Monopoly Capital

Paul A. Baran

• Editorial: Monthly Review Press
• Año: 1966
• ISBN:
  9781583674000
• Categoría: Economics
• Categoría: Economic Policy

This landmark text by Paul Baran and Paul Sweezy is a classic of twentieth-century radical thought, a hugely influential book that continues to shape our understanding of modern capitalism. "This book… deals with a vital area of economics, has a unique approach, is stimulating and well written. It 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

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INTRODUCTION

The situation in the social sciences in the United States today is paradoxical. The number of research workers and teachers is rapidly rising. Their training and command of their disciplines, including the ability to use precise mathematical reasoning and sophisticated statistical methods, are far above the levels attained by their predecessors of even one generation ago. Universities, foundations, and governments organize research projects and dispense grants on an unprecedented scale. Books, reports, and articles are turned out in a never-ending stream. And yet all this high-powered intellectual activity has yielded few important new or fresh insights into the way our society works and where it is headed.

To be sure, we know that our society is working anything but well. But only a few years ago, during what C. Wright Mills aptly called the Great American Celebration, social scientists were assuring us that everything was fine. That the opposite is true—that idle men and idle machines coexist with deprivation at home and starvation abroad, that poverty grows in step with affluence, that enormous amounts of resources are wasted in frivolous and often harmful ways, that the United States has become the symbol and defender of reaction all over the world, that we are engaged in several wars and clearly headed toward more and bigger ones—the knowledge of all this, and much more, did not come to us from the social sciences but from the observation of unavoidable facts. One can even say that social scientists, assuring us for so long that all was for the best in what they took to be the best of all possible worlds, did what they could to keep us from looking reality in the face.

How can we account for the paradox of more and better trained social scientists failing ever more glaringly to explain social reality?

Part of the answer no doubt lies in plain opportunism. Who pays the piper calls the tune, and everyone knows who the payers are and what tunes they prefer. In a capitalist society, an effective demand will always call forth its own supply.

But it would be both wrong and libelous to leave the matter there. Among American social scientists there are men and women of the highest integrity who are motivated by a genuine passion for truth. If they too have failed to throw light on the great social issues of our time, the reason is not opportunism but the inherent limitations of their outlook and methodology. These they have partly inherited from the past and partly shaped in response to their own environment. This environment is above all one of increasing complexity calling for more and more specialization of every kind and at every level. Following this road, social science has become more and more compartmentalized, with its practitioners turning into ever narrower specialists—superbly trained experts in their own “fields” but knowing, and indeed able to understand, less and less about the specialties of others. As for society as a whole, which in the past has been the chief preoccupation of the great social thinkers, since it transcends all the specialties, it simply disappears from the purview of social science. It is taken for granted and ignored.

And yet the dictum of Hegel which we have chosen as an epigraph for this book retains its undiminished validity: “The truth is the whole.” To be sure, there are also an infinitude of small truths which American social scientists have been diligent, and often successful, in pursuing. Having borrowed liberally from their findings, as the reader will discover, we would be the last to belittle them. But just as the whole is always more than the sum of the parts, so the amassing of small truths about the various parts and aspects of society can never yield the big truths about the social order itself—how it got to be what it is, what it does to those who live under it, and the directions in which it is moving. These big truths must be pursued in their own right and for their own sake. And here bourgeois social science has abdicated all responsibility.

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The same cannot be said of Marxian social science. Its focus is on the social order as a whole, not on the separate parts; and it embodies a methodology and a theory, or perhaps more accurately a number of theories, which go far toward explaining how our society works and where it is going. But here too there are grounds for dissatisfaction. Important works of Marxian social science have been rare in recent years. Marxists have too often been content to repeat familiar formulations, as though nothing really new had happened since the days of Marx and Engels—or of Lenin at the latest. As a result Marxists have failed to explain important developments, or sometimes even to recognize their existence. The Great Depression of the 1930s accorded admirably with Marxian theory, and its occurrence of course greatly strengthened the belief that similar catastrophic economic breakdowns were inevitable in the future. And yet, much to the surprise of many Marxists, two decades have passed since the end of the Second World War without the recurrence of severe depression. Nor have Marxists contributed significantly to our understanding of some of the major characteristics of the “affluent society”—particularly its colossal capacity to generate private and public waste and the profound economic, political, and cultural consequences which flow from this feature of the system.

The stagnation of Marxian social science, its lagging vitality and fruitfulness, cannot be explained by any simple hypothesis. Both objective and subjective causes are involved, and to disentangle them and give each its proper weight would be a difficult task. But there is one important factor which we believe can be identified and isolated and hence (at least in principle) remedied: the Marxian analysis of capitalism still rests in the final analysis on the assumption of a competitive economy.

