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Paternalistic Capitalism

Paternalistic Capitalism

Andreas G. Papandreou
Copyright Date: 1972
Edition: NED - New edition
Pages: 200
  • Book Info
    Paternalistic Capitalism
    Book Description:

    The distinguished economist and Greek political leader presents here a powerful critique of American capitalism and its relationship to government and foreign policy. Dr. Papandreou first examines the orthodox view of the contemporary capitalist economy and the “myth of market capitalism” which it has engendered. He then considers the Neo-Marxist view that the economy can best be understood as monopoly capitalism, and the technocratic interpretation of society proposed by J. K. Galbraith. Dr. Papandreou accepts and rejects various aspects of these two interpretations, and moves to define the salient features of what he calls paternalistic capitalism, wherein privatized decentralized planning increasingly is carried out by the corporate managerial elite, in the interest not of the consumer, but of the “system.” The paternalism is that of the autocratic big brother. The author then explores the relationship between the managerial elite and the instrumentalities of the State, and claims that next to the managerial elite stand the national security managers -- not by accident, for paternalistic capitalism is aggressively expansionist, as is reflected in the foreign policy of the capitalist metropolis, the United States. The global aspect of paternalistic capitalism is further delineated in Dr. Papandreou’s discussion of the “new mercantilism” and of the institutional device of the multinational corporation. Finally, he considers briefly two alternatives -- the Soviet experiment, which he rejects as paternalistic socialism, and a vision of a regionally decentralized society, in which man will control rather than be at the mercy of his social environment.

    eISBN: 978-0-8166-6390-3
    Subjects: Economics

Table of Contents

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  1. Front Matter
    (pp. i-viii)
  2. Table of Contents
    (pp. ix-2)
  3. A Distortion of Vision
    (pp. 3-8)

    The spectacular growth of the social sciences — and especially of economics — has tended to obscure and distort rather than elucidate our vision, our understanding of the processes of the social system of which we were destined to be a part. This distortion of our vision of contemporary society has many roots. One of them may well be traced to scientific inertia. Having developed in the past a set of tools and concepts possibly appropriate for the interpretation of the behavior and the evaluation of the performance of yesterday’s society, we unwittingly continue to employ them in a social environment which...

  4. The Myth of Market Capitalism
    (pp. 9-40)

    The faith of the common man in the West in the viability of the market economy was badly shaken from the experience of the thirties when a deep and persistent depression was highlighted by high unemployment and numerous business failures. It led to drastic reforms in the United States under the banner of Roosevelt’s New Deal, and stoked the fires of fascism on the European continent. It is not possible to tell with certainty whether or not the New Deal would have restored full employment and buoyant business activity because the Second World War provided a full solution to all...

  5. A Neo-Marxist View of the Capitalist Metropolis
    (pp. 41-63)

    If contemporary capitalism is not a society of competing shopkeepers, then what is it? Ever since James Burnham’s The Managerial Revolution or even A. A. Berle’s and G. C. Means’ The Modern Corporation and Private Property there have been many attempts to propose an alternative, more “realistic” view of contemporary capitalism. Of these, today two stand out. The first, a Neo-Marxist interpretation, is Paul Baran and Paul Sweezy’s MonopolyCapital.¹The second is J. K. Galbraith’s The New Industrial State.² It is clear that no meaningful discussion of contemporary, advanced-country capitalism can go forward without reference to these two closely...

  6. Paternalistic Capitalism: The Economy
    (pp. 64-89)

    J. K. Galbraith in his New Industrial State offers a technocratic interpretation of contemporary industrial society. The basic argument is rather simple. Modern technology imposes the necessity both for large size of the firm and for planning. This has consequences. “In the industrial enterprise, power rests with those who make decisions. In the mature enterprise, this power has passed, inevitably and irrevocably, from the individual to the group. That is because only the group has the information that decision requires. . . . Since technology and planning are what accord power to the technostructure,¹ the latter will have power wherever...

  7. Paternalistic Capitalism: The State
    (pp. 90-120)

    For market capitalism, the State’s role was limited to providing the legal framework for its operations as well as, of course, to assisting its expansion beyond the nation’s shores in imperialistic adventures. Paternalistic capitalism expects much more from the State. To begin with, it relies on the social regulation of aggregate demand, since the modern corporations cannot guarantee through their actions that the flow of aggregate demand will be adequate to the task of removing from the market their planned output at the controlled prices. This burden falls upon the State, which through its fiscal policy and monetary management prevents...

  8. Peaceful Coexistence and Gounter-Revolution
    (pp. 121-143)

    An increasingly militarized society is of necessity involved in war, actual or potential. The two global powers, the United States and the Soviet Union, have in fact been engaged in war ever since the death of President Roosevelt. It has been called the Cold War, but “cold” it actually almost never was. Armed confrontations directly or indirectly involving the two superpowers have studded the last quarter century and have taken a spectacular toll of life and property. The only sense in which the war could be called cold is that the recourse to arms has been intentionally localized.

    There are...

  9. The New Mercantilism
    (pp. 144-161)

    On June 12, 1969, Gabriel Valdes, the Foreign Minister of Chile, made the following statement to President Nixon: “It is generally believed that our continent receives real financial aid. The data show the opposite. We can affirm that Latin America is making a contribution to financing the development of the United States and of the other industrialized countries. Private investment has meant and does mean for Latin America that the sums taken out of our continent are several times higher than those that are invested. Our potential capital declines. The benefits of invested capital grow and multiply enormously, though not...

  10. Social Planning
    (pp. 162-184)

    Socialism, having established a beachhead half a century ago, has since spread out rapidly over the globe as the major challenger, as the key practicable alternative to the capitalist mode of social organization. According to Marx’s vision, it should have ushered in a classless society, free of the antagonisms, the contradictions that are characteristic not only of capitalism but of all the societies of the past. In Marx’s terms: “In the social production of their lives, men enter into certain definite relationships, indispensable to them and independent of their will: these are the relationships of production, which correspond to a...