The profit motive, market ideology

In The New Industrial State Galbraith devotes a chapter to arguing that the profit motive, the shibboleth of neo-classical economics and the linchpin of conservative ideology, is undermined by the fact that the globalized corporate economy is essentially made up of monopolies who plan rather than react to markets and are theoretically liberated from seeking profit. Besides, Galbraith argues, management works to maximize the profit of shareholders, not itself. This seems sort of right — managers work to preserve their job, and retention is based on performance, and performance is dictated by maximizing efficiency and profit. But profit need not be the chief criterion of job performance. One can imagine easily an organization, already large enough to assure its own profitability and survival by virtue of size and inertia, that rewards family members or those espousing ideologically correct principles or unflagging loyalty to flawed causes — maybe this is what Bush meant when he promised to be the CEO president.

Galbraith is basically deconstructing neo-classical eonomics by going after its “transcendent signifier,” its one postulate that enables the fabrication of the rest of the system, that one Archimedean point from which the world of economics can be moved. Markets only explain behavior if it remains universall true that all agents within are seeking to maximize utility. Any behavior that doesn’t conform to that explanation is dubbed an externality and made irrelevent to economics. But Galbraith’s main goal is to show that the economy is not driven by the market — the consumer and the government are not autonomous in their demands but rather the demand they manifest is always already shaped by the industry that supplies it. Industry doesn’t give the people what they want — this is far too risky when so much capital needs to be invested far in advance to bring anything to market in a meaningful way an a national/global scale. If industry was reactive, it would always be bringing things to market too late. Instead, industry shapes demand, manages it to assure continued steady growth.

The compelling question that follows from this concerns the efforts necessary to prop up the autonomous consumer ideology. It seems to me that this animates even the ads that don’t seem to be advertising a product, this is a message that gets through even if you reject the thing being advertised — the message being that you the consumer have the ultimate choice and industry exists to serve you. Also worth investigation is the efforts made to maintain the ideology of the profit motive. These too are everywhere, in every inference that you love a bargain or you love to save or you get shit-in-your-pants excited over a sale, or that having more makes you happy, or that human nature is to be greedy or to want more. These tropes are part and parcel of all commercially made art — once art needs to survive in a marketplace, it begins to espouse market ideology.

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