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Monopoly Capital at the Half-Century Mark

[Monopoly Capital] represents the first serious attempt to extend Marx’s model of competitive capitalism to the new conditions of monopoly capitalism.

Howard J. Sherman, American Economic Review, 19661

A list of Marxist writers on political economy [since the Second World War] whose works are known to a relatively large number of activists would be very short, at least until the beginning of the 1960s. Three names would stand out: Sweezy, Dobb, and Baran. It is not by chance that the label of “neo-Marxist’ has been applied to their works, so that they appear to be the only inheritors of the tradition of Marxist political economy. Within the German student movement, for example, Baran and Sweezy seem to be the two theoreticians whose works have been best received and most widely read.

Mario Cogoy, Les Temps Modernes, 19722

A half-century after its publication, Paul Baran and Paul Sweezy’s Monopoly Capital remains the single most influential work in Marxian political economy to emerge in the United States.3 Like any great theoretical work that has retained its influence over a long period of time, Monopoly Capital‘s significance today derives not simply from the book itself, but from the complex debates that it has generated. In recent years, interest in Baran and Sweezy’s magnum opus has revived, primarily for two reasons: (1) the global resurgence of debates over the constellation of issues that their work addressed—including economic stagnation, monopoly, inequality, militarism and imperialism, multinational corporations, economic waste, surplus capital absorption, financial speculation, and plutocracy; and (2) the new, fundamental insights into the book’s origins resulting from the publication of its two missing chapters and the public release of Baran and Sweezy’s correspondence.

I shall divide this introduction on the influence and development of the argument of Monopoly Capital over the last fifty years into three parts: (1) a brief treatment of the book itself and its historical context; (2) a discussion of responses to Monopoly Capital, and of the development of the tradition that it represented, during its first four decades, up to the Great Financial Crisis that began in 2007; and (3) an assessment of the continuing significance of monopoly capital theory in the context of the historical period stretching from the Great Financial Crisis to the present.

The Work

Monopoly Capital was subtitled An Essay on the American Economic and Social Order, referring both to the book’s provisional character and historical limitations on its scope. Baran and Sweezy made it clear that their intention was not to try to replace Marx’s Capital itself, but rather to raise the question of modifications in the system’s laws of motion under monopoly capitalism. For example, Monopoly Capital did not include an analysis of the labor process—instead, it simply assumed the continuing validity of Marx’s own theory of labor exploitation. Their book took its primary significance from the changing character of the individual unit of capital, or the typical capitalist firm, over the course of the twentieth century. As a result of such changes, they argued, monopoly must now be “put…at the very center of the analytical effort” in any attempt to understand the latest stage of capitalist development. In this way they sought to give a sharper meaning to what thinkers like Rudolf Hilferding and V. I. Lenin had referred to as “finance capitalism” and “the monopoly stage of capitalism.”4

The dominance of monopolistic accumulation at the center of the system meant that the whole nature of competition under capitalism had been altered, taking on the form of oligopolistic rivalry. Individual firms or small clusters of firms, protected by barriers to entry and by the sheer scale of their operations, gained extensive control over price, output, investment, and innovation. Such giant firms increasingly operated on a global scale as multinational corporations, and attained significant leverage over the state. These new, mammoth entities were long-lived accumulation mechanisms, constantly mutating into larger, more centralized corporations. The typical firm was not a price taker but a price maker. Genuine price competition or price wars of the kind that would destabilize the co-respective relations between oligopolistic enterprises was effectively banned. Above all, such firms enjoyed widening profit margins and typically grew in size relative to the economy as a whole. It was these features of the firm under monopoly capitalism that led Baran and Sweezy to introduce their thesis of “the tendency of surplus to rise”—monopoly capitalism’s inversion of Marx’s famous theory of the tendency of the rate of profit to fall.5

The economic surplus was conceived in its simplest definition as the difference between the costs of production and the price of the actual (or potential) output generated.6 Under the monopoly stage of capitalism, the primary contradiction at the center of the system shifted from the generation of surplus to its absorption. Capital continually produced more surplus than it could absorb in existing and prospective markets. The result was a tendency to economic stagnation, since surplus (ex ante) that was not absorbed meant economic losses to the system, pulling down growth.

Under monopoly capital, therefore, the economy confronted chronic problems of surplus absorption, excess capacity, unemployment, and underemployment. “The normal state of the monopoly capitalist economy,” Baran and Sweezy contended, “is stagnation.”7 Even technological innovation could not suffice to overcome this tendency, since apart from what they called “epoch-making innovations” on the level of the steam engine, the railroad, or the automobile—which changed the whole spatial and temporal context of production while also expanding demand—innovations tended to be endogenously controlled by monopoly capital itself, and introduced only in accordance with the investment needs of dominant corporations. (None of this meant that Baran and Sweezy underestimated technological change itself. In 1957 Sweezy was the anonymous author of one of the most prescient analyses of technological development of the age, in the form of a pamphlet entitled The Scientific-Industrial Revolution, written for the Wall Street corporate research group Model, Roland and Stone.)8

Yet the monopoly capitalist economy did not simply sink into a deep depression. Instead, the system developed its own internal and external defenses, promoting economic expansion through economic waste and state spending—the latter often in the form of unproductive expenditures, such as military spending. The result was a growing irrationality at every level of the economy—from the sales effort to product obsolescence to socially inefficient and meaningless products to the expenses of empire. Such waste resulted in the squandering of human lives and effort, and the transformation of capitalism’s “creative destruction,” as Joseph Schumpeter famously called it, into a more pervasive, uncreative destruction—toward the products of human labor, the environment, and ultimately humanity itself.

Assessing the scale of waste in the economy, Baran and Sweezy returned to the old concept of unproductive labor, extending it to account not only for what was unproductive from the standpoint of the individual capitalist (i.e., not producing surplus value), but also from the standpoint of capitalism in general (in which the waste of monopolistic competition, e.g. advertising, became visible), as well as from the standpoint of society as a whole (i.e., from the critical view of a more rationally planned, socialist society).9

The impact of Baran and Sweezy’s Monopoly Capital on readers in the late 1960s and early 1970s had much to do with the way it engaged with, but also transcended, the Keynesian Revolution, associated with John Maynard Keynes’s 1936 General Theory of Employment, Interest and Money—a work which had given new life to orthodox economics, enhancing the role of the state in the management of the economy. At the heart of Keynes’s incomplete break with neoclassical economics (which later allowed his analysis to be reincorporated into neoclassical theory in what Joan Robinson aptly called “bastard Keynesianism”) was his critique, along lines first developed by Marx, of Say’s Law of markets, whereby supply was thought to create its own demand.10 Say’s Law had suggested that economic crises could only stem from supply-side pressures—that is, from increased costs, particularly of labor—and never from the demand side, i.e., from a lack of effective demand. Keynes decisively demonstrated the logical fallacy of Say’s Law, and envisioned a new role for governments in the promotion of effective demand through state spending.11

However, the major breakthroughs in the Keynesian Revolution were first developed not by Keynes but by the Polish Marxist economist Michał Kalecki, several years prior to the publication of the General Theory. (Ironically, Kalecki was often seen as a mere follower of Keynes and a developer of his ideas.) In a series of works from the early 1930s through the 1960s, Kalecki developed an analysis of demand-side weaknesses in the capitalist economy, based in the concepts of class and monopoly. He put particular stress on the rise in “the degree of monopoly.”12 Kalecki’s close colleague at the Oxford Institute of Statistics during the Second World War, the Austrian economist Josef Steindl, was to extend this analysis in his 1952 Maturity and Stagnation in American Capitalism, connecting the growth of monopolistic accumulation to the tendency toward economic stagnation.13

It was on the basis of Kalecki and Steindl’s work in particular—as well as their own earlier analyses, in Sweezy’s The Theory of Capitalist Development (1942) and Baran’s The Political Economy of Growth (1957)—that Baran and Sweezy developed the distinctive critique of the post-Second World War U.S. capitalist system that distinguished Monopoly Capital.14 Going beyond Kalecki and Steindl, they advanced an analysis that was as political as it was economic. The book’s focus on militarism and imperialist interventions transformed them from mere accidental historical developments—as in liberal thought and even in many radical readings—into structurally necessary elements of capitalism’s global expansion. The real causes of the Vietnam War were laid bare. The tactics of Madison Avenue, and the rise of the so-called consumer society were linked with a powerful critique of the sales effort under monopoly capitalism. Institutional racism and its connection to imperialism were exposed. In this sense, Baran and Sweezy offered a fairly complete “essay-sketch” of the dominant issues of the age, in line with the epigraph to their book, Hegel’s famous statement that “the truth is the whole.”15

The most obvious problem facing Marxian theory in the 1960s was the failure of the working class in the industrial capitalist economies to continue their struggle against capitalism, a failure that had become even more apparent after the system rose out of the Great Crisis represented by the First World War, the Great Depression, and the Second World War. Although revolutions had broken out in the periphery and semi-periphery of the system in Russia and the third world, the working classes in the advanced capitalist centers had become increasingly reformist and even conservative. Baran and Sweezy’s analysis, while continuing to sympathize with working-class struggles in the United States, particularly among its most marginalized populations, gave more attention to revolutionary potential of third world peoples struggling against imperialism. Nevertheless, the tendency toward stagnation suggested that continuing economic contradictions at the center of the system could conceivably lead at some point to a more rebellious working class there as well.

