OPE-L Pollin on Sweezy

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Sat Mar 06 2004 - 13:57:04 EST


Weekend Edtion
March 6 / 7, 2004

Remembering Paul Sweezy

"He was an Amazingly Great Man"


When news came that Paul Sweezy had died we turned to Robert Pollin,
once a student of Sweeezy's, for input on Sweezy's economic
contributions. Pollin is professor of economics at U Mass, Amherst,
at the Political Economy Research Institute, which he and his
colleagues have made into a power house of research, most notably
into the living wage campaigns across the US, most recently in New
Mexico and Louisiana, which Pollin pioneered. A few months ago we
reviewed here Contours of Descent: US Economic Fractures and the
Landscape of Global Austerity, Pollin's superb book on the US economy
in the Clinton and early Bush years. Pollin swiftly responded with
the extremely enlightening reflections below. AC.

Dear Alex,

Here are some thoughts on Paul Sweezy.

First, on his major intellectual and political contributions:

There is no doubt that Paul was the leading Marxian economist in the
United States, and probably the world, during his lifetime. Certainly
he was the most widely recognized and respected. In my view, he made
four major intellectual/political contributions.

1. His book, Theory of Capitalist Development (first published, I
believe in 1942), was an extraordinarily cogent explanation of the
economics of Karl Marx, in particular the main themes of Capital.
Paul went through all the basic issues, starting with the labor
theory of value, and getting all the way to the falling rate of
profit. However, this was not merely a work of exegesis-of collecting
and assembling quotes. Paul presented a clear and fair treatment of
Marx, but he also developed some ideas of his own. Perhaps most
important, Paul was critical of the falling rate of profit
explanation of economic crisis in Marx-and that criticism was all the
more powerful because Paul presented Marx's arguments in such a clear
way. But Paul went further than criticism: he also developed the
underconsumptionist strains in Marx's writings, which were not as
well developed in Capital as the falling rate of profit arguments. No
doubt, Sweezy was strongly influenced by the pull of JM Keynes in
developing the underconsumptionist arguments in Marx. Keynes said the
macroeconomic problem of capitalism was effective demand-and that was
the cause of the 1930s depression. Sweezy saw this point coming out
of Marx, and well before Keynes. [By the way, Keynes himself
acknowledged Marx, along with some obscure people, like Silvio
Gessel, as predating him with an underconsumptionist perspective]. I
will come back to this Marx/Keynes connection in Sweezy. But the main
thing on Theory of Capitalist Development is that it was a classic,
incredibly clear, exposition of Marxian economics. It remains today
the first place I would send a student who wants to get the basics of
Marx in a serious, but still totally accessible way.

2. The next big book was, of course, Monopoly Capital, written with
Paul Baran, though Baran died before they finished the manuscript.
This book tried, and succeeded in many ways, to bring Marxism alive
for its time. It was not another exposition of Marxian economics per
se, and it did not use Capital in an orthodox way. It was trying to
capture the spirit of Marxism in an era of giant corporations and big
government capitalism. It focused on the U.S., deliberately, in the
way Marx focused on England in Capital-as the most important and
advanced capitalist economy. It was also written with the 1930s
depression and 1940s war-induced amazing recovery as the background.
Thus, Sweezy and Baran hypothized about a "tendency of surplus to
rise" rather than the profit rate to fall. Surplus would rise because
big corporations had monopolistic pricing power, and so they could
extract surplus both from non-monopolistic elements of the U.S.
economy, and from less developed countries, which at the time
included everyone. The fundamental problem to the internal logic of
this system was then, what they termed "surplus absorption"-who was
going to buy the things that the corporations could produce? This is
how they linked up the issue of big government and imperialism with
the functioning of the monopolistic capitalist model. They said
military spending was necessary to buy up the surplus product; and
thus we needed the cold war, and imperialism, to prevent the economy
from again lapsing into depression. Here again you see the links with
Keynesianism, and with the obviously powerful experience of coming
out of the depression: the only thing that brought us out of the
depression being, obviously, massive deficit spending to pay for the
war. And here is where the idea of military Keynesianism becomes very

