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Remarks on Paul Sweezy on the Occasion of His Receipt of the Veblen-Commons Award

John Bellamy Foster teaches sociology at the University of Oregon and is a member of the board of the Monthly Review Foundation. This paper was presented at the Veblen-Commons Award Ceremony, annual meeting of the Association for Evolutionary Economics, New York, NY,on January 3,1999. It is reprinted here by permission from the Journal ofEconomic Issues, vol. 33, no. 2 (June 1999), pp. 223-228.

I would like to quote at length from Paul Samuelson, who wrote a piece exactly thirty years ago for Newsweek magazine about a time thirty years before that “when giants walked the earth and Harvard Yard”:

When Diaghilev revived his ballet company he had the original Bakst sets redone in even more vivid colors, explaining, “so they would be as brilliant as people remember them.” Recent events on college campuses have recalled to my inward eye one of the great happenings of my own lifetime.

Joseph Schumpeter, Harvard’s brilliant economist and social prophet, was to debate with Paul Sweezy on “The Future of Capitalism.” Wassily Leontief was in the chair as moderator, and the Littauer Auditrium could not accommodate the packed house.

Let me set the stage. Schumpeter was a scion of the aristocracy of Franz Josef’s Austria. It was Schumpeter who had confessed to three wishes in life: to be the greatest lover in Vienna, the best horseman in Europe, and the greatest economist in the world. “But unfortunately,” as he used to say modestly, “the seat I inherited was never of the topmost caliber.”

enfant terrible of the Austrian school of economists. Steward to an Egyptian princess, owner of a stable of race horses, onetime Finance Minister of Austria, Schumpeter could look at the prospects for bourgeois society with the objectivity of one whose feudal world had come to an end in 1914. His message and vision can be read in his classical work of a quarter-century ago,Capitalism, Socialism, and Democracy.

Whom the Gods Envy

Opposed to the foxy Merlin was young Sir Galahad. Son of an executive of J.P. Morgan’s bank, Paul Sweezy was the best that Exeter and Harvard can produce…[and] had early established himself as among the most promising economists of his generation. But tiring of the conventional wisdom of his age, and spurred on by the events of the Great Depression, Sweezy became one of America’s few Marxists. (As he used to say, you could count the noses of U.S. academic economists who were Marxists on the thumbs of your two hands: the late Paul Baran of Stanford; and, in an occasional summer school of unwonted tolerance, Paul Sweezy.)

Unfairly, the gods had given Paul Sweezy, along with a brilliant mind, a beautiful face and wit. With what William Buckley would desperately wish to see in the mirror, Sweezy faced the world. If lightning had struck him that night, people would truly have said that he had incurred the envy of the gods.

So much for the cast. I would have to be William Hazlitt to recall for you the interchange of wit, the neat parrying and thrust, and all made more pleasurable by the obvious affection that the two men had for each other despite the polar opposition of their views.1

The debate on that occasion sixty years ago, which Samuelson so vividly recalled thirty years later, was part of the great stagnation debate of the late 1930s. Both of the famous protagonists—Sweezy, whose first professional economics article appeared in the Review of Economic Studies when he was twenty-three, and who, by his late twenties, already had a host of brilliant publications to his credit, was as much an enfant terrible as Schumpeter had been—agreed that rapid growth under capitalism had given way to economic stagnation. But for Schumpeter, the causes were largely political: the downfall of classical liberalism and the growing alienation against the system—of which Sweezy was the “talisman,” while for Sweezy they could be attributed to the economic flaws of the accumulation process: the real barrier to capital was capital itself.

The irony in all of this is that Samuelson’s recollections in 1969 of the Schumpeter-Sweezy debate were not brought on by any awareness of approaching stagnation at the time that he himself was writing. Indeed, Samuelson—the first U.S. economist to be granted the so-called Nobel Prize in Economics—was dismissive of the whole issue. As the 1960s came to a close, he remained the cheerful prophet of endless economic prosperity created by the neoclassical-Keynesian synthesis. No one could have been more completely unaware of the fact that the long economic boom was actually at an end and decades of deepening stagnation were to follow. Rather, Samuelson’s 1969 recollections were engendered by growing upheavals on college campuses as a result of the Vietnam War and by the emergence of a group of young radical economists who drew their inspiration from Monopoly Capital (1966) by Paul Baran and Paul Sweezy. For Samuelson, writing in his Newsweek column in 1969, Schumpeter had turned out to be entirely wrong about economic stagnation but right about the fact that Sweezy—who by then was revered throughout the third world, as well as by young radical economists in this country, as the greatest U.S. opponent of imperialism—personified a form of political alienation that would increasingly endanger the system.