In its clarity of thought and style—a quality that even the Economist commended—Monopoly Capital was able to present many of the complex contradictions associated with the rise of the giant corporation in easily accessible terms.16 Still, most readers were mainly influenced by Baran and Sweezy’s more obvious historical observations, and failed to recognize the depth of the theory behind these observations, or their larger implications. Subsequent radical thought was slow to recognize the book’s subtler insights and to incorporate its ideas creatively and constructively. In each successive decade, Monopoly Capital was read differently, reflecting nothing so much as the changing historical conditions of the times. The range of responses to their magnum opus by generations of radicals reveals much about the developing political-economic critique of capitalism since the Second World War.

The Debate on Monopoly Capital: The First Four Decades


Paul Sweezy had early on established a strong reputation as an assistant professor of economics at Harvard, publishing pioneering work in the theory of oligopolistic pricing and other areas. In 1942 Sweezy had written The Theory of Capitalist Development, widely considered the finest synthesis of Marxian economics of its time. On being released from military service at the end of the Second World War, he resigned his position at Harvard with more than two years still remaining on his contract, forsaking the possibility of tenure in order to concentrate on his writing and his hope of eventually starting a socialist magazine. (Four years later, in May 1949, the first issue of Monthly Review appeared, edited by Sweezy and Leo Huberman.)17

From 1949 until his death in 1964, Paul Baran was a professor of economics at Stanford University—and the only Marxist economist to hold a tenured position at a major U.S. university. In 1957, he published The Political Economy of Growth, helping to launch dependency theory as a radical response to mainstream development economics in the post-Second World War period.

Considering their respective reputations, Baran and Sweezy’s joint work was eagerly awaited by critics of the system all over the world. It did not appear suddenly: the book had a gestation time of about ten years, and only came out in 1966, two years after Baran’s death. Sweezy prepared the final manuscript based on chapters that they had authored individually and then reworked together, reluctantly leaving out two additional chapters drafted by Baran that had not been sufficiently revised by the two of them. (These two chapters, “Some Theoretical Implications” and “The Quality of Monopoly Capitalist Society: Culture and Communications,” were published in Monthly Review in July-August 2012 and July-August 2013, respectively.)18 In 1965, Sweezy explored the possibility of publishing Monopoly Capital with the mainstream British publisher McGibbon and Kee. Although the book received a highly favorable external reviewer’s report which was passed on to Sweezy, for reasons still unclear, no contract was signed, and the book was published by Monthly Review Press on March 26, 1966, the second anniversary of Baran’s death.19

The initial response to Monopoly Capital was startling, especially for a work of Marxian economics during a tense phase of the Cold War. It was reviewed in many of the leading journals of the economic profession, both in the United States and abroad, including the American Economic Review, Journal of Political Economy, Econometrica, Economic Journal, and elsewhere. Beyond the academy, it attracted notice in the New York Review of Books, the New York Herald Tribune, the Economist, the Nation, New Left Review, Science and Society (which published a full symposium on the work), and other outlets. Its sales were large for a book of its kind, and extraordinary for a work in Marxian economics at the time, reaching 50,000 copies in its English-language edition in just the first five years, and in the same period it was translated into eight additional languages.20

Monopoly Capital had an extraordinary effect on the New Left emerging in the United States in the late 1960s and early 1970s, and the book in many ways provided the primary basis on which radical political economy developed in the period—particularly in economics and sociology. This was most apparent with the founding of the Union for Radical Political Economics (URPE) in 1968 and the appearance shortly after of the Review of Radical Political Economics. In April 1971, Sweezy delivered the prestigious Marshall Lecture at Cambridge University, entitled “On the Theory of Monopoly Capitalism.”21

With the advent of economic crisis in 1974–75, URPE brought out its first “economic crisis reader,” a collection of essays called Radical Perspectives on the Economic Crisis of Monopoly Capitalism, in which the influence of Baran and Sweezy’s analysis was evident throughout. Part three of the 1978 edition of another URPE-related reader, The Capitalist System (first published in 1972), edited by Richard C. Edwards, Michael Reich, and Thomas E. Weisskopf, was devoted to “Monopoly Capitalism in the United States.” It contained selections by Baran and Sweezy, Harry Braverman, Douglas Dowd, William Domhoff, Stephen Hymer, David Kotz, James O’Connor, and others.22

Other major works in Marxian political economy in the 1960s and early 1970s inspired in part by Monopoly Capital reinforced and extended the general critique that it had initiated. In 1969, Harry Magdoff, who, following Leo Huberman’s death in 1968, had joined Sweezy as coeditor of Monthly Review, published The Age of Imperialism, providing a detailed economic analysis of U.S. imperialism. James O’Connor’s 1973 The Fiscal Crisis of the State offered a widely influential radical approach to state spending, building on the idea of the division of the economy into competitive and monopoly sectors. Harry Braverman’s 1974 Labor and Monopoly Capital brought Marx’s critique of the labor process into the late twentieth century, integrating it with Baran and Sweezy’s Monopoly Capital—filling the gap left by Baran and Sweezy’s own neglect of the labor process. Samir Amin’s Accumulation on a World Scale, which appeared in an English edition in 1974 (drawing on his doctoral dissertation in the 1950s) linked Monopoly Capital to the global theory of underdevelopment, overlapping in this respect with Baran’s Political Economy of Growth. Stephen Hymer’s definitive work The Multinational Corporation, which interfaced with Baran and Sweezy’s work, was published posthumously in 1979.23

Of course, not all early commentaries on Monopoly Capital were favorable. Because of its influence among young radical economists, the book became a target of neoclassical economics. For example, in two March 1973 op-eds in the New York Times, leading mainstream economists Paul Samuelson and Kenneth Arrow faulted Sweezy for not acknowledging that Keynesian economics had effectively ended the business cycle—a charge Sweezy countered by pointing to the obvious fact that the economy owed much of its post-Second World War success to huge military spending driven by the Korean and Vietnam Wars, which helped boost not only U.S. capitalism but the advanced capitalist system generally.24 In The Political Economy of the New Left (1971), a book that drew much attention in the early 1970s, orthodox Swedish economist Assar Lindbeck focused his criticism on Baran and Sweezy’s Monopoly Capital, claiming that a Keynesian welfare state could resolve the systemic contradictions that they described. A 1977 edition of Lindbeck’s work included supporting commentaries by Samuelson and James Tobin, together with radical responses by Sweezy, Hymer, and Frank Roosevelt, dramatizing the impressive range of concerns raised by left thinkers.25

Baran and Sweezy’s analysis also drew fire on the left—particularly with the “back to Marx” movement of the 1970s and the emergence for the first time of Marx’s law of the falling rate of profit as a major tradition in Marxian crisis theory. Thinkers like Paul Mattick, Mario Cogoy, and Ernest Mandel criticized Baran and Sweezy for ostensibly abandoning Marx’s value theory, replacing the concept of surplus value with a more broadly defined “surplus,” and for advancing an “underconsumptionist” theory of crisis.26 These theorists reverted to the supply-side, falling-rate-of-profit theory of capitalist crisis, in contradistinction to Baran and Sweezy’s overaccumulation and stagnation perspective, with its emphasis on problems of demand. Sweezy responded by denying that he and Baran had ever rejected Marx value theory, or that their concept of economic surplus was anything more than a means of adapting and extending Marx’s theory of surplus value to changing historical conditions. Sweezy argued in his essay “Some Problems of Capital Accumulation” that the question of whether the profit rate rose or fell was an empirical and historical matter, not intended by Marx as a suprahistorical prophesy, and that different answers to this question were equally compatible with Marx’s overall analysis of capital accumulation and crisis.27


As noted above, Baran and Sweezy’s analysis in Monopoly Capital had pointed to stagnation as “the normal tendency of monopoly capitalism.” Logically, this meant that it was not necessary to account for the appearance of economic crisis or slow growth (unlike mainstream theory, which assumed that rapid economic growth was the norm). Rather, from the standpoint of stagnation theory, the chief task was to explain the post-Second World War boom itself, viewed as an exceptional period of sustained high growth. Baran and Sweezy addressed this issue by emphasizing such factors as (1) the growth of the sales effort; (2) the second wave of automobilization in the U.S. economy, representing the continuation and eventual petering-out of an epoch-making innovation; and (3) the expansion of military and imperial spending, including two regional wars in Asia. They also made a brief mention of the growth of finance as a factor roughly equivalent to the sales effort in absorbing economic surplus. Sweezy and others associated with monopoly capital theory saw the economic crisis of the mid-1970s as the result of the waning of such countervailing factors to stagnation.

Nevertheless, disagreements within the left widened over the course of the 1970s. The 1975 crisis resulted in a period of stagflation, as governments sought to escape the crisis through increased spending, generating inflation even amid stagnation—a possibility that Baran was one of the few economists on the left to foresee.28 This in turn led to a crisis of Keynesian, demand-side economics and the rise of monetarism and supply-side economics in its place. In the supply-side view, the crisis was associated with decreasing profitability caused by rising wage costs, a slowdown in productivity growth, and excessive, inflationary government spending.

