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Countervailing Power

In: Galbraith and Market Capitalism

Author

Listed:
  • David Reisman

Abstract

In a perfectly competitive economy, no individual producer can harm others without harming, himself: if he cuts wages he will lose labour to other employers, if he raises prices he will lose his customers to his competitors, if he underpays his suppliers they will divert their goods to other firms. In such a situation the problem of power does not arise: no one buyer or seller has the ability to influence prices charged or quantities sold, or to impose his personal goals and decisions willy nilly on other individuals and groups. In such a situation, moreover, State intervention — save of the law and order variety — is widely held to be both unnecessary (free competition is itself adequate to ensure optimal and democratic allocation of resources) and undesirable (it constitutes a new locus of power in a world where power otherwise would be dispersed and impersonal).

Suggested Citation

  • David Reisman, 1980. "Countervailing Power," Palgrave Macmillan Books, in: Galbraith and Market Capitalism, chapter 4, pages 50-71, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-04952-3_4
    DOI: 10.1007/978-1-349-04952-3_4
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