I would add though that the idea of military Keynesianism was first
articulated clearly by Kalecki in his great short paper "The
Political Aspects of Full Employment". Paul acknowledged his debt to
Kalecki many times. He also said that Monopoly Capital was heavily
influenced by Josef Steindl's book, Maturity and Stagnation in
American Capitalism. In any case, Paul was indeed trying to
synthesize Marxism with aspects of Keynesianism, as well as the
theory of monopoly. This latter connection also made lots of sense,
since Paul himself, in an earlier incarnation, had made a major
contribution to the theory of monopoly pricing, a topic to which I'll
return below.

3. The third major intellectual and political contribution by Paul
was, of course, his creating Monthly Review, and serving as its
co-editor for 50 years. I mentioned this contribution third, but I
don't mean to place it third. It is probably first in terms of
overall influence and as a measure of Paul's lifelong dedication to
the left. However, it is also true that Monthly Review would not have
had anything close to the stature it enjoyed had Paul not also been
the author of Theory of Capitalist Development and Monopoly Capital.
Monthly Review was hugely important, in my view, in sustaining a
serious Marxian left that was talking about real things, and not
wandering into either cult-like Marxology or over academic trivia. It
was also important in maintaining a focus on political economy as
central to Marxism, just as Karl himself meant it to be. Monthly
Review did also spawn something like what Paul and Harry liked to
call "The Monthly Review school." I would say the most important
stream of that school of thought was its perspective on imperialism
and underdevelopment. It was connected to what became known as the
"dependency school"-the view that the third world was underdeveloped
because of the system of dependency that was created by imperialism.
The Monthly Review version of this approach was more infused with a
Marxist spirit, but it was basically in this strain of thought.
Certainly Andre Gunder Frank and Harry Magdoff was major thinkers
here, as well as Paul himself.

But the main thing with Monthly Review wasn't so much the specific
things that were in it, but rather that it existed and it kept going,
all through the dark McCarthy period. It then was a touchstone for
the left as the 1960s burst out. This leads me to what I think was a
fourth major contribution by Paul, starting really in the 1970s.

4. This fourth contribution was the work Paul was doing with Harry
Magdoff, beginning in the late 1960s and continuing through the 1970s
and 1980s, of documenting the emerging form of capitalism that has
now become ascendant-the increasing role of finance in the operations
of capitalism. This has been termed "financialization", and I think
it's fair to say that Paul and Harry were the first people on the
left to notice this and call attention. They did so with their
typical cogency, command of the basics, and capacity to see the
broader implications for a Marxist understanding of reality. I myself
was heavily influenced by this work when I was a graduate student.
Indeed, I got my idea for my dissertation after I read a Review of
the Month by them called "Debt and the Business Cycle." They were
writing such things when, at the same time, the New School itself
didn't even have a field in financial economics-since most of the
people thought this was for the bourgeoisie to figure out on their

5. I mentioned Paul's earlier work on monopoly and want to come back
to that. Before Paul was involved in Marxian economics, he was a
superstar graduate student and junior faculty member at Harvard. He
was the protégé of Joseph Schumpeter, who was conservative but
brilliant and open-minded. Anyway, in this early phase of Paul's
career, he developed an explanation for how oligopolistic firms set
their prices-he called it a "kinked demand curve." The kink in the
kinked demand curve refers to the capacity of oligopolists to push up
prices beyond what a normal smooth demand relationship would suggest
because of their pricing power. This was an important contribution in
the literature on microeconomics and industrial organization, and I
believe Paul wrote it as a graduate student. In any case, this theory
was in all the textbooks. There is even a story that someone told me
about an orthodox economist, obviously totally oblivious to anything
about the left, who said something like the following: "Remember that
guy Paul Sweezy? He was this brilliant young economist who came up
with the kinked demand curve theory. Too bad he died so young."

