Tom Mayer is a professor emeritus of sociology at the University of Colorado at Boulder.

Paul A. Baran (1910–1964) and Paul M. Sweezy (1910–2004) were two of the most creative and influential Marxist economists of the last century. They were the coauthors of Monopoly Capital, published in 1966 and often considered “the single most influential book…by Marxian political economists in the United States” (13). The Age of Monopoly Capital collects hundreds of letters between Baran and Sweezy, written between 1949 and Baran’s death in 1964. The correspondence contains numerous interesting, important, and unanticipated ideas. Nuggets of wisdom about economic theory, socialist history, dialectical method, academic politics, and many other topics are scattered throughout. They also convey a vivid sense of the U.S. political landscape, as experienced by two men of the left during some of the darkest years of the Cold War. But the letters’ main focus is on developing the concepts and framework used in Monopoly Capital.

This was no simple task. Although firmly anchored in the Marxist tradition, the book—which in their letters Baran and Sweezy refer to simply as “opus”—was an innovative and in some ways iconoclastic work. It argued that the form of capitalism prevailing in the postwar United States and other advanced capitalist countries, which Baran and Sweezy called monopoly capitalism, was very different than the competitive capitalism studied by Karl Marx. Under monopoly capitalism, each major industry was dominated by a few giant corporations, strongly supported by the state. Collectively, the corporations that controlled an industry were price makers rather than price takers, and unlike firms of competitive capitalism, did not need to gravitate toward equal rates of profit.

Baran and Sweezy also advance the concept of economic surplus, defined as “the difference between the income that could be generated with existing economic and technological means and the costs of productive labor,” as a more useful means of analyzing monopoly capitalism than the conventional Marxist notion of surplus value (36). The latter was closely linked to the labor theory of value and often identified with the sum of profits, interest, and rent. Economic surplus, as conceived by Baran and Sweezy, is a broader and more capacious concept.

Monopoly capitalism’s main propensity is not the falling profit rate of classical Marxism, but rather the tendency of surplus to rise. Baran and Sweezy interpreted many aspects of U.S. society, from the unrelenting “sales effort” to increases in government spending to the escalation of militarism, as attempts to absorb the rising economic surplus. This integration of economic, political, and cultural processes is the most original achievement of Monopoly Capital.

Baran and Sweezy, although close friends, were quite different human beings. Sweezy was a scion of the U.S. capitalist class, a banker’s son who attended Exeter and then Harvard, where he became editor of the Crimson. Sweezy was not radicalized until early adulthood—by the Great Depression, by Harold Laski’s lectures at the London School of Economics, and by his reading of Leon Trotsky’s History of the Russian Revolution. His letters in The Age of Monopoly Capital suggest that, notwithstanding his deep commitment to Marxism, he retained many of the empiricist inclinations of American social science, and that, though angry at the iniquities and irrationalities of U.S. capitalism, he did not really feel alienated from U.S. society. Nevertheless, until the end of his life, he remained devoted to a revolutionary transformation of capitalism: “I guess I am temperamentally disgusted by reformism” (375).

Baran had a very different provenance. Born to a Jewish family in Ukraine, he grew up in the vortex of the Russian Revolution, even as his father, a physician, opposed the Bolsheviks. Shortly after 1917, the Baran family moved to Poland and acquired Polish citizenship, though his parents eventually returned to the Soviet Union. Baran was educated in both Germany and the USSR, and received a PhD in economics from Humboldt University in Berlin in the early 1930s. Although active in European left politics, he managed to evade the clutches of both Hitler and Stalin, and came to the United States in 1939, enrolling as an economics graduate student at Harvard, where he met Sweezy. Baran’s style of Marxism was more remote from positivist empiricism than Sweezy’s. He interpreted historical materialism as a kind of critical rationality: “Marxism is not and never was intended to be a ‘positive science,’ an assortment of statements about past and present facts, or a set of predictions about the shape or timing of future events,” he wrote in one essay. “It was always an intellectual attitude, or a way of thought, a philosophical position the fundamental principle of which is continuous, systematic, and comprehensive confrontation of reality with reason” (Baran’s italics).1

