
and of economic policy. When such a new approach is
presented by one who writes with considerable grace and style
and one whose past works have become best sellers, however,
it deserves particular attention from the historian of thought.
Galbraith is attempting to change the way people view
economic society and economic science. That he so attempts
at a time when people are more willing to accept different
ideas lends force to his presentation. That he is capable
of writing in plain language in a highly persuasive manner
enhances further that force of presentation. It is Galbraith's
attempt to change people's views that forms the subject
of this analysis; with the development of a new approach to
the history and philosophy of science the historian has a
powerful new tool for such reason.
Method of Analysis
Thomas Kuhn's revolutionary work in the history of
science has revitalized that field and others as well
(Kuhn, 1970). While he focuses on the history of the
physical sciences his analysis is being applied to other
areas. Kuhn's schema identifies revolutionary changes in
the basic scientific gestalt as the major mode of scientific
progress; he denies the conventional view which is that
science proceeds incrementally, with each new development
building on preceding ones.
These revolutionary shifts in the basic point of view
occur in times of scientific crisis. Such periods occur
when existing theories and models, or traditional ways of
viewing the field, do not provide acceptable solutions to
the problems facing the scientific community.
Kuhn's theory seems well suited for application to
Galbraith's attempt to affect the basic point of view of
economic science. There are problems which face the
economics profession which have so far proven insoluble
through the use of traditional approaches to theory and
policy. Economists are more open to different ways of
viewing economic phenomena as a result of this situation.
This study will analyze Economics and the Public Purpose
as a potentially revolutionary work in economics. Kuhn's
theory will be applied to Galbraith's analysis to ascertain
whether he has in fact fulfilled the necessary conditions
for such a revolution.
The central condition, and the one which receives most
of the attention in this study, is the creation of an
alternate paradigm, an alternative to the traditional way of
viewing economic phenomena which, as mentioned, has dominated
the community of economic scholars for two hundred years.
Kuhn's theory implies that unless Galbraith has
developed this particular sort of cognitive construct he will
not succeed in his stated task of effecting a change in the
basic way in which scientists view economic phenomena and
economics. Since the paradigm concept can be rigorously
stated Galbraith's work can be tested using Kuhn's analysis.
The presence of a new paradigm in the book would fulfill a
necessary though not sufficient condition for the beginning
of a scientific revolution in economics.
Organization of the Study
Chapter II is devoted to a summary of Kuhn's theory of
the history of science and in particular to the paradigm
concept. The chapter focuses attention on an important
refinement to that concept which Kuhn has effected. The
chapter then outlines Kuhn's analysis of normal science,
scientific revolutions, and scientific progress. It also
includes a discussion of the rather sparse literature in
economics which deals with Kuhn's concepts.
In Chapter III we extract from Economics and the
Public Purpose the common elements in the way Galbraith
views the economic phenomena in the work. These elements
are technology, organization and power. After a discussion of
Galbraith's mode of exposition and a review of the paradigm
concept each element is analyzed and the characteristics of
its appearance in the book explicated. Galbraith's paradigm
must logically be composed of those common elements in the
same way as they appear in the text of his book.
METHODOLOGY AND BACKGROUND
Methodology: Thomas Kuhn's Theory
of the History of Science
Thomas Kuhn's recently developed theory of the history
of the physical sciences offers historians of thought in
the social sciences a new tool for understanding the history
and practice of their disciplines (Kuhn, 1970). This chapter
outlines Kuhn's theory with special emphasis on a subsequent
refinement of one of his most important concepts. The
chapter also summarizes and discusses the literature in
economics which utilizes Kuhn's theory.
Beginning with the paradigm concept, the outline
proceeds through normal science to scientific revolutions
with a concluding note on the direction of scientific
progress. Such brief treatment cannot do real justice to
the scope and subtlety of Kuhn's theory; it is possible,
however, to arrive at an understanding of his basic
paradigm and to grasp the important refinement in his
theory which appears in the Postscript to the second
edition of his book (Kuhn, 1970). It is this refinement
which he has come to view as one of his more novel and
valuable contributions to the history of science (Kuhn,
The Paradigm Concept
The concept of a paradigm is central to Thomas Kuhn's
theory of the history of science. Kuhn has been somewhat
vague, however, in his definition of what a paradigm is.
On this point, he admits, his "original text leaves no
more obscure or important question" (Kuhn, 1970, 181).
Margaret Masterman has isolated twenty-one separate but
related senses of the paradigm concept which appear in
Kuhn's original text (Masterman, 1970). Noting her work in
this area Kuhn refines his concept in the Postscript to
the second edition of his work (Kuhn, 1970). He settles
on two major senses of the paradigm concept. (Masterman
isolates three senses of the concept. The first two are
congruent with the first of Kuhn's senses and the third
the same as Kuhn's second sense.)
The first of Kuhn's major senses of the paradigm
concept is the "disciplinary matrix." This is the "entire
constellation of beliefs, values, techniques and so on
shared by members of a given (scientific) community"
(Kuhn, 1970, 175).
It is this matrix which is shared among the practi-
tioners of a particular branch of science and thus allows
them to communicate and practice their discipline on the
basis of shared language and meanings. The disciplinary
matrix is thus more than a basic theory or even a set of
theories; it contains, Kuhn says, such elements as
symbolic generalizations, beliefs in particular models,
values, and exemplars (Kuhn, 1970, 182).
The disciplinary matrix thus contains metaphysical as
well as sociological and cognitive elements. It therefore
functions as a Weltanschauung, or world view, as well as
in a regulative and cognitive manner within the scientific
community. This sense of the paradigm concept has received
the most attention from Kuhn's readers. Nevertheless it is
not the one which Kuhn feels is the most useful in his
analysis of the history and practice of science.
The second sense of the paradigm concept, exemplars, is
actually one of the elements in the disciplinary matrix.
Kuhn feels that exemplars represent a separate and extremely
important sense of the paradigm concept; it is to these
that we now turn and with which we shall be concerned
throughout this analysis.
Kuhn defines exemplars as "the concrete puzzle-
solutions which, employed as models or examples, can
replace explicit rules as a basis for the solution of the
remaining puzzles of normal science" (Kuhn, 1970, 175).
He refers to this concept as the "most novel and least
understood" aspect of his work (Kuhn, 1970, 187). Since
this concept is for Kuhn the central sense of what a
paradigm is and also the central concept in this analysis,
we will now investigate this critically important concept
from The Structure of Scientific Revolutions (Kuhn, 1970).
Masterman hails the paradigm/exemplar concept as a
major contribution since it is based as much on what
scientists actually do in their work as it is on a
theoretical approach to knowledge and science (Masterman,
1970, 59-61). What scientists actually do, in the course
of their normal endeavors, is to solve puzzles.
Exemplars are what scientists use to determine which
puzzles to solve and how to solve them once they have been
identified as solvable. More discussion of this function
of the exemplar will be presented in the section on normal
science. The problem solving function of exemplars also
determines to a great extent their logical characteristics.
Scientists use exemplars to group objects and
situations into similarity sets, to ascertain that the
observed is like some and unlike other situations or
objects previously seen. To the extent that a puzzle is
like others already solved the paradigm can give the basic
form which the solution to that puzzle must take to be
acceptable to the scientist. While the solution must be
adapted to the particular puzzle under consideration, the
paradigm outlines its general form.
Thus a paradigm functions in an analogical sense. It
is a picture of something, A, used to perceive the
similarity of something else, B. Within the situation, B,
it duplicates the relations which it described in its
picture of A. Thus it gives, in B, a solution, B', which
duplicates, for some purpose, the main features of the
paradigm, A. This process of main feature replication in
successive puzzles is what Kuhn describes as the articulation
of a paradigm.
The puzzle-solving nature of paradigms leads Kuhn to
their main logical characteristics. These are logically
necessary given the puzzle-solving function of paradigms,
whether they are stated in symbols, such as "f = ma", or
in natural language, such as "the force of a moving
object is equal to the product of its mass and its
The first necessary characteristic is crudeness, or
incompleteness. In order for a paradigm to be replicable
in a wide range of puzzles it must be a relatively crude
description of its concrete relations. If the picture is
specified in too great detail certain puzzles are
inevitably excluded from consideration; the requirement
that a paradigm solve puzzles demands that it solve as
many as possible. The statement that force equals mass
times acceleration, for example, is incomplete as a
description since it says nothing about the direction of
motion, the object which is moving, or the environment
in which the motion occurs. Thus this statement is
relevant to the free fall of objects, the swing of a
pendulum, a pair of interacting harmonic oscillators,
gyroscopic motion, and others (Kuhn, 1970, 188-9). Poets
understand the crudeness characteristic of statements
which are designed to have as wide a relevance as possible.
The second characteristic of a paradigm is concrete-
ness. Concreteness, in the sense of pertaining to or
being concerned with realities rather than abstractions,
seems to some extent to be in conflict with the necessary
crudeness of statement. It is the relations between the
elements in the paradigm which must be to some extent
concretely specified, however; this characteristic does
not relate to those elements themselves. It is the concrete-
ness of the relations which allows a solution to the puzzles
to be offered by the paradigm/exemplar, for it is the
relations between the elements of the paradigm which are
replicated in the puzzle to yield the solution.
Masterman describes two kinds of concreteness inherent
in a paradigm (Masterman, 1970, 78). The first of these
is contained in the structure of the paradigm; the paradigm
is a concrete picture of something,A. She labels this
"A-concreteness." There is another component to the
concreteness, however, which develops as the paradigm is
articulated, or replicated in successive puzzles.
As the paradigm is articulated, as its main features
are replicated in successive puzzles, a second kind of
concreteness seeps back into the original statement. This
is what Masterman refers to as "B-concreteness." This
concreteness is what seeps back into the paradigm from
its field of application. So a paradigm is a crudely
stated concrete picture of something which is used analogi-
cally to discover similarity relations in different objects
or situations. The paradigm, in specifying a concrete
picture, gives the scientist the general form of the
solution to his puzzle. It therefore points out which
puzzles look like they are soluble and gives the scientist
a useful beginning in the search for a solution.
This process of main feature replication is logically
difficult to describe, but it seems, in Kuhn's view, to be
how the human brain actually works in scientific endeavor.
Thus we arrive at the next characteristic of a paradigm/
A paradigm is pre-theoretic in its functioning in
the neural process. It operates before interpretive thought
begins. Each individual receives stimuli from the observed
object or situation which are then converted to sensations.
Interpretive thought occurs on the basis of the registered
sensations. It is a commonplace observation, however,
that two people may view the same object or situation,
receive the same stimuli, and develop different sensations
on that basis. What perception leaves for interpretation
to complete, Kuhn suggests, "depends drastically on the
nature and amount of prior experience and training"
(Kuhn, 1970, 195).
Paradigms function in the stimulus-sensation portion
of the neural process. They structure the stimuli
associated with a particular object or situation. Thus
they may be called ways of seeing. It is in this part of
the neural process that similarity relations are discerned.
Scientific education thus involves the repetitive applica-
tion of exemplars to situation after situation until they
become embedded in this neural process.
Paradigms are therefore utilized unconsciously, or
perhaps preconsciously. Perception is not, in Kuhn's view,
an interpretive process, an "unconscious version of what we
do after we have perceived" (Kuhn, 1970, 195). The
paradigm structures the stimuli, producing patterns of
sensations upon which basis interpretive thought occurs.
All this is to say that human beings do not, for the most
part, perceive an infinitely complex reality directly.
The human brain is constantly ignoring some and emphasiz-
ing other stimuli; the scientific mind is programmed to
utilize paradigms for this purpose.
Within a scientific community paradigms function so
as to standardize the way in which puzzles are viewed so
that communication may proceed on the basis of common
points of view. It is to the nature of normal science
that we now turn.
