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The Theory of Monopoly Capitalism

The Theory of Monopoly Capitalism

John Bellamy Foster
Copyright Date: 2014
Published by: NYU Press,
Pages: 320
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  • Book Info
    The Theory of Monopoly Capitalism
    Book Description:

    In 1966, Paul Baran and Paul Sweezy published Monopoly Capital, a monumental work of economic theory and social criticism that sought to reveal the basic nature of the capitalism of their time. Their theory, and its continuing elaboration by Sweezy, Harry Magdoff, and others in Monthly Review magazine, infl uenced generations of radical and heterodox economists. They recognized that Marxs work was unfi nished and itself historically conditioned, and that any attempt to understand capitalism as an evolving phenomenon needed to take changing conditions into account. Having observed the rise of giant monopolistic (or oligopolistic) fi rms in the twentieth century, they put monopoly capital at the center of their analysis, arguing that the rising surplus such fi rms accumulatedas a result of their pricing power, massive sales efforts, and other factorscould not be profi tably invested back into the economy. Absent any epoch making innovations like the automobile or vast new increases in military spending, the result was a general trend toward economic stagnationa condition that persists, and is increasingly apparent, to this day. Their analysis was also extended to issues of imperialism, or accumulation on a world scale, overlapping with the path-breaking work of Samir Amin in particular.John Bellamy Foster is a leading exponent of this theoretical perspective today, continuing in the tradition of Baran and Sweezys Monopoly Capital. This new edition of his essential work, The Theory of Monopoly Capitalism, is a clear and accessible explication of this outlook, brought up to the present, and incorporating an analysis of recently discovered lost chapters from Monopoly Capital and correspondence between Baran and Sweezy. It also discusses Magdoff and Sweezys analysis of the fi nancialization of the economy in the 1970s, 80s, and 90s, leading up to the Great Financial Crisis of the opening decade of this century. Foster presents and develops the main arguments of monopoly capital theory, examining its key exponents, and addressing its critics in a way that is thoughtful but rigorous, suspicious of dogma but adamant that the deep-seated problems of todays monopoly-fi nance capitalism can only truly be solved in the process of overcoming the system itself.

    eISBN: 978-1-58367-454-3
    Subjects: Political Science

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface to the New Edition
    (pp. vii-viii)
  4. Preface to the First Edition
    (pp. ix-ix)
  5. Introduction to the New Edition
    (pp. x-xlviii)

    The Theory of Monopoly Capitalism: An Elaboration of Marxian Political Economywas initially written thirty years ago as my doctoral dissertation at York University in Toronto. It was expanded into a larger book form with three additional chapters (on the state, imperialism, and socialist construction) and published by Monthly Review Press two years later.² The analysis of both the dissertation and the book focused primarily on the work of Paul Baran and Paul Sweezy, and particularly on the debate that had grown up around their book,Monopoly Capital: An Essay on the American Economic and Social Order(1966).³ In this...

  6. 1 The Monopoly Capital Debate
    (pp. 11-23)

    With the turn for the worse in the U.S. and world economy in the early 1970s, a majority of mainstream economists turned their backs on reality and the Keynesian “revolution” and reverted to the supply-side perspective that had always been the preferred liberal response to crisis. Thus when Paul Samuelson told his readers in 1983 that Keynes’s “prescription in its most simple form self-destructed, as the obligation to run a full-employment humanitarian state caused modern economies to succumb to the new disease of stagflation—high inflation along with joblessness and excess capacity,” he was simply giving further evidence of the...

  7. 2 The Economic Surplus Concept and Marxian Value Theory
    (pp. 24-50)

    Paul Mattick, representing the traditionalist Marxist perspective, has suggested that Baran and Sweezy’s substitution of the concept of economic surplus (defined as the “difference between total social output and the socially necessary costs of producing it”) for surplus value inMonopoly Capitalmerely reflected the fact that they had “switched from Marxian to bourgeois economic analysis, which does not operate with class terms such as value and surplus-value but with the amalgam national income, the concept of ‘effective demand,’ and Keynesian remedies for capital stagnation.”¹ Ph. Herzog has likewise remarked that Baran and Sweezy “remain prisoners of the bourgeois problematics...

