Interview with Paul M. Sweezy

Monthly Review, April 1987, v.38.

by Sungur Savran and E. Ahmet Tonak

The following interview was conducted by Sungur Savran,
visiting scholar in economics, and E. Ahmet Tonak,
professor of economics at Simon's Rock of Bard College,
in Great Barrington, Massachusetts on March 20, 1986.
The interview previously appeared in Onbirinci Tez
(Thesis Eleven), a Marxist theoretical journal published
quarterly in Istanbul, Turkey since November 1985. The
interviewers, who are the members of the editorial
collective of Onbirinci Tez, thank Derek Link for his
contribution to the transcription of this interview.

E. Ahmet Tonak (EAT): We would like to start out by
discussing your lifelong activities as a socialist intellectual
and author before turning to questions of theory and
politics. You have, on various occasions, made clear that
you turned to socialism and were convinced of its
relevance for the contemporary world at the beginning of
the 1930s, which means that you have been active
developing and defending socialist views for more than
half a century. Now it seems obvious that at least until the
mid-seventies, this period was not really marked by a
vitality of the socialist movement in the United States.
During the Cold War period, in particular, socialism was to
be downgraded and vilified by the political establishment,
the mass media, the intelligentsia, etc. How would you
characterize the experience of being in an extremely small
minority as a socialist? Are there any significant and
interesting instances of the pressures you were submitted
to that you would like to evoke?

Paul M. Sweezy (PMS): Well, of course, the period of fifty
years that you mentioned has been one of great variety.
The reason I first became interested in Marxism and
radical ideas was because of the state of the world in the
early thirties, the financial collapse, and the Great
Depression, the international situation which was prelude
to the Second World War. And during that decade,
particularly in the United States--well not particularly, but
certainly markedly in the United States-- there was an
upsurge of radical activity and radical thought. Up to then, I
would say, there was virtually no Marxism in the United
States.
You may be familiar with the work of Thorstein Veblen. He
was one of the original faculty at the New School. He was
not a Marxist, but he was very strongly influenced by
Marxism, and he was just about the only important U.S.
social scientist of the time, of the 1920s, who had really
taken Marxism seriously. There was the old Socialist Party
which had developed a few interesting thinkers,
particularly Louis Boudin, who was more or less in the
mold of Kautsky and the social democratic theories of the
German party. But he was also an original thinker. And
there were a few others. But by and large, in academia
anyway, Marxism was nothing of any influence whatever,
and whatever was known about it or written about it was a
caricature, was not serious. There was no serious Marxist
tradition. When I came back from England in the fall of
1933, it had already begun to change. There was a good
deal of questioning and thinking around the big
universities. I was at Harvard at the time, but this was true
of various other universities too. Particularly in New York,
New York University, City College. During the 1930s, the
Communist Party, of course, grew rapidly, and took a
leading role in the organization of the working class, and
the CIO, the breakaway federation from the American
Federation of Labor. And generally speaking it was a
period of a great deal of not very sophisticated theoretical
work, but a good deal of ferment and interest. And that
was the context in which I became a self-educated
Marxist. I had had a normal neoclassical training, but as a
Marxist I had a problem of mostly teaching myself, and of
course in conjunction with trying to absorb traditions,
German particularly, and the European tradition. It was
during that period that I gradually wrote, over several
years, The Theory of Capitalist Development, which was
started more or less as an effort of self-clarification. I was
teaching from about 1935 or 1936 a course on the
economics of socialism, which we interpreted in two ways.
One, as the economics of a socialist society. And two, as
the economic theories of socialist movements. And in the
latter, of course there were many socialist traditions,
Christian socialism, Fabian socialism and so on, and
Marxist. And I tried to raise the level of treatment of
Marxism in that course, and in graduate courses and
seminars, and found that it was a long hard struggle to
overcome the traditions and inhibitions of a neoclassical
training. I don’t know. I can’t say I was terribly successful
in the early stages. It took me a long, long time before I
could accept the Marxist labor value theory because I was
totally accustomed to the type of thinking of marginal utility
price theory, and so on. And I couldn’t for a long time, I
couldn’t see how there could be another kind of value
theory with totally different purposes. That took years. The
Theory of Capitalist Development was finished soon after
the war started, and was published just a few months
before I went into the U.S. army. Now by that time, I think I
could call myself a Marxist, with a reasonable background
in the modes of theoretical reasoning and a grounding in
the classical texts. But it didn’t come quickly by any
means.

EAT: You wrote somewhere that after the Second World
War you were "duly ushered out of Harvard.’ It is also
known that, despite student demands, you were never
granted a stable position at other American universities.
Would you say a few words on the Harvard experience
and other similar incidents?
PMS: Well there is a certain misconception, fairly
widespread I think, that I was fired by Harvard. That is not
true. When I left Harvard in 1942, I went into the army and
the OSS (I was taken from the army into the intelligence
apparatus, that’s the predecessor of the CIA, of course). I
spent most of the war years in Europe--England, France,
and Germany. The fact was that I was on military leave
from Harvard at the time. I was an Assistant Professor,
and had a five-year contract when I left; and when I
returned to the United States in 1945, the fall of 1945, I
had two years more on the contract, two and a half years I
think, but I decided not to go back to academic teaching. I
talked with my friends at Harvard and discovered that
there was no possibility of the department agreeing on my
being retained with tenure, so I didn’t wait. I didn’t want to
go back for just a couple of years at that time, and I just
resigned. So it’s not true that I was ever fired, though it
certainly is true that I wouldn’t have been given tenure if I
had stayed.
Sungur Savran (SS): Was it made obvious that, well at
least did you know that their reasons were political?
PMS: Yeah, ideological.
SS: Yes, that’s what I mean.
PMS: The department was sharply divided. Not between
radicals and conservatives, but between those who were
adamantly opposed to having any radicals in the
department and those, like Schumpeter for example, who
were very friendly. In fact during the war, there was an
opening that came up, a permanent tenure position came
up in the economics department, and they had to appoint
somebody immediately. And I was one of the two
candidates who were considered for the job. The other
was John Dunlop, who subsequently became a very well
known labor economist. Schumpeter was a very strong
supporter of my candidacy. I was told about that later, I
was away at the time in England. But partly because they
needed somebody who was there and could teach during
the war, Dunlop was given the job. After that, there was
never any chance that they would take a Marxist.
