Monopoly Capital at the Turn of the Millennium

Monthly Review

Volumn 51, Issue 11, 2000, Pages 1-18

  Foster, John Bellamy ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0347899483     PISSN: 00270520     EISSN: None     Source Type: Journal    
DOI: 10.14452/MR-051-11-2000-04_1     Document Type: Article

References (38)

1. Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966), p. 125. It should be emphasized that in referring to "the tendency of surplus to rise" Baran and Sweezy had no intention of presenting this as an iron law, i.e., one not subject to countervailing factors that modify or mitigate its effect. Rather they invariably emphasized that this was a mere tendency (or tendential law), which could not be examined apart from such countervailing factors.
2. Business Week, August 16, 1999, pp. 88-90, August 2, 1999, pp. 28-31 and December 27, 1999, pp. 52-55.
3. Kevin J. Clancy and Robert S. Shulman, Across the Board (October 1993), p. 38, and Marketing Myths that are Killing Business (New York: McGraw Hill, 1994), pp. 140, 171.
4. Kevin J. Clancy and Robert S. Shulman, Across the Board (October 1993), p. 38, and Marketing Myths that are Killing Business (New York: McGraw Hill, 1994), pp. 140, 171.
5. National Income and Product Accounts of the United States, vol. 1,Tables 1.1 and 1.16; and U.S. Commerce Department, Survey of Current Business, vol. 79, no. 8 (August 1999), pp. D2 and D5. I would like to thank my friend and colleague Michael Dawson for the initial analysis of this data. It should be noted that depreciation is sometimes seen as a cost to be deducted before arriving at net profits, but in practice depreciation (the amount of which is enormously increased by accelerated depreciation allowances) is part of the social accumulation fund (or total economic surplus) available to capital and hence needs to be included in the surplus. In other words, the appropriate categories for analysis of accumulation are gross profits, gross savings/surplus and gross domestic product (all of which include depreciation) rather than net profits, net savings, or net national product. For more detailed discussion of these issues as well as a far more comprehensive empirical treatment of the tendency of the surplus to rise see Michael Dawson and John Bellamy Foster, "The Tendency of Surplus to Rise, 1963-1988," in John B. Davis, ed., The Economic Surplus in Advanced Economies (Brookfield, Vermont: Edward Elgar, 1992), pp. 42-70. A heavily abridged version of this research was published under the same title in Monthly Review, vol. 43, no. 4 (September 1991), pp. 37-50. For a graph of this data showing the tendency of the surplus to rise, see Michael Dawson and John Bellamy Foster, "Is There an Allocation Problem?: Accounting for Unproductive Labor," Science & Society, vol. 58, no. 3 (Fall 1994), p. 323.
6. National Income and Product Accounts of the United States, vol. 1,Tables 1.1 and 1.16; and U.S. Commerce Department, Survey of Current Business, vol. 79, no. 8 (August 1999), pp. D2 and D5. I would like to thank my friend and colleague Michael Dawson for the initial analysis of this data. It should be noted that depreciation is sometimes seen as a cost to be deducted before arriving at net profits, but in practice depreciation (the amount of which is enormously increased by accelerated depreciation allowances) is part of the social accumulation fund (or total economic surplus) available to capital and hence needs to be included in the surplus. In other words, the appropriate categories for analysis of accumulation are gross profits, gross savings/surplus and gross domestic product (all of which include depreciation) rather than net profits, net savings, or net national product. For more detailed discussion of these issues as well as a far more comprehensive empirical treatment of the tendency of the surplus to rise see Michael Dawson and John Bellamy Foster, "The Tendency of Surplus to Rise, 1963-1988," in John B. Davis, ed., The Economic Surplus in Advanced Economies (Brookfield, Vermont: Edward Elgar, 1992), pp. 42-70. A heavily abridged version of this research was published under the same title in Monthly Review, vol. 43, no. 4 (September 1991), pp. 37-50. For a graph of this data showing the tendency of the surplus to rise, see Michael Dawson and John Bellamy Foster, "Is There an Allocation Problem?: Accounting for Unproductive Labor," Science & Society, vol. 58, no. 3 (Fall 1994), p. 323.
