I shall be concerned in this paper in the main with some problems of methodology as practiced by Baran and Sweezy in their analysis of Monopoly Capital.

Baran and Sweezy raise the problem themselves in the very beginning of their book in a fundamental way. Postulating, without any substantive, critical analysis, that the analysis of monopoly has been unsatisfactory by bourgeois and Marxist social scientists alike, they raise the question: why has that been so? As far as Marxists are concerned, the reason for the unsatisfactory state of affairs is to be found in the fact, asserted by Baran and Sweezy that the Marxian analysis of capitalism still rests in the final analysis on the assumption of a competitive economy. Though it is admitted that Lenin, in analyzing the domestic and international politics of the period which culminated in the First World War, gave full weight to the predominance of monopoly in the advanced capitalist countries yet it remains true that neither Lenin nor any of his followers attempted to explore the consequences of the predominance of monopoly for the working principles and the ‘laws of motion’ of the underlying capitalist economy. There Marx’s Capital reigns supreme.

Leaving aside in this paper any inquiry into the assertion of the adequacy or inadequacy of Marxist monopoly analysis, we shall be merely concerned with Baran and Sweezy’s contention: whether Marxists, though aware of the existence of monopoly, have analyzed and continue to analyze it in a conceptual framework that is based on free competition, and whether this competitive frame of reference is the frame of reference of Marx’s Capital.

Baran and Sweezy admit that Marx does discuss monopoly in Capital. But: Like the classical economists before him, he treated monopolies not as essential elements of capitalism but rather as remnants of the feudal and mercantilist past. Marx also fully recognized the powerful trend toward concentration and centralization of capital inherent in a competitive economy: his vision of the future of capitalism certainly included new and purely capitalist forms of monopoly. But he never attempted to investigate what would at that time have been a hypothetical system characterized by the prevalence of large-scale enterprise and monopoly.

What Baran and Sweezy try to say in the above quotations, is that while the trend towards monopoly was inherent in the economy analyzed by Marx, the phenomena and real historical problems analyzed by Marx did not as yet show significant monopolistic characteristics. From this they conclude that indeed the analytical frame of Capital is freely competitive, and they call this supposedly competitive frame the competitive model.

If this be so, some conclusions necessarily follow. If the phenomena and problems Marx analyzed in Capital were those of a competitive economy, then the laws formulated in the wake of this analysis must apply to a competitive economy, and to a competitive economy only. Hence, in order to analyze properly the problems confronting us today and in contradistinction to the competitive model, it becomes necessary to set up a model of monopoly capitalism. In the words of Baran and Sweezy: We believe that the time has come to remedy this situation and to do so in an explicit and indeed radical fashion. If we are to follow the example set by Marx and make full use of his powerful analytical method, we cannot be content with patching up and amending the competitive model which underlies his economic theory.

Let us take note very clearly: the Baran-Sweezy argument is that Marx presented in Capital an analysis of the capitalist economy in terms of a competitive model. Consequently neither the model nor the laws formulated in terms of that model are applicable to today’s monopoly capitalism. Furthermore, and what is still more important: Marx’s powerful analytical method exists according to Baran and Sweezy apart from and independent of either the competitive or the monopolistic model or, if you wish, independent of the particular economic or social conditions. Marx would have characterized such method of analysis as free-floating in the air, or typically ideological.

So far I have only presented a problem which Baran and Sweezy themselves have raised. I shall ask now whether they have raised it properly, and whether the answer they suggest an answer which is their justification for having written their book is an adequate one or not. But beyond even this I shall raise the further question whether the matter of the proper method of analysis is one whose significance transcends the Baran-Sweezy case, and is of particular importance and indeed urgency at this very moment.

The issue here is the issue of scientific method, of theory. This issue has been dodged, and dodged most successfully, in the Anglo-American world up to this moment. It has been dodged by Marxists as much as by bourgeois social scientists. (I shall not be concerned here with the way this problem presents itself in the natural sciences.) The issue has been dodged successfully and for good material and historical reasons. These reasons constitute in fact in a major way the subject matter of the Baran-Sweezy work: they are to be found in the effects of first British and then American imperialism. It was the profitability of British and American imperialism that made it possible for Anglo-American social scientists to stop their inquiry into the world in which they live at the point of describing it without being forced, by the reality of emerging social contradictions, to analyze the nature of that reality. The same conditions which provided the largely external profits that corrupted, temporarily, large sections of the Anglo-American labor movement, also corrupted the Anglo-American intelligentsia into pragmatism, that a-theoretical attitude of the American people which is often described but rarely analyzed.