Those, whether Marxists or not, who are familiar with the theoretical works of Lenin may find this statement surprising. For it was Lenin who wrote: “If it were necessary to give the briefest definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism.”¹ And there is no doubt that Lenin, in analyzing the domestic and international politics of the period which culminated in the First World War, gave full weight to the predominance of monopoly in the advanced capitalist countries. This was indeed a decisive advance in Marxian theory and goes far to account for the tremendous power and undiminished relevance of Marxism in its Leninist—and Maoist—forms. And yet it remains true that neither Lenin nor any of his followers attempted to explore the consequences of the predominance of monopoly for the working principles and “laws of motion” of the underlying capitalist economy. There Marx’s Capital continued to reign supreme.

Not that Marx was unaware of the existence of monopoly in the British economy of his day—the real historical system from which he distilled his theoretical model. But like the classical economists before him, he treated monopolies not as essential elements of capitalism but rather as remnants of the feudal and mercantilist past which had to be abstracted from in order to attain the clearest possible view of the basic structure and tendencies of capitalism. It is true that, unlike the classicists, Marx fully recognized the powerful trend toward the concentration and centralization of capital inherent in a competitive economy: his vision of the future of capitalism certainly included new and purely capitalist forms of monopoly. But he never attempted to investigate what would at the time have been a hypothetical system characterized by the prevalence of large-scale enterprise and monopoly. Partly the explanation is no doubt that the empirical material on which such an investigation would have had to be based was too scanty to permit reliable generalization. But perhaps even more important, Marx anticipated the overthrow of capitalism long before the unfolding of all its potentialities, well within the system’s competitive phase.

Engels, in some of his own writings after Marx’s death and in editorial additions to the second and third volumes of Capital which he prepared for the printer, commented on the rapid growth of monopolies during the 1880’s and 1890’s, but he did not try to incorporate monopoly into the body of Marxian economic theory. The first to do this was Rudolf Hilferding in his important work, Das Finanzkapital, published in 1910. But for all his emphasis on monopoly, Hilferding did not treat it as a qualitatively new element in the capitalist economy; rather he saw it as effecting essentially quantitative modifications of the basic Marxian laws of capitalism. As we have already noted, Lenin, who was strongly influenced by Hilferding’s analysis of the origins and diffusion of monopoly, based his theory of imperialism squarely on the predominance of monopoly in the developed capitalist countries. But as also noted, neither he nor his followers pursued the matter into the fundamentals of Marxian economic theory. There, paradoxically enough, in what might have been thought the area most immediately involved, the growth of monopoly made the least impression.

We believe that the time has come to remedy this situation and to do so in an explicit and indeed radical fashion.² If we are to follow the example set by Marx and make full use of his powerful analytical method, we cannot be content with patching up and amending the competitive model which underlies his economic theory. We must recognize that competition, which was the predominant form of market relations in nineteenth-century Britain, has ceased to occupy that position, not only in Britain but everywhere else in the capitalist world. Today the typical economic unit in the capitalist world is not the small firm producing a negligible fraction of a homogeneous output for an anonymous market but a large-scale enterprise producing a significant share of the output of an industry, or even several industries, and able to control its prices, the volume of its production, and the types and amounts of its investments. The typical economic unit, in other words, has the attributes which were once thought to be possessed only by monopolies. It is therefore impermissible to ignore monopoly in constructing our model of the economy and to go on treating competition as the general case. In an attempt to understand capitalism in its monopoly stage, we cannot abstract from monopoly or introduce it as a mere modifying factor; we must put it at the very center of the analytical effort.³

Now Marx derived his theoretical model of the competitive capitalist system from study of Britain, by far the richest and most developed capitalist country of his day. This was necessary and unavoidable.⁴ And on the same principle a theoretical model of the monopoly capitalist system must be based on study of the United States, which is today as far ahead of other countries in terms of capitalist development as Britain was in the nineteenth century.

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The purpose of this book is to begin the process of systematically analyzing monopoly capitalism on the basis of the experience of the most developed monopoly capitalist society. This statement, however, needs to be clarified; for in science, as in art, a beginning can be of two kinds: a sketch of the overall conception, to be elaborated and filled in later, or the actual commencement of the final work. Our effort is in the nature of a sketch, a fact we have sought to underline by labeling it an “essay.” We hope that our success or failure will be judged accordingly—not by errors or shortcomings of detail in fact or reasoning (though naturally we want such errors and shortcomings to be pointed out and criticized with all necessary severity), but by the extent to which we have effectively focused attention on the need to study monopoly capitalism as such, and have pointed to its crucial problems and the ways in which they may be most fruitfully tackled

Our essay-sketch makes no pretense to comprehensiveness. It is organized around and attains its essential unity from one central theme: the generation and absorption of the surplus under conditions of monopoly capitalism.⁵

We believe that this is the most useful and enlightening way to analyze the purely economic functioning of the system. But, no less important, we also believe that the modes of utilization of surplus constitute the indispensable mechanism linking the economic foundation of society with what Marxists call its political, cultural, and ideological superstructure. In some societies this mechanism is relatively simple and its effects easily accessible to analysis. In a true feudal society, for example, the surplus is forcibly extracted by feudal lords from the labor of serfs and directly consumed by the lords and their retainers without significant mediation of traders and other types of middlemen. Under these circumstances, the determinants of the size of the surplus, the way it is used, and the relation between these matters and the politics and culture of the society are readily understandable. In other societies the connecting mechanism between economic and noneconomic phenomena is vastly more complicated and may come to play an important role in the functioning of both the foundation and the superstructure. We believe that monopoly capitalism is a society of the latter type and that any attempt to understand it which omits or slights the modes of utilization of surplus is bound to fail.