This shift within liberal economics toward a supply-side perspective encouraged similar criticisms on the left, directed at those Marxian theories that had focused on the growing exploitation of labor and inadequate demand—most notably Monopoly Capital. Baran and Sweezy were increasingly accused, particularly amid the resurrection of Marx’s falling rate of profit theory, of promoting a crude “underconsumption” theory, in their emphasis on a rising rate of exploitation (the tendency of the surplus to rise) as the central contradiction of the capitalist economy and the source of demand-side contradictions.29

Reflecting the changes in mainstream theory, left analyses put renewed emphasis on Marxian supply-side theories of crisis, consisting of the falling rate of profit theory, and related profit-squeeze theories.30 Initially, these left supply-side perspectives focused on the business cycle. The profit-squeeze approach—promoted in the United States by theorists like Samuel Bowles, David Gordon, and Thomas Weisskopf, and in Britain by Andrew Glyn and Bob Sutcliffe—mirrored the establishment analysis of the era, even as it identified politically with the working class.31 In this view, the long-term crisis of the 1970s could be seen as a result of the rise in the labor share of output at the peak of the business cycle in the mid-1960s expansion.32 Hence Glyn, in an article published in the New York Times, referred to the 1970s conjuncture as a “wage-push crisis of capitalism.”33 However, such a perspective, which seemed almost intuitively obvious to those without much background in economics, downplayed the fact that a rise in the labor share of output near the peak of the business cycle characterizes every cyclical peak. It could not therefore be expected in itself to explain the cycle as a whole, much less the long-term economic trend or the fundamental contradictions of accumulation in a given period.34 The deep decline in manufacturing capacity utilization in the U.S. economy and the concomitant decline in investment did not occur until the late 1960s and early 1970s, associated with the diminishing war effort in Vietnam, which preceded the 1974–75 crisis.35

A further significant change in radical thought of this period, especially in responses to Monopoly Capital, was motivated by the growing role played by foreign multinational corporations in key areas of the U.S. economy, such as automobile production. For those who interpreted Baran and Sweezy’s analysis in terms of the relatively static structure associated with John Kenneth Galbraith’s decidedly non-radical New Industrial State, any intrusion of foreign multinationals into the U.S. economy seemed to signal a new world of virtually unlimited competition, and the consequent breakdown of monopoly capital. Thus in 1998 Robert Brenner concluded in The Economics of Global Turbulence that Baran and Sweezy’s analyses of “‘monopoly capital’ and ‘capitalist stagnation'” consisted simply of “reifications of quite temporary and specific aspects of the U.S. in the 1950s,” which were to be largely erased, he claimed, in subsequent decades by the dynamism of international competition.36

What such analyses overlooked was that this increased competition by multinationals, though real, was a form of international oligopolistic rivalry, part of a larger global process of concentration and centralization, which could only lead to a relatively small number of corporations dominating the world economy—exactly as monopoly capital theory predicted. Indeed, as Magdoff and Sweezy had written in 1969, this process, barring revolution, would “logically” end with “all major industries in all capitalist countries [being] dominated by a few hundred giant corporations.”37 Almost fifty years later, the world has moved considerably further down this path, with the revenue of the top 500 corporations worldwide now equal to around a third of world income as a whole, a phenomenon that has led Samir Amin to refer to the system of “generalized, financialized, and globalized monopolies.”38

In a related development, fundamentalist Marxian theorists challenged the reality of monopoly capital altogether, categorically denying any tendency toward increasing concentration and centralization of capital and growth of monopoly profits. For the Marxian economist John Weeks, “the monopolies that stalk the pages of the writings of Baran and Sweezy have no existence beyond the work of those authors. For these monopolies, which at will set prices, control and suppress innovation, and the like, are idealistic resurrections of ‘feudal monopolies before competition.'”39 Weeks, however, offered no empirical basis for his position, simply suggesting that to address the issue of monopoly capital—notwithstanding Hilferding and Lenin—was somehow un-Marxian.

Indeed, what was most remarkable about such criticisms was the paucity of meaningful empirical analysis, addressing not just four-firm or eight-firm concentration ratios and profit rates of firms, but also more holistic issues, such as the hierarchy of profit rates, aggregate concentration, conglomeration, multinationalization, mergers and acquisitions, and the role of finance in leveraging increased levels of concentration. Attempts on the left in the early Reagan era to disprove the tendency to monopolization (or concentration and centralization of capital) generally relied on the same abstract models and reductionist methods as those then being developed by the conservative economists and think tanks opposing anti-trust laws and promoting deregulation. In this way, fundamentalist Marxian thinkers such as Willi Semmler and James Clifton rejected not only the historical and holistic methods characterizing classical Marxist theory itself, but also the whole empirical tradition built over decades within anti-trust, industrial-organization, and institutionalist economics. One traditionalist Marxian critic went so far as to argue, against monopoly capital theorists, that airline deregulation, for example, would in the long term serve to increase competition and reduce monopolization in the industry.40

Largely discounting these new fashions on the left, Magdoff and Sweezy, continued to focus on the central dynamic of accumulation under monopoly capitalism, as manifested in the reemergence of long-term economic stagnation. Already in January 1973, Sweezy had observed “that the U.S. economy is experiencing at one and the same time a cyclical boom and secular stagnation.” Writing in the following year in response to the criticisms of his position by Samuelson and Arrow, Sweezy stated: “The real question to which economists ought to address themselves, but consistently refuse to do so, is why capitalism in the twentieth century has such a powerful tendency to stagnation that it requires increasingly massive forms of public and private waste to keep itself going at all. (As every reasonably sensitive observer of contemporary capitalism knows, military waste is only the leading species of a much larger genus.)”41 In December 1977 Magdoff and Sweezy wrote an article on “Creeping Stagnation,” examining what they called the deep-seated “stagnationist trends” in the U.S. economy in the period, as reflected in what was later called “the atrophy of net investment.”42

This focus on stagnation distinguished the monopoly capital tradition from all other forms of radical economics of the time, which did not take the long-term slowdown of the economy at all seriously as a structural reality of accumulation under monopoly capitalism. Magdoff and Sweezy coupled this approach with an analysis of capitalist economies’ increasing reliance on financial speculation—an issue emphasized by Magdoff as early as 1965, before the publication of Monopoly Capital, and which reemerged most spectacularly in these years in Magdoff and Sweezy’s articles “The Long Run Decline in Liquidity” (1970) and “Banks: Skating on Thin Ice” (1975).43 The continued growth of the system, they argued, was more and more dependent on the expansion of finance relative to production. Agreeing with the dissident economist Hyman Minsky on the importance of the debt explosion in the 1970s, they nonetheless argued that this and other developments needed to be understood not, as Minsky argued, primarily in business cycle terms, but rather in relation to the long-run problem of secular stagnation, or the tendential decline in the secular growth rate of the economy—requiring ever more wasteful forms of spending and speculation simply to keep the system afloat.44

In his 1981 work Four Lectures on Marxism, Sweezy greatly extended the stagnation argument beyond the framework of Monopoly Capital, returning to the wider question of industrial “maturity,” first introduced by the Keynesian economist Alvin Hansen in his writings on secular stagnation, but developed, in Sweezy’s argument, in terms of Marx’s reproduction schemes. Here industrial maturity meant a historical situation in which both Department I (investment goods) and Department II (consumption goods) had been built up, with considerable excess capacity, and were capable of providing for any conceivable increase in demand quickly and incrementally, drawing on depreciation allowances and utilizing more advanced technology—with no real boost to net investment sufficient to pull the economy out of stagnation. In this argument, monopoly, while still central, was to be seen in a context that also included industrial maturity.45

In the mid-1980s, profit-squeeze theorists on the left, such as Bowles, Gordon, and Weisskopf, made a brief effort to develop a theory of long-run stagnation to explain the decline on the trend-rate of growth, claiming that the deep restructuring of the economy under Reagan and right-wing supply-side economics (now generally encompassed under the term neoliberalism) was a necessary response of the system to the fact that labor was too strong and capital was too weak. Writing in a new URPE crisis reader, The Imperiled Economy, they declared that a period of extended crisis or stagnation

may occur in capitalist economies because the capitalist class is “too strong” or because it is “too weak.” When the capitalist class is “too strong” it shifts the income distribution in its favor, reducing the ratio of working class consumption to national income and rendering the economy prone to cries of underconsumption or—in more contemporary Keynesian terms a failure of aggregate demand. When the capitalist class is “too weak,” the working class or other claimants on income reduce the rate of exploitation, squeezing the profit rate, and reducing the level of investment.46

The fault of monopoly capital theory, Bowles, Gordon, and Weisskopf argued, was to believe that stagnation was embedded in a situation in which the capitalist class was “too strong,” and prone to a structural condition of the overaccumulation of capital. On the contrary, they argued, the current long-run crisis derived from conditions in which labor had grown too strong and the “capitalist class…too weak,” leaving the capitalist class desperately short of capital with which to invest, their profits suffering from the underexploitation of labor. What was needed by the system, like it or not, they suggested, was a new “social structure of accumulation” that would redress this unfavorable balance in favor of capital.47 It was possible that by these means the system would right itself. (Bowles, Gordon, and Weisskopf, as left economists, did not of course support neoliberal policy, but rather pointed to the objective requirements of capital in this regard in order to question the legitimacy of the system itself.)