The point that Marx made in this connection was not only that man’s mind reflects the world in which man lives, but that society produces the kind of mind that can analyze and hence contribute to the solution of the problems which that very society poses. While pragmatism was thus the proper form in which the intelligentsia in this part of the world reflected a then still expanding American imperialism, and while much of the so-called Marxist analysis still reflected a condition in which the sharper edges of the class struggle could still be blunted by concessions on the part of the capitalists, it is precisely the progressing qualitative change in these conditions that poses today the problem of theory with utmost seriousness.

Let us now return to our critique of Baran and Sweezy. We had seen that for Baran and Sweezy Marx’s powerful analytical method existed quite independent of the particular subject matter, in this case the particular historical phase to be analyzed. As to Marx’s procedure in Capital, there can be no question that he did depart in his analysis from conditions in the capitalist economy (illustrated with examples taken from the British economy, which can be characterized in a general way as competitive). The question is: was that historical condition the subject of his analysis? Baran and Sweezy infer that the object of Marx’s analysis was freely competitive capitalism. If it had been, Baran and Sweezy would be right in speaking of Marx having employed a competitive model. Fortunately, we can here refer to Marx himself in order to clarify this problem. In the postscript to the second edition of the first volume of Capital, Marx quotes an article from the European Messenger of May 1872, dealing exclusively with the method of Das Kapital, in which the unnamed author says: The one thing which is of moment to Marx is to find the law of the phenomena with whose investigation he is concerned; and not only is that law of moment to him which governs those phenomena that have a definite form and interconnection within a given historical period. Of still greater moment to him is the law of their variation, of their development, i.e., of the transition from one form into another, from one series of connections into a different one. Having discovered this law, he investigates in detail the effects in which it manifests itself in social life. Consequently, Marx is concerned only with one thing: to show, by rigid scientific investigation, the necessity of certain orders of social relations, and to establish, as unassailable as possible, the facts that serve him as his point of departure. And this purpose is served when he shows at one and the same time the compelling reason for the present order of things as well as the necessity with which the present order has to change inevitably into another order Marx concludes this quotation by saying, while the writer describes what he calls my true method what else is he describing but the dialectical method? (Marx-Engels Werke, v. 23, Dietz, Berlin, 1962, pp. 25-57; translation by author.)

Marx never did, and indeed never could have, rested his analysis of capitalism in the final analysis on the assumption of a competitive economy,” nor were his laws ever formulated in terms of a competitive model, nor were they applicable to a competitive model only.

Nor is it in the present context i.e., in the critique of the Baran-Sweezy book of any importance to point to one or another epigone of Marx who may have interpreted Marx’s analytical method of Capital in the manner indicated by the present authors. What is important is to show clearly and unmistakably the nature and significance of the Baran-Sweezy interpretation of Marx’s analytical objective. Marx’s analysis in Capital is far from merely reflecting the competitive stage of capitalism. On the contrary, Marx’s method brings out clearly that free competition and that is the Baran-Sweezy model is a veil behind which the qualitative dialectics of social production and private appropriation play their structure-changing game. What appears to the uncritical and a-theoretical eye as free competition, turns out to be not a condition but a process. The methodological aspect of this material and historical process is dialectics, and of it Marx said in the same Postscript mentioned before, that it is a scandal and an abomination to the bourgeoisie and its doctrinaire professors, because it includes in its comprehension and its affirmative recognition of the existing state of things at the same time also the recognition of the negation of that state, of its inevitable breaking up; because it regards every historically developed social form as in fluid movement, and therefore takes into account its transient nature no less than its momentary existence.” (Ibid., pp.27-28.)

