FREE ESSAY ON JOHN KENNETH GALBRAITH`S NEW INDUSTRIAL STATE

JOHN KENNETH GALBRAITH`S NEW INDUSTRIAL STATE

John Kenneth Galbraith in The New Industrial State argued that U.S. anti-
trust legislation is a result of outdated arguments about the need to preserve "free 
enterprise" and the competitive market. Galbraith stated, that large corporations in 
modern economies may need to limit competition in order to achieve efficiency and 
compete with foreign imports in the new global economy.
I agree with this statement. When a corporation becomes big and starts 
to grow and expand they will soon gain control of their market. Once a company has 
gained control of their market, within their nation, they can focus their attention on 
competing in the global market for their product. More effort can now be directed 
towards, achieving efficiency, and the improvement of their particular product. And since

their only competition is foreign competition they can spend less money on advertising 
and other cost consuming practices of competition. 
A monopoly is a market situation in which there is only one seller of a 
particular good or service. When companies exercise monopoly power they act as if they 
were monopolies. Government regulation of big business/monopoly power arose because 
of the following accusations: monopolies raise prices, monopolies reduce output and 
living standards, monopolies are inefficient and wasteful, monopolies are intensive to 
consumer demand, monopolies engage in unfair competition, monopolies help bring on 
recessions and they threaten our political system. 
The current antitrust laws were written without respect to the foreign 
market. When these laws were created the foreign market was not as big as it is today, 
nor was the US's involvement in it. The US's economy was just starting to develop 
and to boom. The antitrust laws were needed to nurture and to boost the growing 
economy. Now that our economy is flourishing, and no longer needs to be nurtured, these 
laws are hindering further growth. They need to be reviewed, and revised in order to 
better suit our current economy. The purposes of these laws are no longer true. 
Monopolies can no longer raise prices with regards only to the ease with which buyers 
can find substitutes products. They still have to worry about the foreign products being

sold for less. Therefore, prices will not be higher, output and living standards will not
be 
affected, they will not become inefficient and wasteful, they will not be intensive to 
consumer demand and they will not help to bring on recessions.
The series of antitrust laws that were enacted because of accusations 
against monopoly power are, the Interstate Commerce Act (1887), the Sherman Antitrust 
Act (1890), the Clayton Antitrust and Federal Trade Commission Acts (1914), the 
Robinson-Patman Act (1936), and the Celler-Kefauver Antimerger Act (1950). One law 
that I would drop, had I the power, would be the Celler-Kefauver Antimerger Act, which 
prohibited mergers that would result in the creation of a monopoly. The reason that I 
would drop this law is because, as I stated previously, I do not believe that monopolies

will have negative effects on our economy today. I would also drop the Interstate 
Commerce Act, which restricted monopoly power of railroads by creating the nation's 
first regulatory agency, the Interstate Commerce Commission (ICC), whose duties are 
now being performed by other federal agencies. This law, I would drop, because 
competition for such an expensive product can cause the losing business or businesses to

lose a massive amount of money and may help bring a recession. I would revise the 
Sherman Antitrust Act and the Clayton Antitrust and Federal Trade Commissions Acts 
which, declared that "...every contract, combination...or conspiracy in restraint of
trade 
is illegal.", provided penalties for companies that violated these laws by attempting to

limit competition, described specific practices as a "restraint of trade", exempted labor

unions from the provisions of the antitrust laws, and created a regulatory agency, the 
Federal Trade Commission (FTC), to enact the antitrust laws. Restraint of trade, I would

allow to remain illegal, but I would not describe monopoly power, or attempting to limit

competition as a restraint of trade. I would allow the FTC to remain in action, but only
to 
prevent unfair trade practices, which does not include limiting competition, and false or

misleading advertising.
The ideas of John Kenneth Galbraith are, in my opinion, true. The 
antitrust legislation in the US is outdated and based on outdated arguments. In our
current 
economy we have more foreign competition than ever. In order to be efficient, and 
compete with foreign imports companies must limit competition. We now have to 
compete within the new global economy and not just our domestic one. As times and 
economies change, so should our laws relating to it.