Two Cheers for Capitalism
I’ve often thought how pleasant and easy and also remunerative it would be, were one so motivated, to make the case for modern business organization—what many including Irving Kristol call capitalism. One would avoid, above all, the cataleptic and self-refuting litany of the neoclassical market. A thousand or so huge corporations now supply about half of all private product in the United States. No one of sound mind, unless extensively conditioned by economic instruction, can any longer be persuaded that these firms, which now make up the characteristic sector of the economy, conform to the market-controlled and politically passive model of the neoclassical creed.
They have a highly visible ability to raise and cut prices. Since watching television is still common, the effort to cross the market and manage the consumer is also widely seen. The papers speak similarly of corporate pressures on the Congress, as does Jimmy Carter, a man who seems safely, above any suspicion of being anti-business. The unique foreign policies of the oil companies, ITT, and Lockheed have been well celebrated. The way big steel in these last weeks has converted from warnings about regulation and big government to demands for more of both has not been at all reticent. The close and symbiotic relationship between the Pentagon and the weapons firms was highlighted nearly twenty years back by Dwight D. Eisenhower. And, with all else, General Motors, Exxon, and IBM simply do not look like the textbook microcosms. So the defense would begin by no longer trying to get people to believe the patently unbelievable about the subordination of the modern large firm to the market and the state, an effort that principally persuades people that there must be something vaguely illegitimate or fraudulent about the large corporation since it tries so elaborately to misrepresent itself.
Having accepted that the corporation transcends its market and has power in the state, then an effective and adequately insouciant defender would say, What a good thing! By controlling its prices and managing its customers, it can plan. If hundreds of millions of dollars and several years are to be spent on producing a new automobile model, there must be some assurance about the eventual price of—and consumer response to—the particular compromise between novelty and banality that is so expensively contrived. If billions are to be put into an oil pipeline across Alaska or a gas pipeline across Canada, there must also be a tight grip on the eventual price. It would be insane to leave that to the unpredictable gyrations of the competitive market. The big corporation eliminates or subdues market forces and substitutes planning. In the modern economy planning is essential.
It would also be held that only a big corporation can deal effectively with big government; the small competitive entrepreneur doesn’t have much access even to Michael Blumenthal, James Schlesinger, and the other Carter populists, and it is not concern for the small man’s state of confidence that has made modern economic administration a minor…
This article is available to online subscribers only.
Please choose from one of the options below to access this article:
Purchase a print premium subscription (20 issues per year) and also receive online access to all all content on nybooks.com.
Purchase an Online Edition subscription and receive full access to all articles published by the Review since 1963.
Purchase a trial Online Edition subscription and receive unlimited access for one week to all the content on nybooks.com.