This discussion of normal science is primarily concerned
with the role played by paradigms in such activity. Emphasis
of one factor does not do justice to the scope and depth
of Kuhn's theory; it is rather dictated by the purpose of
Kuhn's basic insight about the kind of work scientists
actually do is that it is primarily habit-governed puzzle-
solving. The results of such work are almost never
revolutionary or upheaving of fundamentals in the respec-
tive science. Masterman refers to this "crashingly obvious"
characteristic of scientific work as one of Kuhn's important
contributions to the field of the history of science
because of its basis in real scientific work rather than in
ex post theorizing (Masterman, 1970, 60). It is also the
reason why normal scientific activity does not produce
major new conceptual and phenomenal results (Masterman,
Paradigms guide the scientist in normal scientific
work. Such activity is thus the articulation of the
paradigms of the scientific community. The articulation
occurs as the paradigms are applied to and yield solutions
to a succession of puzzles. As the solutions develop the
second, or "B" component of the concreteness of the
paradigm is increased, thus adding to the attractiveness of
the paradigm. The scientific community's commitment to
the paradigm grows as the number of successful solutions
Puzzles are problems which look like they can be
solved through the use of a particular paradigm. Not all
problems are puzzles. The paradigm performs a critical
function in giving the scientist some indication of the
potential for finding a solution to particular problems.
Thus time is saved in deciding upon targets for research.
Not all puzzles are solved, however. If a problem cannot
be framed in such a manner that one of the scientific
community's paradigms can suggest the form of a solution
then it will not be considered a puzzle and will not
become the target for legitimate scientific research.
Another function paradigms perform is that of allow-
ing scientists to specialize. Because the paradigms are
developed and operative in a pre-theoretic sense the
scientist need not return to fundamentals to study each new
puzzle. Paradigms allow the scientist to quickly ascertain
the similarity relations in a new object or situation so
that specialized knowledge and experience may be brought
to bear upon the particular problems inherent in the new
Through the process of main feature replication the
paradigm gives the scientist the basic form of the solution.
It also gives some guarantee that an acceptable solution
may be found; once the puzzle is stated in such a way that
the paradigm fits then the form of the solution leads the
scientist towards an answer or solution. Note the use of
"an answer." Successive paradigms in the same science may
solve the same puzzle quite differently. At the time the
puzzle was solved each solution was "correct" or "true"
with respect to the scientific community of the time.
None of this discussion of normal science should be
taken to mean that such work is easy. While paradigms do
simplify considerably the work of normal science they leave
tremendous problems in the path of the scientist.
"Achieving the anticipated in a new way," as Kuhn calls
normal scientific puzzle-solving, "requires the solution
of all sorts of complex instrumental, conceptual, and
mathematical puzzles" (Kuhn, 1970, 36). Even when the
necessary form of the solution is given by the respective
paradigm the puzzle may take years, or even decades, to
For normal scientific activity to proceed one paradigm
must become dominant, that is, must gain the allegiance
of the scientific community. Were competing paradigms to
exist the fundamentals of the field would be called into
question thus preventing normal scientific puzzle-solving
from occurring. Thus normal science is not characteristic
of every period of science. We cannot, and Kuhn does not,
view the history of science as a long uninterrupted period
of normal scientific puzzle-solving. The development, use,
and demise of a succession of paradigms has resulted in
periodic upheavals in the cognitive, sociological,
metaphysical and psychological nature of the respective
scientific communities. Kuhn calls these upheavals
"scientific revolutions": it is to these disturbances that
we now turn.
A scientific revolution occurs when a new paradigm
replaces another as the dominant one in a particular
scientific community. The simplicity of the definition
belies the complexity and the extent of the process and
its consequences for the community of scholars and the
individual scientist. The Weltanschauung of the individual
scientist and the sociological patterns of relationships in
the community of scholars are disrupted in the course of a
scientific revolution, and often severely.
This disruption is a partial consequence of the struc-
ture and function of paradigms. The pre-theoretic nature
of a paradigm is particularly important in this regard.
Because paradigms function preconsciously and because
scientists come to be committed to their use it is often
extremely difficult for a scientist to shift from one to
the use of another. In many cases it is impossible; the indi-
vidual, who may have been using the paradigm for most of a
lifetime, cannot envision changing, would not consider
changing. It is for this reason that scientific revolutions,
like their counterpart in political life, are carried out
by the young or by those with less than normal commitment
to the existing order.
The analogical process of main feature replication, which
is the essence of the way in which a paradigm functions,
gives a clue as to the impact on the scientist (and on the
scientific community) of a change in the dominant paradigm.
If a paradigm change does occur the scientist then looks
for an entirely different set of similarity relations in
the objects and situations under consideration. From the
point of view of the individual and also of the scientific
community the nature of the field has changed. Old objects
and situations have new meanings; new relationships are
perceived and old ones are redefined.
In the course of a scientific revolution there is
often a serious lack of communication between those
committed to the old paradigm and the adherents of the new
one. The reason for this is the pre-theoretic function of
paradigms and the resultant mode of perception mentioned
above. Since the two groups ascribe different meanings to
the same objects, situations and even words communication
becomes, given the sociological nature of the scientific
But what might be the cause for the development of a
new paradigm? As an accepted paradigm is articulated in a
succession of puzzles it may meet with an anomalous puzzle.
Such a puzzle, called by Kuhn an anomaly, is one which
should have been soluble but which is, in fact, insoluble
under the existing paradigm. Even if the paradigm produces
a result the solution may be absurd, or irrelevant.
The mere existence of an anomalous puzzle is not
sufficient to signal the beginning of what Kuhn calls a
scientific crisis, however. The scientific community may
simply choose to ignore the problem or may consider it
unimportant. In such a case the traditional paradigm
remains dominant and individual scientists target their
When the scientific community decides that the anomalous
problem is both anomalous and important some time will
usually be spent attempting to solve it in the traditional
manner. If such efforts are unsuccessful then a recognized
scientific crisis emerges. The insoluble puzzle calls the
paradigm and through it the fundamentals of the field into
question. Kuhn refers to the change from one paradigm to
another as "a reconstruction of the field from new
fundamentals, a reconstruction that changes some of the
fields most elementary theoretical generalizations as
well as many of its paradigm methods and applications"
(Kuhn, 1970, 85). He likens it to a change in "visual
gestalt" (Kuhn, 1970, 85).
The development and introduction of a new paradigm
often causes severe disturbances in the scientific community
despite the recognition of a scientific crisis. The
contrast between the well articulated traditional paradigm
and the less developed new one often leads to charges and
countercharges of vagueness, lack of specificity, poor
empirical work, and general lack of scholarship. The
argument often continues in an ad hominem fashion; this
is a result of the commitment to the traditional paradigm
on the part of the bulk of the scientific community and of
the equally strong commitment to the new paradigm on the
part of its adherents.
Thus, paradigms as ways of seeing make communication
between groups adhering to different paradigms difficult if
not impossible. If the new paradigm does begin to gain
more adherents, to gain the allegiance of a larger group of
scientists, those who refuse to shift to the new one may
simply be pushed out of the community or may fight a rear
guard action until they leave the field voluntarily.
When the new paradigm proves that it is a worthy
'source of future research work.the community of scholars
accepts it and begins normal scientific work again. The'
anomalous puzzle or puzzles are no longer anomalous and the
field seems considerably different to the scientific
community as well as to the individual scientist. Science
progresses, in Kuhn's view, in a series of such scientific
revolutions. The strength of Kuhn's theory comes from
its grounding in the type of work scientists actually do
as well as in the perceptual mode of human beings and the
sociological nature of scientific communities.
So Kuhn sees a succession of scientific revolutions as
the basic course of scientific "progress." He does not,
however, view scientific progress as moving ever closer to
"the truth" or to "objective reality." Kuhn's view of human
perception implies that one cannot use "objective reality"
as a point of reference to judge scientific progress since
there is no theory-independent way of constructing such a
concept. /Thus as a science undergoes a paradigm change
the field is reconstructed, populated with new entities
and new relationships between old entities. This aspect of
Kuhn's theory is highly controversial and deserves further
A Note on Scientific Progress
Kuhn's view of scientific progress has been one of
the more controversial aspects of his approach to the
history of science. Most scientists and laymen usually
assume that successive developments move science
closer and closer to "the truth," to "objective reality,"
towards describing what is "really there." Thus, successive
paradigms would be viewed by such people as populating
the field of science with entities which more and more
closely correspond to objective reality; successive
paradigms and therefore the course of scientific development
lead towards ultimate truth.
Such a view, however, requires a theory independent
construction of "ultimate truth" or "objective reality."
The Kuhnian view of perception and thus of the nature and
function of paradigms implies that such a task is, as
Kuhn puts it, "illusive in principle" (Kuhn, 1970, 206).
We may know our sensations and understand our interpretive
thought which is based on those sensations, but we have no
direct way, no way independent of interpretive sensation-
based thought, of knowing the stimuli with which our
sensations are associated/
Thus all paradigms have a truth component relative to
their environment; for the particular historical period and
the relevant scientific community the paradigm is "true."
The Einsteinian paradigm is thus as true as was the
Aristotelian paradigm or the Newtonian paradigm.
Does science then progress at all? Is Kuhn a total
relativist with respect to the development of science?
Kuhn denies that his work is characterized by pure
relativism; scientific development, he suggests, is "a
unidirectional and irreversible process" (Kuhn, 1970, 206).
Successive paradigms, he feels; "are better than earlier
ones for solving puzzles in the often quite different
environments to which they are applied" (Kuhn, 1970, 206).
Kuhn sees improvements in the accuracy with which
predictions are made, especially in quantitative predictions,
in the balance between esoteric and everyday subject matter,
and in the number of puzzles solved by a particular
paradigm (Kuhn, 1970, 206). These are important aspects of
science, and progress in these areas is what makes Kuhn a
believer in scientific progress.
Background: Kuhn's Concepts in the
The recent publication of Kuhn's work has resulted in
a relatively sparse literature which apply his theory to
economics. The fact that his work deals with the physical
sciences has created serious difficulties for those who
attempt such an application.
Kuhn himself doubts that the social sciences are
dominated by paradigms in the same manner as are the
physical sciences (Kuhn, 1970, 15). He suggests, however,
that economics is the most likely social science to achieve
normal scientific status that is, to become dominated by
a single paradigm (Kuhn, 1970, 160). In the Postscript to
the second edition of his work Kuhn suggests that the
concept of a paradigm as an exemplar represents an important
aspect of his work that may be relevant to other areas
besides the physical sciences (Kuhn, 1970, 208).
The most important difficulty encountered in the
attempt to apply Kuhn's theory to the social sciences is
rooted in the difference between the physical and the
social sciences. Phenomena in the physical sciences do
not change with time; the social sciences study a non-
constant universe where the phenomena change constantly.
Thus, as Kunin and Weaver point out, "normal scientific
research is vulnerable to anomalies not only from within the
internal dynamics of the scientific enterprise itself but
also from sources external to the science as such" (Kunin
and Weaver, 1971, 395). Therefore the structure of
scientific revolutions in the social sciences is considerably
more complex than that in the physical sciences.
This greater complexity of the process of change in
the social sciences does not detract from the value of
Kuhn's approach. There remain "marked similarities"
between the social and the natural sciences, as Coats says,
and these similarities are strong enough, in his opinion,
to lend significant credence to a Kuhnian view of the
development of economic thought (Coats, 1969, 290).
The application of Kuhn's approach to economic science
does not, as Coats points out, "merely involve the
translation of a few methodological commonplaces into a
new language; it provides a new interpretive framework"
(Coats, 1969, 292). The strength of this framework is
that it allows the historian of economic thought to certain
the importance of particular scientific development from a
new point of view. Kuhn's inclusion in his theory of
cognitive, sociological and perceptual elements strengthens
this aspect of the value of his theory to the historian.
Another difficulty involved in the application of
Kuhn's theory to economics lies in the vagueness with
which Kuhn defined the paradigm concept in his original
text. The important refinements of the concept which he
made in the Postscript to the second edition appeared
after most of the articles concerning the application of
his concepts to economics were published.
Thus Stigler in particular states that his "main
quarrel with Kuhn is over his failure to specify the
nature of a paradigm in sufficient detail that his central
thesis can be tested empirically" (Stigler, 1969, 225).
Kunin and Weaver note with "dismay" the "range of
descriptions or definitions which Kuhn invokes at various
points in his work" and call this the "prime difficulty"
involved in working with his theory (Kunin and Weaver, 1971,
292). Masterman, as noted, has listed twenty-one related
senses of the paradigm concept which appear in Kuhn's
original text (Masterman, 1970).
Most economists using the paradigm concept have
published their articles prior to the publication of the
second edition of Kuhn's work. Thus the important
refinement of the paradigm concept has yet to receive
significant attention in the literature. A few articles
mention the exemplar concept, as we shall see, but in no
case are its logical characteristics systematically laid
out and applied to a particular development in economic
Thus Stigler defines a paradigm as "the corpus of
theoretical knowledge and analytical and empirical
techniques which is accepted by the dominant group of
the members of a science" (Stigler, 1969, 223). It is
this definition which leads to his main quarrel with Kuhn:
Kuhn's lack of specificity in defining the paradigm concept
so that his central thesis may be tested empirically.
