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Nigel Harris

Portrait of a System?

(Autumn 1967)

From International Socialism (1st series), No.30, Autumn 1967, pp.24-26.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Monopoly Capital
Paul A. Baran and Paul M. Sweezy
Monthly Review, 62s.

The great transition in capitalism between 1929 and 1950 swept away the existing rationale of the system. Both the old ‘free enterprise’ system and its ideology, Liberalism, received death blows from the succession of disasters beginning with slump and ending in war. It is relatively recently that both the defenders and the attackers of the surviving status quo have sought once more to put together the pieces left in order to offer a coherent picture and perspective of modern capitalism and an explanation for its survival. Strachey tried the exercise in the fifties in order to reconcile the radical birth of socialism with the anaemic conservatism of the 1950s Labour Party; Crosland devoted attention to justifying the second. More recently, Shonfield in Britain and Galbraith in the United States have tried to offer a rationale of ‘planned capitalism’ from a similar viewpoint: after all, any overall plan requires some coherent picture of existing reality. All of these authors more or less presupposed an audience on their Right, defenders or proponents of laissez-faire, but that audience – despite Enoch Powell and the IEA – has been slowly disappearing throughout the postwar world, leaving this case increasingly as the case for capitalism per se.

The Left has long needed a substantial counter-case, one that reanalysed the whole of modern capitalism as a system, incorporating the immense structural changes that have taken place since 1930 and relocating both the central drives of the system and its perspectives in relationship to the immediate action of socialists. Ernest Mandel’s Treatise on Marxist Economics (London, 1967) was one attempt to come to grips with the voluminous material of modern bourgeois economics, and Michael Kidron’s Modern Western Capitalism (London, due for publication at the end of the year) should locate some of the key features of contemporary capitalism relative to socialist action. Baran and Sweezy’s work is a similar attempt to grasp the whole system, to provide a basic critique of capitalism and a textbook for socialists: as such, it is an immensely welcome attempt.

The book takes as its central datum the modern large scale corporation (rather than the market as in classical accounts), arguing that it effectively controls its market and thereby can maximise its returns over the long term. The problem of the system arises in what to do with its rapidly increasing ‘surplus.’ The authors document the outlets involved in capitalist consumption and investment, in an expanding expenditure on manipulating consumers to buy, in Government expenditure, in militarism and imperialism. They consider separately the quality of life in American capitalism – the race problem, poverty and welfare, work and leisure, and so on.

There is much in this which is of value, particularly some of the factual material collated, and it is only inevitable in a work of synthesis that it should include much that was well known before. However, apart from this, there are very serious deficiencies which make the work weaker than earlier books by the same authors, and of much more limited significance for serious socialists. First, Baran and Sweezy’s capitalism seems to have no central drive as a system, for when the struggle between capitalists themselves and between capitalists and workers is removed (as they imply it has been removed by monopoly organisation), the drive in the original Marxist scheme – the drive of capitalists to accumulate capital – disappears. The authors’ capitalists do seek to accumulate, but for no necessary reason. This result follows from an over-emphasis on the possibilities of administered capitalism, and a failure to see that both the struggle on the factory floor continues – particularly fiercely hi the United States – so pushing capitalists to invest to reduce their labour needs; and, at least as fiercely, the struggle between capitalists continues, monopoly or not. Coal may constitute a monopoly, but only of coal; for oil, electricity, gas and soon, atomic energy, are all competitors for the same buyers. Even for particular commodities, there are always foreign corporations waiting to grab a section of the monopoly’s domestic market – American steel breathes down the necks of British, and European cars nibble at the edge of the US market. Thus ‘monopoly’ is only one stage in the war, not its end, and at best, a stage which is a relatively temporary one within a protected market enclave. But it is the continuing war which drives the system forward, both domestically and internationally (even if in different ways). In correctly seeing the decline of the small competitive firm, of the open market in particular commodities, the authors have excised just the element that continues even more fiercely to drive the system forward. In a similar way, their analysis of both the international market and of the role of the State is very weak. In the case of the second, the extension of the State is surely one of the key elements in the ‘administered’ nature of capitalism, and this role gives the State a quasi-independent position above warring corporations: the State becomes, not merely the cork floating on the wave of the bourgeoisie, but the central pillar and major organising agency of the ruling class as a whole. This is, perhaps, more obvious in the more highly centralised European States, all attempting overall planning in one way or another, but it is a process also far advanced in the United States (so leading one US economist [1] to argue that the United States is, by reason of organisation and development, one of the most highly planned non-Communist economies in the world).

