Few economists have wielded prose as deftly as John Kenneth Galbraith, whose writing—sharp, erudite, and tinged with dry wit—made macroeconomics palatable for the lay reader. In The New Industrial State (1967), Galbraith turns his attention to the machinery of modern capitalism, arguing that America’s economy is not, as classical economists imagined, a freewheeling marketplace of individual entrepreneurs, but rather a tightly managed system dominated by sprawling corporate bureaucracies. It is an argument that, nearly six decades later, feels both prescient and incomplete.
At the core of Galbraith’s thesis is what he calls the “technostructure”—the cadre of managers, planners, and engineers who, he contends, have supplanted both the profit-seeking entrepreneur and the fickle forces of supply and demand. Large corporations, he argues, are no longer beholden to the whims of the market; they shape it. Through advertising, research, and sheer economic weight, they dictate not just what gets produced but what consumers will want, bending the invisible hand of the market to their own ends.
This insight, radical in its time, has aged remarkably well. In an era of trillion-dollar tech firms and monopolistic platforms, Galbraith’s vision of an economy managed by powerful corporate actors feels like less of a critique than a straightforward description of reality. The Apple-Amazon-Google axis of our age fits neatly into his framework: firms that do not merely respond to demand but manufacture it, shaping everything from our purchasing habits to our very modes of communication.
Yet, for all his prescience, Galbraith’s framework falters when faced with the full volatility of history. His corporate-state symbiosis assumes a level of stability that the neoliberal revolution of the late 20th century would upend. The deregulation of the Reagan era, the rise of financialization, and the unchecked expansion of globalization all reintroduced chaos into the system he saw as carefully managed. Galbraith also underestimates the persistence of financial speculation, treating it as something largely tamed by managerial capitalism. The 2008 financial crisis proved otherwise.
Still, The New Industrial State remains an essential text—not just for its analysis but for its literary panache. Galbraith was that rare economist who could turn an argument into an aphorism, lacing his critiques with an urbane skepticism that makes his writing as pleasurable as it is insightful. Whether his conclusions fully withstand the test of time is almost beside the point; the questions he raised continue to shape our economic debates.
Join us in making the world a better place – you’ll be glad that you did. Cheers friends.