BOOK REVIEW/Seth Sandronsky

Monopoly Capital Now

Don’t let the title scare you. John Bellamy Foster’s The Theory of Monopoly Capitalism: An Elaboration of Marxian Political Economy (Monthly Review Press) is a good read and resource for making sense of the world around us.

Foster edits the independent socialist magazine Monthly Review, launched in 1949 with an Albert Einstein essay, and he is a professor of sociology at the University of Oregon. For the past three decades, Foster has been breaking new ground in writing on the ecology, economy and polity in the pages of MR and MR Press.

Foster’s analytic orientation is Karl Marx. The latter is gaining readers worldwide since the Great Recession rocked the world, and a weak recovery benefits a well-heeled few.

A proponent of Marxist authors Paul Baran and Paul Sweezy, Foster expands their historical-materialist critique in Monopoly Capital: An Essay on the American Economic and Social Order (1966). Foster writes: “The publication of a new edition of The Theory of Monopoly Capitalism thirty years after it made its first appearance as a doctoral dissertation, and twenty eight years after its expansion into a book, is testimony both to the power of the tradition of political-economic thought it sought to elaborate and to the deepening stagnation of the capitalist economy to which that tradition owes its continuing relevance.”

Baran, Sweezy and Foster theorize the system’s class and corporate power in the developed and developing worlds, producing an outcome they term monopoly capital. It is a process and not a thing.

We certainly do not have to look far for proof of monopoly capital. It surrounds us: Big Banks/Pharma/Telecom, comprise a partial list.

Now add idle people, plant and equipment. The epidemic of homeless people and empty homes is but a single example.

Season this toxic brew with stagnant economic growth. Add a dollop of ascendant finance. In eight chapters, Foster delivers a wide-ranging exploration of the monopoly capital theory. For starters, he explains the core concept of economic surplus, and its ties to the accumulation of capital.

Foster lays out the process of economic surplus that Baran and Sweezy theorized. Their economic surplus is not the same thing as surplus value (profits, interest and rent).

The latter is Marx’s term. The process of economic surplus, Foster writes, is in part about “dealing with the various forms of economic waste” under monopoly capitalism of giant corporations dominating production.

Economic surplus is the gap between the necessary costs of production and total output, and features the “sales effort” of advertising, public relations and planned obsolescence. Think of GM’s surface changes, i.e., fins and grills to cars, advertised as “new” models, with other auto companies aping this business practice.

The sales effort expanded economy-wide in the US during the postwar era of widespread prosperity. That was not all, though, Foster theorizes.

The economic surplus grew faster than the sales effort could absorb it, he writes, following Baran and Sweezy. With a lack of profitable investment outlets, the economic surplus flooded into financial speculation over the past three-plus decades, with the 2007-08 home-price bust under a mass of toxic debt a recent case in point.

Economic surplus does derive from Marx’s view of surplus value. For Baran, Foster, and Sweezy, however, modern technological change partly complements Marx’s analysis.

Monopoly capital theory opponents such as Paul Mattick disagree. Foster presents his critique of the opponents’ criticisms, and the broader debate with monopoly capital proponents, in a fair-minded way.

The modern era contrasts with the competitive capitalism that Marx analyzed. Now for instance, monopoly industries have high entry barriers to new companies, and do not compete with rivals on the prices of commodities.

Marx’s epoch differed. However, then and now, the exploitation of laborers in the workplace (at or away from home) is the heart of the system.

Foster references the work of Thorstein Veblen, the iconoclast economist who lived and wrote over a century ago. His term “conspicuous consumption” to describe the system’s distortions away from satisfying human needs is not the half of monopoly capital’s wasteful sales effort, according to Foster.

Foster spells out how and why monopoly capitalism creates excess capacity. He examines ways to measure it, from mainstream to radical. This outlook is quite useful. Foster argues, convincingly, that excess capacity is a built-in part of the system. Such a condition chronically creates weak demand, or buying power relative to actual output. The Keynesian solution is for the state to shift capital via taxes to the laboring class, but falls short of addressing the system’s generation of excess capacity, according to Foster.

His chapters on free competition and monopoly capital; accumulation and crisis; the state; imperialism, and post-revolutionary societies, employ no small measure of empirical evidence. Such analysis sheds light on why the economy, despite rising productivity gains, is failing to improve most people’s lives. While not the final word on what Foster terms “today’s monopoly-finance capitalism,” his book goes aids readers’ understanding of the system’s flaws. In his view, humanity has the ability to use reason to develop a sane social order.

Seth Sandronsky is a Sacramento journalist and member of the freelancers unit of the Pacific Media Workers Guild.

From The Progressive Populist, September 1, 2014