Some other Sweezy stories:

The connection with Schumpeter is very interesting. Schumpeter
clearly admired Sweezy greatly. And remember, at the time, with the
exception of Keynes, Schumpeter was probably the most prestigious
economist in the world. Schumpeter wrote this massive history of
thought book, which went far beyond what anyone else had attempted,
at least in terms of length, called History of Economic Analysis. The
number of references to Paul Sweezy in the index of that book are
quite substantial. I would guess Sweezy was in the top 10-15 in terms
of references-and that's pretty good when you are talking about the
whole history of economic analysis, including everyone. And this was
before Sweezy had done Monopoly Capital.

There is more to the Sweezy/Schumpeter connection in my view, though
I don't think anyone else had ever thought about this. Schumpeter
wrote this wonderfully provocative book called Capitalism, Socialism
and Democracy. He was really reaching to be provocative since he
started one section with the book asking the question: "Can
Capitalism Survive?" And he answered no-this coming from probably the
leading intellectual defender of capitalism in the world at the time,
with the possible exception Hayek. But there's more. Schumpeter then
goes on to ask: "Can socialism succeed?" And to this, his answer is
an equally shocking, "Yes, I think it can."

Now Schumpeter goes on to explain what he really means when he gives
these answers. And in both cases, I think he was heavily influenced
by his relationship with Paul. Can Capitalism survive? He said no
because he said capitalism breeds intellectual freedom, people with
critical minds. And it was only inevitable that this spirit would
breed powerful minds who would turn their guns on the deficiencies of
capitalism itself. No doubt, he had Sweezy in mind here-since here
was Sweezy, the smartest young economist at Harvard, from a ruling
class family, becoming a Marxist before Schumpeter's own eyes. Then
on the question of socialism. Schumpeter says it will succeed, in
that it will be workable, though it will be cumbersome and
bureaucratic, if more egalitarian than capitalism. And how will it
even work at that level? Because the brilliant thinkers who have
grown dissatisfied with the crassness and injustices of capitalism
will also rise to the top in a socialist society, and make it
function decently well. And again, who else could he have had in mind
here but Paul, his student and protégé? Anyway, I once asked Paul
about this theory of mine. He didn't dismiss it, but of course, he
was too modest to claim it was entirely true. He told me, "well there
were lots of people around then and Schumpeter was just picking up
the spirit of the time." Yes, true, but no doubt, Sweezy embodied
that spirit for Schumpeter more fully and powerfully than anyone else.

On his Harvard career-again I think before he became a Marxist, Paul
and some other graduate students put together a small book called, I
think "A Program for American Democracy." It was a clear exposition
of how to implement a Keynesian demand stimulus program for the
fighting the depression. My understanding was that it had some
significant influence at the time it came out-Kindleberger, for
example, cites it in his history of the Depression.

Let me finally give a few personal thoughts. I may be the only person
in the world who can make this claim: outside of high school, the
first book I ever read in economics was Monopoly Capital, and the
first teacher of economics I ever had was Paul Sweezy. In my first
semester at the New School, spring of 1975, I took Paul's course
titled "Reading and Using Capital." As you can imagine, I was totally
pumped to be taking a course on Marx's Capital from the person
universally acknowledged as the leading Marxist economist in the
world at the time. When I met with the student advisor my first day
there, I told him I felt like I would be taking a course on the Civil
War taught by Abraham Lincoln.

Anyway, the advisor-Ron Blackwell, who is now a leading official of
the AFL-CIO-told me that "Paul Sweezy isn't really a Marxist but a
Keynesian." I didn't know enough to have any idea what Ron meant by
that. I have subsequently come to understand the comment. In fact,
there is a lot of Keynes in Sweezy-as I mentioned before, with
respect to both Theory of Capitalist Development and Monopoly
Capital. This was a powerful synthesis he was attempting, while still
retaining the basic spirit and commitments of Marxism.