From the standpoint of monopoly capital theory, such radical supply-side views were unconvincing in their contention that labor was too strong and capital too weak, and in their inability to explain secular stagnation. In an article on “Monopoly Capitalism” written in 1987 for the New Palgrave Dictionary of Economics, Sweezy concluded:

Neither mainstream nor traditional Marxian theories had been able to offer a satisfactory explanation of the stagnation phenomenon which has loomed increasingly large in the history of the capitalist world during the 20th century. It is thus the distinctive contribution of monopoly capitalist theory to have tackled this problem head on and in the process to have generated a rich body of literature which draws on and adds to the work of the great economic thinkers of the last 150 years. A representative sampling of this literature, together with editorial introductions and interpretations, is contained in [John Bellamy] Foster and [Henryk] Szlajfer, ed. 1984.48

The volume that Sweezy referred to here—The Faltering Economy, published by Monthly Review Press—included contributions by Maurice Dobb, Magdoff, Kalecki, Jacob Morris, Sherman, Ron Stanfield, Steindl, Sweezy, and Paolo Sylos-Labini, along with the book’s editors. Yet what Sweezy did not say is that none of the contributions selected for the volume, including those taken from Magdoff and Sweezy’s own writings, addressed directly what Magdoff and Sweezy themselves now saw as the principal problem of the theory of monopoly capital and stagnation: the role of finance. In this respect they stood almost entirely apart, even amongst those with whom they were most closely associated, in their unswerving commitment to addressing this critical problem—almost unfathomable from the perspectives of both mainstream and radical economics—on which, in their view, the whole relevance of the theory associated with Monopoly Capital now rested.

Hence, by the late 1980s, Magdoff and Sweezy had come to focus their investigations on the dialectical relationship between Stagnation and the Financial Explosion—the title of their 1987 book, the fourth in a series, published shortly after the twentieth anniversary of Monopoly Capital.49 The first section of the book discussed stagnation, and in the first chapter Sweezy recounted the debate on secular stagnation at Harvard in the late 1930s and early 1940s, in which Hansen and Schumpeter had been the two main protagonists. From there he went on to trace the subsequent development of the stagnation argument in monopoly capital theory.

But the core of the book lay in its second section, on “Production and Finance.” Here Magdoff and Sweezy cautiously introduced an analysis that went beyond the notion of the “financial explosion” and offered a full-fledged theory of the financialization of accumulation under monopoly capitalism. Financialization, they explained, was a response to the stagnation of production and investment under monopoly capital, transforming the interaction of the “real” and monetary aspects of the economy. This made it possible for stagnation in the production sector and speculative growth in the financial sector to “coincide” for extended periods—something unheard of in capitalism up to that time.50 Although worsening financial crises were to be expected, the monopoly capitalist system was increasingly wedded to financial growth as its main means of preventing a deep stagnation, creating a situation for which there was no historical precedent.

No sooner had Stagnation and the Financial Explosion been published than the United States encountered the 1987 stock market crash, the market’s biggest decline since 1929, which was the first real sign (though several severe credit crunches had preceded it) of how significantly the economy had changed. Although the Federal Reserve poured liquidity into the system and quickly restored the financial system to health (for which Alan Greenspan got much of the credit) the writing was on the wall. As Magdoff and Sweezy wrote a year later, in “The Anniversary of the Crash,”

It is now clearly only a matter of time before a new break materializes. It could be another stock market crash—many observers of the business scene confidently expect it—but it equally could occur elsewhere—in the bond market for example, a panic on the high-flying Tokyo stock market, a rapid plunge of the dollar, a refusal of Third World debtors to go on bleeding their people for the benefit of First World capitalists, the sudden bankruptcy of a huge bank or corporation. That all of these possibilities are very real, more and more discussed and worried about in the business media, only attests to the running out of the clock on the Reagan miracle [i.e. the long financially driven economic expansion in the 1980s].

But, you may ask, won’t the powers that be step into the breach again and abort the crisis before it gets a chance to run its course? Yes, certainly. That, by now, is standard operating procedure, and it cannot be excluded that it will succeed in the same ambiguous sense that it did after the 1987 stock market crash. If so, we will have the whole process to go through again on a more elevated and more precarious level. But sooner or later, next time or further down the road, it will not succeed. The recession will then start in earnest….

We will then face a new situation as unprecedented as the conditions from which it will have emerged.51


By 1987, it was clear to Magdoff and Sweezy and others in the monopoly capital theory tradition that the system had changed massively, and that the vital task was to understand how financialization had arisen out of monopoly capital and stagnation. The main lesson of the 1980s was the doubling-over of the contradictions of the system, whereby the countervailing forces to stagnation, most importantly financialization, became major sources of instability.

Yet Monopoly Capital and the tradition that it represented lost much of its influence within radical political economy during this period, while Marxian economics in general lost most of the ground it had gained for a few years in the late 1960s and early 1970s. (The fall of the Berlin Wall in 1989 and subsequent demise of the Soviet Union contributed to this decline.) URPE crisis readers were a thing of the past. Within the economics profession, Marxian thought became increasingly associated with a calcified analysis that merely rehearsed Marx’s falling rate of profit, with little contemporary relevance. Profit-squeeze theorists resorted to explaining the previous four decades of political-economic development in terms of a neoliberal “social structure of accumulation,” resulting from an alleged short-lived profit squeeze in the late 1960s and early 1970s.52 Left-leaning political economists increasingly argued for re-regulation, taking their cue from the critique of the self-regulating market inspired by Karl Polanyi’s The Great Transformation (1944)—usually in watered-down and distorted versions of Polanyi’s pathbreaking work. “Radicalism” in this period often aspired merely to recapture the postwar “golden age” of U.S. capitalism.53 Even Harry Braverman’s Labor and Monopoly Capital came under increasing attack by Marxian theorists for failing to focus on workers’ consent to exploitative industrial practices.54 The ahistorical notion of globalization, as propagated in the mainstream, provided neoliberalism with a new ideological determinism, unraveling much of the critical analysis on the left.

Meanwhile, the monopoly capital analysis of the financial explosion pioneered by Magdoff and Sweezy was ignored by most theorists on the left, who either excluded finance from their inquiries altogether, or treated it as a complicating factor of only minor importance. For instance, Brenner’s The Economics of Global Economic Turbulence—which filled an entire issue of New Left Review and was considered by some the major work in Marxian political economy of the late 1990s—barely mentioned finance at all, failing to incorporate it centrally into his general analysis, despite monopoly capital theory’s longstanding emphasis on finance and its emerging problems. As a result, Brenner’s analysis could not address the Asian financial crisis that arose in 1997, just prior to the publication of his work. For Brenner, the long-term economic crisis and what he saw as a declining average profit rate were merely the result of the exigencies of international competition. An emerging capitalist technological bloc was seen as challenging an earlier capitalist technological bloc in ways that intensified inter-capitalist competition—while failing to overcome inertia in the replacement of fixed capital in the older bloc. This led to widespread problems of overcapacity and declining profit. Monopoly capitalism, stagnation, financialization, and even class power played little role in the analysis.55

Confronted with the Asian financial crisis, followed by the 2000 stock market crash, Brenner, to his credit, recognized the weaknesses of his analysis in its failure to account for the structural conditions of financial instability. No doubt for this reason, he held off publishing the 1998 New Left Review version of The Economics of Global Turbulence in book form, instead focusing on writing The Boom and the Bubble, published in 2002. It was not until eight years after its first publication that The Economics of Global Turbulence appeared as a book, now with the role of finance in accelerating economic turbulence included as an afterword to the original work. However, the downplaying of monopoly capital and economic stagnation meant that Brenner’s excursion into the analysis of financial instability still lacked a solid basis. He offered a fairly conventional thesis of politically manufactured financial bubbles, pointedly avoiding the analysis of financialization as a structural byproduct of the stagnation of accumulation under monopoly capitalism—a central concern of Baran, Sweezy, Magdoff, and other theorists in the monopoly capital tradition.56

Despite its waning influence in a weakening Western left in this period, monopoly capital theory, with its emphasis on the symbiotic relation between stagnation and financialization, continued to develop. Sweezy ended his career in his late eighties by underscoring the changes with respect to the monopolization, stagnation, and financialization in the world economy, in articles such as “The Triumph of Financial Capital” (1994) and “More (or Less) on Globalization” (1997).57 In the first of these he emphasized that financial capital, as distinct from finance capital, was something qualitatively new, confined not simply to finance (i.e., banks, insurance companies, and real estate) but also permeating non-financial corporations, which increasingly took the form of hollowed-out financial institutions, for whom production was secondary and outsourced. In “More (or Less) on Globalization,” he referred for the first time anywhere to “the financialization of the accumulation process” as one of three dominant trends in the global economy since the 1974–1975 crisis: “(1) the slowdown [stagnation] of the overall growth rate, (2) the worldwide proliferation of monopolistic (or oligopolistic) multinational corporations, and (3) what may be called the financialization of the capital accumulation process.”58 In this way he brought the three trends examined in the three decades since the publication of Monopoly Capital into a single framework, which he saw as increasingly dominating global accumulation at the end of the twentieth century.