EAT: We know that, among others, you were a student of
Schumpeter. It is even said that the title of your now
classic The Theory of Capitalist Development, (TCD) was
designed so as to distinguish your approach from that of
Schumpeter, one of whose more important works having
as title, The Theory of Economic Development. How would
you characterize your relationship to Schumpeter, and
could you evoke any personal reminiscences you have of
him that may be of intellectual or political interest? In
particular, what was his reaction when you were "ushered
out of Harvard’?
PMS: Personally, we were very close friends, although we
were at opposite ends of the political spectrum. Any
economist who has studied the history of economic
thought in the twentieth century, will realize that
Schumpeter was a unique figure. He understood the
importance of Marxism. As a matter of fact, he was a
contemporary of a group in Vienna which included
Hilferding, Otto Bauer, and Max Adler, the leading lights of
the Austro-Marxist school. He understood their intellectual
significance, their importance. His own attempt at a
comprehensive theory of capitalism was deliberately
architected as an alternative to Marxism. In other words,
he paid Marxism the compliment of understanding and
recognizing that it was the most important intellectual trend
of the time. That’s totally different from anything in the
Anglo-Saxon world, where Marxism was simply not taken
seriously. It was regarded as part of something like what
Keynes called an intellectual underworld, which he didn’t
take seriously. So personally, I was very fond of
Schumpeter, and he of me, I think. Actually, I wasn’t really
a student of Schumpeter’s. But personally, I was very
much influenced by him.
EAT: You didn’t take any formal course with him?
PMS: Well, when I came back from England, there was a
small graduate seminar. Very small seminar, about four or
five people, including Oscar Lange.
EAT: He was there?
PMS: Leontief used to come to it, and myself, and the
woman to whom Schumpeter was later married. But it was
very small. I never took anything else of his. Later on in the
mid-thirties, for two years, I think it was two years, I was
Schumpeter’s assistant in his introductory graduate course
in economic theory. I would assist in reading papers,
consulting with the students, and the like.
EAT: How about Samuelson and Solow who as students
attended your postgraduate seminars?
PMS: No, Solow took the course I mentioned earlier, the
economics of socialism. He was one of the best students I
ever had, very bright and very left to begin with.
SS: Oh, that’s interesting.

EAT: Yes, he said so. I listened to him at one point.
PMS: Oh yeah, very left for a couple of years. And then
after, I don’t know quite what his trajectory was, whether
he did his graduate work at Harvard, but maybe he didn’t. I
kept in touch with Solow a little bit right after I left in the
early years of the war, but he drifted very rapidly to the
mainstream, and became, well, you know Solow. I think he
could be called somewhat opportunistic.
EAT: What about Samuelson, who took the course?
PMS: He was never left.
EAT: But he was in your seminar, right?
PMS: Not that particular one. He wasn’t yet in Cambridge
at that time in 1933. He came about 1936. And he took
Schumpeter’s course when I was Schumpeter’s assistant.
EAT: I see.
PMS: We used to have informal discussion groups from
time to time. Schumpeter would be involved, but not
necessarily. Visiting economists from all over the world
would come to Cambridge in the 1930s, very largely
because of Schumpeter’s being there. He was the drawing
card. Hansen was another well known person. Lange was
one of the visiting scholars and Georgescu-Roegen, you
probably know them here were a lot of visiting economists
who came on Rockefeller Fellowships and spent half a
year, even a year, or in Lange’s case, two years, at
Cambridge. Another was Eric Roll, whose specialty was
the history of economic thought, and with whom you are
probably familiar. The first edition of Eric Roll’s History of
Economic Thought is still, I think, a very good book. He
changed it a lot in later editions. And as you know, he
became a prominent civil servant in Britain. Now he is Lord
Roll, head of one of the big London banking houses. He
also moved to the right, but never as much as some of the
others. I see Eric Roll occasionally, when he is in the
United States. While he’s not a radical any more, he’s not
unfriendly. I mean he’s not a Thatcherite or a Reaganite or
anything like that. He’s too sensible for that. He’s a very
able person, too. For a lot of these people, and you can
understand it, there was no real career to be made in the
left movement. And there were many other careers to be
made, the attractions were enormous, the possibilities in
academia, the possibilities in government. Solow and Roll
were almost paradigms of the kind of careers that were
open to them. Very intelligent, bright radicals, who
adjusted their politics to their jobs. It’s a kind of
opportunism in a way, and yet in these cases it wasn’t
crass or vicious. It was the kind of thing that the pressures
of U.S. society make it extraordinarily difficult for a person
to resist, especially if he doesn’t have some independent
means. You have to understand that I probably would
have gone that way, too. I was fortunate in not having to
depend on an academic salary. My father was a banker;
as a matter of a fact, he was the vice president of the First
National Bank, which was one of the predecessor
corporations to the Citibank now. In its day, under the
leadership of George F. Baker, it was one of the leading
forces in United States finance capital. Baker and J.P.
Morgan were very close partners in effect. And at that time
the First National Bank had only five vice presidents.
Today, the Citibank probably has a hundred or more. The
old First National was a corporate bank, I don’t think it took
deposits of less than a million dollars. It had very few
personal accounts, and that’s one of the reasons it couldn’t
survive in the later period. It had to merge with the
National City Bank in order to survive at all. But there was
a time when it was sort of an adjunct to the Morgan
empire, a part of it. And my father was upper-level
management, a vice president, of the First National. He
wasn’t very rich. He could have been but for the crash of
1929. He was heavily involved in many of the things that
went bust in 1929. So it was not as though he had a big
fortune, but enough to live on. That was necessary. In the
United States, if you don’t have access to a little surplus
value, you know, you’re not going to be able to play a
really independent role in the intellectual environment. So I
don’t blame these people in any personal sense. I try to
explain it and thank my lucky stars that I was able to
escape those pressures, to which so many people
succumbed.