7. National Income and Product Accounts of the United States, vol. 1,Tables 1.1 and 1.16; and U.S. Commerce Department, Survey of Current Business, vol. 79, no. 8 (August 1999), pp. D2 and D5. I would like to thank my friend and colleague Michael Dawson for the initial analysis of this data. It should be noted that depreciation is sometimes seen as a cost to be deducted before arriving at net profits, but in practice depreciation (the amount of which is enormously increased by accelerated depreciation allowances) is part of the social accumulation fund (or total economic surplus) available to capital and hence needs to be included in the surplus. In other words, the appropriate categories for analysis of accumulation are gross profits, gross savings/surplus and gross domestic product (all of which include depreciation) rather than net profits, net savings, or net national product. For more detailed discussion of these issues as well as a far more comprehensive empirical treatment of the tendency of the surplus to rise see Michael Dawson and John Bellamy Foster, "The Tendency of Surplus to Rise, 1963-1988," in John B. Davis, ed., The Economic Surplus in Advanced Economies (Brookfield, Vermont: Edward Elgar, 1992), pp. 42-70. A heavily abridged version of this research was published under the same title in Monthly Review, vol. 43, no. 4 (September 1991), pp. 37-50. For a graph of this data showing the tendency of the surplus to rise, see Michael Dawson and John Bellamy Foster, "Is There an Allocation Problem?: Accounting for Unproductive Labor," Science & Society, vol. 58, no. 3 (Fall 1994), p. 323.
8. National Income and Product Accounts of the United States, vol. 1,Tables 1.1 and 1.16; and U.S. Commerce Department, Survey of Current Business, vol. 79, no. 8 (August 1999), pp. D2 and D5. I would like to thank my friend and colleague Michael Dawson for the initial analysis of this data. It should be noted that depreciation is sometimes seen as a cost to be deducted before arriving at net profits, but in practice depreciation (the amount of which is enormously increased by accelerated depreciation allowances) is part of the social accumulation fund (or total economic surplus) available to capital and hence needs to be included in the surplus. In other words, the appropriate categories for analysis of accumulation are gross profits, gross savings/surplus and gross domestic product (all of which include depreciation) rather than net profits, net savings, or net national product. For more detailed discussion of these issues as well as a far more comprehensive empirical treatment of the tendency of the surplus to rise see Michael Dawson and John Bellamy Foster, "The Tendency of Surplus to Rise, 1963-1988," in John B. Davis, ed., The Economic Surplus in Advanced Economies (Brookfield, Vermont: Edward Elgar, 1992), pp. 42-70. A heavily abridged version of this research was published under the same title in Monthly Review, vol. 43, no. 4 (September 1991), pp. 37-50. For a graph of this data showing the tendency of the surplus to rise, see Michael Dawson and John Bellamy Foster, "Is There an Allocation Problem?: Accounting for Unproductive Labor," Science & Society, vol. 58, no. 3 (Fall 1994), p. 323.
9. National Income and Product Accounts of the United States, vol. 1,Tables 1.1 and 1.16; and U.S. Commerce Department, Survey of Current Business, vol. 79, no. 8 (August 1999), pp. D2 and D5. I would like to thank my friend and colleague Michael Dawson for the initial analysis of this data. It should be noted that depreciation is sometimes seen as a cost to be deducted before arriving at net profits, but in practice depreciation (the amount of which is enormously increased by accelerated depreciation allowances) is part of the social accumulation fund (or total economic surplus) available to capital and hence needs to be included in the surplus. In other words, the appropriate categories for analysis of accumulation are gross profits, gross savings/surplus and gross domestic product (all of which include depreciation) rather than net profits, net savings, or net national product. For more detailed discussion of these issues as well as a far more comprehensive empirical treatment of the tendency of the surplus to rise see Michael Dawson and John Bellamy Foster, "The Tendency of Surplus to Rise, 1963-1988," in John B. Davis, ed., The Economic Surplus in Advanced Economies (Brookfield, Vermont: Edward Elgar, 1992), pp. 42-70. A heavily abridged version of this research was published under the same title in Monthly Review, vol. 43, no. 4 (September 1991), pp. 37-50. For a graph of this data showing the tendency of the surplus to rise, see Michael Dawson and John Bellamy Foster, "Is There an Allocation Problem?: Accounting for Unproductive Labor," Science & Society, vol. 58, no. 3 (Fall 1994), p. 323.