In May 2000, Monthly Review, then with four editors, including Magdoff, Sweezy, Robert W. McChesney, and myself, began an analysis of expansion of working-class consumption in the previous decade by focusing, in an article entitled “Working-Class Households and the Burden of Debt,” on the unstable combination of working-class finance with growing mortgage debt and the bubble-like conditions that this generated.59 Soon after, in April 2001, the editors wrote an analysis of “The New Economy: Myth and Reality,” arguing that the expansion that led to the 2000 stock market crash had been based primarily on finance, negating the myth that digital technology constituted an epoch-making innovation of the kind that could lift effective demand in the whole economy for decades, on the scale of the railroad in the nineteenth century and the automobile in the twentieth century.60 For the next five years, economic analysis in Monthly Review focused on the weak, relatively jobless recovery from the 2000 recession.61 Central to the analysis in this period was the research led by Michael Yates into the conditions of the working class and labor.62

It was only in 2006 that the assessment of accumulation and risks took a sharp turn, when I wrote “The Household Debt Bubble,” which pointed to the growing inability of workers in the lower three income quintiles to service household debt. Shortly afterwards, Fred Magdoff wrote “The Explosion of Debt and Speculation,” examining the trends with respect to debt in the entire economy. It was abundantly clear by then that the laws of motion of monopoly capital had been transformed to the point that the system had entered a new phase. In December 2006, I wrote an essay in honor of the fortieth anniversary of Monopoly Capital entitled “Monopoly-Finance Capital,” seeking to define this new phase. This led to two articles by Fred Magdoff and me outlining the financialization of accumulation and the emerging financial crisis. After the collapse of Lehman Brothers in September 2008, our argument was extended to cover these new developments. This series of essays was then collected together to form our book The Great Financial Crisis: Causes and Consequences, the first major analysis to appear on the 2007–08 meltdown.63 It was clear the world economy was now characterized by a hybrid system of monopoly-finance capital, reflecting the interwoven contradictions of stagnation and financialization.

While still under-acknowledged, the contributions of monopoly capital theory to the understanding of financialization began once again in these years to attract mainstream attention. For example, New Yorker economic correspondent John Cassidy, noting the complete failure of neoclassical economics to predict the Great Financial Crisis, turned in his book How Markets Fail to Minsky and Sweezy as the two major theorists who had seen it coming—Minsky due to his theory of financial crisis, and Sweezy because of his ability to perceive financialization as an outcome of monopoly and stagnation.64

After the Great Financial Crisis: Vindication of a Theory?

The Great Financial Crisis of 2007–2009 proved to be a historic turning point. With investment or capital accumulation sputtering amid market saturation, and the breakneck financialization process of earlier years stalled by the deep financial crisis, the economy fell into the “unprecedented” situation of which Magdoff and Sweezy had warned in the late 1980s. Under these circumstances, stagnation was more than a tendency lurking just below the surface, countered in part by forces such as military spending, the sales effort, and financialization; it had now become a daily reality. Economic growth rates had declined on a decade-by-decade basis since the 1960s, and continued to decline.65 But if the U.S. economy was prone to stagnation, Europe and Japan were in even worse shape. Moreover, it soon became apparent that in the globalized economy of the twenty-first century, even China, dependent as it was on markets in rich countries, and showing evidence of its own financialization trap, was not immune.

In 2012 Robert W. McChesney and I published The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the U.S.A to China, based on articles in Monthly Review (for which we were aided by the extraordinary empirical research of R. Jamil Jonna, who coauthored several articles on which chapters of the book were based). In the book’s opening line, we wrote that “the world economy as a whole is undergoing a period of slowdown. The growth rates for the United States, Europe, and Japan at the center of the system has been sliding for decades….Stagnation is the word economists use for this phenomenon. In human terms it means declining real wages, massive unemployment, a public sector facing extreme budget crises, growing inequality, and a general and sometimes sharp decline in the quality of life.”66

Referring to our book, James K. Galbraith, in his The End of Normal, characterized us as “Marxian early adopters of the there-will-be-no-recovery position.” He continued:

But while their book The Endless Crisis follows Paul Baran and Paul Sweezy in recognizing the role of finance capital in the modern system, the crisis that they identify is not, strictly speaking, a financial crisis. In their analysis, finance is part of the burden on the economic system, and the resulting rise in inequality, alongside low growth of wages, is a cause of the unmanageable expansion of household debts. Yet the crisis, itself, as identified by Foster and McChesney, is a crisis of monopolism, of overaccumulation of capital, and of the excessive size of the financial in relationship to the “productive” sector of the economy, along with the phenomenon of “superexploitation” associated (they argue) with the move of manufacturing industry to China.67

In a 2013 speech to the International Monetary Fund, former U.S. Treasury Secretary Larry Summers reintroduced the notion of secular stagnation to mainstream economics, conceiving of financial expansion as an ameliorative force in the context of stagnation—a view quickly taken up by other Keynesian-leaning mainstream economists, such as Paul Krugman.68 “Monopoly and Competition in Twenty-First Century Capitalism,” the article that had become the central chapter of The Endless Crisis, was cited in the New York Times by Krugman and Nancy Folbre, and was used the basis of an Industry Week article on the growth of monopoly.69 Thomas Piketty’s Capital in the Twenty-First Century, although rooted in a neoclassical perspective, relied on the distinction between productive capital and capital as wealth, in the sense of financial assets—echoing the fundamental contradiction between stagnant investment and financialization basic to monopoly capital theory, and likewise pointing to the phenomenon of long-run stagnation.70 In March 2016, Summers made it clear that the central force behind stagnation, together with high profits, was the rise of monopoly, a conclusion subsequently supported by Krugman and Joseph Stiglitz.71 Krugman’s article was reprinted in the Irish Times under the striking headline “Monopoly Capitalism Is Killing the U.S. Economy.”72

Without openly acknowledging it, mainstream theorists were being forced by the changing conditions of the capitalist economy to recognize the power of an analysis traceable back to Baran and Sweezy’s Monopoly Capital, and even before that to the work of Kalecki and Steindl—all rooted ultimately in Marx. In “Monopoly’s New Era,” a May 2016 article for the website Project Syndicate, Stiglitz wrote:

For 200 years, there have been two schools of thought about what determines the distribution of income—and how the economy functions. One, emanating from Adam Smith and nineteenth-century liberal economists, focuses on competitive markets. The other, cognizant of how Smith’s brand of liberalism leads to rapid concentration of wealth and income, takes as its starting point unfettered markets’ tendency toward monopoly….

For the nineteenth-century liberals and their latter-day acolytes, because markets are competitive, individuals’ returns are related to their social contributions—their “marginal product,” in the language of economists. Capitalists are rewarded for saving rather than consuming—for their abstinence, in the words of Nassau Senior….

The second school of thought takes as its starting point “power,” including the ability to exercise monopoly control or, in labor markets, to assert authority over workers. Scholars in this area have focused on what gives rise to power, how it is maintained and strengthened, and other features that may prevent markets from being competitive….

In the West in the post-World War II era, the liberal school of thought has dominated. Yet, as inequality has widened and concerns about it have grown, the competitive school, viewing individual returns in terms of marginal product, has become increasingly unable to explain how the economy works. So, today, the second school of thought is ascendant.73

What makes Stiglitz’s statement so provocative is what it does not say. He refers to Adam Smith and Nassau Senior, to classical liberalism, and to the competitive theory, giving names and labels to what he calls the “first school,” while his “second school” has not a single name associated with it, nor is it labeled in any way. This is undoubtedly because Stiglitz knows he cannot refer to the concentration of capital and monopoly in relation to classical economics without mentioning Marx, nor can he refer to modern monopoly capitalism without naming such figures as Thorstein Veblen, Kalecki, or Baran and Sweezy. Indeed, the “second school” has been deeply influenced by Marxian theory. Even to cite a moderately left-leaning institutionalist economist like John Kenneth Galbraith, who in his last book lamented the disappearance of the notion of “monopoly capitalism,” is for Stiglitz, at present—though this may change—to walk too close to the edge.74 It can no longer be denied that reality has been cruel to neoclassical economics, and that the views—if not the politics—associated with monopoly capital theory are now “ascendant.”

Other thinkers working in the broad Marxian tradition, associated particularly with Kalecki and connected to the Monopoly Capital perspective, have arrived at similar conclusions, though at a much deeper and more critical level than establishment thinkers like Summers, Krugman, and Stiglitz. Samir Amin, Costas Lapavitsas, Prabhat Patnaik, and Jan Toporowski, all contributors to this special issue, have drawn on monopoly capital theory in their major works on the economy. Amin developed his analysis of the current phase of the system into one of “the capitalism of generalized monopolies.”75 Lapavitsas, Patnaik, and Toporowski expanded the Marxian-Kaleckian tradition into a theory of financialization, overlapping with and partly influenced by Baran and Sweezy’s analysis. In Toporowski’s case, these ideas were linked to the entire Marxian tradition, reaching back to Rosa Luxemburg.76 In The Enigma of Capital, David Harvey, from a more conventional Marxist perspective, adopted the language of Baran and Sweezy to describe the crisis of capitalism in the early twenty-first century, pointing to the “capital ‘surplus absorption problem'” associated with the growth of excess capacity, and to “overaccumulation crisis.”77

In the past decade, Monthly Review has expanded the general monopoly capital theory in various directions, building on neglected aspects of Baran and Sweezy’s framework. The magazine has consistently drawn on the monopoly capital tradition in its studies of imperialism, culminating in the July-August 2015 issue on “release of their correspondence.” Elsewhere, Hannah Holleman, McChesney, and I conducted an empirical reassessment of U.S. military spending, uncovering the relationship between acknowledged and unacknowledged military expenditures. This was followed by a study of the prison-industrial complex and its racist underpinnings, as well as new research into the sales effort.78 The theory of monopoly capital has also been extended to the analysis of ecological contradictions and to media and communications.79 Recently McChesney and John Nichols, in their book People Get Ready, have drawn on Sweezy’s anonymous 1957 pamphlet on the Scientific-Industrial Revolution to examine the current technological revolution involving robotics, and Michael Yates has authored a major new work, The Great Inequality. Amin has used Baran and Sweezy’s analysis and the subsequent development of theory in Monthly Review in the form of his new argument in The Law of Worldwide Value.80

The discovery of the missing manuscripts of Monopoly Capital—”Some Theoretical Implications” and “The Quality of Monopoly Capitalist Society: Culture and Communications”—has enormously enhanced the understanding of the depth and breadth of Baran and Sweezy’s Monopoly Capital, opening up new areas of research. The release of their correspondence has also shown the organic development of their ideas, and the many paths that they pursued in developing their analysis.81

All of this serves to recall the epigraph to Monopoly Capital that Baran and Sweezy took from Hegel: “The truth is the whole.” Over the last five decades, the analysis that they introduced has played a central role in understanding the complex and contradictory development of the economic and social order up to the present moment. Nevertheless, for Baran and Sweezy, as for Marx, the main point was not simply to understand the world, but to change it. Theirs was a revolutionary outlook.


