In Remembrance of Paul M. Sweezy

by Dr. Gupta

[This article appeared in People’s March, the Voice of the Indian Revolution, Vol. 5, No. 6, June 2004.]

      One of the front ranking Marxist political economists Paul M. Sweezy breathed his last in Larchmont, New York on 27th February, 2004. Spanned over nine decades, the life of Sweezy ran as a rich banker’s son with academic life as a student at Harvard in 1931-32 and then at the prestigious London School of Economics from where he imbibed Marxism and died a Marxist after about 70 long years. For many the Monthly Review that he founded with Leo Huberman in 1949 and edited till death had overtaken him along with a plethora of books, written singly or jointly, do still provide comprehensive understanding of the Marxist view points on the capitalist economy, imperialist exploitation in the third world countries, socialism, etc. Sweezy’s writings on political economy clearly reflect his command of not only Marxian economics but also other strands of economic thought. What comes prominently in his long life is an unflinching faith in Marxism and in the inevitability of socialism by replacing the existing system of capitalism. There are some valid criticisms of Sweezy’s economic analysis, but by no means does that undermine Sweezy’s great role as a leading radical economist and political analyst in the world.

      As early as in 1938 Sweezy wrote his seminal work The Theory of Capitalist Development: Principles of Marxian Political Economy. It was a bold textbook on the Marxist principles on political economy. And with this Sweezy opened a vigorous debate with Joseph Schumpeter against his views contained in Capitalism, Socialism and Democracy. It should be admitted that Schumpeter, the prominent non-Marxist economist, was a close friend of Sweezy and held Sweezy in high esteem. Drawing on a melange of elements from Marx and Keynes without any self-contained model, Schumpeter had also to concede socialism as a consequence of economic development in which “the economic affairs of society belong to the public and not to the private sphere.”

      Schumpeter believed that stagnation of the capitalist system was caused by political control while Sweezy pointed to the inherent contradictions lying in the development of the capitalist system itself. For Sweezy capital appears as obstruction to capital itself. It is particularly true in Sweezy’s analysis of the tendency towards under-consumption in the capitalist system.

      Sweezy for some time taught at Harvard, worked for some New Deal agencies and joined the US army when World War II was on. He was a member of the League Against Fascism and other popular front organisations in the late 1930s. While working with the Army Research Branch in London in 1943, Sweezy tried his hand at editing the monthly magazine European Political Report with a clearly anti-Fascist, left leaning position. After his short stint at the army, he was denied appointment at Harvard and he was driven to the conclusion that as a Marxist he had no chance of a tenured position. A politically conscious Sweezy did not disavow his Marxist stance and instead teamed up with Leo Huberman to bring out one of the world’s most prestigious Marxist magazine Monthly Review: An Independent Socialist Magazine in May 1949 through the financial assistance of Harvard literary scholar Professor F.O. Matheissen. The first issue carried an article of Albert Einstein on “Why Socialism?” This Monthly Review has remained a necessarily invaluable magazine to discern modern capitalism and movements over decades.

      When the Cold War clouds in the 1950s and draconian McCarthyism in the USA appeared as a menace, Monthly Review under Sweezy and Hubennan became so eloquent in its scathing criticism that New Hampshire Attorney General subpoenaed Sweezy and even put him behind bars on charges of contempt of court. A bold Marxist, Sweezy refused to answer the questions of the court and later the U.S Supreme Court purged him of the contempt charge in 1957. Sweezy emerged victorious as a symbol of courage and intellectual honesty. It was times when anti-communism was the battle cry of U.S. imperialism. The U.S. army invaded Korea and U.S. imperialism went full steam with its cooked up version of the Korean War. Monthly Review Press came into being with the publication of I.F Stone’s book refuting the official version on the war.