SS: Monthly Review has rightly been called an "institution’
of the American left. You started to publish it in 1949, at
the dawn of the McCarthy era. Then came Monthly Review
Press (MRP) in 1952. I would like to ask you two questions
concerning MR: One, was it ever subjected to judicial or
political repression?
PMS: Well, both. The co-founder was Leo Huberman,
whose books I think you are familiar with. He was a
popularizer in the very best sense of the word. He wrote
marvelously lucid and clear, well-informed books on the
history of American democracy, We The People, and a
history of capitalism, Man’s Worldly Goods. He and I were
the co-founders of Monthly Review. And both of us were
subjected to a certain amount of harassment, by what is
usually called the witch hunt aspects of the McCarthy
period. Leo, I think, was called once before the McCarthy
Committee, and once before the Un-American Activities
Committee. I was the object of a state subversive activities
witch hunt in New Hampshire, where I was living at the
time, which went on for four years. In 1953 I was
questioned by this local state inquisition, you might call it,
and actually was--well the details don’t need to bother you.

I was found guilty of contempt of court, and sentenced to
jail. It was in 1953-54. It was immediately appealed, and
the case went on until the summer of ’57, when it was
finally decided by the United States Supreme Court in my
favor. So all that period I was out of jail on bail. The year
1957 was the peak of the liberal phase of the Earl Warren
court. And on that day in June of 1957, they handed down
six or eight decisions overturning several of the worst
McCarthyite excesses. My case was one of them. But
these had nothing to do with Monthly Review. I mean,
except indirectly, there was no attack on the journal as
such.
Neither Leo nor I had, fortunately, happened ever to join
the Communist Party, although it could have happened
easily enough at one stage or another. Many people joined
the party in the 30s just because it seemed to be the most
effective left organization of the period. They never thought
of it as anything terribly important, and maybe didn’t stay
very long. Lots of them went through the party, and that
became later on a handle which could be used to
persecute people in very vicious ways. We were lucky in
that they didn’t have that available. Of course people were
very careful about subscribing to Monthly Review, or being
seen with it. For years we had to mail it in a plain wrapper,
so that folks wouldn’t see it. But that kind of thing is
different from a direct attack. As a matter of fact, the
United States legal system has been, I would say,
meticulously careful: there is a certain bias against any
sort of direct censorship in the system. They don’t need it.
Our publications are so small, they do not pose a threat to
anybody.
SS: Second: How do you now, after close to forty years of
publication, evaluate the contribution of MR to socialism in
America and, of course, in the world at large?
PMS: Well, I would think it has had much more influence
outside the United States than in the United States. There
is what is called a Monthly Review "school,’ which
includes, besides Huberman and myself, Paul Baran, who
was at Stanford University with tenure. Fortunately he got
tenure in 1948.
EAT: He was the first American Marxist to get tenure at a
big university. Is that right?
PMS: Well, no, there were others, but perhaps in
economics, yes.
EAT: Yes, that’s what I mean.
PMS: But there were quite a lot of Marxists, more likely
mathematicians and physicists. Marxism didn’t interfere
with their work or get them in trouble. Baran was very
close to us. And Harry Magdoff, and then Harry
Braverman. The main works, I suppose, are my Theory of
Capitalist Development, Monopoly Capital by Paul Baran
and me, Harry Braverman’s Labor and Monopoly Capital
and, Harry Magdoff’s The Age of Imperialism. There is a
recognizable tendency in American Marxism, which can
be, in a rough way, said to be the Monthly Review school. I
don’t think it’s predominant. My guess is that it definitely
isn’t. In the URPE, for instance, the Union for Radical
Political Economics, I would say the Monthly Review
tendency is a minority, a definite minority. There are many
others. Anwar Shaikh’s tendency is another minority
tendency, and one could mention Bowles and Gintis, and
others as well.
EAT: But they are getting to be the majority, in a way.
PMS: Could be, I don’t know. I am not really closely
associated with the URPE and its inner politics. But in any
case, I think it’s been useful. As you know, the U.S.
Marxist movement is small, very small. Nobody can claim
that it has had a major impact on American intellectual life.
There’s a cold war mentality. But Marxism has a certain
toehold. It’s much more serious than it used to be. We take
it as it comes.
SS: One final question concerning your career as a
socialist intellectual: It is striking that a socialist of your
influence and commitment should not have been involved
in practical socialist politics, i.e., organizational political
work. Would you tell us the reasons for this and how you
feel about it when you look back over the years?
PMS: Well, that’s not altogether true. I was involved in a lot
of things in the thirties. I was very active in the Teacher’s
Union, and one of the founders of the Harvard Teacher’s
Union.
SS: No, what I meant to say had to do with working
towards the formation of a political party. And you in fact
yourself, in the piece that you wrote for the twenty-fifth
anniversary of Monthly Review, did mention this sort of
thing. You never went into organizational politics,
especially in the sixties, when the movement was on the
rise. How do you view that looking back on it?
PMS: I view it as sort of inevitable, because I think to have
tried to join in in the sixties would have been difficult. It
was a young movement in the sixties, they didn’t think they
needed old people like us. But they did need something
that could establish some continuity with the radical past,
because the sixties movement had little sense of history,
very little sense of its own place intellectually or politically
in the development of the country. And we always saw our
role as trying to maintain certain radical traditions, a
certain sense of history, which could not be done in any of
the available existing party formations, sectarian
formations. And so we tried to produce something which
would be useful to all of them, if they wanted to place
themselves in the historical development. And really the
only serious political party was the Communist Party, plus
the Trotskyists, who are a variant of the Communist Party:
the parties that came out of the Third International. And
they were absolutely impossible from the point of view of
any intellectual creativity. I remember when I wrote the
Theory of Capitalist Development. Just when it came out,
friends of mine said we don’t know what to think of it
because Moscow hasn’t said anything about it yet. Well in
that kind of an atmosphere, you can’t carry on serious
work. Perhaps you could in England. I mean Maurice Dobb
was always a member of the Communist Party, for
example. And I think they left him alone. He could say
what he wanted. As a matter of fact, he was a creative
writer during the whole period. But that wasn’t possible in
the United States. That’s a very complicated set of
questions, and I don’t really know enough about it to have
a definitive opinion. I would be delighted if I thought there
was a movement with a possibility for the future, to join it
and play a role in it. But I don’t see it. We have friends who
are in the DSA. The DSA is the Democratic Socialists of
America. And I can see the point of some people who find
that a community, an intellectual community, is something
they need. But I don’t think they take it very seriously as a
whole movement.