  1. Howard J. Sherman, “‘Monopoly Capital: An Essay on the American Economic and Social Order,’ by Paul A. Baran and Paul M. Sweezy—Review,”American Economic Review 56, no. 4, part 1 (1966): 919.
  2. Mario Cogoy, “Neo-Marxist Theory, Marx, and the Accumulation of Capital,”International Journal of Political Economy 17, no. 2 (1987): 11; originally published as “Les theories neo-marxistes, Marx et l’accumulation du capital,”Les Temps Modernes 29 (1972): 314–15.
  3. Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966).
  4. Baran and Sweezy,Monopoly Capital, 4–7. Rudolf Hilferding,Finance Capital (London: Routledge, 1985); Vladimir I. Lenin,Imperialism, the Highest Stage of Capitalism (New York: International Publishers, 1939), 88.
  5. Baran and Sweezy,Monopoly Capital, 53–54, 71–72.
  6. On the various forms and definitions of economic surplus in Baran and Sweezy’s work, addressing different aspects of the problem, see John Bellamy Foster, The Theory of Monopoly Capitalism (New York: Monthly Review Press, 2014), 27–45. Joseph D. Phillips provided estimates of the actual economic surplus in an appendix toMonopoly Capital, spanning the years 1929–1963. Michael Dawson and I later extended this, after critically analyzing Phillips’s methods, for another quarter-century, up to the end of the Reagan period: see Michael Dawson and John Bellamy Foster, “The Tendency of the Surplus to Rise, 1963–1988,” in John B. Davis, ed.,The Economic Surplus in Advanced Economies (Brookfield, VT: Elgar, 1992), 42–70.
  7. Baran and Sweezy,Monopoly Capital, 108.
  8. Paul M. Sweezy (authored anonymously),The Scientific-Industrial Revolution (New York: Model, Roland and Stone, 1957).
  9. On the role of waste in their analysis, see Henryk Szlajfer, “Waste, Marxian Theory, and Monopoly Capital,” in John Bellamy Foster and Henryk Szlajfer, eds., The Faltering Economy: The Problem of Accumulation under Monopoly Capitalism (New York: Monthly Review Press, 1984), 297–321; Foster,The Theory of Monopoly Capitalism, 24–50.
  10. Joan Robinson, “‘Money, Trade, and Economic Growth,’ by J.G. Johnson—A Review,”Economic Review 72 (1962): 690–92.
  11. John Maynard Keynes,The General Theory of Employment, Interest, and Money (London: Macmillan 1936). On the role of Marx’s analysis in the development of Keynes’s critique of Say’s Law, see John Bellamy Foster and Robert W. McChesney, The Endless Crisis (New York: Monthly Review Press, 2012): 51–55.
  12. See Michał Kalecki, Theory of Economic Dynamics (New York: Monthly Review Press, 1965);Selected Essays on the Dynamics of the Capitalist Economy, 1933–1970 (Cambridge, UK: Cambridge University Press, 1971).
  13. Josef Steindl, Maturity and Stagnation in American Capitalism (New York: Monthly Review Press, 1976).
  14. Paul M. Sweezy, The Theory of Capitalist Development (New York: Monthly Review Press, 1964); Paul A. Baran, The Political Economy of Growth (New York: Monthly Review Press, 1957).
  15. Baran and Sweezy,Monopoly Capital, xiv; G. W. F. Hegel,The Phenomenology of Spirit (Oxford: Oxford University Press, 1977), 11.
  16. “Message from Marx,”Economist, June 25, 1966.
  17. Paul M. Sweezy, “Monopoly Capital (letter),”New York Review of Books, July 7, 1966. Sweezy was well aware that his promotion to tenure two-and-a-half years down the road was unlikely given the era’s Cold War hostilities, and this may have affected his decision to resign with years still remaining on his contract. During the war he had become the editor ofEuropean Political Report, published by the Research and Analysis section of the Office of Strategic Services, and was interested in the possibility of starting a political and economic magazine, although this did not materialize for a few years.
  18. Paul A. Baran and Paul M. Sweezy, “Some Theoretical Implications,”Monthly Review 64, no. 3 (July-August 2012): 24–59; “The Quality of Monopoly Capitalist Society: Culture and Communications,”Monthly Review 65, no. 3 (July-August 2013): 43–64. For background, see John Bellamy Foster, “A Missing Chapter of Monopoly Capital,”Monthly Review 64, no. 3 (July-August 2012): 3–23.
  19. “Report onMonopoly Capital by a reader for McGibbon & Kee (30.XII.65),”Monopoly Capital file, Monthly Review Foundation.
  20. Paul M. Sweezy to Manuel Benedito, September 15, 1971,Monopoly Capital file, Monthly Review Foundation.
  21. Paul M. Sweezy, Modern Capitalism and Other Essays (New York: Monthly Review Press, 1972), 25–51.
  22. Union for Radical Political Economics (URPE),Radical Perspectives on the Economic Crisis of Monopoly Capitalism (New York: URPE, 1975); Richard C. Edwards, Michael Reich, and Thomas E. Weisskopf, eds.,The Capitalist System (Englewood Cliffs, NJ: Prentice Hall, 1978).
  23. Harry Magdoff,The Age of Imperialism (New York: Monthly Review Press, 1969); James O’Connor,The Fiscal Crisis of the State (New York: St. Martin’s Press, 1973); Harry Braverman, Labor and Monopoly Capital (New York: Monthly Review Press, 1974); Samir Amin,Accumulation on a World Scale (New York: Monthly Review Press, 1974); Stephen Hymer,The Multinational Corporation (Cambridge, UK: Cambridge University Press, 1979). Braverman’s famous discussion of the scientific-technical revolution derived much of its basis in Sweezy’s anonymous pamphlet for the Wall Street firm of Model, Roland and Stone, cited above. Hymer moved steadily from radicalism to Marxism, ending up writing for and allied withMonthly Review.
  24. Paul A. Samuelson, “Taking Stock of War,”New York Times, March 14, 1973; Kenneth J. Arrow, “Somehow, It Has Overcome,”New York Times, March 26, 1973; Paul M. Sweezy, “Op-Ed Liberalism,”Monthly Review 25 no. 1 (May 1973): 44–48, “Capitalism, for Worse,”Monthly Review 25, no. 9 (February 1974): 1–7. See also Leonard Silk,Capitalism: The Moving Target (New York: Praeger, 1974).
  25. Assar Lindbeck,The Political Economy of the New Left (New York: New York University Press, 1977).
  26. Paul Mattick,Anti-Bolshevik Communism (London: Merlin, 1978), 187–209; Cogoy, “New Marxist Theory, Marx, and the Accumulation of Capital,” 11–13; Ernest Mandel, “The Labor Theory of Value and ‘Monopoly Capitalism,'”International Socialist Review 29, no. 4 (1967): 34. For a detailed response to these criticisms, see Foster,The Theory of Monopoly Capitalism, 24–50.
  27. Paul M. Sweezy, “Monopoly Capital and the Theory of Value,” in Foster and Szlajfer, eds.,The Faltering Economy, 25–26; Paul M. Sweezy, “Some Problems in the Theory of Capital Accumulation,” in Foster and Szlajfer, eds.,The Faltering Economy, 41–56.
  28. Paul M. Sweezy, “Baran and the Danger of Inflation,”Monthly Review 26, no. 7 (December 1974): 11–14.
  29. Anwar Shaikh, “An Introduction to the History of Crisis Theories,” in URPE,U.S. Capitalism in Crisis (New York: URPE, 1978), 226–31; Michael Bleaney,Underconsumption Theories (New York: International Publishers, 1976), 11–14, 102–19, 225–48; Erik Olin Wright,Class, Crisis, and the State (London: New Left Books, 1978), 138–47; Cogoy, “Neo-Marxist Theory, Marx, and the Accumulation of Capital,” 11–37, David Yaffe, “The Marxian Theory of Crisis, Capital, and the State,”Economy and Society 2, no. 2 (1973): 212–16. The term “underconsumption theory” was used only once, and in a pejorative sense, inMonopoly Capital, and the framework of the analysis did not directly address the issue of workers’ consumption, assuming, in Kaleckian terms, that workers spend what they get. The entire emphasis was on the problem of surplus absorption, based on the overaccumulation of capital, associated with the overbuilding of productive capacity. Although both Baran and Sweezy, like many others, used the term “underconsumption” to identify their work in the 1930s, this was in the sense of what Joseph Schumpeter had called the “non-spending” approach to underconsumptionism, which encompassed all effective demand theories, like those of Kalecki and Keynes. Although the term was commonly used in this sense in the 1930s, and also sometimes in subsequent decades, the meaning gradually changed, and underconsumptionism came to be associated almost exclusively with the crude fallacies of thinkers like Sismondi and Rodbertus, and thus diverged from theories of effective demand. Meanwhile, Sweezy’s approach had changed in the 1950s to emphasize investment more directly, which caused him to relabel his approach at that time to “overaccumulation” theory. (See Paul M. Sweezy,The Present as History [New York: Monthly Review Press, 1953], 359.) In the 1960s and after, Sweezy was to refer to overaccumulation theory, monopoly capital theory, and stagnation theory to identify his approach, but abandoned the label of underconsumption. Yet even though those Marxian theorists emphasizing the demand-side contradiction of the system have largely ceased using the term for half a century or more, in favor of an approach better described as overaccumulation, their fundamentalist Marxian critics have continued to characterize them as “underconsumptionists,” in order to suggest a basic flaw in their analysis. On this general problem, see Foster,The Theory of Monopoly Capitalism, 74–106; Jonathan Penzer, Harry Magdoff, and Paul M. Sweezy, “Capitalism and the Fallacy of Crude Underconsumptionism,”Monthly Review 64, no. 8 (January 2003): 45–48.