      In the post-world war II period the question of transition to capitalism from feudalism sparked a huge debate with the publication of Morris [Maurice] Dobb’s book Studies in the Development of Capitalism in 1946. Dobb stressed on the internal contradictions in the feudal system and the growth of new productive forces in England as the fundamental cause behind the emergence of capitalism. Paul Sweezy after a couple of years contended the view with his ‘exchange relation’ perspective defining capitalism in terms of production for profit through market exchange as against the near-subsistence economy of feudalism. Sweezy forcefully placed his view that capitalism emanates through forces like trade and the international division of labour. Sweezy particularly raised aspects like the expansion of internal and external trade, inclusive of unequal colonial trade which served as a major factor behind dissolution of feudalism. However, after half a century of that rich debate, it seems the internal or external factor — as emphasized by Dobb and Sweezy respectively — cannot fit in with the development of capitalism in all different countries. In any case it is in order to add here that both Dobb and Sweezy held the focus basically on economic changes or the play of economic factors against the prevalent view of the bourgeois sociologist, Max Weber, for whom the catalyst of change from feudalism lay in the ‘Protestant ethic’, a sort of cultural explanation.

      Sweezy had his academic training in classical and neoclassical economics and he admitted that he had to struggle hard to reach the Marxian theory of labour brushing aside the theory of marginal utility. In his Theory of Capitalist Development the significant conclusion was made regarding long-term stagnation of capital as consequence of the tendency of capital towards over accumulation. Sweezy was negatively influenced by John Memard Keynes, the best representative of reformed capitalism, going ahead of the classical economists like Ricardo and others. While discussing value-detennination and income distribution those earlier economists started from the premise that in the capitalist system all the factors are wholly involved and that for the given state of full involvement of factors, there is never any scarcity of active demand. Keynes in his General Theory dismissed such a prevalent view on the full play of factors all the time as mere conjecture. Keynes wanted to prove that involuntary unemployment exists in a capitalist society, production level rests far below the full employment level and here full employment is not an inevitable reality. He argued that a decrease in wages will also reduce the demands for commodities and this decrease in demand will lead to stagnation. Keynes recommended that in the period of decreasing household consumption, unused capacities in different sectors and acute unemployment, the state should, in the extreme, go in for increased supply of print money for financing projects for creating jobs. Keynes also spoke of ‘comprehensive socialisation of investment’ — an opinion which, however, was kept vague. Actually speaking, in essence Keynesian theory is devoted to overcoming the massive crisis of the 1930s. Paul Sweezy admired Keynes as an authentic representative of the neoclassical school “whose main achievement was to rescue it from some of its worst errors.” Like Marx, Keynes also rejected Say’s Law of Markets (which denied the possibility of a shortage of demand in relation to production) and Sweezy praised Keynes’s greatest contribution as lying in the liberation of Anglo-American economics from a tyrannical dogma. However, Sweezy found such negation “unmatched by comparative positive achievement”. Sweezy learnt from Keynes the “penetrating analysis of the capitalist economy which shows that depression and unemployment far from being impossible, are the norms to which that economy tends, and which explodes once and for all the myth of a harmony between private and public interests [which] was the cornerstone of nineteenth century liberalism. But Keynes stopped here in his critique of the existing society...” [Paul Sweezy, Essays on Keynesian Economics and The Crisis of Capitalism, Cornerstone Publications, India, 2002, p. 13]. Sweezy critically drew on some of the analyses of the capitalist system but the meeting points end at that, since Sweezy believed that Keynes failed to see “economics as an integral part of a social system” and as Sweezy himself was a believer in “a profound change in the structure of social relations” for a new advance in the “material and cultural conditions of the human race.”