Although he lived in the United States for twenty-five years, Baran never felt at home in U.S. society. As his son Nicholas Baran writes in the book’s preface, “while some European immigrants embraced American culture and sought to assimilate into it, my father kept his distance, disdainful and contemptuous of American culture. He absolutely despised the game of baseball. He had similar feelings about chewing gum, potato chips, Coca-Cola, and the abomination of American television, all of which were forbidden in his household” (9). In fact, Baran suspected he would remain an outsider in almost any society: in a letter from May 1962, written in Moscow, he laments, “I am definitely no good for any Establishment…. Maybe this is the is the eternal function of the intellectual after all—in all times and places” (302). The Age of Monopoly Capital includes little personal material, but it is clear from these letters that Baran often struggled with bouts of depression.

Two aspects of the correspondence are particularly impressive. The first is the way—through years of study and debate—that the two Marxists overcame significant intellectual, political, and cultural differences to arrive at a shared, penetrating analysis of “the American economic and social order,” in the words of the subtitle to Monopoly Capital. They reached this analysis without curtailing their disagreements or suppressing their individual positions, yet also with very little rancor. Neither Baran nor Sweezy dominated the slow process of intellectual convergence evident in these letters. Sometimes one partner convinced the other through rational argument, while at other times each arrived at a shared position far removed from their starting points. On still other occasions they downplay or reframe points on which agreement was not forthcoming.

Indeed, the letters reveal that initial disagreements between the two Pauls were neither uncommon nor about merely secondary issues. Among other things, they differed at first on the merits of Thorstein Veblen as a critic of capitalism, on the role of underconsumption in the generation of capitalist crises, on whether imperialism preceded the advent of monopoly capitalism, on the Sino-Indian War of 1962, and on the validity of the Chinese Communists’ analysis of imperialism and their prescriptions for revolutionary strategy.2 In each of these cases save the last, they eventually forged a common outlook. This remarkable capacity for comradely compromise is first and foremost a tribute to the relationship between two passionate and incisive intellectuals. But it also suggests that, with sufficient intelligence, civility, and will, many others on the left might overcome that perennial discord that so often undermines their political influence.

A second impressive feature of the correspondence is their nuanced, respectfully critical attitude toward Marx and Marxism. Baran and Sweezy recognized the brilliance and profundity of Marxist thought and its relevance for any project of radical social change. Nevertheless, they did not regard the writings of Marx or subsequent Marxists as infallible sources of truth. On the contrary, both agreed that as societies change, a truly useful Marxism must change accordingly. In December 1958, Sweezy writes that

Marxism is on the one hand what Marx said and implied about a lot of subjects and things. On the other hand, it is a living set of principles and doctrines which must in the nature of the case change with time. Since many of the things Marx said or implied are dated and have since been disproved or become irrelevant, does it not follow that Marxism the living set of ideas grows progressively away from Marxism the creation of Marx? (223)

A few days later, Baran responds:

I would agree with you that abstractly speaking there is a tendency for the individual Marxian statements to become irrelevant with the progress of science. De facto, however, this tendency is not quite as strong as one might think, simply because in the realm of social sciences there has been very much less progress since the days of Marx than one would think on the basis of what has happened in the field of natural sciences. (225)

At a time when Marxism in the United States was dominated by dogma and party directives, Baran and Sweezy treated the Marxian legacy as a creative springboard, not an intellectual straitjacket. Without losing its essential Marxist identity, their interpretation of historical materialism evolved with the movement of history and adapted to specific socioeconomic contexts. Such disciplined flexibility placed it on the cutting edge of revolutionary thought, and gave it enduring political relevance.