As far as the community part is concerned, Monthly
Review gives us a kind of base.
We, Harry and I, come into the office normally once a
week on Tuesdays. And there is a kind of an informal
tradition now of the Tuesday lunch, a brown-bag lunch
(people bring their own sandwich or coffee or whatever),
which attracts people from all over the world. They come
in, sit down, and discuss. This last Tuesday, for example,
Eduardo Galeano, very well known in Latin America, a
Uruguayan, who wrote The Open Veins of Latin America,
published by Monthly Review Press. He was in New York.
He came to lunch. And there was somebody else, oh, our
longtime colleague, Bobbye Ortiz. She just came back
from the Dominican Republic, where she had been a
delegate to a Women’s conference there. We get people
from all over. And this establishes relationships when we
go abroad. We can usually find people who have been in
to see us when they have been in New York at the UN or
the New School, or something like that. John Eatwell is
one who comes regularly. Eric Hobsbawm comes when
he’s in New York, not regularly, but two or three times. MR
is a kind of center in its own right, of a very informal sort,
which gives us some contacts. We don’t have many, I wish
we had more, of a grass-roots variety. There really isn’t a
movement that provides such contacts. Harry Braverman,
had he lived, might have established a close relationship
with the trends and tendencies in the working-class
movement. I don’t know. We don’t have real contacts of
that kind.
SS: Now I suppose you chose a conscious path of carrying
on an intellectual tradition. Was that it?
PMS: Really, I think that’s the way I would say it.
EAT: Moving over to your contributions to Marxist theory,
can we start out by discussing some aspects of your first
major contribution, Theory of Capitalist Development,
which dates from 1942. That book was firmly rooted, it
seems to me, in the theoretical debates that went on
among European Marxists such as Grossmann,
Luxemburg, Hilferding, etc., and presented in fact a
synthetic view of their theories (the most obvious example
being your discussion of the controversy surrounding crisis
theory). Postwar American Marxism, on the other hand,
seemed to have isolated itself from this sort of tradition, at
least until recently. Do you agree with this judgment? And
if so, don’t you think that this state of things is to be
deplored?
PMS: Yes, I think there is a sort of parochialism or
isolationism in the American movement. But that’s always
been true organizationally, theoretically, and intellectually.
It’s always been true. I was simply trying to tie into the only
intellectual tradition that existed at the time, which was the
one coming down from the Second International to the
Third International, and to pick out the most important
thinkers like Hilferding, and Lenin of course. Lenin plays
an important part as a theorist in the Theory of Capitalist
Development and so do Luxemburg and the English to a
certain extent. Dobb was probably the only really important
English thinker in this tradition. I don’t think of anybody
else. In other words, that was the tradition which had to be
brought over here and made available. Now the fact is that
it hasn’t been followed up, except sort of sporadically and
in my opinion in a superficial way. The French fashions
have a tendency to catch on from time to time. And there
is a serious group at the University of Massachusetts, the
Wolff/Resnick tendency. That’s a kind of development I’m
not too sure that I understand. It’s a development of
Althusserianism, French. But it’s a bit of a sect in an
intellectual sense, not in an organizational sense. They
have followers spread around at various universities,
usually very intelligent and brilliant people.
But the New Left movement of the 60s was pretty much
anti-intellectual, attempting to develop its own theories, its
own niche in the stream of radical thought and radical
organization. I’m sure you know this as well as I do. In fact,
in recent years, you’ve had more opportunity to relate to
younger people than we’ve had.
SS: One of the outstanding aspects of Theory of Capitalist
Development is that it was there that you first introduced
into the English-language Marxist literature the debate on
the so-called "transformation problem.’ It would not be
wrong to see the subsequent discussion in English as
deeply influenced by your manner of casting the problem.
We know, on the other hand, that since the 70s there has
been a new current which, basing its economic analysis on
the work of Sraffa, has denied any validity whatsoever to
Marx’s labor theory of value. How do you personally view
the debate between the so-called "neo-Ricardians’ and the
defenders of Marx’s theory of value?
PMS: Well, let me say first--and I think it’s very important
to understand this--that Sraffa himself did not see what he
was doing as an alternative to Marxism, or in any way a
negation of Marxism. From his point of view, this was a
critique of neoclassical orthodoxy. And he made that very
clear. Joan Robinson was very explicit, saying that Sraffa
never abandoned Marxism. He always was a loyal Marxist,
in the sense of himself adhering to the labor theory of
value. But he didn’t write about that. Now that was Sraffa’s
peculiarity. He started as a critic of Marshallian economics.
You remember his famous article in the 1920s. He was in
the Cambridge group. He fought these ideological
struggles which had their center in Cambridge. He took a
certain side in them, but he didn’t take it as a Marxist, but
he took it as a critic of the orthodoxy of the time. Now
that’s a peculiar position, but it doesn’t entitle anybody to
take Sraffa and counterpose him to Marxism, as Ian
Steedman does. To make out of Sraffa a whole alternative
theory, in my opinion, is quite wrong and has nothing
whatever to do with the real intentions of Sraffa, or
certainly nothing to do with the real purposes of Marxist
analysis. There is no dynamic, no development in
Steedman that I can see. Thinking that it is possible to get
along without a value theory (using the term in a broad
sense to include accumulation theory and so on) seems to
me to be almost total bankruptcy. It’s no good at all. And I
don’t think anything has come of it. It was good to show
the limitations, the fallacies, the intemal inconsistencies of
neoclassical theory, that was fine, that was important. But
to think that on that basis a theory with anything like the
scope and purposes of Marxism can be developed is quite
wrong.