Marx’s dialectics is an inherent aspect of his concrete analysis. He is emphatic in pointing out the need of developing the method out of the subject matter under analysis, and not impressing a preconceived method upon a given reality. The authors’ de facto separating the analysis of capitalism into two separate undertakings one, Marx’s (and apparently all other Marxists’) analysis of the competitive phase of capitalism, and the other, the author’s analysis of the monopolistic phase not only leaves the road from the one to the other unaccounted for, and separates the laws of the one phase from those of the other, but above all emasculates the dialectics of the process into quantitative dynamics, into secretions. Marxist analysis is not a research method. It is not an accumulating of data and the culling from them of possible or probable trends. Marxist analysis is the developing self-consciousness of man, the emerging capacity of seeing society as a process and of understanding the direction and the eventual goal of that process. The avowed goal of the authors: that the whole is the truth, even in its Hegelian formulation, is not served by splitting the process of capitalist development and of the laws governing that development, asunder. The meaning of seeing things as a whole lies in the ensuing capacity to act in line with reality thus understood. This capacity of man is a reflection of the fact that he, man, produces himself, is producing society, and that he is not doing so consciously. In doing so man changes the forms of social reproduction. This is the process which, as the authors admit, occupies not a” but the central place in Marx’s analysis of capitalism: the labor process. And it is this process which, as the authors also admit, is almost totally neglected in their study. It is the implications of this neglect that the authors have failed to see. In ignoring the labor process the authors deprived themselves of the source from which spring the changes that characterize the capitalist process. Without accounting theoretically, and that means at the same time concretely, for the source of the structural changes, these changes, and indeed the economy as such, appear accessible to analysis only in quantitative terms. And it is then from such quantitative data that inferences as to possible meaning have to be made. What we have as a result is the pragmatic method. Let me hasten to add that it is by no means only Baran and Sweezy who find themselves in this situation. All too many of the economic analyses that present themselves to their readers as Marxist, exhibit the same methodological shortcoming.

Let me cite briefly two instances in the Baran-Sweezy book in which this methodological neglect produces unfortunate results. It was Paul Baran who, in his Political Economy of Growth, developed the concept of the economic surplus. Paul Baran was a brilliant scholar, and like so many Marxists, an impatient one. Confronted with the deeply anti-theoretical bias of both the American intelligentsia and the labor movement, he despaired of ever convincing either, within his own time, of the correctness of Marxist theoretical analysis in its own terms and language. Instead of making patiently correct analyses in correct terms, convinced that the internal contradictions of capitalism would forcefully open up the mind of inter alia the American scholar, Baran tried the (to the Marxist) impossible: to explain Marx and to present Marxist analyses in terms of American pragmatism. In doing so, he invented and formulated the special Baranian concept of the economic surplus.

For anyone who has long and arduously labored in the barren acres of American scholarship in general, and American pragmatism in particular, it is a beguiling concept. Not only is it simple and can be grasped by anyone, but it is so real in fact it appears to be the incarnation of the abstract and theoretical and its transformation into the concrete and practical all in one. Or, to put it differently, it is the transubstantiation of the old surplus value into the new economic surplus. Joseph D. Phillips, in the Appendix to the Baran-Sweezy book, tries in a brilliant tour-de-force to put statistical flesh onto the pragmatic bones of this brainchild of Paul Baran.

The economic surplus is defined by Baran and Sweezy as the difference between what a society produces and the cost of producing it. The size of the surplus, we are told furthermore, is an index of the productivity and wealth, of how much freedom a society has to accomplish whatever goals it may set for itself. (Italics added.) After stating that for a variety of reasons it is very difficult to arrive at accurate estimates of the magnitude of the surplus and its various components, Baran and Sweezy state: It is for this reason that we prefer the concept ‘surplus’ to the traditional Marxian ‘surplus value,’ since the latter is probably identified in the minds of most people familiar with Marxian economic theory as equal to the sum of profits interest rent The quotation ends with the authors expressing the hope that a change in terminology will help to effect the needed shift in theoretical position.