Bronfenbrenner cites Stigler's caveat with regard to
Kuhn's definition of a paradigm and develops his own
definition, the "mode or framework of thought and language
in some branch of science" (Bronfenbrenner, 1971, 137).
Other economists define the paradigm concept at a
similar level of generality. Sweezy and Zweig utilize a
Weltanschauung approach in their treatment of "bourgeois"
and "radical" paradigms (Sweezy, 1971; Zweig, 1971a).
Peabody, in an article published in the same issue of the
Review of Radical Political Economics, describes a
paradigm in the sense of the disciplinary matrix used by
Kuhn in the Postscript to the second edition; he mentions
the exemplar sense of the concept in a note but fails to
utilize it in the body of his article (Peabody, 1971, 15).
A. W. Coats, one of the first to apply Kuhn's schema
to economics, suggests that for the social sciences a
paradigm may be defined as a "basic theory" (Coats, 1969,
292). This is clearly a non-Kuhnian use of the term;
the disciplinary matrix is broader than a basic theory and
an exemplar exists prior to a theory. Coats concludes
that economics has been dominated by a single paradigm
throughout its history; such a conclusion might also be
made using the exemplar sense of.the paradigm concept
(Coats, 1969, 292). Despite this dominance, however,
Coats suggests that revolutions have in fact occurred in
the development of economic thought. This seems to conflict
with his view of a dominant paradigm since a Kuhnian
revolution is by definition a paradigm change.
Donald Gordon was the first to apply Kuhn's theory to
economics. Despite his reliance upon the first edition of
Kuhn's'work he comes closer to using the exemplar sense of
the paradigm concept than any other economist. Defining
a paradigm as a "universally recognized scientific
achievement" which provides "model problems and solutions"
Gordon cites the necessary crudeness of an exemplar and the
articulation process (Gordon, 1965, 122-3). On the basis
of this approach he concludes that "Smith's postulate of
the maximizing individual in a relatively free market
and the successful application of this postulate to a wide
variety of specific problems is our basic paradigm" (Gordon,
1965, 123). Thus he also recognizes the different components
of concreteness inherent in the developed paradigm.
J. Ronnie Davis is also persuaded that no Kuhnian
revolutions have occurred in the development of economic
thought; he utilizes a definition of a paradigm which is
closer to the disciplinary matrix than to the exemplar,
however (Davis, 1973). Herbert Gintis also defines a
paradigm in a manner close to Kuhn's disciplinary matrix;
he identifies three paradigms in modern economics: the
"traditional neoclassical, the widely held Galbraithian, and
the more heterodox 'radical' paradigms" (Gintis, 1972, 267).
Gintis describes the Galbraithian "paradigm" in the
following manner. "The Galbraithian views social outcomes
partly as the result of the direct power of those who
control large productive organizations, and partly as the
result of consumer choices manipulated by those who
control production" (Gintis, 1972, 267). This formulation
is close to that derived in the following chapter. Gintis
clearly feels that producer sovereignty as an assumption
is congruent to his formulation of the Galbraithian
paradigm; this suggests he is not utilizing the paradigm
concept in the sense of an exemplar but rather in a manner
closer to the disciplinary matrix sense of the term.
There is a section on the sociology of economics in
Schumpeter's famous volume on the history of economic
analysis (Schumpeter, 1954, 33-47). In it he defines
an economist's "vision" as "a preanalytic cognitive act
that supplies the raw material for the analytic effort"
(Schumpeter, 1954, 41). In discussing the problem of decid-
ing which problems to solve and in the framing of those
problems Schumpeter outlines very much the same view of
the perception process as does Kuhn. Schumpeter is more
interested in the intrusion of ideological elements into
economic analysis in this section, however, so his "vision"
cannot be taken as congruent to the exemplar sense of a
paradigm but is rather closer to the Weltanschauung
aspect of the disciplinary matrix.
There are debates in the literature over specific
alleged "revolutions" in the history of economic thought;
the Keynesian and marginalist developments receive perhaps
the most attention in this regard. These debates are
outside the scope of this analysis; it seems clear, though,
that the development and application of the exemplar concept
to these discussions will offer new insights to all the
In normal scientific work one paradigm dominates the
scientific community. Despite the commitment of the members
of the scientific community to that paradigm other such
constructs may and probably do exist. These other paradigms
are not contradictory to the dominant one. Thus a scien-
tific community may, within a given disciplinary matrix
and a dominant exemplar, have other exemplars as well.
The position in the literature which is most congruent
with the exemplar sense of the paradigm concept is that
economics has been dominated by a single paradigm since the
time of Adam Smith. Coats suggests that, "despite
persistent and often penetrating criticism by a stream of
heterodox writers (economics) has been dominated throughout
its history by a single paradigm--the theory of economic
equilibrium via and market mechanism" (Coats, 1969, 292).
Gordon takes the same position, although his formulation of
the paradigm differs somewhat from that of Coats. "Smith's
postulate of the maximizing individual in a relatively free
market and the successful application of this postulate
to a wide variety of specific questions," he says, "is
our basic paradigm" (Gordon, 1965, 123).
Davis takes a position similar to that of Gordon but
adds scarcity to the formulation of the paradigm (Davis,
1972, 11). While Spengler sidesteps the debate over
revolutions in economic thought and simply enumerates the
factors influencing the development of economics, he
suggests that the price system as the regulator of economic
activity through the interaction of individuals began with
Smith and is still the "central concern" of economists
(Spengler, 1968, 180). Boulding suggests that much work
in economics has been talmudicc" in the sense that it has
"clarified, expounded, expanded, mathematicized and
translated into modern language ideas which were essentially
implicit in The Wealth of Nations" (Boulding, 1971, 229).
That economic science should have been dominated by
a single paradigm for almost two hundred years is not
surprising given the history of the market as a social
institution during that same period. Kunin and Weaver
suggest that the'dominance of a social science by a single
paradigm may depend on a particular institution achieving
"dominant status within the evolutionary development of
. society" (Kunin and Weaver, 1971, 395).
The vagueness of the paradigm concept in the original
text of Kuhn's work has resulted in serious difficulties
for those attempting to apply his schema to the social
sciences. His lack of specificity has also induced
considerable confusion among social scientists themselves
and has retarded attempts to empirically test Kuhn's
theses. The refinement of the paradigm concept into the
two senses of the disciplinary matrix and the exemplar
and the specification of the logical characteristics of
the latter will hopefully remove the barriers to such work.
The results will be significant to our understanding of the
history of economic thought whether Kuhn's theory is
supported or disproven.
THE COMMON ELEMENTS: THE
In his Presidential address to the eighty-fifth
meeting of the American Economic Association John Kenneth
Galbraith argued that the orthodox tradition in contemporary
economic theory is becoming less and less realistic as
institutional change proceeds in the American economy.
Galbraith entered a plea for more realistic theorizing;
he suggested that policies based on a theory which is a
picture of a previous era in economic history cannot solve
the complex problems of the modern industrial economy.
Galbraith has now offered the public and the profession
his alternative to the orthodox tradition in economic theory.
The publication of Economics and the Public Purpose repre-
sents Galbraith's view of the entire economic system and
also of the economic policies which, based upon his view
of that system, are required to solve the problems facing
us today (Galbraith, 1973a). Noting in the Foreward to
the book that there is widespread discontent with the
established approach to economic theory, Galbraith says that
his previous books have established for him a "bridgehead
in existing belief" (Galbraith, 1973a, xiii). Writing this
book for what he feels is a more receptive audience
Galbraith is more confident than ever that his views will
be effective in inducing the public and the profession to
move towards the development of a new tradition in
economic theory and policy.
The response of the economics profession to Galbraith's
efforts has been ambivalent at best. Paul Samuelson, the
most influential teacher of economics in the last two
decades, has said that ". .. the objective scholar must
assert that economics will never be quite the same as in
the days before the Galbraithian trilogy" (Samuelson, 1970,
488). (Note: The Galbraithian "trilogy" is American
Capitalism (Galbraith, 1956), The Affluent Society
(Galbraith, 1971a), and The New Industrial State (Galbraith,
1971b). Economics and the Public Purpose is the direct
descendant of the latter two works.) At the same time,
however, it is also true that few economists who were
educated before the late sixties have been seriously
influenced in their research by Galbraith's efforts.
Nonetheless, Galbraith may well be the most widely read
modern economist; both The Affluent Society and The New
Industrial State were best sellers, a status rarely
achieved by economic tracts.
Reviews of Economics and the Public Purpose have been
as varied as are the views of different sorts of economists.
Melville Ulmer refers to the book as "as novel for its
times, as comprehensive and nearly as iconoclastic as that
of Karl Marx." He continues and suggests that the book
"may well go down as the most important book in this
discipline since John Maynard Keynes' 1937 classic. ."
(Ulmer, 1973, 24)
Herbert Stein, as might be expected, says that "the
outstanding feature of Mr. Galbraith's new book is the
scarcity of factual evidence" (Stein, 1973, 22). Murray
Weidenbaum calls the work "provocative" (Weidenbaum, 1973,
10). Paul Sweezy believes that "in many respects Galbraith's
model is seriously flawed and ends up as a kind of new,
streamlined apologetic for monopoly capitalizm" (Sweezy,
Barbara Bergmann, in her review of Economics and the
Public Purpose, says that, while "there is much in this
book to set the teeth of most economists on edge, . there
is a discernible movement in a Galbraithian direction among
some students of the economy" (Bergmann, 1974, 900). By
populating his analytical system with elements from the
real economy, she says, Galbraith's book has a plausibility
which lends force to his analysis.
Galbraith has commented on the criticism his book has
received. We must recognize, he says, how change occurs
in economic science. "Scholars do not often change their
minds," he observes. Galbraith has little hope of
convincing the economists of his own generation; he instead
hopes to affect the younger generation of scholars who he
hopes will be more receptive to new ideas on the basis
of their less conditioned perceptions of economic
phenomena ( Challenge, 28).
Economics and the Public Purpose was written with a
clear Galbraithian purpose. Myron Sharpe, in a recently
published critique of Galbraith's books, callsGalbraith's
efforts "nothing short of an attempted revolution in
economic science. . The Galbraithian attack is two-
pronged; one against each branch of economic theory. If
it were to succeed the whole of neoclassical economics
would come crashing down" (Sharpe, 1973, 2-3).
Galbraith is aided in his task by his formidable
literary talents and a keen sense of the proper time for
publication of his ideas. Written in clear English, his
ideas are understandable and palatable to large numbers of
people. A revolutionary who cannot explain his ideas to
others is doomed to ineffectiveness; Galbraith will endure
no such fate. While Galbraith's theory may be said to be
revolutionary with respect to orthodox economics, his
policies are clearly not revolutionary in the political
sense. Galbraith correctly considers himself a reformer.
Economics and the Public Purpose thus presents the
historian of economic thought with an invaluable opportunity.
Galbraith is offering the profession and the public an
explicit alternative to traditional economic theory. He
does so at a time when economics and the economy are in a
state of disarray, when they are in a state of crisis. At
a time when new ideas and theories seem necessary to the
solution of our problems the most widely read and perhaps
the most persuasive economist of our era offers his
magnum opus as an alternative, hoping to foment a
scientific revolution. The historian of economic thought,
whatever his opinion of Galbraith's theory, can gain
valuable insights into the nature of economic science and
the structure and functions of the community of economic
scholars through research into this situation.
The historian is aided in this task by the theory of
the development of science recently published by Thomas
Kuhn (Kuhn, 1970). Summarized earlier, this approach to
scientific change for the first time gives the scholar a
theoretical base for studying the deterioration of a
traditional approach in a particular science. His work
also stresses revolutionary change in science; it is thus
particularly well suited for use in an analysis of
Galbraith's efforts in the present situation in economics
and the economy.
Method of Analysis
It is the purpose of this chapter to isolate and
discuss the common elements in the manner in which
Galbraith views puzzles and devises solutions to those
puzzles in Economics and the Public Purpose. The.following
chapter will formulate and test the Galbraithian paradigm
which must logically be composed of these common elements.