10. Both monopolistic and competitive sectors of the economy continue to exist side by side, but the giant corporation, able to control to a considerable extent its level of price, output, and investment, is the typical firm in a dynamic sense in the monopoly capitalist economy. Noting the difference in price structure in monopolistic and competitive industries, the Natural Resources Committee report, The Structure of the American Economy (1939), directed by Gardiner Means, observed that the term "monopoly" could be "used on the whole to refer to situations in which sufficient control would be exercised over price by an individual producer or by a colluding group of producers to make possible monopoly profits, i.e., profits above the rate necessary to induce new investment in other industries not subject to monopoly control." Conversely, "a situation was in general classified as competitive if there was insufficient control over price to make monopoly profits possible." Gardiner Means, ed., The Structure of the American Economy, Part I (Washington, D.C.: U.S. Government Printing Office, 1939), p. 139.
11. See Harry Magdoff, "A Note on Inflation," in John Bellamy Foster and Henryk Szlajfer, ed., The Faltering Economy: The Problem of Accumulation Under Monopoly Capitalism (New York: Monthly Review Press, 1984), pp. 118-23. The Great Depression was of course an exception to the inflationary tendencies under monopoly capitalism.
12. Competition, which has as its main goal the development of monopoly power (entailing surplus profits or monopoly rents) through the monopolization of particular technologies and markets, is sometimes known as "Schumpeterian competition" and closely corresponds with how the term "competition" is used within business today. See James Galbraith, Created Unequal: The Crisis in American Pay (New York: The Free Press, 1998), pp. 40-42.
13. Myron Gordon, "Monopoly Power in the United States Manufacturing Sector, 1899 to 1994," Journal of Post Keynesian Economics, vol. 20, no. 3 (Spring 1998), pp. 323-25. Gordon's analysis is inspired by Michal Kalecki's concept of the "degree of monopoly," defined as the price mark-up over average prime production costs. On the relation of Kalecki's analysis to that of Baran and Sweezy see John Bellamy Foster, The Theory of Monopoly Capitalism (New York: Monthly Review Press, 1986).
14. Myron Gordon, "Monopoly Power in the United States Manufacturing Sector, 1899 to 1994," Journal of Post Keynesian Economics, vol. 20, no. 3 (Spring 1998), pp. 323-25. Gordon's analysis is inspired by Michal Kalecki's concept of the "degree of monopoly," defined as the price mark-up over average prime production costs. On the relation of Kalecki's analysis to that of Baran and Sweezy see John Bellamy Foster, The Theory of Monopoly Capitalism (New York: Monthly Review Press, 1986).
15. Gordon, "Monopoly Power," pp. 323-25. The production workers category, upon which much of Gordon's analysis depends, is described in the Census of Manufactures as follows: "This item includes workers (up through the line-supervisor level) engaged in fabricating, processing, assembling, inspecting, receiving, storing, handling, packing, warehousing, shipping (but not delivering), maintenance, repair, janitorial and guard services, product development, auxiliary production for plant's own use (e.g., power plant), recordkeeping, and other services closely associated with production operations at the establishment covered by the report. Employees about the working-supervisor level are excluded from this item." General Summary, Census of Manufactures, 1992, p. A-1. Like most economic statistics there are some conceptual issues raised by the production workers category, which have to be taken into account in its application, such as the fact that it excludes all of those managers supervising production above the line-supervisor level (including these among nonproduction workers). Nevertheless, it draws an important distinction between those production workers directly engaged in the process of producing use values and those nonproduction workers primarily geared to management, marketing and finance, etc.
16. Gordon, "Monopoly Power," pp. 323-25. The production workers category, upon which much of Gordon's analysis depends, is described in the Census of Manufactures as follows: "This item includes workers (up through the line-supervisor level) engaged in fabricating, processing, assembling, inspecting, receiving, storing, handling, packing, warehousing, shipping (but not delivering), maintenance, repair, janitorial and guard services, product development, auxiliary production for plant's own use (e.g., power plant), recordkeeping, and other services closely associated with production operations at the establishment covered by the report. Employees about the working-supervisor level are excluded from this item." General Summary, Census of Manufactures, 1992, p. A-1. Like most economic statistics there are some conceptual issues raised by the production workers category, which have to be taken into account in its application, such as the fact that it excludes all of those managers supervising production above the line-supervisor level (including these among nonproduction workers). Nevertheless, it draws an important distinction between those production workers directly engaged in the process of producing use values and those nonproduction workers primarily geared to management, marketing and finance, etc.
17. Gordon, "Monopoly Power," pp. 326-27.
18. There are some theoretical difficulties in equating the "nonproduction workers" category with the concept of "monopoly workers." For one thing, monopoly power is normally rooted in production, so that production workers are also, in a sense, monopoly workers. But Gordon's intention is clearly one of emphasizing that production workers are caught up in the stringent capitalist logic of increasing productivity, and at the same time keeping down unit labor costs-in other words raising the rate of exploitation-in contrast to nonproduction (or "monopoly") workers who have as their main task the increase of the mark-up.