  8. 3 Free Competition and Monopoly Capital
    (pp. 51-73)

    Much of the “stagnation of Marxian social science,” Baran and Sweezy contended in the opening pages of their book, could be attributed to the fact that, notwithstanding the contributions of Hilferding and Lenin, “the Marxian analysis of capitalism still rests in the final analysis on the assumption of a competitive economy.”¹ And thus real history could be expected to diverge to an ever greater extent from the world of Marx’sCapitalwithin the crucial realm of competition itself:

    We must recognize that competition, which was the predominant form of market relations in nineteenth-century Britain, has ceased to occupy that position,...

  9. 4 Accumulation and Crisis
    (pp. 74-106)

    The modern, neo-Marxian theory of accumulation, of which Baran and Sweezy’sMonopoly Capitalis the best-known example, arose out of the fusion of two distinct strands in Marx’s thought: (1) the underconsumptionist approach to the crisis phenomenon, and (2) the analysis of concentration and centralization (leading to the notion of monopoly capital). Since it is only under monopoly capitalism that underconsumptionist tendencies come to the fore, the second strand, with its emphasis on the stagnation of investment, came to characterize the theoretical synthesis as a whole in the eyes of its main proponents.¹

    Most critics ofMonopoly Capital, however, have...

  10. 5 The Issue of Excess Capacity
    (pp. 107-127)

    “According to our model,” Baran and Sweezy wrote,

    the growth of monopoly generates a strong tendency for surplus to rise without at the same time providing adequate mechanisms of surplus absorption. But surplus that is not absorbed is also surplus that is not produced: it is merely potential surplus, and it leaves its statistical trace not in the figures of profits and investment but rather in the figures of unemployment and unutilized productive capacity. If, as most economists and historians seem to agree, we can date the growth of monopoly capital in the United States from approximately the end of...

  11. 6 The State of the Economy
    (pp. 128-159)

    The widely heralded “fiscal revolution in America,” supposedly unleashed by the Keynesian revolution, was neither as complete nor as lasting as the economic pundits once imagined. Rising deficits, demands to “balance the budget,” cutbacks in federal programs for the poor, coupled with low growth and rising unemployment and excess capacity, have brought the “crisis of the tax state” back to the center of economic discussion. And yet there is a tendency to focus on what is merely symptomatic of the larger illness of monopoly capitalist society.

    By far the most influential study in this area by a radical economist is...

  12. 7 Imperialism and the Political Economy of Growth
    (pp. 160-192)

    According to the traditionalist Marxist economist John Weeks,

    Capitalist accumulation in dependency theory is primarily the result of the redistribution of surplus product between developed and underdeveloped areas. This presupposes both the production of surplus product (a precondition for its distribution and redistribution) and accumulation itself. Accumulation is not related to the social relations under which a surplus product is produced or appropriated, with the implicit view that a surplus product is a sufficient condition for accumulation.¹

    This statement clearly expresses the view, fairly widespread among the more traditionalist Marxists, that radical dependency theory is fundamentally opposed to the theoretical...

  13. 8 Some Notes on Socialist Construction and Postrevolutionary Societies
    (pp. 193-220)

    Near the beginning of the previous chapter it was noted that:

    There can be little question about the fact that Paul Baran’s main object in writing his now classic study,The Political Economy of Growth, was to emphasize the very real possibility of substantial development in underdeveloped countries, once they had freed themselves from the shackles of imperialism. As he explained in a letter to Paul Sweezy, “In addition to what imperialism does, one should consider and indeed emphasize what its role is in the prevention of what needs to be done.”

    “What needs to be done” was discussed by...

  14. Appendix: The Early Introduction
    (pp. 221-224)
    Paul A. Baran and Paul M. Sweezy
  15. Notes
    (pp. 225-264)
  16. Index
    (pp. 265-280)