      In Marx’s Capital the questions of capital accumulation, concentration of capital and the tendency towards concentration of capital, etc. found significance and in the Marxist tradition Lenin and others argued that monopoly is the intensification of but not negation of competition. They based themselves on Marx’s theory of the falling rate of profit. Paul Sweezy and Paul Baran in their seminal work Monopoly Capital, in line with the under-consumption view, emphasized a tendency to stagnation and saw monopoly as displacing competition and the coercion to invest. Incidentally, in the Keynesian theory too deficiencies in market levels of demand figure prominently. Sweezy and Baran incorrectly argued that monopolistic firms do have increasing profits in contrast to Marx’s law of falling rate of profit. In their view the profits approximate society’s economic surplus tending to rise both absolutely and relatively with the development of the system. In here lies, they argued, the structural change from “competition to monopoly capitalism”. The concept of rising “economic surplus” in the national income is the difference between what a society produces and the costs of producing it. Obviously this notion of ‘economic surplus’ is quite different from Marx’s concept of surplus value. Its calculation is made at market prices in stead of values and it depends on the socially necessary costs. In addition to that such ‘economic surplus’ is located in the process of exchange, market domination in contrast to Marx’s notion of surplus labour based on the labour process itself. Sweezy and Baran were inspired by Michal Kalecki to conclude that if rising stagnation is not checked, for its inherent inability to employ the surplus, it must lead to under consumption. Thereby, they tended to drift away from the Marxist interpretation.

      Beside that they referred to ‘wastes’ as essential to monopoly capitalism, significantly surpassing that of competitive capitalism. Such wastes are prominently found in all kinds of sales effort by giant corporations, much-touted outlays on research and development, regular expenses on litigation, entertainment of clients, lobbying advertisements and so on. Such phenomena are far too common in the present day capitalist world. In several later writings Sweezy and Magdoff pointed to the new trends. Sweezy particularly held the focus on “a secular increase in society’s debt structure, with a parallel decline in corporate and individual liquidity. Thus the economy became more and more vulnerable to the kind of shocks which in the old days used to touch off panics; and in order to guard against this recurring threat, the need for still more inflation becomes increasingly acute ....”

      Monthly Review and the Monthly Review Press had to function in great adversity. In the early 1950s both Sweezy and Huberman regularly made devastating criticisms of the Vietnam War in their writings. After the Cuban Revolution in 1959, just 90 miles away from the U.S.A., Paul Sweezy and Huberrnan not only supported that event, they personally got to know Fidel Castro and Che Guevara with whom they had enjoyed the privilege of touring the island. Sweezy and Huberman discerned this crucial fact in the aftermath of the revolution that in order to sustain itself, Cuba must inevitably move on to the path of socialism. Monthly Review Press published two books on Cuba focussing on its economic transformation.

      Paul Baran’s The Political Economy of Growth was path breaking in the sense that with this publication the dependency theory came to the forefront establishing Monthly Review’s role as the great supporter of the revolutions in the third world countries. After almost a decade, when Sweezy and Baran wrote Monopoly Capital: An Essay on the American Economic and Social Order, it was dedicated to Che Guevara. Among the books published in the 50s and 60s Monthly Review Press, the [most] notable was William Hinton’s Fanshen — the vivid description of land reforms in Mao’s China. Way back in 1967 Sweezy argued that the tempo of struggles in the whole of the 20th century had transferred to the third world and that revolts against capitalism and building of socialism would unfold primarily in the periphery of the capitalist world. In this context it is necessary to mention the victory of Allende’s Marxist government through parliamentary election and its toppling by the C.I.A sponsored coup in 1973. Sweezy himself was present as guest-of-honour at the swearing-in ceremony of the Allende government. While wholeheartedly supporting such a government Sweezy was candid in his forewarning that without the backing of an armed force and being cornered from all sides by capitalist states, the popular Unity government would remain perpetually weak. In the Monthly Review Sweezy made his brilliant analysis on the tragic experience in Chile with the clear conclusion that in countries surrounded by the capitalist world revolution can win only through armed struggle. Since the late 1980s Monthly Review began to strike a sympathetic chord with the radical working class movements towards social change. Not only was Sweezy a staunch supporter of the anti-US upsurge in El Salvador, Monthly Review under the editorship of Paul Sweezy and Harry Magdoff highlighted the Naxalite movement, the student movement in France, Germany, Italy, etc. in 1968, the Maoist movement in Nepal, the Chiapas revolt in Mexico, etc. Paul Sweezy joined hands with some other intellectuals in the early 1970s to protest against state repression on basically Naxalite forces in India. In 1974 too he was a signatory to the memorandum of protest against Indian state repression.