The 1950s, during which most of these letters were written, were bleak times for the U.S. left. The radical upsurges of the Depression and Second World War had been contained and then rolled back, as McCarthyism ravaged leftist parties and radical unions, socialist ideas became taboo or even treasonous, and prominent labor leaders cozied up to corporate capitalism. Accordingly, attentive readers will notice a pessimistic tone in many of Baran and Sweezy’s letters. The two Marxists doubt that working classes in advanced capitalist societies can drive progressive change in the foreseeable future. They bemoan the timidity and conformism of the intelligentsia in these societies, and dismiss bourgeois democracy as largely a sham, “democratic in form, plutocratic in content” (286). The Soviet Union has abandoned the revolutionary path, and while other Communist societies, notably China, have made some impressive achievements, they too exhibit authoritarian politics and glaring economic pathologies. The only plausible hope for revolution emerges from the underdeveloped part of the capitalist world, and even here insurgencies are few and far between.

Baran and Sweezy were particularly concerned with the role of revolutionary intellectuals in non-revolutionary times. In their most extensive discussions of the topic, in the spring of 1963, both men stress the importance of theoretical honesty, irrespective of the short-term practical consequences. Baran first recounts a disturbing discussion with the Italian Communist leader Palmiro Togliatti, distressed by his (and Khrushchev’s) reformism and unrealistically benign view of imperialism. In response, Sweezy suggests that the imperialist centers of the capitalist world have entered a period that, for radical intellectuals, could be labelled “socialist monasticism”:

I can see no other legitimate activity for genuine socialists in the imperialist centers than to preserve intact a set of ideas and aspirations for the time when they will once again become politically meaningful, hoping all the that that time may be nearer than now seems likely. In the meantime, I believe it is of the greatest importance not to get bogged down in the reformist muck as all the Western CP’s are doing…. The function of people like us vis-a-vis the socialist countries is of course not to reject or denounce but rather to do what we can to encourage and help them to do what none of them has yet shown any signs of even trying to do, i.e., develop a genuinely Marxist critique of their own realities…. It seems to me that we are in fact entering, perhaps have already entered, a period of what might be called “socialist monasticism.” Those of us who are genuine socialists are really cut off from our society and we live a life of our own even if we are not physically separated from the rest. (403–04)

In a subsequent letter, Baran agrees and emphasizes the importance of a rigorous theoretical program:

The only important consolation: in our days when the world is being pretty rapidly (by historical standards at least) changed, there may be room for interpreting it. That is why I am against journalism today, against trying to be au courant today, and for more theoretical, more approfondir [deepened knowledge] type of work. Not having to worry about votes, political expedience, &c. one can afford simply looking for and saying the truth. (405)

Sweezy nevertheless found Baran’s view too pessimistic, and insisted that Marxist theorists like themselves had already fomented revolutionary consciousness in underdeveloped countries: “I am less pessimistic about the role people like us can play than you seem to be…. We have had a lot to do with educating the best revolutionaries of Latin America. I am proud of what we have done in this respect, and I believe we can do a lot more” (409). I found these reflections particularly meaningful because, over the past six decades, I have often felt the same conundrum, as have, I suspect, many other readers of this magazine.

Reading these letters also prompted me to reread, for a fourth time, Monopoly Capital. The authors’ correspondence deepened my understanding of the book’s arguments and their context. But more than half a century after its publication, the book also invited some (respectful) critical thoughts about Baran and Sweezy’s claims.

The most important of these center on the concepts of rationality and economic surplus, both fundamental to the propositions in Monopoly Capital. The notion of rationality was vital to Baran’s thought and, to a somewhat lesser extent, to Sweezy’s. As the quotations above indicate, rationality lay at the heart of Baran’s understanding of Marxism as an “intellectual attitude.” It also deeply informed his critique of monopoly capitalism, which he considered an “irrational system.” For both Baran and Sweezy, the nucleus of a rational system was economic planning. Although both were deeply troubled by the shortcomings of then-existing Soviet-type socialist states, they nevertheless regarded these societies—mainly because each operated some form of planned economy—as taking early, essential steps on the long road toward a rational society.