From our vantage point today—another thirty years down the road—the situation is reversed. It is neither political alienation that seems most immediately relevant today (and which brings the work of Paul Sweezy to mind) nor even militarism and imperialism, though we would be wrong to ignore these issues, but rather economic stagnation: the very question that occupied Sweezy and Schumpeter sixty years ago and that Baran and Sweezy had sought to resurrect in Monopoly Capital, just prior to the collapse of the great post-Second World War boom. The argument of that work was elegant in its simplicity and has been further elaborated by Sweezy (together with his Monthly Review coeditor Harry Magdoff) over the last three decades. For Sweezy, stagnation, rather than rapid growth, was the normal state of monopoly capitalism, because of the tendency of the investment-seeking surplus (or potential savings) to rise relative to the profitable outlets for investment. The natural tendency of the system was therefore toward excess capacity and a secular decline in investment. (The basic line of argument was, of course, derived from Marx, Keynes, and Kalecki.) What had to be explained, then, were the exceptional conditions that had led to what Baran and Sweezy argued was a temporary post-Second World War boom. These included: (1) the epoch-making stimulus provided by the second great wave of automobilization in the United States (also encompassing the expansion of the glass, rubber, steel, and petroleum industries, the building of the interstate highway system, and the rapid suburbanization of the United States); (2) the rise of military Keynesianism in the Cold War period, including the economic boosts provided by two regional wars in Asia; (3) the vast expansion of what Baran and Sweezy (inspired in part by Veblen) called the “sales effort” and finally the historic augmentation of the role of finance (an issue that was raised in Monopoly Capital, but in retrospect, not given nearly enough attention).

By analyzing the way in which the economic surplus was absorbed through these and other channels, Baran and Sweezy enlarged the usual bounds of economics to take into account a much larger, more institutional context. The essential point, though, was that these stimuli would prove short-lived and that the economy would once again find itself immersed in stagnation (something that, we now know, began to materialize shortly after Monopoly Capital was published). In subsequent analyses, Sweezy and Magdoff investigated the way in which an immense financial superstructure arose as a result of this stagnation within production as the surplus sought alternative outlets, leading to greater and greater instability as the system took on an increasingly speculative character. This problem was not merely confined to the advanced capitalist world, but extended in various ways through the medium of imperialism to the periphery itself.

There is no doubt of the relevance of this analysis today when one only has to pick up a business or financial publication on any day of the week to read about overcapacity, stagnation, world economic crisis, and financial instability. Paul Sweezy’s name, of course, seldom arises among establishment economists today. (A Monthly Review economist met a mainstream economist at a party a number of years ago and mentioned Paul Sweezy. The mainstream economist exclaimed, “Oh, Paul Sweezy, too bad he died so young!”) But this failure to recognize Sweezy’s formidable and continuing contribution to economic thought—the immensity of which puts him in league with such thinkers as Veblen and Schumpeter—is nothing but a sign of the stagnation that has encroached upon economics itself, which has been in decline as a meaningful form of inquiry since its high point this century—the publication of Keynes’s General Theory. Nowhere is this stagnation of economics more evident than in the refusal of orthodox economists to address openly the issue of economic stagnation, despite nearly three decades of slow growth, rising excess capacity, and financial explosion.

