Paul A. Baran and Paul M. Sweezy, Monopoly Capital. New York and. London: Monthly Review Press, Pp. ix + Harry Magdoff. New School for Social . This landmark text by Paul Baran and Paul Sweezy is a classic of Monopoly Capital and millions of other books are available for Amazon Kindle. Learn more. Monopoly Capital [Paul And Sweezy, Paul M. Baran] on *FREE* shipping on qualifying offers.

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Paul SweezyPaul A.

Monopoly Capital: An Essay on the American Economic and Social Order

He was a frequent contributor to Monthly Reviewco-author with Paul M. Please visit the MR store for subscription options. It is, then, the state of the market which decides for any particular capital whether it should expand, contract or leave production at a given level. In practice, no distinction mmonopoly made between the public and the private sector capitl the economy, and in both all transactions are money transactions.

Because periods of stagnation are crisis conditions, one could say that the temporary crisis has become permanent. The composition of the surplus shows how it uses that freedom: What is the continuing relevance of Monopoly Capital? There is a point of accumulation where the decreased variable capital cannot anr compensation in an increase of surplus-value large enough to yield sufficient profits on total capital.

And as the government has nothing to give monopoyl exchange but the money it extracts out of the economy, the utilisation of private productive resources by government equates — as far as private capital is concerned — with their non-utilisation in their previous state of idleness. After these events, capiatl do not see how the feelings of any socialist toward the Soviet Union can remain unchanged. Fourth, military spending does not compete with capitalist interests in the same way as civilian spending and through imperialism serves to enhance those interests.

And it is of course true that this was accomplished by government interventions in the economy. In any case, it is only under conditions of rapid capital accumulation that demand expands sufficiently to enable the realisation and capitalisation of surplus-value.

What Baran and Sweezy might possibly mean by their assertion bzran Marx neglected monopoly — i. It is only through the growing capacity to produce that total exchange-value is enlarged capiyal capital accumulated.

There was a seeming confusion in their book about the definition of economic surplus to do with the fact that they were gauging it by somewhat different yardsticks at different points using what is known as comparative monopolg. Monopoly profits reduce the competitively established average rate of profit and therewith lead to the progressive decline of the quantity of profits transferable to monopoly capital.


A lack of effective demand relative to the production potential leads to unused resources. Monopoly Capital was commonly viewed sweey the fundamental critique of the system in the historical period we monnopoly living through. The vast extent of this increasing actual and potential surplus is visible in the underutilization of productive capacity, the level of unemployment, the waste embodied in the sales effort, and military spending. I viewed Monopoly Capital as a direct development of classical Marxian theory meant to account for twentieth-century conditions.

Baran and Sweezy have produced an appraisal of American society … capiyal is totally at odds with the interpretation of American society we find in the books of most professors … unlike most books we read, this one attacks prevailing beliefs at their roots.

The increasing rate of obsolescence indicates the quickening pace in which means of production lose their profit-producing capacity.

Monthly Review | Baran and Sweezy’s Monopoly Capital, Then and Now

In fact, the capacity to produce increases particularly in crisis situations in order to effect a resumption of the accumulation process. Monopoly Capital was the principal Marxian, and indeed radical, political-economic work to be published in the s, fapital by the two most prestigious Marxian economists in the United States and perhaps globally. According to Baran and Sweezy, the normal modes of surplus utilisation are capitalist consumption and investment — capitl by unavoidable expenses of the circulation process and by necessary but unproductive activities.

Yet paradoxically enough, the impact of this profound economic transformation was felt least of all in the area most immediately affected: And this increase may be progressive. This theory disregards the value-character of capitalist production. This has led to an extension of theory to address what barxn called “monopoly-finance capital,” capktal “internationalization of monopoly capital,” the globalization of the reserve army of labor, and the growing monopolization of communications, most dramatically the Internet.

Assuming, for the moment, that Baran and Sweezy are right, they would still only repeat what Marx himself pointed out, namely, that a sufficient rate of exploitation temporarily bars the fall of the rate of profit. The increase of the debt is held to be quite harmless as long as the national income increases faster than the debt.

Yet capitalism did live to see that future. Private accumulation therefore requires the support of government spending geared primarily towards imperialistic and militaristic government tendencies, which is the capjtal and surest way to utilize surplus productive capacity. It was one of the first major works to focus on multinational corporations.

It is clear, in that case, capitaal if production were less effective the demand would be relatively greater. But all these items are cost-of-production items which are not recoverable in sales-prices on the market, for, with insignificant exceptions, the products produced for government fall out of the market system. In brief, the maintenance of the private-enterprise system sets definite limits to the expansion of government-induced production.


As regards monopoly profits secured by price manipulations, it should be clear that they can be gained only through corresponding profit-losses on the part of the non-monopolistic capital — No matter what the structure of capitalism, there is, at any given time, a definite amount of national and international income derived from surplus-value.

Sweezy also later criticized Monopoly Capital for not referring directly to Marxian value theory categories, i. Second, I had a negative response to the profit-squeeze theory that had grown up on the left parallel to the demise of Keynesian theory and the annd of bourgeois supply-side economics in its place in the Thatcher and Reagan years. When it is not possible to convert all produced commodities into money, it is not possible to realise the profits based on that part of production which falls to the capitalists.

There is a difference, however: Third, capitalist opposition to civilian spending as a threat to their class interests and class power limited the ability of such spending to provide effective demand. With the financial crisis of and the Great Recession of these years, followed by conditions of economic stagnation, some political economists have argued that Baran baraj Sweezy’s analysis in Monopoly Capital is key to the theoretical and historical explanation of these events.

Baran and Sweezy highlighted five aspects of the surplus absorption problem.

Where and when this is no longer possible, investments will be unprofitable and consequently will not be made. To increase their shares of a given market, or to maintain their profitability in a shrinking market, the different capitals will try to cheapen their production in order to maintain or increase their competitive ability. It is also the only available means to arrest this decline.

To express this, I call the value composition, in so far as it is determined by the technical composition and mirrors the changes of the latter, the organic composition of capital.

Other forms of absorbing the surplus include expansion of the sales effort and the growth of finance, insurance, and real estate. True, government purchases actually do increase production generally, for the non-marketable final products require intermediary productive activities, such as the production of raw materials, the consumption needs of increased employment, and the required additions and changes in the productive machinery.

With the decline of profitability it becomes increasingly more difficult to expand production in this particular way.