  30. The issue of the rise of Marxian “supply-side” theories of crisis, countering Marxian demand-side theories, first appeared in John Bellamy Foster, “Marxian Economics and the State,” reprinted in Foster and Szlajfer, eds.,The Faltering Economy, 325–49 (originally published inScience and Society 46, no. 3 [1982]: 257–83).
  31. Andrew Glyn and Bob Sutcliffe,Capitalism in Crisis (New York: Pantheon, 1972); Samuel Bowles, David M. Gordon, and Thomas E. Weisskopf,Beyond the Wasteland (New York: Anchor, 1983).
  32. David M. Gordon, Thomas E. Weisskopf, and Samuel Bowles, “Power, Accumulation, and Crisis,” in Robert Cherry et al.,The Imperiled Economy, Book I (New York: URPE, 1987), 43.
  33. Andrew Glyn, “The Wage-Push Crisis of Capitalism,” in Leonard Silk, ed.,Capitalism: The Moving Target, 89–93.
  34. Howard J. Sherman, “Inflation, Unemployment, and the Contemporary Business Cycle,” in Foster and Szlajfer, eds.,The Faltering Economy, 91–117;The Business Cycle (Princeton, NJ: Princeton University Press, 1991), 251–52. An important criticism of such profit-squeeze theories can be found in Robert Brenner,The Economics of Global Turbulence (London: Verso, 2006), 16–25; Brenner’s analysis first appeared inNew Left Review 229 (1998).
  35. John Bellamy Foster, “The Limits of U.S. Capitalism: Surplus Capacity and Capacity Surplus,” in Foster and Szlajfer, eds.,The Faltering Economy, 207.
  36. Brenner,The Economics of Global Turbulence, 54; Robert J. S. Ross and Kent C. Trachte,Global Capitalism: The New Leviathan (Albany: State University of New York Press, 1990), 38–50; John Kenneth Galbraith,The New Industrial State (Boston: Houghton Mifflin, 1967). Ironically, Brenner’s declaration in 1998 that the monopoly capitalist corporations that Baran and Sweezy described were mere “reifications” was made at the very moment that the United States was experiencing the onset of the greatest merger wave since the beginning of the twentieth century, and perhaps in all of history up to that point. See Richard B. Du Boff and Edward Herman, “Mergers, Concentration, and the Erosion of Democracy,”Monthly Review 53, no. 1 (May 2001): 14–29. In 1999, Brenner went so far as to contend that the growing availability of credit through expanding finance meant that both monopolistic barriers to entry and monopoly profits would quickly give way to competition. “The upshot,” he wrote,” “is that more than temporary monopolies are difficult to maintain, without direct political action by governmental authorities to sustain them.” Robert Brenner, “Competition and Class,”Monthly Review 51, no. 7 (December 1999): 35. Here he overlooked the fact that the development of finance has always been linked to mergers and acquisitions, and so to ever more concentrated and monopolistic capital.
  37. Harry Magdoff and Paul M. Sweezy, “Notes on the Multinational Corporation, Part Two,”Monthly Review 21, no. 6 (November 1969): 4.
  38. John Bellamy Foster and Robert W. McChesney,The Endless Crisis, 76–77; Samir Amin, Three Essays on Marx’s Value Theory (New York: Monthly Review Press, 2013), 19.
  39. John Weeks,Capital and Exploitation (Princeton, NJ: Princeton University Press, 1981), 165–68. Weeks in this passage quotes Marx, writing in the 1840s on “feudal monopoly,” to support his point. However, Marx was referring to Proudhon’s backward, “feudal” conception of monopoly—and writing at a time prior to the historical emergence of monopoly capitalism. See Karl Marx and Frederick Engels,Collected Works, vol. 6 (New York: International Publishers, 1975), 194.
  40. The use of such conservative, reductionist methodologies in ostensibly Marxian arguments, with predictable and misleading results, was particularly evident in Willi Semmler, “Competition, Monopoly, and Differential Profit Rates: Theoretical Considerations and Empirical Evidence,”Review of Radical Political Economics 13, no. 4 (Winter 1982): 43–49, later expanded asCompetition, Monopoly, and Differential Profit Rates (New York: Columbia University Press, 1984); and James A. Clifton, “Competition and the Evolution of the Capitalist Mode of Production” Cambridge Journal of Economics 1, no. 2 (1977): 137–151. For more sophisticated analyses from this period, supporting Baran and Sweezy’s analysis, see Howard J. Sherman, “Monopoly Power and Profit Rates,”Review of Radical Political Economics15, no. 2 (Summer 1983): 127; Joseph Bowring,Competition in a Dual Economy(Princeton, NJ: Princeton University Press, 1986). See also Foster,The Theory of Monopoly Capitalism, 70–72. The notion that airline deregulation had created “highly competitive” airlines and was reducing oligopoly in the industry was advanced by Steve Zeluck in a polemic against monopoly capital theory: Steve Zeluck, “On the Theory of the Monopoly Stage of Capitalism,”Against the Current1, no. 1 (1980): 48.
  41. Paul M. Sweezy, “Notes on the U.S. Situation at the End of 1972,Monthly Review24, no. 8 (January 1973): 3; “Capitalism, For Worse,” 6.
  42. Harry Magdoff and Paul M. Sweezy, The End of Prosperity (New York: Monthly Review Press, 1977), 111–24. On the atrophy of net investment, see Harold G. Vatter and John F. Walker,The Inevitability of Government Growth (New York: Columbia University Press, 1990), 6–22.
  43. Paul M. Sweezy and Harry Magdoff, The Dynamics of U.S. Capitalism (New York: Monthly Review Press, 1972), 13–16, 80–96;The End of Prosperity, 33-54. Magdoff raised the criticism of Baran and Sweezy’s insufficient scrutiny of the issue of credit and debt in his review ofMonopoly Capital—see Harry Magdoff, “‘Monopoly Capital,’ by Paul A. Baran and Paul M. Sweezy—A Review,”Economic Development and Cultural Change 16, no. 1 (October 1967): 145–50. Sweezy subsequently argued that the failure to address finance in the analysis of surplus absorption under monopoly capital (though this was briefly discussed in the final section of the sales effort chapter) was the greatest weakness ofMonopoly Capital, which he tried to overcome in his later work. See Paul M. Sweezy, “Monopoly Capital after Twenty-Five Years,”Monthly Review 43, no. 7 (December 1991): 52–57.
  44. Magdoff and Sweezy,The End of Prosperity, 133–36.
  45. Paul M. Sweezy, Four Lectures on Marxism (New York: Monthly Review Press, 1981), 26–45. This book was also notable for its more developed treatments of “Competition and Monopoly” and “The Law of the Falling Tendency of the Rate of Profit,” in two appendixes.
  46. Gordon, Weisskopf, and Bowles, “Power, Accumulation and Crisis,” 43. See also Thomas E. Weisskopf, Samuel Bowles, and David M. Gordon, “Two Views of Capitalist Stagnation,”Science and Society 49, no. 3 (1985): 259–86.
  47. Gordon, Weisskopf, and Bowles, “Power, Accumulation and Crisis,” 43–44. For a different perspective on stagnation, in line with Baran and Sweezy’s theory, appearing in the same URPE reader, see John Bellamy Foster, “What is Stagnation?”The Imperiled Economy, Book I, 59–70.
  48. Paul M. Sweezy, “Monopoly Capitalism,” in John Eatwell, Murray Milgate, and Peter Newman, eds.,The New Palgrave Dictionary of Economics, vol. 3 (London: Macmillan, 1987), 544.
  49. Harry Magdoff and Paul. M. Sweezy, Stagnation and the Financial Explosion (New York: Monthly Review Press, 1987).
  50. Magdoff and Sweezy,Stagnation and the Financial Explosion, 93-105.
  51. Harry Magdoff and Paul M. Sweezy, The Irreversible Crisis (New York: Monthly Review Press, 1988), 76. Hyman Minsky also saw 1987 as a turning point requiring a new theory of capitalism and finance. See Hyman P. Minsky, “Financial Crises and the Evolution of Capitalism,” in Mark Gottdiener and Nicos Kominos, eds.,Capitalist Development and Crisis Theory (London: Macmillan, 1989), 391–403.
  52. For example, see Alejandro Reuss, “That ’70s Crisis,”Dollars and Sense 285 (2009),