EAT: Your joint work with Baran, Monopoly Capital (MC),
published in 1966, was immensely influential and could be
said to have given rise to a whole school of thought. It has
also been the object of much controversy. One of the
points made by critics is that MC is based on a theoretical
structure which is at odds with the labor theory of value. In
a preface written for a Greek edition of MC you explicitly
state that the theory put forth in MC is not in contradiction
with the labor theory of value. However, you would
perhaps concede that it is based on a conception of
monopoly capitalism where the competitive battle among
capitals recedes to the background, to say the least. What
would you have to say about this aspect of MC, especially
given that the world economic crisis has once again
exacerbated competition among capitalists and tended to
break down every cartel and agreement that existed
before?
PMS: The first thing I would say there is that you have to
remember the context within which Monopoly Capital was
written. We started it in 1956, but it didn’t actually get
published until 1966. So it was in the process of
development for 10 years. But the atmosphere in the
mid-50s was full-fledged McCarthyism, and it was
practically impossible for Marxist dialogue to exist within
the U.S. academy. Baran and I were trying to introduce
ideas at a level and in a language which could be effective
with younger, perhaps radically inclined, economists who
had no real education in Marxism, no prior acquaintance
with Marx’s writings. So we did use quite a lot of
Keynesian and neoclassical and monopoly theory
concepts like marginal revenue curves, Keynesian ideas of
savings and investment as a way of analyzing the
accumulation process, things of that sort. Perhaps that
was a mistake. We had originally planned a couple of
other chapters for Monopoly Capital which would have
done more by way of explaining the relations between our
conceptual framework and the Marxian value analysis.
These chapters were in very rough draft, not publishable in
the book or in any other form when Baran died, so there
was no possibility of including them in the book. And I
don’t know whether they would have succeeded, or
whether they were worth the attempt. But the point was
that the problem of monopoly in our view was not how the
surplus got produced and how it got squeezed out of the
producers, the workers, but how it got divided up. And in
Marxist theory in Volume III of Capital, there is the whole
mechanism turning around the average rate of profit and
competition among capitalists of roughly co-equal status
as far as their power and their control in the market was
concerned. All of that, following on in the classical tradition
of Adam Smith. And we wanted to argue that the
distribution of the surplus was affected by the changes in
the structural characteristics of capitalism beginning
around the 1880s or 1890s, where the market situations
were altered and the big corporations rose to dominance.
We felt that these developments could be effectively
analyzed without in any way implying that capital is
productive of value. It was simply that the surplus was
distributed according to different rules. And as a matter of
fact, our argument was that the changed rules, the laws of
distribution of surplus under monopoly capitalism,
exacerbated rather than alleviated the contradictions of
capitalism, as Hilferding and some of the social democratic
economists had argued, concluding that the more
organized capitalist society was less prone to crises. We
argued on the contrary that it was more prone to crises
and to stagnation tendencies than the more competitive
models of the earlier period. So the purpose of that little
introduction to the Greek edition was simply to get on the
record that we really weren’t abandoning Marxism by
talking about surplus instead of surplus value. I have
subsequently, in some instances, touched on that. You
know that "Value and Prices’ essay which was published in
1982, wasn’t it in the Elson volume?
SS: No, The Value Controversy.
PMS: Yes, The Value Controversy. So, I think that that
criticism is very misguided on the whole; it doesn’t get to
the heart of the matter. Now, the second point you raised
as to whether the internationalization of the economy has
basically altered the tendencies which we found to be
present in Monopoly Capital. I don’t think so. Let’s put it in
a very extreme form. If you had a real complete
multinationalization, a complete elimination of all trade
barriers, there would be a relatively long period during
which many monopolistic positions would be destroyed,
and a new pattern of monopolistically competitive relations
would be established on an international scale. But
basically the laws of the concentration and centralization of
capital would be unchanged, whether operating on a
national, multinational, or regional scale; and you would
once again have the building up of a structure similar to
the one we talked about in Monopoly Capital.
EAT: MC also gives the impression that at that time you
attributed great importance to Keynesian techniques of
demand management. The theory of the absorption of the
rising surplus through wasteful state expenditure seems to
be an attempt at explaining the nature of Keynesian
economic policies in Marxist terms. It is true that you later
explicitly criticized the shortcomings of Keynesian policies.
However, it has been said many times that you viewed
Marx’s contribution to crisis theory as a precursor of
Keynesian analysis. Would you tell us how you would
characterize your relationship to Keynes or, for that matter,
the relationship of Marxist economics to Keynesianism?
PMS: Yeah, this is a very complicated problem, of course.
I was very much influenced, as I think was my whole
generation, by Keynes, by the General Theory. And I think
that the General Theory is a much more important book
than most Keynesians realize. I don’t know if you have
read it recently, most people haven’t. In their student days,
they read it and got certain things out of it that were mostly
pretty formal, like the marginal efficiency of capital, the
multiplier, the propensity to consume, all of those formal
concepts. Actually there is a lot of what you might call
economic sociology in the General Theory. I recently had
occasion to read again chapter 16 of the General Theory,
called "The State of Long-Rum Expectations.’ It’s a
marvelous piece, sort of psycho-economic history. It’s
extraordinary. And once you read that, you cannot for a
moment believe that the marginal efficiency of capital is
anything but a mush. There’s no reality to it, no reality
whatever. It’s all based on expectations, on the general
climate of opinion, on the way people react to the historical
context. All those things enter into it. When it gets into a
formal model, you know, it’s like there is a definite
schedule of what various amounts of capital invested
today will yield over a period of years, and what interest
rate you can apply to this, and from these data you get a
definite result. But there is nothing like that in what you
might call a fuller development of a Keynesian set of ideas.
He was also quite aware that private enterprise and the
distribution which arises from the private ownership of
capital was not a viable system. To be sure, he thought it
would be easy to reform the system--not easy perhaps, but
that it would be possible, because he didn’t have any
theory of the state, any theory of power relations. He was
completely blank on that. But in his perception of the
problems of capitalism, Say’s Law for example, and the
primacy of profit-making over use values. All of that is, at
least, implicitly recognized in Keynes. The thing that
irritates me about Marxists is that they want to throw that
all out, and the thing that irritates me about Keynesians is
that they want to reduce Keynes to simple formulas. I think
that is to misunderstand the importance of a very important
figure. He didn’t understand Marx at all, he was not at all
attracted by him. But now, I think you know that at one
stage, his eye was caught by the M-C-M’ formula. And he
immediately recognized it as a conceptual way of seeing
the business world which differed from that of the C-M-C
formula.