This failure to see the contradictory elements in the system has wider implications in this book, for there is no real endemic conflict in the authors’ capitalism. The class struggle has ended, there are no real classes at all, only a recreation of the old Populist image of an ‘oligarchy’ (C. Wright Mills’ ‘power elite,’ not a ruling class properly so defined), wielding virtually unlimited power, and a mass, bribed, coerced, demoralised. This is a muckraking view of American society, usefully polemical, but not really a scientific analysis of a going system. As a result, the economics of ‘monopoly capitalism’ which are reasonably clear do not cohere with any adequate picture of American society. The authors denounce things indiscriminately, the kind of attacks varying from the querulous resentment of aged slightly prurient intellectuals bored at a cocktail party to a hodge podge of remarks about the dreadful nature of work in factories, seen quite clearly from the safe vantage point of a comfortable study. Any authority will do to support the kind of prejudices deployed at excessive length (Freud is dragged in for much of this section), but at no stage do the authors indicate how what they dislike is integrally related to the system they want to analyse.

Without anything like an adequate view of capitalist society, it is understandable that the authors see no social force available to change it. In any case, it is the implicit burden of much of their argument that monopoly capitalism has got its domestic challengers licked – only increased neurosis is the future for the majority; tormented from every direction, the utterly impotent mass can do no more than raise a cry of anguish. The authors early on say, somewhat startlingly in an analysis that claims to be Marxist, that they intend to neglect the ‘labor process’ (p.8), and at the end of this long work, assert without serious argument that ‘The answer of traditional Marxian orthodoxy – that the industrial proletariat must eventually rise in revolution against its capitalist oppressors – no longer carries conviction’ (p.363). There is no suggestion that whether or not the proposal is ‘convincing’ turns in part on what the authors propose to do. The poor and the negroes constitute something, but again, they are ‘too heterogenous, too scattered and fragmented, to constitute a coherent force in society’ (p.364). The best that can be hoped is that the negroes will act as the agents, the ambassadors, for the deus ex machina, the Third World, which will ultimately somehow bring revolution or at least destroy capitalism (the mechanism of this change is not explained).

Now unfortunately the abandonment of the proletariat is not an optional element in Marxism – without it, Marxism becomes nonsense, and socialist critics of society are driven back to the position of French philosophes, individuals with nothing but a higher morality or rationality to put in their guns. The search becomes one for any kind of revolution, not the lynch-pin of the Marxist system, a proletarian socialist revolution, and the promise of a proletarian revolution disappears: we have no guarantee that the same old tyrannical system will not reassert itself. Without the proletariat, class struggle becomes struggle between nation-states or groups of States (the Two Camps of days gone by), or between the white and the coloured, a conflict which directly contradicts the non-racial internationalism of Marxists. Inevitably, nationalism or racialism are the only exits available from an impossible dilemma. The authors have reached that impossibility, and would have no hope at all if they could not project them on their distant hero, the Third World, much as Marx suggested men created God as a peg for their frustrated hopes, a reification of the possibilities for themselves if oppression were ended. Yet, the authors offer no account of the ‘Third World,’ no analysis of the complex relationships between capitalism and the backward and the radically transformed content of those relationships – at times, the authors seem to suggest that the US role in the world today is a mere repeat of Britain’s in the nineteenth century. There is almost no suggestion at all that the Third World consists of millions of people of very different kinds, that the ‘Third World’ is an almost meaningless term, designed to hide reality for Western intellectuals and cover the crude materialism that asserts that sheer poverty wherever and however it occurs, is an adequate seedbed for socialism (a point specifically contradicted by Marx among others). To do these things would be to spoil the roseate vision, to introduce reality and perhaps curb the only hope the authors have. Thus, in their scheme, the emancipation of the working class is not to be its own act, but is to be secured by substitutionism, by a noble invader. Since the authors fully accept the Soviet Union as socialism (not even ‘degenerated’), and accept the acquisition of Eastern Europe by Russia after 1945 (the East European working class was thus ‘emancipated’ by the Red Army), their case is not inconsistent. But they have none of their sympathy for the American exploited left over for their Russian and East European brethren.