Indeed, what has been shifted is the theoretical position of Baran and Sweezy in relation to Marx. What becomes so clear in this shift is the naïve pragmatic base from which it is undertaken. Consider the sequence of the argument: the concept of the economic surplus is defined in quantitative, statistical terms, however approximate. Then the quantitativeexpression of the concept of surplus value as supposedly formulated by Marx is presented as its definition. While, as the saying goes, this is a free world in which anybody can use a word any way he wished and where thus Baran and Sweezy can define their concept economic surplus quantitatively, what they can not do is to substitute a quantitative expression for a theoretically and qualitatively defined concept of somebody else.

The point at issue here is not whether this substitution of incomparables was done consciously or not. It is rather that the substitution followed logically from its premise the pragmatic formulation of the concept economic surplus. Having defined economic surplus quantitatively, it would seem natural to redefine and use surplus value in the same way. But let us consider some of the further consequences of this methodological procedure. With the quantitative redefinition of surplus value, there is of course no longer any room nor any use for the theory of surplus value. And with the disappearance of the theory of surplus value, such other associated laws as that of the industrial reserve army, or that of the increasing misery of the people, become obsolete also.

Some other laws of Marx seem to become transformed. The law of the tendency of the rate of profit to fall is declared, without entering into an analysis of the different versions of the latter, to presuppose in its formulation a competitive system. Hence, the Baran-Sweezy law of the rising surplus is substituted for it. It is difficult to see the meaning of the statement that the formulation of the law of the tendency of the profit rate to fall presupposes a competitive system when the law itself is one expression of the structural change inherent in the system and thus in its very being asserts the inherent and inescapable transitoriness of the competitive condition. It is, thus, precisely the operation of the law of profit under monopolistic conditions that accounts for the flow of capital from less surplus value producing countries to those that can be made to produce more, extending, thereby, the international reach of monopoly. Similarly, the dramatic rise in public investment as a means to counteract through public intervention the declining private investment and hence profit opportunities, is a testimony for the continued operation of the tendency of the profit rate to fall. That profit margins per individual productive enterprise may rise though by no means for all enterprises need not be doubted in order to deny any necessary implication that aggregate profits as share of the national product must have risen. Professor Phillips has shown in the statistical Appendix that profits plus interest plus rent declined as part of the surplus, though surplus as a whole increased.

IV

In constructing their model of the monopolistic economy, the authors tell us that there are no rules for model building. Instead of showing the reader how Marx and Engels had fashioned historically produced and now available mental tools to analyze the correspondingly existing historical process, we are told of the tortuous way in which first hypotheses and ideas are formed, how the unimportant is separated from the important, and how out of the residue are shaped what looks like the parts and elements of a system. It is only after the mountains have moved that there is one criterion to judge the results of the labors: Does it help us to understand the world and act in it intelligently and effectively?

While much of our discussion so far has been concerned with a critique of the Baran-Sweezy methodology, there can be no difference of opinion about the testing of the conclusions arrived at against reality and in action.

What are some of the conclusions of our authors at the very end of their inquiry? Let me quote some lines in order to state the issue clearly and sharply. Behind the emptiness, the degradation, and the suffering which poison human existence in this society lies the profound irrationality and moral bankruptcy of monopoly capitalism itself. No outraged protests, no reforms within the monopoly capitalist framework can arrest the decay of the whole. And as becomes clearer every day, this decay makes increasingly problematical the rationality of even the most spectacular advances in scientific knowledge…The irrationality of the end negates all improvements of the means. Rationality itself becomes irrational…We have reached a point where the only true rationality lies in action to overthrow what has become a hopelessly irrational system.

Let me first state very clearly and simply that there can be no quarrel with the sentiment expressed in these lines. The reaction will be somewhat different when we consider these lines as the result of a scientific analysis.