      Sweezy is also remembered for his famous debate (1970) with Charles Bettleheim who was at one with Sweezy on the Monthly Review position on China and the Cultural Revolution. While Bettleheim characterised the ruling class in the Soviet Union as “state bourgeoisie” as did the CPC, Sweezy incorrectly considered that the USSR was a “post-revolutionary society” neither socialist nor capitalist — having potential to develop into a genuine socialist society. Actually Sweezy, despite his acceptance of the new ruling class in the Soviet Union, could not think otherwise than the earlier faith in the non-existence of private capitalists in the planned economy and the non-separation of the total social capital into competing or potentially competing units. One may refer to Comrade Charu Mazumdar’s contrary assertion in 1968 itself pointing to the emergence of capitalism in the Soviet Union where the classical capitalist class might not be found. Yet, what is to be stated here is that Sweezy clearly wrote in the December 1970 issue of Monthly Review that the bureaucrat-controlled economy in the Soviet Union had either to go forward weakening bureaucracy by politicising the people or to go backward towards the profit-earning course towards establishing capitalist rule. However, Sweezy admitted that the new post-revolutionary societies developed “a military-style cleavage between the leaders and the people which in time ... hardened into a self-reproducing system of antagonistic classes ....” [Paul Sweezy, Preface For A New (Japanese) Edition of Post-Revolutionary Society, July-August 1990].

      Sweezy was never a member of the American Communist Party which he criticised for its wrong policies. But, unfortunately he never was part of any communist party and remained only as a powerful revolutionary intellectual thinker. Similarly he was critical of the CPSU and the communist parties owing allegiance to the Soviet line from the Khruschev period onwards. But he was optimistic of Chinese socialism and he held Mao in high esteem. When the Great Proletarian Cultural Revolution was launched under Mao’s leadership, Sweezy had a general support to it. In one of his brilliant essays “Hundred years After Marx” in the March 1983 issue of Monthly Review Sweezy announced that after Mao’s death Mao had been dismissed by the CPC and like in the Soviet Union at least for a temporary period ‘Marxism’ turned into a Chinese ruling class ideology. As an optimist and unfazed Sweezy, added that Marxism of Marx and Engles, Lenin and Mao was alive and would continue to remain so, as a guiding spirit for human emancipation.

      Despite such robust optimism and a sharp analytical mind, a flicker of false hope temporarily overcame both Sweezy and Magdoff when perestroika and glasnost came to be presented by Gorbachev as a democratic swing-back to socialist principles. However, the rapid change of history and the fall of the Soviet Union and other erstwhile socialist countries in East Europe cruelly dashed such hope to the ground. Despite this, in his 1990 edition of Post-Revolutionary Society he made the remarkable comment “... the crisis of the Soviet Union and the collapse of its East European allies was not due to the failure of socialism. The struggle for socialism in the Soviet Union... was lost long before with the consolidation of a class system, and it was this system which, despite its undoubted achievements, ultimately failed.” It is to be added that Sweezy contributed in many ways in understanding the problems in a socialist economy. He was unequivocal in his assertion that market based reforms in the USSR and East Europe were incompatible with socialist transformation.

      About globalisation Sweezy wrote in 1997 September that it was not an event or state, it is a process continuing since the time of the birth of capitalism. Sweezy strongly reacted to the U.S. aggression in Iraq in 1991 and visualised the impending menace of U.S. imperialism in the world. He was not an armchair critic of imperialism. Nor was he an eclectic thinker. His creative analytical faculty is well expressed in his writings. Monthly Review has reflected not only an anti-imperialist, anti-capitalist stance; it has generally espoused the cause of socialism. Sweezy and his colleagues made a trenchant criticism of market based socialism. Similarly Monthly Review articles gave befitting answers to the anti-Marxist post-modernist views. Simultaneously it provided ample space for highlighting Marxian view on environment and gender problems. Sweezy will be remembered as a Marxist who believed that “unlike human beings, social systems do not die of their own accord. They have to be over thrown by human agents who find their ills no longer tolerable ....”


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