We will begin with a brief review of the paradigm
concept after which a brief list of the puzzles Galbraith
considers in the book will be presented. In order to come
to a better understanding of Galbraith's purposes and,
ultimately, of his paradigm, we will make several points
with regard to his expository mode. The last section in
the chapter will discuss the three common elements which
appear in the manner in which Galbraith views every
puzzle in his work: technology, organization and power.
These we will call the Galbraithian Trinity.
One important point remains to be made. The method-
ology developed by Kuhn and applied in this analysis leads
primarily to an evaluation of the internal dynamics of
Galbraith's work. Therefore, no critical evaluation of
the various points he raises will be made; there will be
no attempt to survey the literature and sources of data
for support or refutation of his theory. Such an endeavor
is clearly best pursued subsequent to the completion of the
task of this analysis, which is the isolation and testing
of Galbraith's paradigm.
Galbraith explicitly attempts to change the way people
view economics and economic phenomena. Kuhn's schema
offers a rigorous test of the extent to which a particular
work achieves such a goal. The application of Kuhn's
schema to Galbraith's analysis requires no critical
evaluation and implies no support or refutation for the
particular theoretical observations Galbraith develops.
While an analysis of the internal dynamics of a work may
well lend positive support to it as a whole it cannot
be taken as empirical support of particular hypotheses or
The Paradigm Concept: A Review
Perhaps the best way to arrive at an appreciation of
the particular power of a paradigm in the perception process
is to observe one's own utilization of the construct.
Even one who is normally suspicious of the market as a
social mechanism commonly finds the traditional economic
paradigm structuring the sensations associated with the
particular stimuli involved in reading Galbraith's book.
The economic situation or theory is perceived, before
interpretive thought begins, in terms of its relation
to the market, or to competitive conditions. The traditional
paradigm functions so as to constantly refer the individual
using it to the structure and function of the market;
non-market situations are precisely that: non-market.
Observation of one's sensations in the course of reading
Economics and the Public Purpose should confirm this
pre-theoretic function of paradigms.
The function of the paradigm is to help the scientist
group situations into similarity sets, to discover
similarity relations. Thus the scientist realizes that the
situation under consideration is like some and unlike
others seen before. The solution to the puzzle is given by
the form of the paradigm; the process of main feature
replication, or duplication of the conditions of the
paradigm in the puzzle-situation, produces the general
form the solution must take.
The paradigm is utilized in an analogical manner; normal
science represents a path from the known to the known.
By guaranteeing that a solution does exist paradigms save
much work for the scientist and allow much specialization
to proceed. The puzzle-solving that is the major charac-
teristic of normal science could not proceed if scientists
had constantly to refer back to fundamentals in their
The guarantee of a solution does not imply that normal
scientific endeavor is simple. Considerable resourcefulness
and great diligence are required for the solution of the
often quite complex problems involved.
A paradigm,' in its central sense as an exemplar, is a
concrete picture of one thing which is used analogically
to describe something else. As we have described its
function it operates like an organized puzzle-solving
gestalt, or way of seeing. It is a picture of something, A,
used to perceive the similarity of something else, B,
to the original A. This process occurs neurally before
interpretive, or hypothetico-deductive, thought; the
paradigm functions in a pre-theoretic sense. Paradigms
thus structure the sensations associated with particular
stimuli before conscious understanding occurs.
The necessary characteristics of a paradigm are
dictated by the functions described above. The first of
these characteristics is crudeness, or incompleteness.
Paradigms are used analogically to detect similarity
relations in a range of situations. The extent of the
range of situations to which a paradigm is relevant is
determined by the incompleteness of its statement, by its
crudeness. If the paradigm is too precisely stated
situations are excluded from its scope; normal scientific
activity becomes limited. Poets understand the necessity
for crudeness of statement; it is this characteristic
which is the source of the power inherent in much great
Paradigms must also be characterized by concreteness,
that is, by certain relations between the entities
described which are specified enough so that a realistic
solution may be suggested. The balance between crudeness
and concreteness is delicate. While the two charac-
teristics are not mutually exclusive they may in certain
It is because paradigms are characterized by crudeness
and concreteness that they need not, and indeed cannot,
explain all the facts with which they can be confronted.
The pre-theoretic function of paradigms is responsible for
this; it is also at the root of the conversion nature of
the psychological shift from one paradigm to another.
Before considering the common elements involved in
the manner in which Galbraith views the puzzles in
Economics and the Public Purpose a brief enumeration of
those problems is in order. The enumeration will be
phrased in the form words Galbraith uses; it should be
remembered that paradigms "create" puzzles in the sense of
determining the manner in which problems are perceived.
Thus, analysis of the way Galbraith sees economic problems,
of the way he turns problems into puzzles, should yield
valuable clues as to the nature of his paradigm.
"Dominating this book as a drumbeat," says Galbraith
in the Foreward, "is the theme of unequal development and
the associated inequality of income" (Galbraith, 1973a, x).
This theme represents an overview of the most important
puzzles in the work.
The first of these is unequal development relative to
need as between sectors of the economic.system. The most
important microeconomic problem of our time, says Galbraith,
is why we have a highly skewed pattern of development as
between industries of great market power and industries of
slight market power, with further development favoring the
The second important puzzle, related to the first one,
is why the American economy is characterized by systemic
sectoral differences in income. Industries with great
market power typically receive larger income flows than do
those characterized by slight market power. Galbraith
also describes these two important puzzles in terms of
excessive and inadequate utilization of resources in
each sector, respectively. It is ultimately the structure
of production which becomes a puzzle in Economics and the
The nature and role of the business organization is
another puzzle in the work; Galbraith explored this
puzzle in great detail in an earlier work and the discussion
here is mostly a summary of that exposition (Galbraith,
1971b). In the Galbraithian view inflation is not a
temporary aberration but a permanent systemic bias in the
economy. Inflation as a puzzle receives different emphasis
than it would were it only a temporary problem.
Galbraith also considers the claims of the military
on productive resources as a puzzle. This problem,
which the traditional paradigm tends to ignore, is a good
example of how paradigms "create" puzzles by including
different problems in the scope of situations to which they
are relevant. This discussion, of course, implies no
criticism or support of Galbraith's solution to the puzzle.
Another puzzle "created" by Galbraith's view of the
economic system is that of inter-industry coordination.
The energy crisis may be viewed in such terms; whatever
one's opinion of this point of view it is a vision of a
contemporary problem which differs considerably from that
taken by the traditional paradigm.
Other puzzles in Economics and the Public Purpose are
the role of the individual in the economic system, the
nature of social influence on the individual, the role of
women in the economy, environmental disharmony, the role'
of technical innovation in the modern industrial state, and
the role of the state in the economy.
Much of Galbraith's book is devoted to highlighting the
differences between the way traditional economic theory
views these puzzles and the way Galbraith's paradigm
envisages them. The latter third of the book is devoted to
the puzzle-solutions yielded by Galbraith's paradigm.
Before analyzing the common elements in the way
Galbraith views and solves the puzzles in his work a
discussion of his mode of presentation is in order. Gal-
braith is widely known for the style of his presentation;
his wit and grace make reading his books pleasurable to
many people. Yet, as we shall see, this very same ease
of expression has been responsible for considerable
confusion among his readers and also his reviewers.
Galbraith's Mode of Presentation
The effectiveness of a given action is determined
as much by its timing as by its nature. This is as true
in scientific work as in other areas of life. Benjamin
Ward has written that "ideas, in the social sciences,
. .gain the acceptance of the scientific community only
when they address some widely recognized phenomena in
terms congenial to the times" (Ward, 1972, 180).
Galbraith's expository style is productive of both
comprehension and confusion in the reader. While his books
have been best sellers he is often accused of overstatement
and lack of specificity, or vagueness. These alleged
characteristics of his work, taken together with his
literary style, have caused many professional economists to
disregard Galbraith's theories.
Galbraith has commented that "there are few, if any,
useful ideas in economics that cannot be expressed in
clear English" (Galbraith, 1971b, 407). At an early date
in his writing career Galbraith published a book on price
control written for the economics profession (Galbraith,
1952). That group of scientists proceeded to ignore the
book. Galbraith swore never again to place himself in
such a position, that is, to allow the economics profession
to be the sole judge as to the acceptability of his work.
The professional jury, he contended, was a "party at
interest" in his attack on orthodox economics (Galbraith,
Thus Galbraith's subsequent works have been written for
the layman as well as for the economics profession.
"The use of this technique," Galbraith .says, "naturally
incurs a measure of professional discomfort. It bypasses
the system by which ideas . are submitted for profes-
sional scrutiny and winnowing before being passed along to
students and the lay public. And it similarly renders
nugatory the process by which the intellectual vested
interest is protected" (Galbraith, 1970, 471n). Galbraith's
understanding of the necessity for timeliness in publication
and of the processes within the community of economic
scholars has led him to an expository mode which, were he
of lesser intellect and literary talent, would certainly
not have resulted in best-selling works and the amount of
public recognition he has received.
Galbraith's writing may be viewed as an attempted
"end run" on the economics profession. Galbraith's
purposes, which revolve around changing the way people
view the economy, have led him to attempt to convince
as many people as possible. His political interests,
which are current and strong, have led him into the arena
of contemporary affairs. Thus his writing and activities
complement each other; his purpose underlies both.
An author's purposes normally determine to a
significant extent the mode of presentation of his ideas.
One of the functions of this analysis is to clarify
Galbraith's purposes so that a similar state may develop in
the continuing debate over his work. Too much of that
debate is centered on nonsubstantive issues such as
George Stigler writes that "new ideas are even harder
to sell than new products" (Stigler, 1964, 5). He also
points out that outspoken persuasion "has preceded and
accompanied the adoption on a large scale of almost
every new idea in economic theory" (Stigler, 1964, 5).
Galbraith writes openly to persuade. The line between
overstatement to make a point and overstatement which
confuses the issue is vaguely drawn; Galbraith comes up
on the wrong side of the line more than once. His style,
however, seems to lead readers to less than usual
diligence in their efforts to understand his ideas. Such
lack of diligence is as characteristic of the professional
response to his work as among Galbraith's nonprofessional
The charge of vagueness or lack of specificity which
economists usually make against Galbraith is more serious.
Underlying this is the contention that Galbraith does not
state his theses in the form of testable hypotheses.
Implicit in this charge is the wish that Galbraith would
make his points in neoclassical and thus testable form.
Testable hypotheses, of course, do not make interesting
reading for the lay public; the exchange between Galbraith
and Solow over the role of "big thinkers" and "little
thinkers" in economics is relevant to this point (Galbraith,
1967; Solow, 1967a, 1967). Obscurity of expression, Gal-
braith has written, "usually signifies either inability to
write clear English or--and more commonly--muddled or
incomplete thought" (Galbraith, 1970, 471n).
An understanding of Galbraith's purpose is as noted
critical to an understanding of his style. Since he
writes to convince the reader to view economics and economic
phenomena differently than does the traditional paradigm
it would be strange indeed if he were to couch his analysis
in traditional verbiage. New paradigms, it should be
remembered, must be crudely stated. The contrast between
a well-articulated paradigm of long standing and a crudely
stated new candidate inevitably leads to charges of
vagueness or lack of scholarship, if not of outright
Galbraith's intention to persuade the reader to view
economic phenomena in a different light leads him to not
cite the empirical and theoretical work he quite evidently
considered in the development of his analysis. This aspect
of his style has resulted in a certain amount of professional
displeasure. Nonetheless, if one is attempting to convince
readers that the point of view in one's work is new and
worth shifting to it would seem, in military parlance,
counter-productive to at each point cite the connections
between previous work by diverse authors and the new
point of view.
Kuhn's approach to the history of science implies
that purely cognitive factors may not be sufficient to get
a new paradigm the consideration by the scientific
community that it deserves. This may be especially true
in the social sciences. Kuhn's theory is thus able to
place Galbraith's expository mode in its proper place with
regard to the cognitive elements of his work.
The Common Elements: The
Careful analysis of the puzzles in Economics and the
Public Purpose yields three elements which appear in the
way Galbraith views each puzzle in the book. These are
the building blocks of the Galbraithian vision of the
economic system and the economic process. They are the
cognitive entities which structure the stimuli Galbraith
receives and provide him with the basis for his theory, for
his interpretive thought. The three common elements are
technology, organization, and power. A fourth element,
time, is inherent in the other three since they are described
dynamically; time will not be considered separately,
however, since the other three elements are dynamically
The First Element: Technology
Technology is the central element in Galbraith's
analysis. It appears in the Galbraithian vision as a
dynamic and imperative historical force. Both the dynamism
and the imperative nature of technology appear in almost
every puzzle in Economics and the Public Purpose.