There is no real account of the Eastern Bloc, despite its crucial significance for ‘monopoly capitalism’ in the future, and the authors are grossly misled by the Cold War ideological froth of the 1950s – Russia is passive virtue, America active evil, implacably devoted to the complete destruction of Russia (this pseudo-psychological drive does something to make the authors’ system move). Thus the authors cannot foresee the possibility of a Washington-Moscow détente (even if, like a monopoly, a limited one), nor the break-up of the Eastern Bloc into competitive polycentric nation-States, nor the equal and matching breakup of the Western Bloc alliances, NATO, Cento, SEATO, etc. Cold War postures remain the dominant modes of operation, which in their turn exaggerate the absence of any perspective beyond a few pious hopes.

For Marxists, it is this last factor which vitiates the entire book, whatever the specific nature of the analysis. The authors try to keep their spirits up, but the basic tone is inevitably pessimistic, and not pessimistic in the sense that one keeps struggling on even though one can see relatively few results (or can acknowledge the immense obstacles to success), but pessimistic in that there is really nothing worth doing at all. The glint of a silver lining is just the faraway tumult of other people in Asia, Africa and Latin America, fighting the good fight where there is the possibility of some – any – radical change. Our task is no more than to bear witness to that fight, to serve while we only stand and wait for the saviour from across the seas.

This review has concentrated on the substantive elements in the authors’ analysis, but it should also be mentioned that their methodology is a serious obstacle to clarity. They employ the concept ‘surplus’ in seeking to demonstrate their view of American capitalism, but it is never clear what this means. Baran used the concept usefully to examine backward economies (The Political Economy of Growth, 1957) where the reproduction and improvement of capital are relatively minor factors, but in an advanced economy, it is difficult to see its relevance. The authors do not say very clearly why they dispense with the labour theory of value (indeed, they seem not to understand the purpose of the concept ‘surplus value,’ p.10), and variously define their own concept as ‘the difference between aggregate net output and aggregate real wages of productive workers’ (p.125) – presumably not including capital; ‘the difference between what society produces and the costs of producing it’ – that is, including new investment; and ‘the difference between the product and the socially necessary cost.’ Apart from being three different things, in an Appendix, a further series of elements are added together without very searching discrimination [2] to produce the conclusion that the ‘surplus’ has increased and continues to do so. Since much of the volume is devoted to tracing the difficulty in ‘absorbing the surplus,’ this basic muddle vitiates the whole book and makes nonsense of the attempt to lay out the system as a whole. More than this, the authors cannot extract from their static economic machine any real perspective, certainly not one which includes the current phase of relatively sustained growth.

Overall then, despite the authors’ disclaimers, they have escaped from class and contradiction, from any unification of theory and practice, and thereby from what is crucial in Marxism. Their account offers a relatively primitive rationale for a Maoist in an advanced country and a perspective of ‘wait and hope.’ As such it has little to offer to serious socialists with both dedication, a perception of the contradictory reality of struggle and stability within capitalism, and less patience than Baran and Sweezy.



1. Cf. W. Malenbaum, Prospects for Indian Development, London, 1962.

2. For a useful and more lengthy discussion of this, cf. Ernest Mandel in International Socialist Journal, July-August 1967.

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