The authors juxtapose the irrationality of the system to the true rationality of an action that is directed at the overthrow of that system. We ask: what is the rationality of that action? Is its nature and character defined as a reaction to the irrationality of the system? What is the quality of such reaction? Is it moral? Is it embedded in and thus in some sense a historically necessary part of the historical social process? In short, what will bring this action about? The fact is that our authors do not ask these questions. They only ask whether such action be forthcoming in sufficient volume and intensity to accomplish its purpose. And it is significantly to this question, i.e., the question of sufficient volume and intensity, that they first juxtapose the answer of traditional Marxian orthodoxy that the industrial proletariat must eventually rise in revolution against its capitalist oppressors, and which they, Baran and Sweezy, then dismiss because it no longer carries conviction. In explanation of this position, they point out that the industrial workers are a diminishing minority of the American working class, and that their organized cores in the basic industries have to a large extent been integrated into the system as consumers and ideologically conditioned members of the society. They are not, as the industrial workers were in Marx’s day, the system’s special victims, thought they suffer from its elementality and irrationality along with all other classes and strata more than some, less than others. (p. 363)

Once again one of Marx’s major conclusions or, if you wish, major laws that of the revolutionary role of the industrial proletariat, is being repealed. At least that is the way it appears. Yet, what Baran and Sweezy have lost faith in is not Marx’s conception of the role of the industrial proletariat in the crisis stage of capitalism, but their own (and others’) reinterpretation and misinterpretation of Marx’s analysis. The industrial proletariat is a class concept designed to explain a basic function in industrial capitalism. In capitalist society its own basic functions are veiled Marx’s entire Capital was designed to unveil its true nature and function. What was unveiled was the true function of man, of producing man, of laboring man. It is in the labor process which Baran and Sweezy so lightly ignored in their analysis that man creates society, creates himself, creates himself increasingly consciously. This social consciousness is the product of man’s labor, is his conscious rationality, is the rationality which must oppose the irrationality of the system if we take Baran and Sweezy’s formulation. Nowhere else can it arise in the last instance than in the labor process, in those that constitute that process, in the industrial proletariat. We are speaking of functions, of historical roles which in their visible roles are subject to pragmatic misinterpretation. Just as it is not the individual laborer whose labor constitutes labor value, so it is not the particular industrial worker, or a particular group of industrial workers, or the industrial workers of a particular nationality that represents the industrial proletariat or what Marx meant by that term. As individuals or groups of individuals they may well have submitted to a differential level of living at the expense of other working people and with the consequent corrupting influence as in the case of some so-called labor aristocracy, or in the more significant and present case resulting from colonial and neo-colonial exploitation. Laborers can be corrupted, labor leaders can be corrupted, labor can not. This is admittedly a difficult concept for the pragmatically minded. It is the intensity of the present contradictions so brilliantly described but so inadequately analyzed by Baran and Sweezy that poses with such unheard-of urgency the problem of theory to all of us today.

But there is a second point that needs clarification. Baran and Sweezy say, as I previously quoted, that the industrial workers are today a diminishing minority of the American working class. Statistically that is quite true; analytically and inference drawn is quite misleading. In fact, Baran and Sweezy themselves point out that the statistical fact that the number of industrial workers and more particularly productive workers is decreasing in America, is of no significance in regard to revolutionary potential, when they say: advanced monopoly capitalism does not exist in isolation, and any speculation about its future which takes account only of its inner laws and tendencies is certain to be misleading. The term inner here may be taken from the context to refer to American, and to that extent there could be agreement that the relevant frame within which to analyze a revolutionary potential is capitalism as a whole and not the American scene in isolation. That interpretation encounters, however, the difficulty that the term inner is connected with laws which poses again the previously discussed problem of analyzing isolates, i.e. models. The wars of resistance against monopoly capitalism are indeed constituent parts of the world capitalist crisis. The point here is that these wars cannot be interpreted as substitutes for the role of the proletariat (in the sense that Marx used that term), but are historical forms of it.

V

To conclude: I have not discussed the enormous and powerful panorama of American monopoly capital that Baran and Sweezy have drawn for us, and for which they deserve the thanks of the American people. What I have tried to do was to show that this panorama is reality seen in a mirror, and as is the nature of mirrors, it reflects but does not direct.

In doing so I have tried to bring out as strongly and as clearly as I know how, the meaning of this Conference as I understand it, and the task which confronts its participants: that this Conference testifies to the fact that the American scholars are beginning to take up the challenge presented to us in the reality of our time, to produce that rationality and theoretical insight that complements the kind of action that changes worlds.

Niebyl Seminar Page
Thoughts on the Material Basis of Conciousness - Part 1
Thoughts on the Material Basis of Conciousness - Part 2
A Problem of Methodology