Galbraith argues against taking technology as a "given"
and studying the allocation of productive inputs on that
basis. It is technological advance, he says, which has
increasingly determined the nature and structure of
economic development; taking this variable as given
removes an important dynamic force from economic analysis.
The relative level of economic development in different
sectors in an already industrialized economy are best
studied with an analysis in which technology is not a
given, static variable. Galbraith develops such an
analysis in his book.
Galbraith defines technology as "the development and
application of scientific or systematic knowledge to
practical tasks" (Galbraith, 1973a, 38). As a central
feature of modern economic development technology has
become a dynamic force in the economic process; it has
therefore become an increasingly causal force in modern
economic and thus social change.
It is the technical nature of modern industrial
production which in Galbraith's analysis has allowed the
large corporation to become the critical instrument in
the transformation of economic society. It is technological
advance which has offset losses of efficiency due to
industrial concentration in product and factor markets.
Technology becomes an imperative force in modern industrial
production in Galbraith's analysis; the characteristics
of production which technology makes possible are at the
same time made necessary if production is to proceed on a
The first of these technological imperatives is an
increased gestation period for new products. The time span
between the initial investment in a new product and the
moment when the first units are actually produced has
increased steadily in Galbraith's view. Related to this,
he suggests, is another imperative consequence of the
highly technological nature of modern industrial production:
increased capital requirements. With these increased
requirements of time and capital have come an increased
inflexibility of investment. Thus market uncertainty
becomes a much more important factor than it would be if
these investments were less rigid and if they resulted in
a shorter gestation period. These factors, Galbraith says,
have important consequences for the form taken by business
organizations and for the structure of the economic system
as a whole.
The production of standardized products allows
extensive geographical concentration of production and thus
allows an intensive application of modern technology.
Some production, of course, does not so allow. Where the
product is unstandardized, where the production process
cannot be geographically concentrated, where artistic
aspects of the product or the process make mass production
methods undesirable, modern technology is not applied in the
same manner or to the same extent as in industrial
production. Technology has a differential impact throughout
the economic system.
In order for the imperatives of modern technology to
be fully realized extensive specialization of labor becomes
necessary. The counterpart of such specialization is
always organization, Galbraith says; the section on the
next common element will discuss this more fully. Thus
production which fully realizes the possibilities inherent
in modern technology can only proceed through the medium of
the large producing organization. Where the nature of the
product or the production process is such that modern
technology cannot be applied to the same extent as in
industrial production the producing organization will be of
smaller size and indeed in some cases organization itself
will be unnecessary. This distinction between forms of
producing firms is one of Galbraith's main points; it is
the presence and extent of organization which for
Galbraith supplies insights into the motives and activities
of the producing concern.
The level of technological development induces
particular forms of behavior in the producing organization.
These will be discussed in the section on organization; it
is enough at this point to say that the technical imperatives
mentioned above lead the producing organization to attempt
to reduce market uncertainty by controlling its operating
environment, in short, to plan. Galbraith's view of
planning will also be discussed below.
As organization develops and increases in size,
Galbraith says, technical innovation as a process comes
under the control of the firm. Galbraith means by this
that technical innovation under such conditions is
divorced from consumer need and proceeds in response to
the goals of the organization. There is no necessary
reason, Galbraith says repeatedly, why the goals of the
organization should be congruent with those of the public;
there is in addition no social mechanism for the equilibra-
tion of organizational goals with those of the public, with
the public purpose. This is one of the basic themes in
Galbraith thus has a different view of technical
innovation in modern industrial society. It proceeds, he
asserts, on the basis of the organizational and economic
needs of the large producing organization. We can no
longer assume, he says, that technical change is in response
to perceived need and is thus progressive in nature. The
public purpose may well diverge from the needs of the
industrial sector; in fact, Galbraith suggests that the
goals of the giant producing organization are increasingly
divergent from the public purpose.
The technical nature of production differs as between
various industries. Thus technological advance is unevenly
distributed throughout the economic system. The possibility
of and necessity for large-scale organization is similarly
distributed. The consequences of this skewed pattern of
economic development are the major theme of the book:
uneven development and the associated inequality of income.
Economic development, seen through Galbraith's eyes,
serves not to erase inequality but to continue and to
Another theme in the book is one Galbraith has explored
in several previous works. The social effects of the
technologically imperative facets of the production
process ultimately lead him to a theory of social influence
on the individual. The stimulation of psychic needs to
produce a demand for products which are the result of
spurious technical innovation is one of Galbraith's most
well know theses. Psychic wants are themselves partially the
product of the activities of the large producing organiza-
tion; the effects on the individual of this process are not
significant according to Galbraith. Technical innovation
thus becomes inextricably tied to the continuing process
of consumer persuasion, to the continuing process of
making existing products psychically obsolete, and to the
inducement of a constant marginal utility of wants over
an indefinitely increased range of production.
The dynamic and imperative nature of technology
appears throughout Galbraith's book in the way he views
the puzzles and in the way he devises solutions to those
puzzles. The Galbraithian paradigm must contain, either
explicitly or implicitly, the element of technology; we
would expect that element to have the same characteristics
in the paradigm as it does in the text of Galbraith's work.
The Second Element: Organization
Galbraith defines the second common element in the
way he views puzzles as "an arrangement for substituting
the more specialized effort or knowledge of several or many
individuals for that of one" (Galbraith, 1973a, 81).
Organization functions in Economics and the Public Purpose
as a basic structural element in the vision of the economic
system and the economic process.
Galbraith argues that organization has developed
historically as a response to the necessities and opportu-
nities involved in technological advance; increasing
specialization, an important concomitant of technical
innovation in both product and process, always leads to
increasing utilization of organization. It is organization
which brings specialists together into a work relationship.
In Galbraith's view technological progress has brought with
it the development of the large-scale producing organization.
It is a major feature of the Galbraithian vision that
technology, and therefore organization, is unevenly
distributed throughout the economic system.
Great increases in the size of the business organiza-
tion have become possible as a result of technological
advance in the industrial sector, Galbraith notes. Large
size is in Galbraith's view made both possible and
necessary by the technological nature of production. As
firms have increased in size and have brought technological
advance under their control they have steadily made larger
the profit-maximizing size of the organization.
Organization appears in Galbraith's analysis as an
active social and economic force. As organizations increased
in size, Galbraith says, their operations became more
complex and they developed goals of their own; these goals,
developed internally and not enforced upon them by the
discipline of the market, are at least partially determined
by the size of the organization. Thus Galbraith ultimately
sees the economic system serving the purposes of the large-
scale producing organization. That these purposes are not
the same as those of the public has been mentioned above
and requires no repetition.
In the view of traditional economic theory that eco-
nomic system is best which produces the most of what most
people want. Galbraith's view suggests that there is more
to judging an economic system than this. Since he sees the
economic system coming increasingly to serve the purposes
of the large-scale producing organization, that is, since
such organizations are increasingly capable of imposing
their purposes on the economic system and society, we must
come to a different judgement than that implied by tradi-
tional theory. The manner in which organization appears in
Galbraith's work should now be generally clear. Several
points, however, have yet to be discussed.
With great size the producing organization gains great
market and extra-market power. This power, as the following
section will show, is a natural attribute of size and is
not wielded in response to some evil design on the part of
the giant corporation or its executives. The technical and
financial requirements of modern industrial production result
in a corporate need for greater certainty than that provided
by the market. This desire for certainty, for predictable
movements in environmental variables, is the source of the
planning which Galbraith describes. Such planning is
carried out through the application of the instruments of
power to the organization's prices, costs, supplies of
productive inputs, demand, the organization's relations with
the state, and its relations with the community. The
instruments will be discussed in the section on the element
Galbraith's famous concept of the technostructure
represents the human form of the large-scale producing
organization. The technostructure is a collection of
individuals, each one a specialist, who are involved in
the pursuit of the internally generated goals of the
corporation. These individuals identify themselves and
their goals with the organization and its purposes rather
than with the purposes of the public as a whole, the
community, the state, or with those of the owners of the
It is by now a commonplace observation that there has
developed a divergence between the owners of the modern
corporation and those who control it. Galbraith's
technostructure concept does not imply that a similar
divergence has now developed between the top management
of the modern corporation and small groups of specialists
making the really important decisions on the basis of
their superior information. Rather, Galbraith's techno-
structure includes management and basically implies a
particular psychological identification on the part of
those individuals. It would seem only natural that as
producing organizations have undergone vast increases in
size and have begun to generate their own goals rather
than respond to market-enforced purposes the members of
those organizations would develop a loyalty to and
identification with the purposes of the firm. Galbraith's
technostructure concept does not, therefore, imply any
conflict between individuals in management and those
specialists involved in the actual production, marketing,
sales, legal, or political efforts of the organization.
It is the element of organization which Galbraith
uses to develop his basic vision of the economic system.
That system he views as a continuum of producing organiza-
tions, ranked by size from the "simplest surviving family
farm at the one extreme to American Telephone and
Telegraph and General Motors at the other. ." (Gal-
braith, 1973a, 10).
Galbraith does not develop criteria for placing firms
in particular places along the continuum; such criteria, he
feels, are unnecessary to the structure of his argument.
He is rather concerned with the basic view of the economic
system; it is this he is attempting to change and the task
calls for different tools and methods than would the
specification of a detailed economic model.
Galbraith feels a useful distinction may be made
between two broad groups of producing concerns. He divides
the continuum into two segments, calling one the "market
system" and the other the "planning system." Separately and
in their interaction they form the structure of the analysis
in Economics and the Public Purpose; they are the sectors
into which Galbraith chooses to divide the economic system.
It should be remembered, however, that the "two systems"
are a conceptual device, an abstraction from Galbraith's
vision of the economic system as a continuum. The abstrac-
tion simply serves to clarify some of the differences in
characteristics which are spread along that continuum.
Thus the dividing line between the two segments is
conceptual rather than empirical in origin. It exists where
control by the individual gives way to the development of
organization as a controlling force. Galbraith suggests that
the historical role of organization in the economic system
is so important that it produces qualitative changes in
the structure and operations of the business firm as it
grows more and more dependent upon its organization.
Unstandardized products, products involving artistic
endeavor, geographically dispersed production tasks,
personal services--these are some attributes of products and
production processes which prevent the business firm from
developing an extensive organization. It is in the market
system that the firm is under the control of an individual;
it is the market system in which the traditional paradigm
in economic science retains descriptive validity.
It is easy to conclude that Galbraith has divided the
economic system into two homogeneous groups of firms.
That this is not the case is clear from his vision of the
continuum of producing organizations. It is particularly
clear in his analysis of the planning system, the segment
of the continuum where producing firms are characterized
by control by an organization.
The planning system is a heterogeneous group of
producing organizations. As one moves from the smaller to
the larger firm, the control of the firm by the techno-
structure, the control by the firm of environmental
This increase in characteristics as one moves out
along the planning system segment of the continuum leads
Galbraith to the use of another conceptual device: the
"mature firm" concept. The mature firm is a giant corpora-
tion of some age. What are tendencies and incompletely
present attributes in the rest of the planning system are
fully developed characteristics in the mature firm.
In the mature firm the power of the technostructure
is at its maximum and the firm is fully controlled by that
collection of specialized individuals. In the mature firm
the power available to the organization for the control of
environmental variables is at a maximum. This power is
both market and extra-market in nature, as the following
section will show. Galbraith repeatedly uses the mature
firm as a proxy for the rest of the planning system because
in his analysis the other planning system firms tend, with
economic development, to move in the direction of the mature
firm. The incompleteness of development of the character-
istics of the planning system firm which are therefore
present in most organizations in that group must be kept in
Thus it is only in the mature firm that the imperatives
of modern technology and organization reach their fullest
development and result, with the vast size of these
organizations, in the greatest deployment of the instruments
of power. As one moves out along the planning system
segment the ability of the firm to pursue its internally
generated goals increases; the desire to do so, however, is
constant. Thus the economic system becomes characterized
by a greater use of producer power as one moves out along
the continuum and also over time. Galbraith does not
suggest that producer power is complete; the tendency, he
argues, is clearly in that direction. For as the planning
system firm increasingly brings environmental variables
under its influence economic development comes increasingly
to serve the goals of the large-scale producing organization,
which in Galbraith's view diverge to a greater and greater
extent from the public purpose.
