Full text: Growth and Stagnation

The extra profits which were created by technical progress 
could be absorbed pro rata by increase in wages in 
those industries or firms which were favored by the progress. 
In this way there arose the high wages of, for example, 
the automobile worker or the steel workers in the U.S. 
This was due to the strength of the bargaining position 
of the workers and their unions in the big concerns# 
This"countervailing power"^ as Galbraith called it, 
has done something to offset the tendency of oligopoly 
to increase its share in the income. It depended on 
full employment and it would not work any more when 
this ended. But then it is unlikely that a shift to profits 
had worked in the time when full employmentstill lasted, 
and haet brought it to an end. 
Last not least,vast changes took place within industry. 
For a long time the doctrine of large scale economies 
dominated economics, the superiority of the big firm 
was a basic tenet of economics, I have myself written 
a little book on it. The doctrine reached its highest point 
in the fifties and sixties when the Japanese built their 
giant furnaces and their supertankers, and when European 
governments considered concentration of industry to be 
the only means of standing up to the competition of the 
U.S. and their giant firms. The difficulties of large scale 
organisation were usually soft-pedalled, organisation 
was supposed to adapt itself to the requirements of the 
mass production paradigm. The post-war years saw indeed 
the rise of this type of management and organisation to its 
highest stage of accomplishment I The vast burocratically 
and hierarchically organised concern, paralleled on the 
opposite side by the mass organised union.

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