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GALBRAITH AND CAPITALISM IN AMERICA

sis on the individual, stressing that one should be motivated by self interest, which in turn would benefit the welfare of all.

Galbraith understands Smith to be the founder of the central American economic tradition. However, it has inequalities which must also be attributed to Smith. He put the focus on the production of aggregate wealth and not its distribution. The fruits of the nation's labor are not dispersed evenly among the population, but instead fall into the hands of the upper classes. Galbraith stresses the fact that Smith understood the plight of the working classes yet conceded their disadvantage to the merchants, manufacturers and landlords who held them under their thumbs.

On the other hand, Galbraith's critics argue that a compact has been reached in the society allowing each individual to pursue his own interest according to his values as long as the rights of others are not placed in jeopardy. If the liberties of individuals were restrained by the system, it would only indicate the return to the age-old organization of superiors claiming their right to rule inferiors (Friedman, 35). Alluding to Smith's statement concerning the market mechanism, conservative economist Milton Friedman ironically comments that, "in the political sphere, individuals like Galbraith who attempt to pursue the public interest as they view it are led by an invisible hand to further private interest" (35).

Galbraith explains that it was a few decades after The Wealth of Nations that economics was labeled the "dismal science," when it became apparent that any system seemed to place some, if not the majority, of the population at a disadvantage. It was at this time that the English economists, David Ricardo (1772-1823) and Thomas Malthus (1776-1834), emerged with an ultra-realistic interpretation and a practical, but heartless, scheme to accommodate the reality of capitalism. To both Malthus and Ricardo, that reality assumed th...

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GALBRAITH AND CAPITALISM IN AMERICA. (1969, December 31). In LotsofEssays.com. Retrieved 18:17, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1680623.html