In Galbraith's view of the puzzles in Economics and the
Public Purpose organization appears as a dynamic response
to the necessities of modern industrial production. Gal-
braith sees a basic tendency in the economic system as that
of producing organizations to become large and to keep
growing. This process, with the associated exercise of
power by those organizations, is in Galbraith's view the
primal force by which modern industrial society is
changed. The social background to Galbraith's economic
analysis is formed by the divergence between the goals
pursued by the planning system firm and those which are
developed on the basis of public need. Thus the economic
system increasingly serves the needs of the giant producing
organizations rather than the public it is, in the
traditional view, supposed to serve.
The element of organization appears consistently in
Galbraith's puzzle views in the manner described above.
It must appear similarly in his paradigm. Before formulating
that paradigm, however, we must turn to the last common
element in those puzzle views: power.
Galbraith views power as a source of conflict in
modern industrial society. He says it is no longer possible
to assume, as does traditional economic theory, a broad
harmony of interests between individuals and organizations.
At the same time, however, he views power as a completely
natural attribute of the vast organization. There are no
scheming men and conspiring organizations in Economics and
the Public Purpose; there are only individuals and
organizations making decisions which, because of the
structure and size of the decision-making unit, are powerful
and demand the accommodation of the rest of society. The
deployment of the instruments of power by the planning
system firm is thus both natural and necessary. Galbraith
also argues that the exercise of such power is dynamic in
the sense that it leads to the development of further power
in the organizations which have it to begin with.
As we move out along the planning system segment of
the continuum the firm is less subject to market constraints
and more independent on its environment, more a structuring
force. To a greater and greater extent time has brought
the imposition on society of the goals of the large-scale
planning system organization.
The exercise of power by the planning system firm is
what Galbraith calls corporate "planning." This concept
will be discussed in greater detail below; it is enough
at this point to say that it is not central economic
planning by a single organization such as the state.
Galbraithian planning is the exercise of power to reduce
uncertainty in the operating environment of the planning
It should be emphasized that Galbraith does not argue
for the assumption of total producer sovereignty, even
within the planning system. For most of that system a
mixture of market and non-market constraints and producer
power prevails, although the development process favors
the growth of the latter. Galbraith simply wishes to
assume producer sovereignty in that sector, and, "assuming
producer sovereignty I want to look at the features of
society which, excluded from view by the assumption of
consumer sovereignty, then swim almost majestically into
view" (Galbraith, 1970a, 475).
Galbraith does not argue, therefore, that the market
has disappeared. Market forces left uncontrolled may
still affect the planning system firm; in the market system
firms remain broadly subordinate to the market as tradi-
tional theory describes. Galbraith only argues for the
demise of the neoclassical view of the market as the social
mechanism which regulated economic activity and assured the
imposition of the public purpose on the producing organiza-
tion according to the independently perceived and financially
registered needs of the individual. One should not confuse
this "market" with the market as a vehicle for the expres-
sion of producer power and as the aggregate of buying and
The Third Element: Power
The third element which appears in the way Galbraith
views the puzzles in his book is power. "Power and the
Useful Economist," the title of Galbraith's presidential
address to the American Economic Association, offers
insight into his attitude toward and use of the power
concept (Galbraith, 1973b). The entire address is devoted
to an argument for the inclusion of this element in economic
Galbraith argued that power is the element which
links economic science to the real world. As such it
normally has significant political content; Galbraith's
address was partially a plea for the development of a
modern political economics. When he included power in his
theorizing Galbraith discovered profound source of
conflict in the economic system and society. . .
On no conclusion is this book more clear," writes Galbraith
in the Foreward to Economics and the Public Purpose,
than that "left to themselves, economic forces do not work
out for the best, except perhaps for the powerful" (Gal-
braith, 1973a, xiii).
Galbraith broadly defines power as the ability either
to impose ones purposes on others or to convince them to
adopt those purposes for themselves. While physical force
and economic deprivation remain as stimulants to action
Galbraith focuses on persuasion as increasingly the most
important instrument by which power is exercised; with
increasing affluence, Galbraith notes, the use of the first
two stimulants mentioned above declines.
A large-scale producing concern has power if others,
both individuals and organizations, accommodate themselves
to its decisions. Those decisions, made in pursuit of
internally generated organizational goals, become the
activities to which the society as a whole accommodates
itself. The critical difference between a market economy
and a planned economy, says Galbraith, is the extent to
which accommodation in the system is to consumer or
producer choice, respectively (Galbraith, 1970a, 472n).
As the large-scale producing organization developed
its own goals and as those goals began to diverge from
the public purpose it also gained the power to pursue
those ends independently of market or non-market constraints.
As we move out along Galbraith's continuum of producing
organizations the extent of the particular firm's power and
thus independence of market constraint increases. Despite
his reference to this whole segment of the continuum as the
planning system Galbraith does not imply that all planning
system firms are totally independent of their environmental
Galbraith identifies the giant producing organization
as the primary repository of economic power in modern
industrial society. He assumes, as preceding sections have
shown, that one sector of the economic system is now so
characterized by these organizations and their power that
producer sovereignty is the most realistic assumption with
respect to whose purposes are fulfilled.
From the discussion of Galbraith's use of the element
of organization it is clear that he feels it is the purposes
of the large-scale producing organization which are
increasingly fulfilled in the modern economy. That these
purposes diverge from the public purpose is an ubiquitous
theme in Galbraith's book; it provides him with his title
as well as with a set of economic problems he feels called
upon to solve.
The giant and powerful corporation should come as no
surprise to anyone, Galbraith feels. It is simply the
latest development in the drive of the business firm for
market power. This drive grew out of, or was induced by,
the market itself; as that mechanism developed in economic
society there also developed certain incentives to attempt
to change its effects. Business firms attempted to gain
market power and governments soon began to attempt to
ameliorate the worst effects of the market on the labor
force. Gradually the business firm grew into the giant
producing organization and monopoly power in the market
grew into power to transcend the market, to overcome its
discipline and regulatory functions.
Galbraith's view thus includes a progressive
centralization of power in the modern industrial state; as
the market served to decentralize decision-making the
development of the modern corporate giant serves to recentral-
ize that power. Thus it is the planning system in the
aggregate rather than the market which Galbraith takes to
be the regulator of social and economic outcomes of economic
activity. The distribution of power, an important matter
to be discussed more fully below, is as uneven as is the
distribution on the continuum of the benefits of size.
The purposes for which power is exercised are quite
naturally those of the wielders of the power. It is the
goals of the large-scale producing organization, Galbraith
argues, which are increasingly assuming ascendancy in modern
industrial society. The public becomes increasingly
persuaded and induced to adopt the goals of the techno-
structure. Galbraith has also constantly described what
he calls the instrumental function of economic theory; that
function is to obscure the nature and sources of power in
the economic system. If producers do have power to
pursue their goals, goals which are not the same as those
of the public, Galbraith argues, and if economics then
assumes that such power does not exist, or if it ignores
such power, then economics and economists play an important
social role that is not neutral whatever the actual value
structure of the theories involved.
The goals of the firm in the planning system form
Galbraith's theory of the large organization. The
particular goals are not important to this analysis;
their importance here lies in the fact that they are, in
Galbraith's view, transmitted to the rest of the economic
system and the society.
The individual and the state come to agree that the
goals of the large-scale producing organization, of the
planning system firm, are congruent with the purposes of
the individual and, in the collective sense, with the
public purpose. What is good for the planning system is
good for the country.
This last statement is not really an overstatement.
To a significant extent the planning system is the economic
system; it is at least the dynamic sector of that system,
the part that determines the pattern and rate of change for
the rest of the economy. In its exercise of power, then, the
planning system merely plays its proper role as befits the
dynamic section in the mo-ern industrial system.
Galbraith views the management of demand as an
important expression of planning system power and persuasion
in general as perhaps the most important way of inducing
public acceptance of general planning system goals.
The relentless propaganda for goods in general, Galbraith
says, the inducement to want things just as strongly at
any level of income, is powerful persuasion that those who
produce the goods are important and should be left to do
their work with a minimum of outside interference. Adver-
tising by individual firms and advertising in the aggregate
affirm this.' The management of aggregate demand by the
government, Galbraith adds, also plays an important role
here. The pegging of aggregate demand at permanently high\
levels through the use of public funds not only serves the
goals of the planning system but affects the economic
attitudes and value structures of the public.
That this management of the public is not compelling
provides Galbraith with an opportunity to attempt to
persuade. More and more people, he feels, are perceiving
the divergence between the purposes of the planning system
and those of the public. He constantly refers to the
power of circumstance to open people's eyes to reality; he
attempts in Economics and the Public Purpose, as in his
other popular works, to help circumstance along in its task.
"Circumstances are the enemy of neo-classical economics,
not Galbraith," he writes (Challenge, 1973, 28).
The unequal distribution of power, following the
unequal distribution of size, leads to a skewed pattern of
economic development. As development proceeds, moreover,
this pattern is exacerbated; its basic inequality is
By this Galbraith means that in some parts of the
economic system there are no upper limits on the size of
the firm and on the growth and development which may occur
on the basis of the exercise of power by those firms.
This, taken together with the constraints on firms in the
market system (and one must remember the differences in
power within the planning system) produces the skewed
pattern of development mentioned above. Development and
growth are thus for Galbraith directly related to
producer power. In some parts of the economy production
and its associated social effects are excessive relative to
the social need for them; in other parts such benefits are
insufficiently present. This reflects, in Galbraith's
eyes, the relative power of the participants.
The pattern of resource utilization and the distribution
of income are similarly affected; Galbraith notes excessive
resource in those parts of the economic system characterized
by great power and insufficient use of resources where power
is present either to a small degree or not at all. The
distribution of income follows a similar pattern; Galbraith
describes systemic sectoral differences in income which
correspond to the distribution of producer power. The
inequities and maldistributive aspects in these areas are
also exacerbated by the process of economic development.
Since that development to an increasing extent proceeds on
a planned basis we may now discuss the nature of Galbraith's
view of planning.
Galbraith's concept of planning is different from
the usual one in economics; it is rather closer to the
normal language use of the word. It is not centralized
financial planning by the state or some similar agency; it
does not, even in the sector characterized by such activity,
entirely replace the market.
Galbraithian planning is the exercise of power by
large-scale producing organizations in the pursuit of
their internally generated goals. Individual organizations
deploy the available instruments of power with no formal
mechanism for intra- or inter-industry coordination.
While no formal coordinating mechanism exists there
are constraints. In the effort to control its operating
environment the giant firm meets the efforts of other
similar firms; thus the planning process is characterized
by a certain amount of constant accommodation to the plans
by other firms. There are, in addition, constraints of
cost involved in, say, gaining an increment in sales.
Galbraith views planning as the attempt by the large-
scale producing organization to control its operating
environment. Modern industrial production, he says, occurs
under technical and financial conditions to which uncertainty,
such as that stemming from market fluctuations, is anathema.
Thus such uncertainty is to be avoided wherever possible.
This desire is as characteristic of the market system firm
as it is of the firm in the planning system; it is only in
the latter sector that the producing concern has the size-
related ability to realize this goal, however.
The planning system firm, Galbraith notes, has exten-
sive influence over prices and major costs. It goes behind
its costs to organize its sources of productive inputs.
It seeks, through its flows of retained earnings and its
influence on financial organizations, an assured supply
of funds for research and investment purposes. Through its
influence in government it affects the course of national
policy as well as the structure and extent of influence of
the various governmental bureaus and regulatory agencies.
And, Galbraith writes, through extensive use of consumer
persuasion and with the not inconsequential assistance of
neoclassical economics and the economists who teach it,
the planning system influences and helps establish the
values and attitudes of the community. The most notable of
these is the association of well being with progressively
increased consumption of the products of the planning
Galbraith does not, as has been noted, argue that the
market actually disappears. His way of viewing the market
yields a different function for that mechanism, however.
In the first place the power of the technostructure in
the individual firm is not plenary except in the mature
firm. The firm cannot transcend the market to the greatest
possible degree except in the case of a few organizations.
This view thus leaves the rest of the planning system firms
with a combination of market influence and producer power.
What is important to Galbraith, though, is the dynamic
nature of producer power. As firms reach large size and
then grow further their power tends to breed more power.