It would be impossible in the short time allotted to me to provide a comprehensive listing of the contributions that Sweezy has made to the historical analysis of our time. But a few highlights deserve mention. He is renowned worldwide for his analysis of the Great Depression; his treatment of oligopoly and monopoly capital (some of you may recall his classic article of the 1930s, “Demand Under Conditions of Oligopoly”); his theory of economic stagnation and financial explosion; his contribution to the theory of dependency and imperialism; his critique of post-revolutionary society; his historical treatments of economic thought; his initiation of the debate on the transition from feudalism to capitalism; his exegeses on Marxist theory; his intellectual attacks on militarism; his contribution to the theory of the state; his analysis of class; his inquiry (following Oliver Cox) into race and monopoly capitalism; his discussions of capitalism and ecology; and his explorations of the future of socialism. (He started saying in the late 1970s, putting this in print by 1980—years before Gorbachev came to power—that the Soviet Union was caught in a condition of economic stagnation that was worse than that of the United States and equally irreversible. I have to admit that I myself doubted this view, which went so much against the conventional wisdom of the time. I looked at both the Soviet data and the CIA data, and the conditions of the Soviet economy, though deteriorating, did not seem that bad. Later on, though, we learned that the official data on both sides of the Cold War divide had been wrong, while Sweezy’s assessment had been correct.)2 Every world-historical political-economic event from the stock market crash of 1929 to the world economic crisis of 1998-1999 has been discussed in Paul Sweezy’s work, which constitutes not only a running commentary on our times, but also perhaps the most systematic treatment of the origins, development, and decline of capitalism and the prospects for the rise of socialism to be found in the writings of any thinker since Schumpeter himself.

A few years ago, I heard Cornel West compare the role of Paul Sweezy and Harry Magdoff in our time to that of Voltaire and Rousseau in theirs. This compliment, though an extraordinary one, was not simply hyperbole, since Paul Sweezy is certainly one of the greatest, most courageous enlighteners of our day. Like other revolutionary thinkers in the past, he has often had to struggle against a repressive political and economic climate. It was Sweezy who, during the McCarthy era, went all the way to the U.S. Supreme Court (in Sweezy v. New Hampshire) rather than name names. Because of his refusal he was declared in contempt of court and consigned to the county jail for failing to comply with a New Hampshire court order demanding that he give information with regard to the membership and activities of former U.S. Vice President Henry Wallace’s Progressive Party, the contents of a guest lecture that he had delivered at the University of New Hampshire, and whether or not he believed in communism. Declining to take the Fifth Amendment, Sweezy chose instead to adopt a principled silence in response to a series of questions that he contended, before the U.S. Supreme Court, were designed to repress “political dissent.” As Sweezy told the U.S. Supreme Court justices, “If the very first principle of the American constitutional form of government is political freedom—which I take to include freedoms of speech, press, assembly, and association—then I do not see how it can be denied that these investigations are a grave danger to all that Americans have always claimed to cherish. No rights are genuine if a person, for exercising them, can be hauled up before some tribunal and forced under penalties of perjury and contempt to account for his ideas and conduct.” Responding to such arguments by Sweezy and his counsel, the U.S. Supreme Court under Chief Justice Earl Warren overturned the New Hampshire Supreme Court in 1957 in what is still regarded to be perhaps the single most important legal decision on academic freedom ever to be issued in the United States.3

Such acts of intellectual integrity, courage, and irrepressible search for the truth have characterized Paul Sweezy’s entire life. Through his unrelenting efforts as coeditor of Monthly Review, now in its fiftieth year, Sweezy has helped nurture critical thought throughout the world over the entire second half of the twentieth century, attracting such important intellectuals and radical political figures as Albert Einstein, W.E.B. Du Bois, Che Guevara, Lorraine Hansberry, I.F. Stone, C. Wright Mills, Herbert Marcuse, Michal Kalecki, Joan Robinson, Noam Chomsky, Eduardo Galeano, Isabel Allende, and Samir Amin. Sixty years after the events that Samuelson portrayed, Paul Sweezy remains what Schumpeter called him—a “talisman” of radical dissent in the United States. In honoring Paul Sweezy today, we can truly say that giants still walk the earth—though maybe not quite so often in Harvard Yard.


  1. Paul Samuelson, “Memories,” Newsweek, June 2, 1969, p. 84.
  2. Paul M. Sweezy, Post-Revolutionary Society (New York: Monthly Review Press, 1980), pp. 150-51.
  3. U.S. Supreme Court, “Sweezy v. New Hampshire,” October Term, 1956, U.S. Reports, vol. 354 (1957), pp. 234-270.
1999, Volume 51, Issue 04 (September)
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