Wolff/Resnick v. Baran/Sweezy

needle_in_the_haystack Reader Justin asked about the work of Richard Wolff and Stephen Resnick, who make some arguments that “run directly counter to the arguments about monopoly that you have advanced in your book. So my question is, what do you make of Resnick and Wolff’s thesis?”

As Justin notes, Wolff and Resnick argue that:

Monopoly power, when achieved, does not necessarily contribute to an expanding economy, nor to a stagnating one. Our value examples show the many ways that monopolies can and do contribute to a variety of different economic conditions: more competition and less competition; more and less technical innovation; inflationary spirals; depressed real wages and consumption spending; unevenly developing depart¬ments; simultaneously falling real wage and rising subsumed class incomes; and so on.

By way of background, Wolff and Resnick are living economics professors.  Baran and Sweezy are deceased economists and authors of Monopoly Capital: An Essay on the American Economic and Social Order, which I judge to have been the single most powerful (though extremely outdated in a few spots) work of social science in the 20th century.

Before saying a few things about this comparison, I would mention that Richard Wolff is close to Monthly Review, the magazine founded by Paul M. Sweezy in 1949, so the conflict here isn’t huge.

Nonetheless, Wolff and Resnick do claim to be correcting and improving upon Monopoly Capital.

I don’t buy it.

First of all, Wolff and Resnick begin by making a false distinction.  “Monopoly power, when achieved, does not necessarily contribute to an expanding economy, nor to a stagnating one,” they write, implying that Baran and Sweezy thought that monopoly power does have automatic and necessary results.  That, of course, is untrue.  Baran and Sweezy repeatedly argue in Monopoly Capital that monopoly capitalism tends toward economic stagnation.  But they also explain in detail how various things like military spending, the expansion of “the sales effort” (i.e., marketing), and new, epoch-making inventions can and do arise and lead to boom periods.  In other words, Baran and Sweezy don’t disagree with Wolff and Resnick’s observation that monopoly power can lead to a variety of contingent outcomes.

None of that, of course, means that the tendency toward economic stagnation isn’t real.  It’s quite real, as we know all too well at the present moment.  It just isn’t automatic.  So, Wolff and Resnick’s first premise is an error, and that’s usually a rather poor way to start a supposedly new and important social science analysis.

To my eye, Wolff and Resnick also do something that Baran and Sweezy rejected:  Wolff and Resnick think that “Marxian value theory,” if perfected, could explain how the whole world works via a series of mathematical “economic” equations.

Baran and Sweezy held no such illusions.  They saw what Marx said about the theory of economic value as an important and realistic way of tracking relationships between workers and business owners.  But they took what Marx said about value as neither a means of calculating the whole of reality nor even the last word on the topic of economic categories.  In fact, one of their prime arguments was that the triumph of corporate capitalism rendered much of what Marx had done with value formulas (most of which lies in the unfinished second and third volumes of Das Kapital) outdated.  Wolff and Resnick, in contrast, seem to take “what Marx said” about value theory as somehow the innermost core of Marxism.

What is and isn’t essential to Marxism is, of course, a topic we could study for months.  Suffice it for now to say that I find Baran and Sweezy’s emphasis on power and history and institutional structures rather than Marx’s cryptic (and unpublished-by-Marx) value formulas to be not only far more effective as a framework for understanding how the world works, but also far closer than Wolff and Resnick’s jumbled neo-orthodoxy to the essential core of Marx’s way of thinking.

And certainly neither Wolff nor Resnick, nor the both of them together, have ever produced a piece of work that comes within a country mile of matching the realism and revelatory power of Monopoly Capital.

By the way, if you’re interested, I think Chapter 8 of this book provides the single best explanation of what’s central and what’s peripheral in the work of Karl Marx.

I also don’t think Baran and Sweezy are perfect, either.  For one thing, I believe they adopted the concept of “monopoly capitalism” out of an irrational desire to boost Lenin, who used the term, as a social theorist.  But Baran and Sweezy then have to turn around and devote pages of their book to explaining that “monopoly” (rule by one) isn’t really the norm of the corporate capitalist order.  Oligopoly, rule by a few, is.