EAT: You recently wrote about that.
PMS: I wrote about that in a footnote to the review of the
Heilbroner book. [MR, January 1986] That just shows that
Keynes’s mind was working differently from the normal
neoclassical economist’s. He was not normal; he was a
much more brilliant and more seminal thinker whom one
should not be afraid to learn from. I think that Marxists
have a certain defensiveness about Keynes: we mustn’t
take seriously a bourgeois thinker because it may infect us
and maybe we’ll turn out to be revisionists without wanting
to be, you know. I don’t think that’s such a danger as long
as you internalize the basic structure of Marxism, which is,
of course, embodied in and summed up in the value theory
and the accumulation theory, surplus-value theory, all of
that. That’s absolutely crucial. And most of the valuable
Keynesian insights can be added to that, at least in my
view. There is no need to lose these basic insights which
are based on a very intimate knowledge of the real
business world--which of course, Marx also had in his day.
But which Marxists taking their stuff out of Capital, can’t
have in our day. This whole business of finance which I
was talking about last night. The present financial
explosion which is unprecedented can’t be handled in
terms of the hints in Volume III about finance. Although,
they are not unuseful, not without considerable value. The
whole notion of an abbreviated accumulation formula,
M-M’, without any production element M-C, is a very fruitful
way of thinking about finance, how it is possible for M’ to
relate only to M without the system of production in the
middle. But that’s what’s happening all the time now. If we
don’t think about this, if we assume that finance is only an
aspect of the circulation of commodities, we’re not going to
understand a lot of what goes on in the world today. I must
say, my own feeling is that this is an area where nobody
has done really very well. I sometimes have the feeling
that economics now is in need of a general theory, in the
sense that physics seems to be in need of a general
theory, i.e., that there are a lot of things that are going on
that don’t fit into the standard physical theories. And they
are looking for a general field theory which would unify all
of it. They don’t have it yet. In economics, we need a
theory which integrates finance and production, the circuits
of capital of a financial and a real productive character
much more effectively than our traditional theories do. I
don’t see that anyone is actually producing it. Some
people are beginning to become aware of the need for it,
but it’s terribly complicated. And I’m sure that I’m too old to
be able to think of those things. I can get snatches,
insights here and there, but I can’t put it together into a
comprehensive theoretical framework. I think it will take
somebody who starts differently and isn’t so totally
dominated by M-C-M’, the industrial circuit, with the
financial circuits always being treated as epiphenomenal,
not part of the essential reality. I don’t know if you are
familiar with the book The Faltering Economy, edited by
Foster and Szlajfer?
EAT: No, I am not.
PMS: Published two years ago by MR Press. The subtitle
is The Problem of Accumulation Under Monopoly Capital.
It’s a collection of essays basically, but there are also
some original contributions. And the ones by the young
Polish economist, Henryk Szlajfer, which take off from
certain ideas of surplus and surplus value as put forth in
Monopoly Capital, are particularly interesting. He has
some very stimulating thoughts, but they are not terribly
clear. He’s a Marxist, basically. He got interested in
American thought and he’s been working in Warsaw,
which is quite remarkable. He certainly doesn’t get much
stimulation there. He’s done work on Latin American
underdevelopment theory, too. I think he’s an important
thinker. You should look at the Foster-Szlajfer book. It has
a collection of useful essays by Steindl and Kalecki and
some of the most important works on the development of
monopoly capital theory.
SS: I wish to go into another subject. One of the pillars of
your characterization of the world situation since 1945 is
your assessment concerning the center of revolutionary
struggles in this period. You have time and again put forth
two closely related judgments: that the working classes of
the advanced capitalist countries were, so to speak,
integrated into the system and that the principal
contradiction, to use your term, was that between
imperialism and national liberation movements. You did
certainly emphasize in the early 70s that the apathy of the
working classes of the West was to be regarded as a
transitory phenomenon. Nevertheless, it is striking, when
one goes through the issues of MR in the early to mid-70s,
that workers’ struggles in France and Italy, in the late 60s
and early 70s, the British miners’ strike of 1974 which
brought down a Conservative government, the Portuguese
revolution of 1974-75, and the struggles of Spanish
workers against the Francoist and post-Francoist state
received very insufficient coverage. Would you agree that
the earlier orientation of the journal acted to obstruct
sufficient attention to these very significant social
struggles? And how do you characterize the world
situation now?
PMS: Well, I haven’t changed my mind basically. I think
the traditional Marxist theory was overoptimistic in its
outlook. I think it underestimated, not only the integration
of the working class into the system, but also the
fragmentation of the working class, the breaking up of its
component parts, which don’t really relate to each other in
the way that Marxists used to think of as normal. They
used to think the capitalist process itself tended to
homogenize the working class, bring together workers and
give them certain common ways of looking at the world, a
common psychology, a common class consciousness. It
doesn’t seem to be happening anywhere. In those places
like France and Italy where it seemed maybe that the
traditional model had more relevance, there the
fragmentation is taking place too, the break-up of the
unified working-class unions and parties seems to be
advancing just as it is in Britain and the United States. I
don’t see any integrating tendencies. I would say there is
only one place in the world today where you can speak of
a capitalist development yielding a capital-labor
confrontation of the classical Marxist kind, and that’’s
South Africa, for very special historical reasons. I can see
the poossibility of a real proletarian revolution in South
Africa, with the black working class posed against the
white monopoly capital ruling class in a confrontation that
would have been very familiar to Marx and Engels in their
way of looking at the world. On the other hand, I think that
if they woke up today and saw the United States and
Britain and the other advanced capitalist countries, they
would be very surprised.
SS: Do you think the rather advanced countries of Latin
America would be close to South Africa?
PMS: Brazil, for example. Brazil is obviously the key to
Latin America. It is so much the most important, and the
most developed. Perhaps. I don’t know enough to be sure.