Events of the past three decades have compelled a rethinking of collectivized property, economic planning, and even the concept of rationality as applied to social structures. Does the retreat of Russia, China, Vietnam, and the countries of Eastern Europe from such policies mean they have abandoned “rationality”? Or does it perhaps suggest that the equation of rationality with economic planning is at least problematic, or that the very concept of a rational society may be ambiguous, flawed, even contradictory? Of course, contemporary capitalism has no shortage of grossly irrational features, such as passivity in the face of climate change, or building thousands of nuclear weapons, or the coexistence of mass hunger and food surpluses. Yet how to overcome these contradictions is by no means self-evident, and surely involves more than applying “dialectical standards of reason” (225). Even a sympathetic reader must wonder whether the concept of rationality is sufficiently clear and substantial to bear the theoretical weight that Baran and Sweezy place upon it.

In their last letters, written just weeks before Baran’s death in March 1964, Baran and Sweezy are still trying to pinpoint the concept of economic surplus. In one letter, Sweezy writes, “I am not clear what is ‘the difference between what we call “economic surplus” and aggregate surplus value.’ I would be inclined to say that we have, perhaps implicitly, defined surplus as aggregate surplus value minus the share of it which the workers are able to capture for themselves. Am I right about this?” (448). Such uncertainty by the authors of Monopoly Capital themselves reinforces my longstanding suspicion that economic surplus is a slippery concept, whose principles may not withstand scientific scrutiny. The definition given early in Monopoly Capital—”the difference between what a society produces and the costs of producing it”—does not always quite correspond to Baran and Sweezy’s actual use of the concept.3 A clearer idea of economic surplus might be obtained by analyzing the concept in the context of a Sraffa production system. The distinction made by Baran and Sweezy between surplus and non-surplus production has considerable affinity with Italian economist Piero Sraffa’s more rigorous distinction between basic and non-basic commodities.4 In fact, Baran and Sweezy speak quite favorably about Sraffa’s ideas at least five times in their letters.

The basic tendency in monopoly capitalism might not be rising surplus, but instead the growing power advantage of the capitalist over the working class. The giant corporation, the system’s institutional core, increases the political leverage of the ruling class, strengthens alliances between capital and the state, facilitates the introduction of labor-replacing technology, and enables regional and global wage arbitrage. The precipitous decline in labor union membership throughout the advanced capitalist world is symptomatic of this growing capitalist class domination over the working class. A purely economic consequence of such a power discrepancy under monopoly capitalism would be a rising rate of exploitation—as affirmed by the widening gap between the productivity and pay of U.S. workers.5

Reading the The Age of Monopoly Capital has been a meaningful experience for personal as well as intellectual reasons. From 1959 to 1964, I was a graduate student in sociology at Stanford University, where Baran taught economics, and I came to know him well. I also met Sweezy at least twice, when he visited campus. Baran and I had numerous conversations about politics, social theory, historical materialism, and U.S. culture. While it would be presumptuous to claim him as a mentor, he certainly had a huge influence on me. More than anyone else, Baran convinced me that Marxism was not a superannuated nineteenth-century doctrine, but a supple living philosophy, consistent with the requirements of science and essential for comprehending the possible trajectories of the modern world. These enduring convictions have been the lodestars of my entire professional and political life.

Although I had enormous respect for Baran’s knowledge and brilliance, we did not always agree. I regarded him as excessively pessimistic (even defeatist on occasion), unreasonably alienated from American culture, and too inclined to favor a Soviet perspective. He likewise considered my interest in mathematical social science a quaint fetish, and my sense that U.S. imperialism was declining as overly optimistic.6 I was amused to learn from reading The Age of Monopoly Capital that, when Baran and I disagreed, my position often paralleled that taken by Sweezy—on Veblen, underconsumption, the Sino-Soviet split, the Sino-Indian war, and other topics.

The Age of Monopoly Capital captures the creativity, insight, and brio of the two Pauls. While any book can give only a muted rendition of the author’s living presence, I hope readers of these letters can garner at least a fragment of the inspiration which so profoundly affected my own life.7

Notes