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.
|Genre:||Health and Food|
|Published (Last):||9 July 2012|
|PDF File Size:||8.17 Mb|
|ePub File Size:||3.53 Mb|
|Price:||Free* [*Free Regsitration Required]|
The authors of Monopoly Capital Paul A. Baran and Paul M. For Marx, price relations derive from value relations and the study of capitalism must therefore begin with value relations. The value analysis of capitalism disregards competition, for in the social aggregate all prices equate with total value. Contrary to what Baran and Sweezy say, the Marxian analysis does not rest on the assumption of competitive capitalism but on the abstract concept of total capital.
If this concept is at all valid, it is so regardless of whether the actual capital structure is competitive, monopolistic or both. Marx lived in a highly competitive capitalism, to be sure, and he knew that prices, not values, determine market events — even though market events are themselves circumscribed by the social relations as value relations. The descriptive parts of Capital refer to capital competition and to the elimination of competition by way of competition, i.
What Baran and Sweezy might possibly mean by their assertion that Marx neglected monopoly — i. His theory of capital competition is at the same time a theory of monopoly, and monopoly, in this sense, always remains competitive, for a non-competitive monopoly capitalism implies the end of market relations such as sustain private-property capitalism. As soon as capital feels itself strong, however, the crutches are thrown away and capitalism moves in accordance with its own laws of motion.
But as soon as it begins to feel itself as a barrier to further development and is recognised as such, it adapts forms of behaviour through the harnessing of competition which seemingly indicate its absolute rule but actually point to its decay and dissolution. Appearances to the contrary notwithstanding, when, instead of being a form of competition, monopoly eliminates competition, capitalism finds itself on the way out. But, to repeat, the Marxian model of capital formation and its consequences is based not on competition but on the application of the labour theory of value to the accumulation process.
Although capital accumulation is actually a competitive process, the falling rate of profit does not depend on competition but on the shifting value relations of capital expansion.
To recall this law: The tendential fall of the rate of profit is just another expression for the accumulation of capital and the increasing productivity of labour. And this increase may be progressive. Sweezh it may not only be so. According to Marx, however, accumulation is characterised by: While the rate of surplus-value monopolg in one direction, the number of baarn falls in the opposite direction. And thus, while the fall of the rate of profit is checked by accumulation it cannot entirely be prevented, for there are definite limits beyond which the absolute labour-time cannot be extended and the necessary labour-time, i.
To speak in extremes: Whatever the mass of labour-power in the real capitalist world, in relation to the progressively faster growing constant capital it must become a diminishing quantity.
There is a point of accumulation where the decreased variable capital cannot find compensation in an increase of surplus-value large enough to yield sufficient profits on total capital. At this point the rate of profit falls below what is necessary to continue the expansion process. The arrival of this point in concrete reality is not predictable, but the tendency in this direction explains for Marx the recurrent crises and the increasing difficulty of overcoming periods of capital stagnation through changes in the conditions of production which raise the rate of surplus-value.
However, as long as capital accumulates it does so because it is still able to increase the mass of surplus-value. 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. Even the division of surplus-value into profit, interest and rent disappears in his value analysis. But this was equally true for competitive capitalism.
But the portion of the surplus which is usually identified with surplus-value, i. In this property-income was Whatever these statistics may be worth, and they are admittedly not worth much, they do not relate to the Marxian problem of the determination of the rate of profit, but to the capitalist problem of the division of recorded income — other than wages — among the various interest groups living on the surplus-product. They simply tell us what is obvious, namely, that in a few capitalist nations the productivity of labour has enormously increased in order to allow for a great amount of waste-production as well as for higher living standards even under conditions of relative capital stagnation.
They also indicate that government requires and receives an ever greater share of the Gross National Product. Apparently, all is well with capitalist society as far as the rate of exploitation is concerned.
According to Baran and Sweezy, the normal modes of surplus utilisation are capitalist consumption and investment — augmented by unavoidable expenses of the circulation process and by necessary but unproductive activities.
In monopoly capitalism, however, these normal modes of surplus utilisation no longer suffice because production outruns sweezg effective demand. The normal state of monopoly capital is thus stagnation. And this captial under-utilisation of available human and material resources.
Only, what used to be a period of stagnation within the business cycle has seemingly become the normal state of affairs. Because periods of stagnation are crisis conditions, one could say that the temporary crisis has become permanent. Instead, there are unused human and material resources. With the resultant growth of idle resources, capital accumulation, that is, the capitalist mode of production, would come to an end.
For all practical purposes it is quite immaterial whether a lack of effective demand is made to explain a restriction of production, or a lack of profitability is seen as the cause for a restriction of production and a consequent lack of effective demand.
In the one case the problem is approached from the market angle and in the other from that of production, but in both there is restriction of production. 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. Because productivity increases even in the absence of accumulation, it is quite independent of the production process as a capital-expansion process.