There was a fever pitch at the New School when the course began. On
the first day, probably 400 people or so showed up, and you couldn't
get into the room. The next class, you had to show your proof of
enrollment to get into the class, as another 400 showed up. However,
things calmed down very quickly once we really got into things. Paul
was an amazingly clear and committed teacher. But he definitely
wasn't into any kind of theatre of teaching or histrionics. So the
course rapidly thinned down to 30-40 people who really wanted to hear
Paul expound on Marx.

Among the students-though he didn't come every time-was Daniel
Ellsberg. I noticed this person one day just sitting there in class,
taking notes on the lecture, like everyone else. This of course was
at the very height of Ellsberg's fame. I said to another student
something like, "Isn't that weird. That guy over there looks exactly
like Daniel Ellsberg." Ellsberg heard me say that, and just walked
over to me, stuck out his hand, and said, "Hi, Dan Ellsberg." Then we
started talking about the class. He said he didn't agree with Sweezy
or Marx, because the Marxian tradition doesn't give enough weight to
spiritual and religious impulses in understanding human behavior, or
something to that effect. Anyway, it was a very interesting
discussion. Ellsberg was perfectly happy to mix it up with the
students, and try to learn from the great Sweezy.

At the time, the first English translation of the Grundrisse had just
been published. Paul was extremely upset about the way it had turned
out, and mentioned it to us repeatedly. As I recall, it all hinged on
a mistranslation of the word from German, "Realization" I really
don't remember the problem exactly, but on reflection it all
definitely had to do with Paul's focus on the issue of
underconsumption, or "realization failure" in understanding Marx's
theory of economic crisis. Apparently Paul thought all this got
garbled in the English translation of the Grundrisse, where it had
been very clear in the original. This was a regular theme in the
class, and became a joke among the students-here goes Sweezy again on

Another more trivial thing about Paul then that we students joked
about was the way he dressed. He had these two loud short-sleeved
shirts-one I think was orange and the other one was blue. He seemed
to wear these shirts on alternating days-as though he knew which loud
shirt to wear according to the day of the week. We would say, "it's a
good thing he has on his blue shirt today. Otherwise, we might be
going over the material from last week's class." The general point is
this: Paul was completely unadorned, completely without pretension,
and paid not the slightest bit of attention to how he dressed.

Which brings up another point. Paul was legendarily handsome in his
younger years, and apparently the attraction for women remained
powerful. Some evidence: Paul Samuelson himself wrote about it, in an
article in Newsweek called, I believe, "When Gods Strode The Earth."
Samueulson was writing about a debate at Harvard between Schumpeter
and Sweezy in the midst of the Depression, when Samuelson was a
student there. In the article, as I recall, Sweezy, not Schumpeter,
was "the God"-he was so smart, so rich, so handsome, and so Marxist.
He apparently made mincemeat of the great Schumpeter, debating the
most burning issue of the time. More evidence: In the mid 1980s I was
at a small weekend retreat sponsored by MR. I happened to be talking
to woman professor at the conference, Patricia Fernandez-Kelly (used
to be at Johns Hopkins, not sure if she's still there). Anyway, I
noticed that she broke off our conversation and became transfixed for
almost a full minute. She then turned back to me and said, "Look at
Sweezy. He is so beautiful." And this is when Paul was in his mid

So, you asked for thoughts of all kinds and you've got them. Paul was
an amazingly great man. I could also give you some criticisms, both
of his work and his politics. But at the moment these would seem
totally trivial and petty.

Robert Pollin is professor of economic and founding co-director of
the Political Economy Research Institute at the University of
Massachuesetts-Amherst. He is also the author of the Contours of
Descent: US Economic Fractures and the Landscape of Global Austerity.
He can be reached at: pollin@counterpunch.org.

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