This process is the basic dynamic force in Galbraith's
vision of modern industrial society; as it proceeds
planning becomes more effective and widespread and market
constraints become weaker and of less significance.
This development of planning as the social mechanism
for the regulation of production represents a new stage in
the historical development of American capitalism.
Galbraith sees it as the natural result of the competitive
firm's drive for monopoly power and the capitalist govern-
ment's efforts to ameliorate the worst effects of the
market mechanism, especially on the labor force. While
Galbraith does not describe or even foresee the total
demise of the market as a social and economic regulatory
mechanism it seems clear that he at least envisages its
downfall in the industrial sector of the American economy.
So the market remains in Galbraith's analysis of its
economic system as the aggregate of selling and purchasing
behavior. It also serves as a vehicle for the expression
of producer power, remembering that at times market
fluctuations affect even the larger planning system firms.
With time, Galbraith argues, this trend will accelerate and
he concludes that the most realistic way of viewing the
economic system is by beginning with the assumption of
producer sovereignty. This assumption serves Galbraith,
even in situations where such sovereignty is not complete,
as the traditional assumption of consumer sovereignty
served traditional economics even in situations in which it
was not entirely descriptive.
A brief digression on Galbraith's view of persuasion
as an instrument of social power will be useful here.
Galbraith asserts that persuasion is coming to be the most
characteristic and widely used instrument of producer power.
In all his popular books Galbraith develops his view of the
social role of the "convenient social virtue," of the
function of useful belief.
"The convenient social virtue," writes Galbraith,
"ascribes merit to any pattern of behavior, however
uncomfortable or unnatural for the individual involved,
that serves the comfort or well being of, or is otherwise
advantageous form the more powerful members of the community"
(Galbraith, 1973a, 30). There is always a conflict,
Galbraith says, between what is right in the sense of
having descriptive validity and what is familiar to most
people and therefore acceptable to them. The tactical
advantage in the conflict, he notes, lies with the familiar.
Thus there exists fertile ground for the persuasive efforts
of the firm in the planning system and for the planning
system as a whole.
The citizen comes to believe in the goals of the large
planning system firm and also in the congruence between
happiness and well-being and the consumption of the goods
which are for the most part produced by such organizations.
The self-interest of the individual thus, Galbraith argues,
becomes identified with the interest of the planning system.
Persuasion, Galbraith has noted in all of his widely known
works, is the most ubiquitous form of communication in our
society. It helps accord importance to frivolous goods; it
helps conceal the tendency, with increasing production, to
the increasing unimportance of what is produced. It adds,
Galbraith says, to the impression of a constant marginal
utility of goods over an indefinitely increased range of
production. Galbraith alleges that this effectively
forestalls most analyses of the structure of production, or
the relative merits of particular forms of production. The
autonomy of the technostructure, of the planning system, is
thus protected and increased.
Galbraith views power as a growing characteristic of
modern industrial society. The aggregate of producer
power in Galbraith's analysis is with time replacing the
traditional market as the regulator of economic activity
and as the mechanism for influencing the social and economic
consequences of that activity. Power is for Galbraith a
natural characteristic of the modern economy; he sees no
scheming firms and evil plans. The exercise of power
Galbraith sees is natural and, even more importantly,
necessary to the operations of the large-scale producing
organization. Thus such exercise of power becomes an
environmental variable to be developed, in Galbraith's
section on reform, as a target variable for the intelligent
exercise of government policy. Power must appear in the
Galbraithian paradigm in the same manner as it appears in
his view of the puzzles in Economics and the Public Purpose;
that such is the case will be confirmed by the following
chapter on that paradigm.
There are three common elements in the way Galbraith
views the puzzles in Economics and the Public Purpose.
Taken together they constitute the foundation of Galbraith's
institutional analysis of the economic system and of
Because Galbraith uses these elements consistently in
viewing puzzles in his book they must logically be parts of
his paradigm. They must further appear in that construct
in the manner in which they appear in the puzzle-views.
Technology appears in the puzzle-views as an imperative,
structuring force; it determines the nature of production
and pushes the business organization along particular
courses of action. Tremendous specialization and the
concomitant organization develop; great increases in
output and productivity occur as the firm grows to
Galbraith views the economic system,as a continuum
of producing firms ranked by size, or extent of organization.
One segment of that continuum is characterized by.firms
which can be run by a single individual. This sector
Galbraith levels the market system; in this part of the
economy, he says, traditional economic theory retains
descriptive and predictive validity.
The other segment of the continuum is populated by
producing organizations. This part Galbraith calls the
planning system since the large-scale producing organiza-
tion is forced, in Galbraith's view, to plan in
its environment. These organizations have market and
non-market power which stems from their size, that is,
from the extent of their organization.
The power is used to avoid market and other uncertainty,
to control the operating environment of the planning system
firm. Only in the largest organizations, what Galbraith
describes as the mature firm, is such power at its height.
For the rest of the planning system incomplete control is
These elements, as the foregoing discussion has hope-
fully made clear, exist in a highly interrelated manner in
Galbraith's analysis. The Galbraithian paradigm, as the
next chapter will show, contains these elements in the
same manner as they appear in the puzzles in Economics
and the Public Purpose.
In this chapter we will present the formulation of
Galbraith's paradigm and analyze its use in Economics and
the Public Purpose to show that Galbraith uses it in the
manner described by Kuhn. The chapter will also discuss the
characteristics of the paradigm itself to show that it
possesses those attributes which Kuhn shows are logically
necessary for the construct to be an exemplar.
The chapter will show that the three common elements
discussed in the previous chapter are present in the
paradigm in the same manner as they appear in the text of
Galbraith's book. Galbraith's use of this paradigm allows
him to view puzzles in a particular and consistent way;
this, too, will be shown.
Galbraith's paradigm may be stated as follows: the
social and economic results of economic activity are
increasingly determined by the use of market and extra-
market power by large-scale producing organizations in the
pursuit of their goals. It is this construct which
Galbraith utilizes in a pre-theoretic sense to structure
the stimuli he receives when viewing economic problems.
Galbraith's theorizing then proceeds on the basis of the
sensations the paradigm produces.
The wording of the paradigm is important. The
paradigm includes both social and economic results of
economic activity, reflecting the broad view of economic
activity taken by Galbraith's essentially institutional
analysis. Large-scale producing organizations use both
market and extra-market power; while the market does not
disappear in Galbraith's analysis firms do transcend it
and in some cases use instruments of power which have no
connection to the market. The organizations use their
power in pursuit of their goals. While the paradigm
itself says nothing about the particular goals or their
source the paradigm states that the organizations have
power to pursue the goals, whatever they are. One last
point requires explication. The word "increasingly" gives
a dynamic aspect to the paradigm. Galbraith views
economic development as exacerbating the shift towards
producer sovereignty. Thus the use of this word implies
both that producer power is not completely sovereign at
this time and that it is becoming more sovereign as the
economic process proceeds.
In the following section we will discuss the three
common elements isolated in the previous chapter. We
will show that they appear in the paradigm just as they
appear in Galbraith's analysis, thus implying consistency in
Galbraith's use of the paradigm. It should be remembered
that the pre-theoretic function of paradigms means that
they may not, and indeed usually are not, consciously
employed. We are thus inferring some of the characteristics
of Galbraith's neural processes; we are attempting to get
inside his mind, as it were.
The Three Common Elements in
The three common elements isolated in the previous
chapter must appear in Galbraith's paradigm in the same
manner as they appear in the way he views puzzles in the
book if we are to conclude that he uses this construct
consistently. They must also appear in the same way if we
are to infer that it is this particular construct that is
yielding his basic vision, his way of grouping situations
into similarity sets. On the basis of the similarity
relations so yielded, of course, Galbraith builds his
Technology is not mentioned explicitly in the
formulation of the paradigm. It may be said to be
implicitly present, however. Galbraith has called the
planning system "an adaptation to the needs of modern
technology" (Galbraith, 1973a, 260). It is technology
which has created, in Galbraith's view, the possibility
of and the necessity for the growth and development of the
large-scale producing organization which plays such a
central role in both the paradigm and Economics and the
Public Purpose. In addition, as the development process
proceeds technical innovation comes under the control of the
organization; thus technological advance to an increasing
extent comes to serve the needs of such organizations.
We may conclude, therefore, that the element of
technology appears in the paradigm in a manner consistent
with the way it is used in Galbraith's book. Technological
imperatives underlie the analysis in the text as well as
the formulation of Galbraith's paradigm. We may now turn
to the second element isolated in the previous chapter:
The large-scale producing organization--the planning
system firm--is for Galbraith the primal force by which
economic society develops and is altered. It is the
development of this form of the business enterprise
which is for Galbraith an important characteristic of a
new historical era in the American capitalist system.
The element of organization appears in just such a
manner in the paradigm. It describes such organizations
using their broad range of powers in such a way as to
increasingly affect their environments. The paradigm
also mentions the pursuit of organizational goals. Thus
it gives the direction of the process of economic develop-
ment and of Galbraith's view of social change as well.
We conclude that organization appears in the paradigm
in a manner consistent with the way Galbraith uses it in
his analysis in Economics and the Public Purpose. We turn
now to the third common element: power.
The element of power is explicit in the paradigm. It
mentions both market and extra-market power; the distinc-
tion between the two is incorporated into the paradigm
because Galbraith does not suggest that the market has
disappeared as a social mechanism. The subordination of
the market to the planning system firm, a central theme of
Galbraith's work, is clearly implied by the paradigm.
The paradigm suggests that the large-scale producing
organization has available to it a wide range of instruments
of power which are used constantly to affect the firm's
operating environment. The constant use of these instru-
ments is implied by the statement in the paradigm that the
social and economic results of economic activity are in fact
increasingly determined by the use of producer power.
Such could not be the case unless that power were used in
the manner described above.
SIt seems clear that power, like the other two elements,
appears in the paradigm just as it does in the book. We
conclude from this discussion of the three elements that
this paradigm, used by Galbraith in a pre-theoretic sense
to structure his perceptions of economic phenomena,
yields his puzzle-views as presented in Economics and the
Public Purpose. Before discussing the logical charac-
teristics of the paradigm, however, it is necessary to
analyze how the paradigm functions to produce those puzzle-
views, that is, how Galbraith's use of the paradigm to
discover similarity relations ultimately yields the
particular analysis in his book.
The Paradigm and the Puzzle-Views
The main puzzles in Economics and the Public Purpose
are unequal development and the associated inequality of
income. Galbraith thus focuses his attention on the
structure of development rather than primarily on the
level. It is the pattern of development as between the
market and the planning systems which forms the background
for the rest of the puzzles in the work.
That skewed pattern Galbraith views as being created,
maintained and exacerbated by the power of the planning
system; the creation of this pattern occurred in response
to technological necessity and opportunity while its
maintenance and continuation proceed on the basis of
necessity and socio-economic power. The power is used in
the pursuit of internally generated organizational goals.
Thus, as development proceeds, the pattern which .Galbraith
sees as resulting from the above-mentioned historical
forces is not subject to forces which would act so as to
counteract or correct the growing inequality; Galbraith
views economic forces as working out for the best only in
the sense of the best results for the most powerful.
Galbraith sees many social ills as the results of
this skewed pattern of economic development. More
precisely he sees them as the results of the pursuit of the
goals of the large-scale producing organization. Environ-
mental disharmony, claims on resources by the military,
the distribution of public spending, the composition of GNP,
the twin problems of downward and upward instability in the
economic system, and the distribution of income are examples
of these social ills which become puzzles in the Gal-
The unequal pattern of development is accompanied by
an unequal distribution of power; policies which do not
take these disparities into account cannot, in Galbraith's
opinion, deal with the realities of the problems. The
question remains: does Galbraith use the paradigm stated
earlier in the manner described by Kuhn? Does it function
in a pre-theoretic sense to group situations into similarity
sets and then, on that basis, through the process of main
feature replication, suggest the basic form which solutions
With regard to the major puzzles in the work, unequal
development and the associated inequality of income,
Galbraith is definitely reproducing the exemplar in the
puzzle-view. The disparate distribution of power implied
by the paradigm and the implicit demise of the regulatory
function of the market "create" the puzzle of a skewed
pattern of development. The paradigm suggests a focus on
the structure of output, on the relative development of
various sectors of the economic system, rather than on
the overall level of output and income.
