While I am not hostile toward Social Democracy, I do not believe it quite matches Galbraith. I would call him as more of a Progressive, which was a more middle-class reaction to excesses of capitalism. They advocated regulation and breaking up trusts through such legislation as the Sherman Anti-trust Act. However, I believe Chávez is on the right track. He should also read Alexander Hamilton's Report on Manufacturers to Congress which was the basic plan for industrial development in the US and it really worked. The keys to development are high tariffs, and the development of internal markets. Foreign trade was not a necessity when the US was at the high point of industrial development. Also price supports for farmers to develop and protect agriculture.
However, using either the Progressive or Social Democratic model, I do believe a decentralized economy is essential. The closer the control of the industrial enterprise is to the factory, the more institutional experience and memory will guide the process. Bad decisions result from a distant manager that has no knowledge of the product or what worked in the past.
Regardless of one's opinion of Israel, I believe the kibbutz is an interesting local industrial or agricultural model for Social Democrats or Progressives.
Pervis J. Casey
Oct 10 2007 - 4:01pm