Personally, I much prefer the term “corporate capitalism” to “monopoly capitalism.”  It’s more descriptive of the core of the problem, requires no special pleading, and is quickly understood by people who encounter it.  And I also see no point in trying to keep V.I. Lenin at the core of what the left is trying to do.  Fuck that guy, in fact.  He probably wasn’t as bad as Stalin, but neither was he anything like a democrat.  He also loved and imposed Taylorism.

If we’ve learned anything from the failure of Socialism 1.0, it is that democracy is neither a toy nor a mere bourgeois trick.  In fact, its extension and improvement is the whole idea of Socialism 2.0.  If we are to have any chance at using that to save our sacred, sorry asses from onrushing capitalist eco-tastrophe, we can’t afford any more “vanguard” jive and Stalinist dead-ends.  As Gandhi and MLK showed, the means are not separable from the ends.

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Sheldon
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Sheldon

Nice to see a post on your take on Marxist theory. A new and interesting twist. I agree with you on “Leninism” but what is to be done?! 🙂

RJHall
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Heh, I’ve always preferred Rosa Luxembourg to Lenin anyway. After her death, Lenin (ungraciously) included in his praise of Rosa Luxemburg a list of all the issues he thought she was “wrong” in. Ironically, on at least two of those issues (the national question and the bureaucratic undemocratic tendencies of the Bolshevik party) subsequent events in the 20th century showed that Rosa was right after all and Lenin was wrong! And probably this current economic crisis increases that number to three (the accumulation of capital). Even Paul Sweezy’s own earlier book, The Theory of Capitalist Development, states that Rosa Luxemburg’s… Read more »

Justin
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Justin

Thanks, Michael What I like about the Monthly Review tradition is that it is real-world and readable. I look around me and I see that the tendency towards monopoly is real. That it might go some other way and on occasions does, is kind of academic. Having said that, I think that Wolff has made a great contribution with his Capitalism Hits the Fan presentation. As for the whole Lenin Stalin legacy, I think that Michael Parenti makes a valid distinction between “pure socialism” and the “siege socialism” that actually developed in Eastern Europe. Democratic socialism is always preferable but… Read more »

Michael Dawson
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Justin, I have sympathy for people trying something for the first time. And democracy was still rather new for everybody back in the Socialism 1.0 days. But it seems clear to me that socialists must wait until we have a movement of the majority of the population, even if that involves pain and suffering along the way. Look at Chavez and Morales, who are doing things the right way. “Siege socialism” is a bit of a cop-out, IMHO. The Leninists were no longer willing to lose, once they took over. That’s a recipe for disaster. And socialists can’t afford disasters.… Read more »

Michael Dawson
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P.S. I think another factor with Wolff and Resnick is that they were both trained as “Marxist economists.” That usually means transferring the abstract logic and technocratic methodology of mainstream economics training onto the “value theories” that Marx wrote about in his unfinished manuscripts. Baran and Sweezy not only held a different, more historicist, institutionalist view of economics (one closer to Veblen and Schumpeter and, yes, Marx), but also were pretty deeply involved in actually running the wartime planned economy in the early 1940s. Both of those things allowed them to figure out what parts of Marx mattered and what… Read more »

Sheldon
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Sheldon

Regarding “siege socialism” Lets not forget there will always be counter-revolution and reaction to any progress towards socialism. So its not like “siege socialism” is some special condition. Popular socialism will have to fight back against this reaction. Somebody once said socialism must be democratic or it won’t be socialism. Of which I agree.

Michael
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Michael

Justin, I appreciate the engagement and your politics, but your opinion is that of someone who has not read enough literature to make what are more than simplistic, virtually ad hominem critiques of someone’s work that you are not familiar with. Wolff and Resnick are founders of an influential journal called Rethinking Marxism read widely around the world. They have been two of about seven key faculty at the University of Massachusetts Department of Economics Ph. D. program, that has trained hundreds of radical and Marxist economists since 1973. They are well published and widely read. One of their students,… Read more »

Michael Dawson
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Just so you’ll know, Justin, this Michael, who writes in about the glories of being “well published and [ahem] widely read” is not me, Michael Dawson. Judging from the email tags I see, I think it is a character named Michael Hillard, from the mighty University of Southern Maine. I consider this last reply to be excellent proof of Russell Jacoby’s main argument in _The Last Intellectuals_. I also consider it to be close to dishonest at the intellectual level. Nobody here made any kind of ad hominem attacks on anybody. And as to what _Monopoly Capital_ says and predicts,… Read more »