19. Ibid, pp. 327-28.
20. Richard J. Barnet and John Cavanagh, Global Dreams (New York: Simon and Schuster, 1994), pp. 325-28; Walter LaFeber, Michael Jordan and the New Global Capitalism (New York: W.W. Norton, 1999), pp. 106-07, 147-48; David Korten, The Post-Corporate World: Life After Capitalism, 1999), pp. 77-78.
21. Richard J. Barnet and John Cavanagh, Global Dreams (New York: Simon and Schuster, 1994), pp. 325-28; Walter LaFeber, Michael Jordan and the New Global Capitalism (New York: W.W. Norton, 1999), pp. 106-07, 147-48; David Korten, The Post-Corporate World: Life After Capitalism, 1999), pp. 77-78.
22. Richard J. Barnet and John Cavanagh, Global Dreams (New York: Simon and Schuster, 1994), pp. 325-28; Walter LaFeber, Michael Jordan and the New Global Capitalism (New York: W.W. Norton, 1999), pp. 106-07, 147-48; David Korten, The Post-Corporate World: Life After Capitalism, 1999), pp. 77-78.
23. On General Motors see Douglas Dowd, The Waste of Nations (Boulder: Westview Press, 1989), pp. 65-66. This example of course doesn't take account of the fact that the sales effort had actually penetrated into the production process of such large firms, as Veblen and later Baran and Sweezy were to argue, so that incorporated into production costs themselves were the costs associated with frequent model changes-accounting for perhaps a third of all production costs in automobile production by the middle of the last century.
24. See Baran and Sweezy, Monopoly Capital, pp. 131-38.
25. Economic Report of the President, 1999, p. 39; Korten, The Post-Corporate World, p. 42; New York Times, January 19, 1998, p. A1; Michael J. Mandel, "All These Mergers are Great But...," Business Week, October 18, 1999, p. 48.
26. Economic Report of the President, 1999, p. 39; Korten, The Post-Corporate World, p. 42; New York Times, January 19, 1998, p. A1; Michael J. Mandel, "All These Mergers are Great But...," Business Week, October 18, 1999, p. 48.
27. Economic Report of the President, 1999, p. 39; Korten, The Post-Corporate World, p. 42; New York Times, January 19, 1998, p. A1; Michael J. Mandel, "All These Mergers are Great But...," Business Week, October 18, 1999, p. 48.
28. Economic Report of the President, 1999, p. 39; Korten, The Post-Corporate World, p. 42; New York Times, January 19, 1998, p. A1; Michael J. Mandel, "All These Mergers are Great But...," Business Week, October 18, 1999, p. 48.
29. "The First Global Car Colossus," Business Week, May 18, 1998, pp. 40-41.
30. Mandel, "All These Mergers," p. 48.
31. Michael Dawson and John Bellamy Foster, "Virtual Capitalism," in Robert W. McChesney, Ellen Meiksins Wood and John Bellamy Foster, ed., Capitalism in the Information Age (New York: Monthly Review Press, 1998), pp. 53-54; United Nations, Human Development Report (New York: Oxford University Press, 1999), p. 3.
32. Michael Dawson and John Bellamy Foster, "Virtual Capitalism," in Robert W. McChesney, Ellen Meiksins Wood and John Bellamy Foster, ed., Capitalism in the Information Age (New York: Monthly Review Press, 1998), pp. 53-54; United Nations, Human Development Report (New York: Oxford University Press, 1999), p. 3.
33. Doug Henwood, Wall Street (New York: Verso, 1997), pp. 72-75; Business Week, January 24, 2000, p. 37.
34. Doug Henwood, Wall Street (New York: Verso, 1997), pp. 72-75; Business Week, January 24, 2000, p. 37.
35. U.S. Department of Labor, Bureau of Labor Statistics, A BLS Reader on Productivity, Bulletin 2474 (April 1996), p. 12.
36. Eric A. Nilsson, "Trends in Compensation for Production Workers, 1948-1995," Review of Radical Political Economics, vol. 31, no. 4 (December 1999), pp. 133-63.
37. Harry Magdoff, The Age of Imperialism (New York: Monthly Review Press, 1969), p. 200.
38. On the concept of the "essential oneness" of U.S. accumulation see Harry Magdoff, Imperialism: From the Colonial Age to the Present (New York: Monthly Review Press, 1978), p. 239.