SS: To follow on from the last question and to talk further
about Western Europe, one of the more heated debates of
the mid-70s in the pages of MR was the discussion on
what you called "the new revisionism,’ i.e.,
Eurocommunism, especially Italian style. Would you say a
few words on this political current?
PMS: Well, as you know, we were very skeptical about the
importance of Eurocommunism as a new movement. We
saw it more as an advance of the countries that so far
didn’t have social democratic parties, towards catching up
with the Northern countries. Well, the United States
doesn’t have a social democratic party either, but in a way
the Democratic Party is a kind of bad substitute for a social
democratic party, a kind of welfare-state party.
Eurocommunism is an abandonment of most of the really
important insights, the principles of Marxist analysis of
capitalism. And the Italian party today is a shambles. I
don’t even know if there is a faction in the Italian party that
could be called Marxist in any real sense of the word.
There are individuals, of course. But my perception of it
now is that it has gone way beyond the original, you might
say, intentions of Eurocommunism. Spain, what’s left in
Spain of the old Communist party where Eurocommunism
got it’s start? There are several little parties now; the
French party has disintegrated, 10 percent of the vote
against 25 percent; the Italian party has become reformist
in the purest sense. The "historic compromise,’ that was
supposed to be the big Italian innovation. Compromise
with what? With Christian Democracy, with capitalism.
They’ve now carried that further, and they want to
compromise with the United States, with the leadership of
imperialism. They passed a resolution in the recent
congress of the Italian Communist Party which, in effect, is
a kind of conciliation of imperialism. Left-wing people
wanted to introduce an amendment to, at least, strengthen
the thing somewhat, but it was rejected at the Central
Committee level. It’s a shambles. Eurocommunism can’t
be taken seriously as a radical movement. Now whether
the advanced countries are going to be capable of
regaining ground, I don’t know. I don’t see any significant
developments yet. The strength of Reaganism and
Thatcherism seems to be waning: they have their own
internal contradictions which are leading to their relative
decline compared to what they promised, or what they
might have seemed to be at one stage. But nothing is
coming up in the opposition. The most recent issue of the
New Left Review has a long article by Raphael Samuel on
the Communist movement in Britain. It’s a very said story,
and it is very moving to me. But there’s nothing left.
SS: In a more recent issue of New Left Review, Ralph
Miliband characterized a similar political and intellectual
drift away from Marxism in Britain (and France) in exactly
the same terms as you talked about Eurocommunism, that
is, he also referred to a "new revisionism.’ Have you seen
that article of Miliband’s? Have you been following these
debates in Britain?
PMS: I don’t know. My own feeling is that the best, the
most important thing that can be done in the advanced
countries now is to oppose the implacable drive of U.S.
Imperialism, of U.S. monopoly capitalism, to prevent any
change in the third world. That is the dynamics of the world
conflict. That is the area where the danger of nuclear war
is germinating. And without being socialist or even
consciously left, we can at least say no to that. And a lot of
people are doing that and becoming conscious, at least at
that very elementary level. Now that doesn’t imply any
great optimism about the post-revolutionary societies. But I
must say that they have more potential than they have yet
been able to realize, whether they are called socialist or
not. I don’t think it’s very useful to call them socialist.
EAT: That’s exactly my next question. If we move further
east in Europe, we could perhaps discuss your
characterization of the Soviet Union and Eastern Europe.
How do you view these societies? Has there been any
significant change in your analysis over the years?
PMS: I think it’s significant in the sense that they have, the
Soviet Union, in the first place, of course, and China, in
spite of all their disappointing developments, repellent
features, they have achieved a certain relative if tenuous
and insecure independence of capitalism. It’s not complete
independence by any means. And the Wallerstein school
which tries to make it out still as a world capitalist system
has a little going for it, but it isn’t really useful. In fact it
obscures the real tendencies.
EAT: I agree with you.
PMS: The Soviet Union is not operating under the laws of
capitalism. China isn’t either, really. There the central
authority can still call a halt to present policies. It may find
it useful for now to use these market incentives, capitalist
incentives, but that doesn’t change the whole system into
one of capitalism. That is a view which some of the
extreme Maoists, in my opinion quite wrongly, deduce from
the present situation. The Eastern European countries,
some of them are quite successful, Hungary, for example,
East Germany. East Germany, I don’t know too much
about it, but what I do hear from people whose judgment I
respect is that it works a hell of a lot better than the U.S.
and the Western press would like you to believe.
Czechoslovakia, I don’t know. I haven’t seen or heard
much about what is going on there. They are not third
world countries, and they have a certain relative
independence from capitalism. They have certain
potentials which, of course, the United States is doing its
very best to suppress, in the sense of making them spend
all their energies on military defense. The more rational
elements of the U.S. right, I think, want to believe that they
can force the Soviet leaders into submission through an
arms race which will become too burdensome for the
Soviet Union to sustain. I think it’s crazy. It’s a totally
incorrect perception. Nevertheless it does great damage.
What can a country like Nicaragua do if it has to spend 60
percent of its gross national product on war? A very poor
country to begin with. What kind of development can they
generate unless they get a lot of help from outside, which
they don’t get of course. Even so, they don’t do too badly
in some respects. it’s remarkable how well they do. And
Cuba is another example. It’s done some very remarkable
things under extraordinarily difficult circumstances. If--an
absolutely impossible if, of course--you could get the ruling
classes of the advanced capitalist countries that are in the
saddle in their own countries, to lay off and leave them
alone, then perhaps those post-revolutionary societies
would have more of a potential than most people think
they do. I myself do not believe in the theory which is put
forth by E.P. Thompson, for example, that the cold war,
the arms race, is essentially a two-sided affair.
EAT: Stretching the argument a little bit.
PMS: I think it’s false. I think it’s false. You can see it now.
Gorbachev has had the good sense to expose the United
States. The offer of complete elimination of nuclear
weapons--well obviously he realizes it isn’t going to be
accepted--but the actual moratorium on testing is a real
factor of unilateral initiative, of stopping testing and saying,
"All right, you stop testing too and it’ll be permanent.’
That’s a real step. The peace movement in this country
hasn’t understood its importance, I think. I am surprised. I
think the Soviet Union has shown more capacity to
respond to a very difficult situation and to do it in a positive
rather than a negative way much better than I had feared.