We do not claim that directing attention to the generation and absorption of surplus gives a complete picture of this or any other society. And we are particularly conscious of the fact that this approach, as we have used it, has resulted in almost total neglect of a subject which occupies a central place in Marx’s study of capitalism: the labor process. We stress the crucial role of technological change in the development of monopoly capitalism but make no attempt to inquire systematically into the consequences which the particular kinds of technological change characteristic of the monopoly capitalist period have had for the nature of work, the composition (and differentiation) of the working class, the psychology of workers, the forms of working-class organization and struggle, and so on. These are all obviously important subjects which would have to be dealt with in any comprehensive study of monopoly capitalism.

Our neglect of the labor process does not, however, mean that this book is not concerned with the class struggle. For a number of reasons, some of which are analyzed in Chapter 7, the class struggle in our time has been thoroughly internationalized. The revolutionary initiative against capitalism, which in Marx’s day belonged to the proletariat in the advanced countries, has passed into the hands of the impoverished masses in the underdeveloped countries who are struggling to free themselves from imperialist domination and exploitation. It is the exigencies of this international class struggle which, as we attempt to show, play an increasingly decisive part in determining the utilization of the surplus, and therewith the whole character of the society, in the leading imperialist power. We also deal in Chapter 9 with the racial problem in the United States, which is one of the critical links between the international class struggle and the internal balance of social forces within the United States.

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The economic surplus, in the briefest possible definition, is the difference between what a society produces and the costs of producing it. The size of the surplus is an index of productivity and wealth, of how much freedom a society has to accomplish whatever goals it may set for itself. The composition of the surplus shows how it uses that freedom: how much it invests in expanding its productive capacity, how much it consumes in various forms, how much it wastes and in what ways. It would obviously be highly desirable to have a full statistical record of the development of each country’s surplus over as long a period as possible. Unfortunately, to the best of our knowledge, no such record exists for any country, even for a short period of time. There are various reasons for this, of which perhaps the most obvious are lack of familiarity with the surplus concept and the absence of reliable statistics. But even where, as in the United States, a reasonably large body of statistical material does exist, it is very difficult to arrive at accurate estimates of the magnitude of the surplus and its various components.

To attempt a full explanation of these difficulties would be to anticipate. Suffice it to say at this point that in a highly developed monopoly capitalist society, the surplus assumes many forms and disguises.⁶ Part of the problem is to identify the most important of these theoretically, and the rest is to extract a reasonable estimate of their magnitudes from statistics which have been set up and prepared for entirely different purposes. In this book we have concentrated our efforts on the theoretical task, introducing quantitative data mostly for explanatory or illustrative purposes. But it also seemed desirable to present systematic estimates of the surplus and its major components. Having a poor opinion of our own knowledge of statistical sources and skill at avoiding statistical pitfalls, we asked our friend Joseph D. Phillips, for whose knowledge and ability in these respects we have the highest regard, to prepare these estimates. After reading a draft of the relevant chapters and giving thought to the problem of sources, he concluded that the task was a feasible one and accepted our invitation. His estimates of the United States surplus and its major components for the period 1929-1963 are presented in the Appendix beginning on p. 369. Though subject to qualifications and caveats, as Phillips makes clear, they are, we feel confident, reliable as indicators of the orders of magnitude involved.

Some of the statistical categories used are intelligible only in the light of the theory yet to be developed. But it is relevant to cite two of Phillips’s major findings since they lend support to the methodology of this work.

First, the magnitude of the surplus in the United States amounted to 46.9 percent of Gross National Product in 1929. This figure declined in the early years of the Great Depression and of course rose sharply during the Second World War. Apart from these interludes, the trend has been steadily upward, reaching 56.1 percent in 1963. The importance of the surplus as a subject of study is here illustrated in a striking way.

Second, the portion of the surplus which is usually identified with surplus value (profits + interest + rent = Phillips’s “property income”) declined sharply in the same period. In 1929 property income was 57.5 percent of total surplus, and in 1963 it was only 31.9 percent. Clearly, not only the forces determining the total amount of surplus need to be analyzed but also those governing its differentiation and the varying rates of growth of the components.

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Marx, analyzing the most advanced capitalism of his day, was emphatic in telling those living in less developed societies, “De te fabula narratur”—of you the story is told. And again: “The country that is more developed industrially only shows to the less developed the image of its own future.”⁷ Should the analyst of American monopoly capitalism today address the same message to t...