The inequality of income which Galbraith views as
associated with the pattern of economic development is not
seen from the point of view of social classes or even of
who earns the income in particular increments. He rather
views this inequality in terms of the activity which
produces the income. Thus the underlying power disparities
and organizational relationships are seen as the cause of
income differentials. Galbraith's paradigm yields this view
of the puzzle of the distribution of income; we conclude
he has utilized the paradigm in the manner described by
The other puzzles in the book are themselves the
result of the pursuit of the goals of the large-scale
producing organization. Thus they are functionally the
natural results of the Galbraithian vision of the economic
system as a continuum of producing organizations, with the
described attributes of size and power.
The distribution of income, environmental disharmony,
inter-industry coordination, claims on resources by the
military, spurious innovation, frivolous production and
consumption, the distribution of public spending, the
composition of output, the pattern of resource allocation,
the lack of critical services such as health care and
housing--each of these puzzles in Galbraith's book viewed
as increasingly the result of the use of market and extra-
market power by large-scale producing organizations in the
pursuit of their goals. Galbraith uses his paradigm to view
economic problems; as they become puzzles in his work they
take the basic form of the paradigm. We can thus conclude
that the paradigm functions as a pre-theoretic construct in
order to group situations into similarity sets. There are
no puzzles in the book which are incongruent with the basic
form of the paradigm.
In each case the large-scale producing organization's
pursuit of its goals using its inherent power critically
affects the economic system and society in general. The
problem in each puzzle lies in the divergence of the purposes
of the organization from those of the public. Galbraith's
paradigm also functions in the proper manner with regard to
the formulation of puzzle-solutions; it is to these
solutions that we now turn.
A paradigm yields the basic form which a solution to
the puzzle under consideration must take. This is a
critical function of a paradigm; it gives a boost to normal
scientific work by guaranteeing the clever and resourceful
scientist that a solution can be found. The paradigm's
capability to guarantee solutions in a range of situations
produces its puzzle-solving potential which in turn induces
the commitment to the paradigm on the part of the scientific
Galbraith's paradigm yields the puzzle of unequal
development as the central problem of the economic system
rather than market imperfection which is the central
focus of the traditional paradigm. The unequal aspect of
development is relative to need; Galbraith sees the
increasing disparity between the public's purposes and
those of the planning system and that sector's growing
ability to pursue and achieve its goals as moving the
planning system's activities further and further away from
the path which the public purpose would impose if there
existed a regulatory mechanism for so doing.
Galbraith focuses on the inequality rather than the
level of development; the paradigm implies that attempts
to increase the level of development will make the inequality
even worse. Galbraith's view of the power of the planning
system firm and of the planning system as a natural
attribute rather'than the result of an evil conspiracy leads
him away from the traditional response to market-power,
which is to attempt to decrease it.
The Galbraithian solution to the problem of unequal
development has two aspects. The first of these is to
control, to a certain extent, the manner in which the plan-
ning system uses its power. Such control would be imposed
on the planning system without attempting to change the
structure of that system by, say, breaking up giant firms
into smaller ones. The second aspect of that solution is
to allow the market system to undergo the same historical
processes which resulted in increases in size and power in
the planning system.
Galbraith proposes reforms which would increase the
size, competence, and power of firms in the market
system and which would control the exercise of power in the
planning system. Thus he would attempt to balance the
pattern of development relative to need, to the public
purpose. A detailed analysis of Galbraith's general
theory of reform is beside the point here; what is important
is that the paradigm functions so as to suggest the basic
form of the solutions to the puzzles.
The paradigm implies that advanced technology and
organization are the sources of the size, and therefore
power, of the planning system firm. It is thus the
distribution of these variables which is at the root of the
pattern of development. Thus the solution is given:
increase the extent of organization and the power of the
weak areas of the system. It will be remembered that
advanced technology calls forth great specialization which
is the basic source of the need for organization. The
provision of advanced technology to increasingly large
organizations in the weak areas of the system is one of
Galbraith's puzzle-solutions which is produced directly by
When it can be shown that a particular social or
economic problem is the direct result of planning system
power then the paradigm suggests control of that exercise
of power through control of the planning system by the
repository of the public purpose, the state. While
Galbraith calls for public ownership in some cases most of
his puzzle-solutions with regard to the planning system
involve the specification of environmental parameters
within which that system would have to operate, parameters
which would be outside the scope of planning system power.
Even in cases of public ownership Galbraith does not
necessarily see firms as being run by the government;
operations could proceed under the specified parameters
mentioned above with the primary difference being public
ownership of the stock.
It seems clear that Galbraith's paradigm functions
in the manner described in Kuhn's analysis. It groups
situations into similarity sets, that is, it functions so
as to produce a coherent set of puzzles and a basis for a
consistent theory which deals with those puzzles. The
paradigm also suggests the form which solutions to those
puzzles must take. Thus our formulation of Galbraith's
paradigm fits Kuhn's analysis of the necessary functions
of such a construct. We may now turn to the necessary
logical characteristics of such a construct.
The Paradigm's Logical Characteristics
In this section we will analyze Galbraith's paradigm
to show that it possesses the characteristics which Kuhn
describes as necessary for a paradigm in its central sense
of an exemplar. The pre-theoretic function of Galbraith's
paradigm has already been discussed; while this is not a
structural characteristic of an exemplar it does have
important implications for the necessary attributes a
paradigm must possess.
Paradigms may be stated either in terms of mathe-
matical relationships, or in symbolic form, or in natural
language. The latter case holds for Galbraith's paradigm.
The impact on the form of the paradigm of the pre-theoretic
function is especially great when natural language is the
mode of expression. Thus we arrive at two logically
necessary characteristics of paradigms which are especially
important in the case of a paradigm expressed in natural
language: crudeness and concreteness.
Crudeness, or incompleteness of statement, is essential
to a paradigm. This characteristic allows the construct to
be relevant to a broad range.of problems. It is crudeness
of statement which allows many different situations to be
grouped into similarity sets. If significant situations are
excluded from the relevant range of the paradigm by a too
specific statement of the paradigm's conditions it may lose
attractiveness to the scientific community; that group
maintains its interest in the paradigm as long as it
retains its capability for generating meaningful solutions
to important problems.
Incompleteness therefore requires that while the
relations in the paradigm be described they not be described
in too much detail. In the traditional economic paradigm
of economic equilibrium arrived at via the market mechanism
it is unnecessary to specify the conditions and charac-
teristics of the market mechanism. In the Galbraithian
paradigm the instruments of market and extra-market power
are not enumerated. The goals of the large-scale
producing organization are not specified either. The
paradigm also says nothing about which particular social
and economic effects of economic activity are being
considered. Galbraith's paradigm may thus be relevant to
a wide range of situations; it fulfills the Kuhnian
standard of crudeness.
The necessity for crudeness of statement in a new
paradigm plays an important role in the scientific debate
which inevitably accompanies the introduction of a new
paradigm into the scientific community. Charges of poor
scholarship, of lack of rigor or elegance, of vagueness of
statement and lack of specificity are almost universally
leveled against the proponents of the new paradigm. The
contrast between a well-articulated traditional paradigm
and a new candidate with regard to elegance and rigor of
statement is striking; the traditional paradigm's many puzzle
solutions lend it more concreteness than it is possible for
any new paradigm to possess. Yet it is the puzzle-solving
potential of the new paradigm relative to that of the
traditional one which will in the end decide whether a
scientific revolution will occur.
In Kuhn's analysis the presence of anomalous problems
which become recognized as such leads to a period of
scientific crisis. Solution of these problems (and perhaps
of significant problems already solved by the traditional
paradigm) by the new paradigm ultimately leads to the
paradigm's being considered for adoption by the community
of scholars. It is a question of potential.
The new paradigm's potential puzzle-solving ability,
as mentioned, makes it attractive to scientists, especially
those who have not become totally committed to the tradi-
tional one. The adoption of a new paradigm by an
individual scientist often exhibits the characteristics of
a conversion. The function of a paradigm in the perception
process is partially responsible for this; it is an act
of faith, however, for a scientist to desert a well-
articulated and time-proven concrete paradigm for a new
and untried one. The fact that the traditional paradigm
was once itself stated crudely and in less concrete form
is not important, especially in economics where the
traditional paradigm has had a life span far beyond that of
any single individual.
Concreteness, already mentioned several times, is
another logically necessary characteristic of a paradigm.
Concreteness, in the sense of pertaining to or being concerned
with realities or actual instances rather than with
abstractions, seems initially to be in conflict with
crudeness of statement. This is not the case, however.
The success of a paradigm in guiding normal scientific
activity, and especially in economics, is significantly
determined by the extent to which its suggested solutions
have real world value. Thus the relations in the paradigm
must be concretely described.
At first glance Galbraith's paradigm may seem to
suffer from a lack of concreteness. In the traditional
paradigm of the market the mechanism by which social
outcomes of economic activity are produced is explicit in
the paradigm. No such mechanism for the regulation of
economic activity and for the transmittal of its effects
to the rest of society is described in Galbraith's paradigm.
This is, of course, because Galbraith sees no such mechanism
in economic society; with the ongoing loss of the regulatory
function of the market has come no concomitant development
of a different social mechanism of similar function.
Underlying this seeming lack of concreteness is an
important methodological difference between conventional
and neo-institutional economics. The latter approach is
more general in nature and broader in scope than conventional
economic analysis; neo-institutional economics views
economics as the study of the industrial system and its
corresponding society rather than just of the "market
system" as it is studied by conventional economists. As
such it includes normative considerations. But, at the-
same time, we must not confuse the study of human goals
with the evaluation of those goals. Thus accusations of
making value judgements which are often made against neo-
institutional economics have no a priori general validity.
Galbraith's paradigm includes market as well as
extra-market power. It also mentions social as well as
economic results of economic activity. Thus the paradigm
cannot be as concretely stated as the conventional
economist might wish. Economists steeped in the positivist
application of the traditional paradigm will probably find
it difficult to accept Galbraith's alternative; Galbraith,
however, does not seem too concerned with this segment of
the scientific community. He is attempting to persuade
the intelligent layman, the young economist, and the
economics student, in short, those less committed to the
Galbraith's paradigm is characterized by a degree of
concreteness, however. The large-scale producing
organization is identified as (increasingly) the determin-
ing factor in the economic process. These organizations
are identified as possessing and wielding power; it is
this use of power which results in the various social
and economic outcomes alluded to in the paradigm. The
specification of the giant corporation as the driving
force in the development of industrial society is a concrete
The power mentioned in the paradigm is also not an
abstraction; its extent is of course open to discussion
with regard to particular situations but its existence is
not in doubt. Thus Galbraith's paradigm is not without
concreteness. The level of that concreteness, given the
purposes of neo-institutional economics in general and of
Galbraith in particular, seem satisfactory.
Galbraith has mentioned his dissatisfaction with his
model of maximization by the technostructure (Galbraith,
1969b, 496n). This should not be interpreted as a state-
ment of dissatisfaction with his paradigm, however.
Maximization by the technostructure is more of a puzzle-
solution than part of the paradigm. One may be unhappy
with a solution which is inadequately specified without
bringing into question the paradigm which suggested the
basic form of that solution.
The last attribute of paradigms to be discussed is
analogical replicability in a wide range of problems
including those which are anomalous with regard to the
traditional paradigm. This characteristic is actually the
result of crudeness and concreteness of statement. It is
this replicability which gives the paradigm potential and
attracts adherents away from their commitment to the
accepted scientific way of seeing problems.
It is beside the point of this study to evaluate the
puzzle-solving potential of Galbraith's paradigm; our
purpose has been to show that such a construct exists in
Galbraith's book and is used in a manner consistent with
that described by Kuhn. To a significant extent such
evaluation can only occur with time, as economists begin
to work with the paradigm. This analysis will hopefully
stimulate such work through its statement of Galbraith's
paradigm in testable Kuhnian terms.
In this chapter we have presented Galbraith's paradigm
and shown that the three common elements isolated in
the previous chapter appear in that construct in the same
manner that they appear in Economics and the Public Purpose.
The chapter also shows that Galbraith uses the paradigm to
produce puzzle-views in the manner described by Kuhn.
Those puzzles are consistently viewed through the relations
described in the paradigm; the form of the puzzle is given by
the paradigm as a way of seeing problems.
The logical characteristics of Galbraith's paradigm
were shown to be adequate for that formulation to function