With accumulation a going concern, naran, the increasing productivity of labour goes hand in hand with the value-expansion of monoplly. Constant monooply variable capital in their value form are inextricably intertwined with the material conditions of production, i. Marx distinguished between the value composition and the material technical composition of swerzy. To anv 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.
For Marx, it is a discrepancy snd material and value production which leads to difficulties in the accumulation process, but which also allows for its resumption and expansion through changes in the material-technical conditions of production which raise the productivity of labour and therewith cqpital rate of surplus-value and profit.
Where and when this is no longer possible, investments will be unprofitable and consequently will not be made. According to Marx, moreover, the profitability of any particular capital depends on the profitability of the capitalist system as a whole.
The latter is an unknown quantity. The only indication as to whether it is rising or falling is given by market events. 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 amd. 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.
They do so all along; but under conditions of economic contraction, weaker capitals succumb more quickly to stronger ones, and the changes in monopply sphere of production are accompanied by changes in the market sphere. Capital will not only be more productive but also more concentrated and centralised. For Baran and Sweezy, however, capitalist problems are exclusively market problems. A lack of effective demand relative to the production potential leads to unused resources.
It is clear, in that case, that if production were less effective the demand would be relatively greater. Obviously, if monopoly capital were able to sell a larger product it would do so.
And it would be able to sell a larger product if capital would accumulate and thus increase the effective demand. But capital does not expand because it would not be profitable.
The complaint about the lack of demand is then, actually, a complaint about insufficient profitability. This theory disregards the value-character of capitalist production. In capitalism the increasing mass of commodities monopoyl use-values appear, however, as exchange-values. Since the mass of exchange-value declines with the growing productivity of labour, capital accumulation requires a faster growing mass of use-values. It is only through the growing capacity to produce that total exchange-value is enlarged and capital accumulated.
In fact, the capacity to produce increases particularly in crisis situations in order to effect a sweezg of the accumulation process. It is precisely the compulsion to increase the capacity to produce which points to the reality of the tendential decline of the rate of profit. It is also the only available means to arrest this decline. It is then the exchange-value of the surplus products, not the products themselves, which must be related to the value of total capital in order to determine the sufficiency or insufficiency of profitability.
Monopoly Capital by Paul Mattick
Since the capitalist capacity to produce relates not to a definite quantity of commodities but to the exchange-value of this quantity, Baran and Sweezy would have to prove their position not with reference to the increasing capacity to produce commodities but with an increasing capacity to produce exchange-value.
In reality, however, capital, no matter what its structure, relentlessly attempts to increase surplus-value under conditions of either a full or a partial use of productive resources. When resources remain idle it is not because they are too productive but an they are not productive enough. The increasing rate of obsolescence indicates the quickening pace in which means of production lose their profit-producing capacity. It is often only the most efficient productive apparatus which will secure the profitability of capiital.
Moreover, insatiable as it is in its quest for profits, capital goes out of its way to extract surplus-value from all the corners of the world in order to augment the profits made at home. Actually, there can never be enough surplus-value and profit, because of the diminishing profitability in the course of capital expansion. The surplus-value embodied in commodities is surplus-labour time.
Both situations indicate that the rate of profit on capital is such as to discourage, or even exclude, additional capital investments on a scale large enough to bring forth an effective demand which would assure the realisation of surplus-value on a larger production.
To think once more in extremes: There would be an enormous amount of production but little direct labour and therefore little surplus-labour. Because the displaced working population would still be there, it would have to be supported out of the automated production; capital would feed labour instead of labour feeding capital.
The conditions of capitalism would have been acpital reversed. Value and surplus-value production would no longer be possible.
Monopoly Capital: An Essay on the American Economic and Social Order
It is for this reason, of course, that such a situation cannot come to pass within the framework of capitalism. For so long as exchange-value is the goal of production, labour-time quantities remain the source and measure of capitalist wealth.
If a highly industrially-advanced country such as the United States — which underlies the whole reasoning of Baran and Sweezy — could be considered a closed system, then, in the Marxian view, its rate of profit should fall with its increasing organic composition of capital, unless offset ssweezy an increased rate of surplus-value expressed in an accelerated capital expansion.
But it is not a closed system, and is thus able captal only to slacken its rising organic composition of capital, by way of capital exports, for instance, but, via the world market, to increase its profits through the importation of profits from abroad.
In the main, it is the increasing productivity of labour which accounts for her increased production. The overproduction of capital in one part of the world confronts the undercapitalisation in another. For capitalism as a whole, of course, the organic composition is not high enough to account for a rate of profit too low to induce further rapid capital expansion. But the accumulation process is at the same time a capital concentration process, and just as it tends to play the accumulating capital into fewer hands in each nation, so does it concentrate the world capital into a few countries.