My feeling about the Soviet Union is not as negative as it
was a couple years ago. That was partly under the
influence of Maoism, which I think was always wrong in its
"three worlds’ theory. I don’t think it was ever a three-world
universe. There is capitalism and then there are those who
manage to get a bit of independence of capitalism, and not
two systems. There is no socialist system. There are
societies which call themselves socialist that are not under
the regime of capital. That’s all to the good, and it has
possibilities. But some of us went too far in our analysis. I
was very much influenced by Mao because I think he was
a very great man and I think he deserved to have
influence. But sometimes it’s hard to know just how far to
go. Take enthusiasm for the Cultural Revolution, for
example. It seemed to be such a right thing to do. It
seemed in an abstract sense to have all the rationality on
its side. But obviously the Chinese people were not ready
for that.
SS: Aren’t present developments proof of the fact that the
Maoist leadership had not really laid the basis for a healthy
workers’ state? Otherwise, how could the Deng leadership
follow such policies without a forcible destruction of
previously existing structures and without facing serious
opposition. This is, in fact, an argument which you have
also used, but in criticizing the Maoist characterization of
the Soviet Union?
PMS: I agree with you, I totally agree with you. I think very
likely, we were all living in a bit of a dream world when we
imagined that the Communist movement in China had
developed in the masses to the point of changing popular
consciousness and class consciousness and so on. That
came from other models and not from reality, I think. Mao,
himself, recognized it in some of his more candid
moments--in that last collection of his talks (I forget what it
was called when it was finally published. The preliminary
title was Mao Unrehearsed, and it contained speeches,
letters, documents from the Cultural Revolution period). In
some of those, he comes on understanding very well, I
think, how skin-deep the Cultural Revolution really was,
how it really didn’t get into the masses and didn’t change
the masses. I don’t think the failure can be blamed on
Mao. What else could he do?
SS: Can we speak finally about the future prospects for
socialism in the world and in the United States? You said
something on South Africa which was very important.
There is also the case of Nicaragua. It seems best to start
out with Nicaragua. You have always been a close
observer of the Cuban experience. In the light of this, what
is your evaluation of the Nicaraguan revolution? Do you
think that the U.S. government will try to crush the
Nicaraguan revolution through direct intervention?
PMS: You know I think the Nicaraguan revolution has to
be distinguished from the Cuban revolution very clearly.

The United States got caught off guard in Cuba. The
Cuban revolution managed to consolidate itself with Soviet
assistance before the United States understood what was
happening. And from then on it meant definitely that
full-scale intervention by United States armed forces would
be necessary if it were to be overthrown. And the Soviet
position, the dangers of nuclear war, were such that the
United States, fortunately, didn’t have the foolishness or
the rashness to try such an adventure. Now the
Nicaraguan revolution is not a socialist revolution; even by
the standards of the Soviet Union, or the so-called socialist
countries, it’s not a socialist revolution. It has a leadership
that is certainly inclined in that direction, but still 60 percent
of the economy is under private ownership. All the same,
from the point of view of the U.S. ruling class, it’s a great
danger, it’s a great danger. If it survives, it’s bound to have
imitators not only in Central America but in South America
and various other places. In that sense the "domino theory’
is a realistic theory. It doesn’t mean they’re all going to flop
into the arms of the Soviet Union, it means they’re going to
flop out of the arms of the United States. And that the
United States won’t tolerate. I think the United States is
very, very wary of direct intervention, however.
The so-called "Vietnam syndrome’ is not dead. It’s not
dead not only in the wide masses of the people,
particularly religious people (church people are playing a
wonderful role now in many areas). It’s not dead in the
U.S. military either. The U.S. military, the top brass, the
chiefs of staff, were very badly burned by Vietnam. They
don’t want to get into a military adventure which will have a
chance of developing into another Vietnam. Unless it has
popular support, unless it is backed by the country, the
minute you get into a Central American war, you’re going
to have a draft again. That turns a whole section of the
middle class against it. In other words, this is not a simple
business where we send in some troops and clean up
Nicaragua. And the U.S. tactic now is to do it another way,
by means of so-called "low intensity’ war, which could last
for a long time. And I think they will continue to pursue that
option. What the outcome will be, I don’t know. They’re in
a struggle right now in Washington, which is another
chapter in this story. But it’s not going to be the last
chapter, by any means.
What is happening in South Africa now is just the
beginning; it’s just the beginning. That will be a very
decisive struggle. I think that has the potential to become
the key struggle for the rest of the century, maybe even
into the next century. It could be of world significance,
comparable to the Chinese Revolution in its day, tipping
the balance in favor of world revolutionary struggle, if the
revolution should win in South Africa. I don’t know exactly
what "win’ means, but at least basic change in social
relations, which would necessarily mean a
post-revolutionary black republic. Socialist, I don’t know. I
don’t care too much whether they call it socialist or not. If it
isn’t capitalist, that’s the important thing to me. The world
has got to get out of capitalism, before we can really begin
to discuss socialism. That’s the big struggle, revolution
versus counter-revolution. And South Africa is, in my
opinion, a very key element in that struggle. I hope, let me
say this, I hope that your country [Turkey] is going to
become another one sometime in the not too far future.
EAT: We know that the United States is the only advanced
capitalist country where there is no working-class political
movement with a mass basis. Given this fact, as well as
the search for a meaningful left agenda, what strategy in
your opinion is most likely to prove fruitful and promising?
PMS: Well, I can only think now that the whole left should
concentrate on defensive struggles. The working class,
and the left in general, is being very strongly attacked. As
you know, the union movement is disintegrating, and the
standard of living of workers is being attacked. And the
first necessity to get something started is to fight against
that. I think it should not only be on the union front,
although that’s important, too, but on the political front.
Harry and I have thought for a long time that the main
thing should be struggles for job creation and elementary
protection of the rights not only of working people but of
women and minorities, blacks and so on. What is needed
is a militant defensive struggle that in the course of time
can take on an offensive character. Many more
opportunities of a political kind will open up when the next
recession comes. This I think is the only way it can be
done.
SS: Well, thank you very much.
EAT: Thank you.