[OPE-L:4349] Re: Mandel vs. Baran-Sweezy

Michael_A._Lebowit (mlebowit@sfu.ca)
Tue, 11 Mar 1997 00:39:39 -0800 (PST)

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In message Mon, 10 Mar 1997 12:28:20 -0800 (PST),
Allin Cottrell <cottrell@wfu.edu> writes:

> On Mon, 10 Mar 1997, Michael_A._Lebowitz wrote:
>> But, Kalecki proposes (in Theory of Economic Dynamics) that:
>> "Imagine, for instance, that as a result of the increase in the
>> degree of monopoly the relative share of profits in the gross income
>> rises. Profits will remain unchanged because they continue to be
>> determined by investment.... The level of income or product will
>> decline to the point at which the higher relative share of profits
>> yield the same absolute level of profits" (61).
>> This statement is consistent with Marx and with
>> Baran/Sweezy... [and] I think, the rational kernel in the
>> Baran/Sweezy Monopoly Capital argument.
> It's logically consistent, but, to me, puzzling. In Marx,
> monopoly engenders a _transfer_ of surplus value in favour
> of the monopolist, whose product is sold above its value (or
> price of production). Generalizing this is problematic: Are
> we supposing that under 'monopoly capitalism' _all_
> commodities are sold above their values, or what?

In fact, Marx does not say unequivocally that monopoly involves a transfer
of surplus value. In Vol. 3, Ch. 50 ("Illusions..."), he indicates there are
*two* possibilities:

1. a transfer (and thus "a local disturbance in the distribution of
surplus-value among the various spheres of production, but this leaves
unaffected the limit of the surplus-value itself.")

2. "It could press wages down below the value of labour-power, but only if
they previously stood above the physical minimum. In this case, the monopoly
price is paid by deduction from real wages...."(Vintage, 1001). Implicit
in this case is the increase in surplus value.

The second of these possibilities would seem to take precedence in the
following way. Insofar as the monopoly price is for an item entering into
workers' consumption, the *immediate* effect of monopoly is the reduction in
the real wage (wages are being reduced below the customary standard, thus
are below the value of labour-power). If, however, workers respond by
struggling to maintain the value of labour-power (and are successful), then
the incidence of the monopoly price will be borne by non-monopoly
capitalists (the "transfer" case). The latter, however, is entirely
contingent upon the struggle of workers and the respective power of the
contending parties. There is no difficulty in generalising this to all
commodities--- and thus to say that an increase in the degree of monopoly=
an increase in the rate of surplus value (unless workers succeed in raising
wages commeasurate with the rise in prices).

> (Another
> problem with the MC argument is that the degree of monopoly
> has fallen quite substantially over the postwar period as a
> whole, in the USA, if you place credence in the figures
> generated in the 'industrial organization' literature.)

This was a subject I addressed in the article on "The Theoretical Status
of Monopoly Capital" (In Resnick and Wolff, Rethinking Marxism) that Jerry
mentioned earlier. The figures you mention relate to the neoclassical focus
on the degree of horizontal integration but that is only one aspect of the
Marxian focus on the tendency for capital to be integrated as a single
capital (an aspect of the separation of means of production from producers).
I agree that this was a problem with Baran-Sweezy and will just quote
briefly from the conclusion of that argument:

"The problem with the Baran-Sweezy notion of monopoly capital has not
been its focus on the need for a special theory of monopoly capital but,
rather, its one-sided focus on the aspect of horizontal integration (with
its corollaries of barriers to entry and differential profit rates). As
incorrect is a position which privileges capital flows between branches of
production as the highest form of competition, treating competition within
particular branches as 'primitive'; it is a position which, focussing on a
form of capital's tendency, loses sight of its essence. Both positions are
one-sided. They fail to capture the whole of capital's tendency to becomwe
One, a tendency which in the real world proceeds unevenly (and which,
accordingly, generates partial and one-sided analyses)." (1985:200)

in solidarity,
Michael A. Lebowitz
Economics Department, Simon Fraser University
Burnaby, B.C. Canada V5A 1S6
Office (604) 291-4669; Office fax: (604) 291-5944
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