Chapter Thirteen The Theoretical Status of Monopoly-Capital Monopoly-capital? In 1966, Paul Baran and Paul Sweezy published Monopoly Capital, a book which was extremely infl uential in introducing a Marxian perspective to a new generation of critics of aspects of capitalism. More than simply an attempt to popularise Marx, however, Monopoly Capital also boldly advanced the argument that Marxian social science had stagnated, stagnated because of its reliance on the assumption of a competitive economy: ‘the Marxian analysis of capitalism still rests in the fi nal analysis on the assumption of a competitive economy.’1 Modern capitalism, however, was characterised by monopoly; the typical economic unit, they noted, ‘has the attributes which were once thought to be possessed only by monopolies’.2 And, recognition of this and its signifi cance had to be at the core of analysis. The emergence of monopoly-capital anticipated but not investigated by Marx, had to be seen not as ‘effecting essentially quantitative modifi cations of the basic Marxian laws of capitalism’, – but as a ‘qualitatively new element in the capitalist economy’.3 Thus, monopoly power, rising surpluses, expansion 1 Baran and Sweezy 1966, pp. 3–4. 2 Baran and Sweezy 1966, p. 6. 3 Baran and Sweezy 1966, p. 5. 226 • Chapter Thirteen of unproductive expenditures and stagnation as the normal state of the economy – elements introduced earlier in Sweezy’s Theory of Capitalist Development – constituted the qualitatively new character of modern capitalism.4 For some Marxists, however, all this has little to do with Marxism. The very concept of a monopoly stage of capitalism, it has been argued, is ‘incompatible’ with Marx’s theory. For, rather than the reduction of competition, Marx believed that capitalism would ‘tend to be less monopolistic’ and competition more intense.5 Rather than Marxism, according to these critics, the Baran- Sweezy theory of monopoly-capital is idealist, bourgeois and leads logically to reformism.6 There is, it appears, what one critic has described as an ‘ambiguous and unclarifi ed relationship of American neo-Marxism to classical Marxism’.7 But, then, what is classical Marxism in this area? In Marx’s Capital, there are two apparent themes which point in opposite directions.8 In Volume I, there is the account of growing monopolisation, the ‘expropriation of many capitalists by a few’, the growing force of attraction and centralisation – and the explicit statement relating the intensity of competition to the number of capitals in a particular sphere: ‘competition rages in direct proportion to the number, and in inverse proportion to the magnitude, of the rival capitals’.9 In Volume III, on the other hand, equalisation of the profi t rate and capital mobility are shown to depend upon the degree of development of capitalism. The less capital is ‘adulterated and amalgamated with survivals of former economic conditions’ and the more the credit system develops, the greater the extent to which capital succeeds in equalising profi t rates among the various spheres of production.10 For those who emphasise this latter theme, then, monopoly power, barriers to entry, differential profi t rates are, at best, transitory phenomena; the very development of capitalism breaks down 4 Sweezy 1956. 5 Zeluck 1980, p. 44; For a reply to Zeluck, Foster 1981. 6 Zeluck 1980, pp. 50–2; Weeks 1981, pp. 153, 157, 165–7; Weeks 1977, pp. 286, 301. See also Clifton 1977, p. 150. 7 Mosley 1979, p. 53. 8 Clifton 1977, p. 145; Williams 1982. 9 Marx 1977a, pp. 929, 779, 777. 10 Marx 1959, pp. 172, 177, 192, 426..