Limited Capitalism, Institutionalism, and Marxism

This chapter examines a part of the relationship between institutionalism and Marxism. Particular attention is given to Ayres (1946), Galbraith (1967), and Baran and Sweezy (1966). The procedure of the chapter is to review Ayres’ analysis of the underconsumption tendency of capitalism and demonstrate its remarkable similarity to the analysis of Baran and Sweezy. Then it is argued that Galbraith’s analysis identifies the capitalist solution to this problem and that this analysis is important to contemporary Marxism. Finally, it is argued that Galbraith’s analysis is itself incomplete without something like the Marxist theory of alienation.