Fifty years ago this month two chapters, “The Giant Corporation” and “On the Quality of Monopoly Capitalist Society—I,” of Paul Baran and Paul Sweezy’s then forthcoming book, Monopoly Capital,were published in a special issue of Monthly Review. Among the other chapters in rough draft form by the end of 1962 were “Some Implications for Economic Theory” (later to be re-entitled “Some Theoretical Implications”) and “On the Quality of Monopoly Capitalist Society—II.” However, Baran’s death in March 1964, before the book was finished, left some unresolved questions with regard to these chapters. Consequently, Sweezy decided to leave these two chapters out of the book when it was finally published in 1966.… This special issue of Monthly Review is organized around the publication of one of these missing chapters of Monopoly Capital: “Some Theoretical Implications.” | more…
Monopoly Capital: An Essay on the American Economic and Social Order by Paul A. Baran and Paul M. Sweezy, published in 1966, is one of the foundational works in the development of Marxian political economy in the United States and indeed the world, and is today recognized as a classic, having generated more than four-and-a-half decades of research and debate. The completion of the book, however, was deeply affected by Baran’s death, on March 26, 1964, two years before the final manuscript was prepared. Although all of the chapters were drafted in at least rough form and had been discussed a number of times the authors had not mutually worked out to their complete satisfaction certain crucial problems. Consequently, two chapters were left out of the final work.… What happened to these two missing chapters—”Some Implications for Economic Theory” and presumably “On the Quality of Monopoly Capitalist Society—II”—remained for many years a mystery. | more…
That all is not well in the realm of bourgeois economic theory is strongly felt by its closest observers. Professor Mason’s blunt statement that “the functioning of the corporate system has not to date been adequately explained,” could hardly be contradicted by anyone familiar with contemporary economic literature. Its most conspicuous feature is, indeed, this very failure to come to grips with the most important aspects of what, one would think, should constitute its central problem.… The reasons for this striking reluctance to place the realities of modern capitalism where they belong: at the center of theoretical attention, are not far to seek… There can be no doubt that the model of a perfectly competitive market economy is “more tractable,” that the examination of its manifold properties is more readily achievable by means of conventional tools of economic analysis than that of a system dominated by oligopolistic corporations. It may not be economics’ claim to applause, but it is understandable that most of its practitioners prefer not to tackle “intractable” matters, but to move along the line of the least theoretic resistance. | more…
These “Last Letters” were written by Baran and Sweezy in late February and early March 1964 and concerned “Some Theoretical Implications,” a chapter that Baran had drafted in 1962 and that they were then revising for their book Monopoly Capital. The discussion was cut short by Baran’s death around two weeks later.… They are published here for the first time. | more…
Paul Baran and Paul Sweezy dared, and were able, to continue the work begun by Marx. Starting from the observation that capitalism’s inherent tendency was to allow increases in the value of labor power (wages) only at a rate lower than the rate of increase in the productivity of social labor, they deduced that the disequilibrium resulting from this distortion would lead to stagnation absent systematic organization of ways to absorb the excess profits stemming from that tendency.… This observation was the starting point for the definition that they gave to the new concept of ’surplus.”… I have always considered this bold stroke as a crucial contribution to the creative utilization of Marx’s thought.… but [Baran and Sweezy] refused to stop, like so many other Marxists, at the exegesis of his writings.… Having, for my part, completely accepted this crucial contribution from Baran and Sweezy, I would like, in this modest offering for the special issue that Monthly Review is devoting to honoring their work, to put forward a ’quantitative metric” of that surplus. | more…
The ’GDP Illusion” is a fault in perception caused by defects in the construction and interpretation of standard economic data. Its main symptom is a systematic underestimation of the real contribution of low-wage workers in the global South to global wealth, and a corresponding exaggerated measure of the domestic product of the United States and other imperialist countries. These defects and distorted perceptions spring from the neoclassical concepts of price, value, and value added which inform how GDP, trade, and productivity statistics are devised and comprehended. The result is that supposedly objective and untarnished raw data on GDP, productivity, and trade are anything but; and standard interpretations conceal at least as much as they reveal about the sources of value and profit in the global economy. | more…
