Monopoly Capital: An Essay on the American Economic Order, by Paul A. Baran and Paul M. Sweezy
Pachter, Henry
Baran and Sweezy may have felt that in writing Monopoly Capital they were doing for the Space Age what Karl Marx had done for the Textile Age and Lenin for the Steel Age. Let it be said from...
...And why must they thus substitute Freud for Marx...
...Because, unlike traditional Marxists, they believe neither in the meliorative force of economic interests nor in the possibility of political action: The normal political system of capitalism, whether competitive or monopolistic, is bourgeois democracy...
...It seems that this Maoist sociology is the real purpose and explanation of the authors' deliberate economic primitivism...
...Therefore, Baran and Sweezy introduce another "surplus," which they variously define as "the difference between aggregate net output and aggregate real wages" (i.e., not counting capital), or "the difference between what a society produces and the costs of producing it" (i.e., including new investment), or "the difference between the product and the socially necessary cost" (something no system of accounting can determine)—which, to begin with, are three different things...
...But more refined methods of analysis have shown that capitalism can overcome the difficulties which still baffled Rosa Luxemburg...
...nor are the authors even aware that it would be their duty—in the framework of their own theory of an oligopolistic economy—to explain the more subtle mechanisms through which the system asserts the working of its self-perpetuating laws...
...I shall say later why I think that "surplus" is inadequate as a tool of analysis...
...For no matter how big the difference may be between "socially necessary" and actual cost, in the capitalistic economy this difference does not play the slightest role...
...To take an example from the book: Chromium plating on a car, hair curlers, and customer entertainment are not "socially necessary...
...that it is not competition that is imperfect but monopoly that is perfect...
...This abstract contention, however, flies in the face of experience, and it is intrinsically untenable...
...The authors do not even ask such questions, nor do they do anything else with their "surplus" except to assert that the capitalists cannot sell it...
...Or perhaps a correlation between slump and boom conditions...
...welfare) economy which they dismiss because it fails to fit their definition of "monopoly capitalism...
...The connection with "monopoly" just eludes me...
...The authors find it easy to show that monopolists are not forced to adapt themselves to new conditions, their basic aim being merely to maximize the profit on a given investment...
...But by at least one of their own definitions, the capitalists need not worry and should be thankful for the surplus...
...This required the blurring of class differences in both the old industrial countries and in the newly developing countries, and to stress the world political conflict be tween the two ideological blocs...
...And since in monopoly capitalism the big corporations are the source of big money, they are also the main sources of political power...
...But if this is so, why then do they deny the possibility of political action for the opponents of the "oligarchy...
...It includes many distinct income streams and thereby blurs the class interests which are fighting over the distribution of the "surplus...
...Their reading is limited, their quotations are often secondhand, and they don't understand the methodological apparatus they have borrowed from Kalecki and Steindl...
...Here, if ever, political and economic motivations must jell into one great vision of monopoly capital's political economy...
...It would be difficult to find in 300 years of economic literature a more preposterous adding operation...
...nor is there any comparison of investments abroad for different countries and at different times...
...But even if we take these values for what they are not, we should ask: Do they reflect a progression from a less monopolistic to a more monopolistic economy...
...However, three critics who are not unfriendly have made the same observation: Robert Heilbroner in the New York Review of Books, David Horowitz in the Monthly Review, and Ernest Mandel in the International Socialist Review, not to speak of the sharp attacks published in Science and Society and Studies on the Left...
...that no plurality of national, social, industrial, and other divisions exists...
...What, finally, is this "surplus" which the capitalists try so desperately to get rid of...
...The stultifying boredom of leisure, the degeneration of what goes by the name of culture . . . Under these circumstances it is easy to understand why sexuality again has come to the fore as the increasingly predominant means of satisfying libidinous drives...
...they devote a third of their space to the cultural, political, and social aspects of monopoly capital...
...But they go further...
...Let it be said from the outset that in scholarship they don't compare with either and are not on a par even with their own earlier efforts...
...Otherwise it is incomprehensible that two experienced economists failed to see that their terminology and methodology is faulty...
...It is based on the idea that "the oligarchy" is a monolith acting in unison...
...I have seen similar complaints in the literature of the ages: sixth century B.C., fourth A.D., the middle ages, and eighteenth century...
...This is so elementary that we must ask ourselves whether perhaps we misunderstand the authors...
...under monopoly, on the contrary, prices may rise while costs are falling, and the "surplus" which is thus created will spread like a cancer through the whole body of society...
...Again, no connection with the "surplus," and indeed the authors state that the limit of increasing defense expenditures may have been reached for technical reasons...
...It is therefore with particular attention that one turns to the chapter on "Militarism and Imperialism...
...Votes are the nominal source of the political power, and money is the real source...
...for the capitalistic economy, however, it only matters that these services are sold, and in fact the pyramiding of these unnecessary new industries has created a new structure of consumption and new outlets for the "surplus" they create...
...but first, I shall ask how the authors themselves use it...
...Again—utter failure to relate the economic theory to the analysis of the society...
...Or perhaps another structural change in response to the increasing productivity of labor and the displacement of factory production workers while service industries increase...
