Title: Galbraith's paradigm : case study in scientific revolution
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Title: Galbraith's paradigm : case study in scientific revolution
Physical Description: viii, 112 leaves. : ; 28 cm.
Language: English
Creator: Waldman, Mark Steven, 1946-
Copyright Date: 1974
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Subject: Economics and the public purpose   ( lcsh )
Science -- Philosophy   ( lcsh )
Economics thesis Ph. D
Dissertations, Academic -- Economics -- UF
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
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Thesis: Thesis -- University of Florida.
Bibliography: Bibliography: leaves 106-111.
General Note: Typescript.
General Note: Vita.
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Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
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Resource Identifier: alephbibnum - 000582491
oclc - 14116802
notis - ADB0866

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GALBRAITH'S PARADIGM: A CASE STUDY
IN SCIENTIFIC REVOLUTION






By

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


1974































COPYRIGHT

By

Mark Steven Waldman

1974

































TO MY FAMILY













ACKNOWLEDGEMENTS


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.






































iv














TABLE OF CONTENTS


Page
ACKNOWLEDGEMENTS.................................... iv

ABSTRACT............................................ vii

Chapter

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
Conclusion................................ 29

III. THE COMMON ELEMENTS: THE GALBRAITHIAN
TRINITY.................................... 30

Introduction.............................. 30
Method of Analysis....................... 34
The Paradigm Concept: A Review........... 36
The Puzzles .............................. 38
Galbraith's Mode of Presentation......... 41
The Common Elements: The Galbraithian
Trinity............................... 45
The First Element: Technology......... 46
The Second Element: Organization..... 51
The Third Element: Power.............. 60
Technology, Organization, Power:
Conclusion............................. 72

IV. GALBRAITH'S PARADIGM........................ 74








Introduction. ............................ 74
The Paradigm............................... 74
The Three Common Elements in
Galbraith's Paradigm................... 76
Technology.............................. 76
Organization............................. 77
Power.................................. 78
The Paradigm and the Puzzle-Views.......... 79
The Paradigm's Logical Characteristics.... 85
Conclusion................................. 91

V. SUMMARY AND CONCLUSION........................ 97

Introduction.............................. 97
Summary................................... 99
Conclusion................................. 102
Further Thoughts ..... .................... 103

BIBLIOGRAPHY......................................... 106

BIOGRAPHICAL SKETCH .................................. 112


I







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

By

Mark Steven Waldman

December, 1974

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

present.

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.


viii













CHAPTER I


INTRODUCTION

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.


The Problem

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

these stresses.

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.













CHAPTER II


METHODOLOGY AND BACKGROUND


Methodology: Thomas Kuhn's Theory
of the History of Science

Introduction

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,

1970, 187).







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

acceleration."

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/

exemplar.

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.


Normal Science

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

this analysis.

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,

1970, 60).

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

increases.

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

puzzle.

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

solve satisfactorily.

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.


Scientific Revolutions

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

community, difficult.







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

efforts elsewhere.

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

discussion.


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
Economic Literature

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

science.

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

participants.





28


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).


Conclusion

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.













CHAPTER III


THE COMMON ELEMENTS: THE
GALBRAITHIAN TRINITY


Introduction

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,

1973, 3).

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

assertions.







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

fields.

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

poetry.

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

cases conflict.

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.


The Puzzles
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

former.

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

Public Purpose.

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,

1970, 471n).

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

his style.

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

readers.

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

frivolity.

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
Galbraithian Trinity

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

framed.







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

profitable basis.

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

the book.

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





50


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

worsen it.

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

of power.

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

firm.

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

variables increase.

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

mind, however.

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

system firm.

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

selling activities.


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

analysis.

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

constraints.

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

increased.







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

system.

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.







Technology, Organization,
Power: Conclusion

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

economic society.

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

gigantic size.

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-





73

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

typical.

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.













CHAPTER IV


GALBRAITH'S PARADIGM


Introduction

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.


The Paradigm
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
Galbraith's Paradigm

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

theoretical framework.


Technology

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





77


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:

organization.


Organization

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




78


his analysis in Economics and the Public Purpose. We turn

now to the third common element: power.


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-

braithian vision.

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

should take?

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

Kuhn.

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

community.

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




83


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




84


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

his paradigm.

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




87


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

traditional paradigm.







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

historical statement.

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




91


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.


Conclusion
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




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