Companies too complex to control, says Galbraith

Modern corporations are now so complex that their operations are beyond any effective control of the shareholders who actually own them, John Kenneth Galbraith says.

In an interview with The Independent in which he discusses the crisis of corporate America, the veteran economist and liberal advocate said he had been astonished by the scale of the problem disclosed by the string of company scandals. The modern corporation had fallen under the "virtually absolute control of management and the individuals recruited by management", said Mr Galbraith, who admitted he had failed to foresee the problem.

No one could yet predict the consequences. "We are looking at a major flaw in the system which is going to weaken confidence, provoke criticism, and force a search for a remedy. But the nature of that remedy is far from evident," he warned.