Michael
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Michael

Mr. Dawson, I don’t know how anything I said counts as bullying. Your attack is indeed ad hominem, because you claim that all Marxists academics in the who do political economy have been participating in 40 years of a pointless project. That is just, frankly, bull shit. I wasn’t engaging in bullying, I was just pointing out what Justin ought to read before making claims about Resnick and Wolff based on a what appears to be a passing glance at an extensive body of work. And you reveal your own lack of knowledge in your implication that (1) that all… Read more »

Michael Dawson
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Well, Mike, just so you’ll know, I am a political economist trained by John Bellamy Foster. I have a Ph.D. It’s in sociology, but I assure you I’ve read all the stuff you mention in depth. I stand by what I’ve said, and I’ll leave it to Justin to go see what’s weak and what’s powerful. And as an additional comment, excluding Itoh (a Sweezian) and world systems theory (which you and I both know is at least as close to Baran and Sweezy as it is to the “value theory” fetish), yes, I would dismiss all those thinkers, except… Read more »

David
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David

I have read this exchange and find it both stimulating and somewhat confounding. Michael Dawson, I am a bit surprised at your pronouncements. You say you are a sociologist trained by John Bellamy Foster (who is happy to be identified with Monthly Review) who would, I believe, no be willing to reduce all Marxian economics (as you say, practiced by academics) to simply a pursuit of or guided by value theory. Nor, would I say it is accurate, to reduce all academic arguments by implying they are produced by thinkers confined to the academy. I can safely say that the… Read more »

Michael Dawson
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David, I am stating my view, which is that the debate over value theory was a waste of time and was won by Sweezy, who argued that it was a distraction from the categories that reflected reality, rather than “what Marx said.” And I am not arguing that Monopoly Capital is perfect and timeless. But I am arguing that it’s basic analysis is what allowed Sweezy and Magdoff to predict the financial explosion before anybody else did. IMHO, I also think that history has ended the over- versus under-accumulation argument quite convincingly in Baran and Sweezy’s favor. Much of this… Read more »

Michael
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Michael

Michael and others: I’m glad to see everyone come out from behind the rocks and reveal themselves a bit. I still see the other Michael painting those who do Marxian political economy with an un-fair broad brush so as to dismiss it. My own take on value theory has been that of an applied Marxian historian. Can you say capital exploits sellers of labor power, or not? If you want the analysis of the labor process, crisis and macro-instability, ideological delusions that start with commodity fetishism, or insightful analysis of unproductive labor and capital, all themes elaborated across the three… Read more »

Michael Dawson
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I am getting over the flu and yesterday was the first day I could write in a week, so I apologize for the perhaps excessive fervor. I don’t retract the argument, but we are certainly all on the same side here, of course. But here’s a positive question for Michael Hillard: What in Baran and Sweezy has been improved upon or corrected by any of the thinkers you’ve mentioned? I would be genuinely glad to know, believe me. please tell us. And not to be too snarky again, but “a synthesis of Marx, Keynes, and Minksy” — throw in Veblen,… Read more »

David
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David

Michael, you make an interesting but I fear false juxtaposition between “scholarship” and comments on a blog. Here is my dilemma: unless contributors feel compelled to be informed any blog or list (I moderated one for many years) degenerates into all sorts of statements that generate noise and crowd out more knowledgeable contributors. As I recall, one thing that started all this was a request by Michael Hillard that contributors be more informed before they make grand statements. That you and he don’t agree on how to view Baran/Sweezy versus Wolff/Resnick is fine, and an informed discussion helps us all.… Read more »

Michael Dawson
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I certainly don’t mean to crowd out anybody. Especially not comrades and allies. But I think the notion that somebody is working on going beyond Baran and Sweezy because Baran and Sweezy are (in some un-named way) fundamentally off track is itself something that’s quite cavalier and dangerously out-crowding. That’s why I have expressed my views, which I’ve spent years developing and questioning, so strongly. I’m not at all somebody who wants to enshrine Monopoly Capital as the new centerpiece in the old “what Marx said” religion. But, really, I do stand by my assertion that MonoCap was the #1… Read more »