May 19, 2006

THE GIANT ALWAYS LOSES TO THE SLING:

An Economy of Davids (Edward B. Driscoll Jr., 19 May 2006, Tech Central Station)

The death late last month of John Kenneth Galbraith helps to illustrate just how much the American economy -- and indeed the world's -- has changed over the last four decades. Galbraith could plausibly write in 1967's The New Industrial State, that large corporations were immune to market forces.

And yet, a mere three years later, the enormous Penn Central Railroad, itself born of a desperate 1968 shotgun marriage between the Pennsylvania Railroad and the New York Central, declared bankruptcy. It was eventually bailed out by Conrail, initially created by the federal government, which itself was acquired in 1998 by Norfolk Southern, and CSX.

Beyond Penn Central and Conrail, as Thomas Sowell recently noted, "Eastern Airlines has gone out of business. The Graflex Corporation has gone out of business." Japanese car manufacturers have completely dominated the seeming monopoly the American "Big Three" automakers had on the US auto market.

Despite all that, Galbraith's theories will be taught in universities for decades to come. Which probably wouldn't surprise Alvin Toffler (interviewed in a recent TCS podcast) in the least.

Posted by Orrin Judd at May 19, 2006 11:48 AM
Comments

Galbraith and EJ Dionne are perfect examples of being of the left meaning never having to let reality get in the way of ideological presumptions.

Posted by: Tom C., Stamford,Ct. at May 19, 2006 12:26 PM

Ironic that 13 years after The New Industrial State it was liberal Democrats who were braying the loudest about bailing out Chrysler, in order to save all those high-paying union jobs (we're about to go through the same secnario, if not with General Motors then with its Delphi subsidiary, which may not under the "too big to fail" category, but has union wage rates and benefits that date from the days it was directly connected to GM).

Posted by: John at May 19, 2006 1:02 PM
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