Austerity is now ’in fashion,” as governments respond to the revenue shortfalls of the crisis through deficit reduction plans and fiscal stability pacts, and economists blame it on the profligate spending of households and countries. Consumers, they say, bought houses they could not afford and countries consumed more than they produced, while loose monetary policies made this spending possible. Governments ’got prices wrong,” keeping interest rates too low for too long, and while increases in government spending might alleviate current employment problems, this deficit spending is inflationary, and in any case will not help in the long run as budget deficits raise interest rates, ’crowding out” business and household spending. It is as if we have stepped back in time, to the depression years of the 1930s, when monetary theories of the cycle were dominant, the ’overinvestment” of the boom blamed for the downturn, and effective fiscal actions proposed by Keynes and others blocked by preoccupation with the public debt and its burdens.… The analysis here is concerned with the systematic rejection of Keynes’s and Kalecki’s revolution in economics and the resurrection of Say’s Law (supply creates its own demand) of pre-Keynesian economics in all but name—a view that underlies today’s austerity economics. | more…
By any measure, Adrienne Rich lived an exemplary life. When she died last March 27, aged eighty-two, she was acknowledged by many critics as perhaps this country’s foremost poet.… Throughout her writing life, Adrienne Rich’s vision of a better world was clear. In her 2008 collection A Human Eye: Essays on Art in Society Rich claimed Che Guevara, Karl Marx, and Rosa Luxemburg as defining heroes. It did not matter if she was speaking to a room full of undergraduates or, having made the long painful climb up the hill to the Women’s Correctional Facility in Bedford Hills, New York, to teach poetry to its inmates, Adrienne’s voice was trenchant. So it was not surprising that when the commercial media ran obituaries of her, they sanitized her life and work, giving more emphasis to her awards than her work, characterizing her as angry rather than radical. At MR however, we preferred to hear her words: “Responsibility to yourself means refusing to let others do your thinking, talking, and naming for you; it means learning to respect and use your own brains and instincts; hence, grappling with hard work” (from “Claiming an Education,” 1977). | more…
When I consider the concept of harmony in the context of humans, their societies, and the environment I have a particular understanding of the concept. It refers to all people living together peacefully without exploitation of one person by another, each able to reach his or her full human potential, in a society in which everyone has their basic material and nonmaterial needs satisfied, feels secure, safe, happy, and fulfilled as human beings. In addition, the concept also implies harmony between people, the environment, and the other species we share the planet with.… [But] there is an overriding issue when considering harmony as I have briefly described it. Harmony in the world—among its people and between humans and the rest of the ecosystems—is not possible in the context of capitalism. Capitalism…has shown that it fosters interpersonal relations and metabolic interactions with the earth that are detrimental to achieving a harmonious existence. | more…
The question “Why Stagnation?” has a rather special significance for me. I started my graduate work in economics exactly fifty years ago this year. The cyclical downturn which began in 1929 was nearing the bottom. Unemployment in that year, according to government figures, was 23.6 percent of the labor force, and it reached its high point in 1933 at 24.9 percent. It remained in the double-digit range throughout the decade. Still, a recovery began in 1933, and it turned out to be the longest on record up to that time. Even at the top in 1937, however, the unemployment rate was still 14.3 percent, and it jumped up by the end of the year. That also happens to be the year I got my Ph.D. Can you imagine a set of circumstances better calculated to impress upon a young economist the idea that the fundamental economic problem was not cyclical ups and downs but secular stagnation? | more…
The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, marking what appears to be a turning point in world history. Although this was followed within two years by a recovery phase, the world economy five years after the onset of the crisis is still in the doldrums…. The one bright spot in the world economy, from a growth standpoint, has been the seemingly unstoppable expansion of a handful of emerging economies, particularly China. Yet, the continuing stability of China is now also in question. Hence, the general consensus among informed economic observers is that the world capitalist economy is facing the threat of long-run economic stagnation (complicated by the prospect of further financial deleveraging)…. It is this issue of the stagnation of the capitalist economy, even more than that of financial crisis or recession that has now emerged as the big question worldwide. | more…
Two poems by Marge Piercy, author of eighteen poetry books, most recently The Hunger Moon: New & Selected Poems, 1980–2010 from Knopf. Her most recent novel is Sex Wars (Harper Perennial) and PM Press has just republished Vida and Dance the Eagle to Sleep with new introductions. | more…