...military needs expanded rapidly during the post-war period, we have to go beyond [1] a theory based on past capitalist experience"— and after a lengthy demonstra tion of the congenital peacefulness of the Soviet Union, the real reason for "the oligarchy's need" is revealed as "the same implacable hatred of socialism, the same determination to destroy it that has dominated the leading nations from the time of the Bolshevik revolution in 1917...
...For every producer is a customer, and the economic planner's job consists precisely in making sure that this automatism is not broken...
...Under monopoly capitalism . . . the whole vital process of sublimation is in danger of collapsing...
...Having neglected to discuss the new techniques of social, political, and economic stabilization, the authors can lightly dismiss as "exceptions" the "temporary" improvements in the situation of the Negroes, or the government's manipulation of GNP...
...Or perhaps just the hundred-year trend of rising rates of surplus value which started long before monopoly had been described and before Baran & Sweezy discovered it...
...The same point must be raised against Baran & Sweezy's treatment of the race issue...
...Strangely enough, the chapter does not tell us...
...There is not even a definition of "neo-colonialism...
...While Baran Sc Sweezy have no hope that the corrupted American worker may change the system, they are confident that the American Negro will overthrow it as part of the general anti-imperialistic uprising of the colonial nations...
...This is indeed the core and raison d'être of the book, which is dedicated "To Che...
...All political activities and functions...
...The conception of "surplus" makes sense only if it is under stood as a theoretical underpinning of the colonial rebellion against white monopolistic domination in the world...
...Surely, in a book which claims to be in the Marxian tradition (though superseding Marx in many respects), one must expect an explanation of the mechanism that translates the economic law into concrete decisions—and indeed the authors raise this claim when they scorn "bourgeois economists" for divorcing micro-economics from macroeconomics...
...It is not Marx's surplus value—once a useful tool to analyze the difference between input and output and the possible sources of a market glut...
...Since both authors once knew better, one can only surmise that they constructed their economic model to suit their political creed...
...Baran & Sweezy, however, need this "crisis-of-Western-civilization" wail because they hope that dementia will eventually precipitate capitalism into self-destruction, and neurosis will prevent its agents from defending their system...
...can be carried out only by means of money, lots of money...
...Instead, "to explain why the U.S...
...Since they doubt that any new invention as great as the steam engine, the railroad, and the automobile will come along, they cannot see that the great needs of our age arise precisely in that area of public (i.e...
...But they are not even successful in giving this conflict a solid economic foundation, and in the last resort they do no more than substitute the coming third world war for the world revolution which failed to come...
...In point of fact, there is no "monopoly" which is not competing with other monopolies— say the steel industry with the plastic materials industry—and no governing elite which is not pressed by another elite that would take its place, even in China...
...this would be as it should if in these chapters their reading were not even more superficial, and if the connection between their economics and their sociology were comprehensible at all...
...Nor do they see much hope in conditions, developments or devices that in earlier periods helped capitalism out of the doldrums—a rapid population increase, decisive new inventions, expansion into underdeveloped areas...
...This crude, simplistic view is not mitigated by any mention of trade unions, pressure groups, pluralism, or the conflict character of social systems...
...At worst, we have oligopoly in the economy, competing elites in the leadership of society, and political pressures which force concessions from "bourgeois democracy...
...To prove that capitalism is now bound to collapse or, perhaps worse, to stagnate and lapse into barbaric wars, the authors state that monopoly has wrought a decisive change...
...The final chapters, which deal with the "quality" of monopolistic society and the "irrationality" of the system, generally bemoan "the emptiness, degradation and suffering which poison human existence," and in particular the deteriora tion in marital relations...
...The latter seems to be seen entirely in terms of brute political power which also uses monopolistic means of economic domina tion...
...hence, their conclusion that integration cannot work "within the confines of the system" is not convincing (though it may be true for other reasons and beyond the system...
...Again, it may well be that the new elites which compete for leadership in this mixed politico-economic management will fail to solve our social problems—but not because they cannot get rid of the surplus or because they are more monopolistic than their grandfathers of laissez faire...
...While one may subscribe to every indictment they hurl against American society, they fail to make it clear how the Negro's plight is specifically related to the oligopoly structure of American capitalism...
...But in an appendix none of these definitions is adhered to...
...for we have been told that imperialism is one of the three methods by which the capitalists try to get rid of "the surplus...
...rather, by adding all "property income," all government expenditures, and all costs of distribution, styling, finance, insurance, legal and similar services, the "surplus" has been found to rise from 40 per cent in 1933 to 56 per cent in 1964...
...Instead of a precise analysis of surplus profit and surplus capital, therefore, we get a sentimental distinction between "Oligarchy" (including its retainers, the white workers) and "the poor" which apparently include 99 per cent of the population in underdeveloped countries...
...Almost unanimously the critics have pointed out that the concept of "surplus" is vague and has neither hands to grasp any reality nor feet to climb any speculative mountain...
...Free competition used to keep profits low and hence helped maintain the equilibrium...
Vol. 14 • May 1967 • No. 3
