Monopoly
The central problem in advanced monopoly capitalism is not one of scarce resources clashing against innate, insatiable wants. Rather, it is one of an abundance of production clashing against saturated consumption and investment markets. In order to absorb potential economic output and forestall excess capacity, business interests must continuously search for new markets to exploit or entice existing customers who stand ready to buy the latest product, iteration, or service, and to induce new investment. The key to business survival in a capitalist economy is continual expansion of market share and reach: grow or die.… The efforts applied to this relentless drive undermine the conventional wisdom of market-determined pricing—for were a competitive price system in place, the funds for these expenditures would not exist. As I will show, the resources and funds expended in this quixotic endeavor to grow can be broadly referred to as the “economic surplus.” | more…
From the 1960s to the Present
In 1964, Paul Baran and Paul Sweezy wrote an essay entitled “Notes on the Theory of Imperialism” for a festschrift in honor of the sixty-fifth birthday of the great Polish Marxist economist Michał Kalecki.… [T]he essay offered the first major analysis of multinational corporations within Marxian theory. Parts of it were incorporated into Baran and Sweezy’s Monopoly Capital in 1966, two years after Baran’s death. Yet for all that book’s depth, “Notes on the Theory of Imperialism” provided a more complete view of their argument on the growth of multinationals. In October and November 1969, Harry Magdoff and Sweezy wrote their article “Notes on the Multinational Corporation,” picking up where Baran and Sweezy had left off. That same year, Magdoff published his landmark The Age of Imperialism, which systematically extended the analysis of the U.S. economy into the international domain.… In the analyses of Baran, Sweezy, and Magdoff, as distinct from the dominant liberal perspective, the multinational corporation was the product of the very same process of concentration and centralization of capital that had created monopoly capital itself. | more…
Three years ago, in December 2006, I wrote an article for Monthly Review entitled “Monopoly-Finance Capital.” The occasion was the anniversary of Paul Baran and Paul Sweezy’s Monopoly Capital, published four decades earlier in 1966.…The article…[discussed] “the dual reality” of stagnant growth (or stagnation) and financialization, characterizing the advanced economies in this phase of capitalism. I concluded that this pointed to two possibilities: (1) a major financial and economic crisis in the form of “global debt meltdown and debt-deflation,” and (2) a prolongation of the symbiotic stagnation-financialization relationship of monopoly-finance capital. In fact, what we have experienced in the last two years, I would argue, is each of these sequentially: the worst financial-economic crisis since the 1930s, and then the system endeavoring to right itself by returning to financialization as its normal means of countering stagnation. It is thus doubly clear today that we are in a new phase of capitalism. In what follows, I shall attempt to outline the logic of this argument, as it evolved out of the work of Baran, Sweezy, and Harry Magdoff in particular, and how it relates to our present economic and social predicament. | more…
The year now ending marks the fortieth anniversary of Paul Baran and Paul Sweezy’s classic work, Monopoly Capital: An Essay on the American Economic and Social Order (Monthly Review Press, 1966). Compared to mainstream economic works of the early to mid-1960s (the most popular and influential of which were John Kenneth Galbraith’s New Industrial State and Milton Friedman’s Capitalism and Freedom), Monopoly Capital stood out not simply in its radicalism but also in its historical specificity. What Baran and Sweezy sought to explain was not capitalism as such, the fundamental account of which was to be found in Marx’s Capital, but rather a particular stage of capitalist development. Their stated goal was nothing less than to provide a brief “essay-sketch” of the monopoly stage of capitalism by examining the interaction of its basic economic tendencies, narrowly conceived, with the historical, political, and social forces that helped to shape and support them | more…