  53. Karl Polanyi,The Great Transformation (Boston: Beacon, 1944). Polanyi’s very important contribution was often watered down, decontextualized, and misunderstood by his followers. Margaret Somers and Fred Block, for example, use Polanyi to attack “the property-centric analysis of Marxism” and to advocate a return to 1950s and 1960s prosperity, which they claim was based on social-democratic institutions. Margaret Somers and Fred Block, “The Return of Karl Polanyi,”Dissent 61, no. 2 (2014): 30–33. More recently, Block has invoked Polanyi to justify his contention that the left should abandon the concept of capitalism entirely, in favor of that of “market society.” Fred Block, “Varieties of What: Should We Be Using the Concept of Capitalism,”Political Power and Social Theory 23 (2012): 269–91. In truth, none of these views would have sat well with Polanyi himself. For a more meaningful historical view related to Polanyi’s work, see Margaurite Mendell and Kari Polanyi-Levitt, “The Origins of Market Fetishism,”Monthly Review 41, no. 2 (June 1989): 11–32—an article by his two daughters which details the development of the views of Hayek and von Mises in Red Vienna, providing the context for Polanyi’s own contributions.
  54. Michael Burawoy led the way in criticizing Braverman for supposedly focusing one-sidedly on the logic of capital and its managerial imperatives, rather than on working-class consent—as if this were not the precondition of a working-class based critique. See Michael Burawoy, “A Classic of Its Time,”Contemporary Sociology 25, no. 3 (May 1996): 296–99. See also John Bellamy Foster, “A Classic of Our Time,”Monthly Review 50, no. 8 (January 1999): 12–18.
  55. Brenner,The Economics of Global Turbulence, xx–xxi. One significant element in Brenner’s theory that attracted attention on the left was his emphasis on “overcapacity,” though this was disconnected from an analysis of monopoly capital and therefore lacked any real theoretical coherence. Ironically, this was hailed as an innovation in certain left circles, despite the fact that the Kalecki-Steindl-Baran-Sweezy tradition had made the concept of excess capacity the linchpin of the theory of investment under monopoly capitalism for over three decades. Long-term data on excess capacity provided inMonopoly Capital was seen as crucial to the whole argument on the tendency to stagnation. Indeed, few other elements of the analysis received more emphasis. Thus, in elaborating the theory of monopoly capital in the late 1980s I had devoted a whole chapter of my book to “The Issue of Excess Capacity.” See Brenner,The Economics of Global Turbulence, 34–40; Baran and Sweezy,Monopoly Capital, 234–44; Foster,The Theory of Monopoly Capitalism, 107–27.
  56. Brenner,The Economics of Global Turbulence, xx–xxi, 54, 276–80;The Boom and the Bubble (London: Verso, 2002). See also John Bellamy Foster, “Is Overcompetition the Problem?Monthly Review 51, no. 2 (June 1999): 28–37. In his preface to the 2006 book edition ofThe Economics of Global Turbulence, Brenner noted that “With the exception of the Afterword, the text published here was completed at the height of both the New Economy boom and the East Asian financial crisis of 1997–98” (xxiii). It was obvious, therefore, that the biggest gap in Brenner’s original analysis was his inattention to the financial explosion, in theory or at the level of mere description. Accordingly, Brenner devoted himself for most of the following decade to the study of financial bubbles (The Economics of Global Turbulence, 267). But having largely excluded class struggle, monopoly power, and secular stagnation from his theory—which amounted to a conception of overcompetition—his analysis of these bubbles could scarcely rise above the general Wall Street view.
  57. Paul M. Sweezy, “The Triumph of Financial Capital,”Monthly Review 46, no. 2 (June 1994): 1–11; “More (or Less) on Globalization,”Monthly Review 49, no. 4 (September 1997): 1–4.
  58. Sweezy, “More (or Less) on Globalization,” 3. The term “financialization” owed much to the writings of Kevin Phillips. See Kevin Phillips,Arrogant Capital (Boston: Little, Brown, 1994), 82. But Sweezy was probably the first to write of the financialization of the accumulation process—an analysis that grew out of decades of analysis with Magdoff on stagnation and the financial explosion.
  59. John Bellamy Foster, Harry Magdoff, and Robert W. McChesney, “Working-Class Households and the Burden of Debt,”Monthly Review 52, no. 1 (May 2000): 1–9.
  60. John Bellamy Foster, Harry Magdoff, and Robert W. McChesney, “The New Economy: Myth and Reality,”Monthly Review 52, no. 11 (April 2001): 1–15.
  61. Foster, Magdoff, and McChesney pointed to the possibility of a major crisis emerging from the bursting of the real estate bubble in housing in 2002, in a debate with other left theorists who downplayed such a possibility. See John Bellamy Foster, Harry Magdoff, and Robert W. McChesney, “Crises: One After Another for the Life of the System,”Monthly Review54, no. 6 (November 2002): 48.
  62. Michael D. Yates, Naming the System(New York: Monthly Review Press, 2003).
  63. John Bellamy Foster and Fred Magdoff, The Great Financial Crisis(New York: Monthly Review Press, 2009).
  64. John Cassidy,How Markets Fail(New York: Farrar, Straus, and Giroux, 2009), 205–17, 332.
  65. Foster and McChesney,The Endless Crisis, 4.
  66. Foster and McChesney,The Endless Crisis, vii.
  67. James K. Galbraith,The End of Normal(New York: Simon and Schuster, 2014), 77.
  68. Larry Summers, “Transcript of Larry Summers Speech at the IMF Economic Forum,” November 8, 2013,; “Why Secular Stagnation Might Prove to be the New Normal,”Financial Times, December 5, 2003; “The Age of Secular Stagnation,”Foreign Affairs 95, no. 2 (March/April 2016): 2–9; Paul Krugman, “Secular Stagnation, Coalmines, Bubbles, and Larry Summers,”New York Times November 16, 2013.
  69. Nancy Folbre, “Who Rules the Global Economy?”New York Times, November 7, 2011; Paul Krugman, “Barons of Broadband,”New York Times, February 16, 2014 (citation in online version); Michael Collins, “Is Manufacturing Industry Consolidation Stifling Competition and Innovation?Industry Week, June 3, 2015. Also see, “Business in America; Too Much of a Good Thing.”The Economist, London, March 26, 2016.
  70. Thomas Piketty,Capital in the Twenty-First Century(Cambridge, MA: Harvard University Press, 2014). For a critique of Piketty from the perspective of monopoly capital theory, see John Bellamy Foster and Michael D. Yates, “Piketty and the Crisis of Neoclassical Economics,”Monthly Review66, no. 6 (November 2014): 1–24.
  71. Larry Summers, “Corporate Profits Are Near Record Highs. Here’s Why That Is a Problem,”Washington Post Wonkblog, March 30, 2016, http//; Paul Krugman, “Robber Baron Recessions,”New York Times, April 18, 2016; Joseph Stiglitz, “Monopoly’s New Era,” Project Syndicate, May 13, 2016,
  72. Paul Krugman, “Paul Krugman: Monopoly Capitalism is Killing the U.S. Economy,”Irish Times, April 19, 2016.
  73. Stiglitz, “Monopoly’s New Era.”
  74. John Kenneth Galbraith,The Economics of Innocent Fraud(Boston: Houghton Mifflin, 2004), 12.
  75. Samir Amin, The Implosion of Contemporary Capitalism (New York: Monthly Review Press, 2013), 15.
  76. Costas Lapavitsas,Profiting without Producing: How Finance Exploits Us All (London: Verso, 2013), 15–24; Jan Toporowski,Why the World Needs a Financial Crisis (London: Anthem, 2010); Prabhat Patnaik,The Value of Money (New York: Columbia University Press, 2009); Jan Toporowski, “Tadeusz Kowalik and the Accumulation of Capital,”Monthly Review 64, no. 8 (January 2013): 33-44.
  77. David Harvey,The Enigma of Capital (Oxford: Oxford University Press, 2010), 45. See also David Harvey,The Limits to Capital (London: Verso, 2006), xxiv.
  78. John Bellamy Foster, Hannah Holleman, and Robert W. McChesney, “The U.S. Imperial Triangle and Military Spending,”Monthly Review 60, no. 5 (October 2008): 1–19; Hannah Holleman et al., “The Sales Effort and Monopoly Capital,”Monthly Review 60, no. 11 (April 2009): 1–23; Hannah Holleman et al., “The Penal State in an Age of Crisis,”Monthly Review 61, no. 2 (June 2009): 1–17.
  79. Robert W. McChesney, The Political Economy of Media (New York: Monthly Review Press, 2008); John Bellamy Foster, “The Ecology of Marxian Political Economy,”Monthly Review 63, no. 4 (September 2011): 1–16, “The Epochal Crisis,”Monthly Review 65, no. 5 (October 2013): 1–12.
  80. Robert W. McChesney and John Nichols,People Get Ready: The Fight Against a Jobless Economy and a Citizenless Democracy (New York: Nation Books, 2016), 77–79, 112, 305; Michael Yates,The Great Inequality (London: Routledge, 2016); Samir Amin, The Law of Worldwide Value (New York: Monthly Review Press, 2010).
  81. See the two introductory essays preceding the publication of the missing chapters of Monopoly Capital: Foster, “A Missing Chapter ofMonopoly Capital“; John Bellamy Foster and Robert W. McChesney, “The Cultural Apparatus ofMonopoly Capital,”Monthly Review 65, no. 3 (July-August 2013): 1–33.
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