The Insurgent Notes editors ask, “Where Was Marx in 1968?” and suggest that Marxism was largely absent, at least in the United States. As a guide to action that was mostly true, but in fact a lot could be said about how the events of that year—mass working-class struggles across the globe—stimulated the development of Marxism within the growing radical movement even in the United States. But that is a huge undertaking. I will instead take the opportunity to comment briefly on one topic: the anti-Marxist influence of Paul Baran and Paul Sweezy’s book Monopoly Capital.

I came into the radical and socialist left in the late 1960s, when Monopoly Capital was all the rage in the us New Left. Baran, Sweezy and their Monthly Review tendency deserved recognition for emphasizing the importance of imperialism in sustaining capitalism for a century or more. But their overall theoretical and political influence was harmful.

Those of us trying to grasp Marxism back then and to apply it to the explosive world we were living in—in the United States, the Black struggle and the country’s imperialist assaults on Vietnam, Cuba etc.—were up against slews of Baran–Sweezy fans who learned from their bible that

the law of value, and therefore Marxist political economy, was useless for understanding the imperialist world and that the working class in the imperialist countries was useless for challenging capitalism.

The main alternative analysis was the book Marx and Keynes by Paul Mattick, but that was terribly difficult to read and never became popular.

Rejecting the working class

B&S’s rejection of the “first-world” working class soon came into conflict with the worldwide and world-shaking struggles of 1968, as the post-war boom drew to an end. French workers seized factories and almost overthrew Charles de Gaulle’s government. The international upsurge (ranging from Europe to China and Mexico) included the United States, with the proletarian-based ghetto uprisings. This was a refutation of theory by reality. But damage had been done.

B&S wrote:

Industrial workers are a diminishing minority of the American working class, and their organized cores in the basic industries have to a large extent become integrated into the system as consumers and ideologically conditioned members of the society. They are not, as the industrial workers were in Marx’s day, the system’s special victims, though they suffer from its elementality and irrationality along with all other classes and strata—more than some, less than others.

That industrial workers were then (and are now) a shrinking section of the us working class is undeniable. But Baran and Sweezy had no conception that the working class (not just industrial workers) would ever come under the pressure of capitalism’s relentless austerity drive, a fact certainly related to their rejection of Marx’s laws of motion. Instead, they read into the working class a diagnosis of apathy, disorientation, boredom, aimlessness and depression—a catalog of middle-class anxieties.

Even though Baran–Sweezy are not responsible for all the turns their followers took, their outlook helped mislead much of a whole generation of radicals into rejecting any anti-capitalist potential of the us working class. Some variants of third-worldism contended that workers in the global North were in collusion with the imperialist capitalists and were themselves exploiters of the South; this current had no interest in promoting the political independence of the working class or even in supporting its struggles against capital. A few years later when radicalism faded, many of them jumped onto the career ladder of the trade-union bureaucracy and the bourgeois (and imperialist!) Democratic Party—where they served amicably alongside social democrats whom they had despised and battled back in the day.

Rejecting Marxist theory

On the theory side, subsequently Sweezy often insisted that he and Baran had not rejected the law of value as the basis for their analysis. You would not know that from the book: the term “value” does not appear there, except for a brief explanation of why they abandoned surplus value. That was not just an oversight. For Marx, value is the starting point of the analysis of capitalism, and price relations are derivative of value. Baran–Sweezy, in contrast, said that “market relations are essentially price relations,” and therefore “the study of monopoly capitalism, like that of competitive capitalism, must begin with the workings of the price mechanism” rather than value. The authors also acknowledged that their method “has resulted in almost total neglect of a subject which occupies a central place in Marx’s study of capitalism: the labor process.” That was an extraordinary admission for people who claim to be developing Marxism, for it is in “the labor process” that value and surplus value are generated.

Baran and Sweezy never made clear whether or not “surplus” meant surplus value in Marx’s sense. And if it did not mean surplus value, it is not clear where it comes from or whether it has any connection to class struggle. Years later, in correspondence published posthumously, it turned out that Sweezy had not been sure whether “surplus” meant surplus value, while Baran insisted they were different. Leaving this question unresolved, and the disagreement unacknowledged, was dishonest and further helped lead thousands of readers to the conviction that Marxist theory was obsolete.

Further on in the theory, Baran–Sweezy argued that the problem with capitalism in its monopoly stage was not that profits were too low but that the “surplus” was too high and needed to be “absorbed.” Marx’s tendency for the rate of profit to fall was replaced by their “tendency of surplus to rise.”

Since the Monthly Review tendency is primarily noted for its stance against imperialism, it is interesting to see how they handled the imperialist drive for super-exploitative foreign investment. In Monopoly Capital Baran–Sweezy ran into a difficulty:

One can only conclude that foreign investment, far from being an outlet for domestically generated surplus, is a most efficient device for transferring surplus generated abroad to the investing country. Under these circumstances, it is of course obvious that foreign investment aggravates rather than helps to solve the surplus absorption problem.

This is an astonishing statement. The second half of the first sentence above is of course true: lots of surplus value, and presumably “surplus” as well, flows from South to North. No surprise: foreign investment in the South is often a highly profitable outlet for surplus value, given imperialism’s ability to super-exploit the workers and drain the resources of the poorer countries.

But think about the dilemma that B&S faced which, according to their theory, should amount to an existential contradiction for the capitalist-imperialist system. If foreign investment aggravates what the authors said is the central problem for capitalism in its monopoly stage, why on earth do the capitalists do it? Can’t the ruling class see what’s “of course obvious,” that their scheme of draining the poorer countries of surplus is counterproductive, that it only aggravates the absorption problem and makes capitalism’s basic economic dilemma worse? If Baran and Sweezy were right, the entire imperialist capitalist class was blind to the fact that their insatiable greed for profit is overfilling the trough they pig out from and exacerbating their problem of excess surplus.

Compare B&S with Marx. B&S observed that the problem they see capitalism as facing, excess surplus absorption, is not helped by foreign investment. For Marx, the problem for capital is not an excess but a shortage of surplus value, in the long run brought about by the falling rate of profit tendency. So the aggravation of the problem is a contradiction in B&S’s theory but not in Marx’s.

From the B&S angle, wouldn’t it be wonderful if the imperialists were to come to their senses and let the third-world countries keep their surplus? And while they are in a contrite and generous mood, why not also lay out some of their surplus to offer workers in the home countries good wages as well? That would bring relief and comfort to all, exploiters and exploited alike. That was, as it happens, more or less the Keynesian answer that was also popular in the 1960s.

Sweezy himself came up with such a proposal even before the Baran–Sweezy book was written.

Would it not, for example, be in the objective interests of the American capitalist class as a whole…to institute a vastly increased program of financial and technical assistance to underdeveloped countries? Would not such a program help to dispose of the always threatening domestic surplus and at the same time strengthen capitalism internationally in its struggle with the rival socialist order?

Sweezy went on to say that “the answer to these questions seems obvious,” and attributed the failure of the ruling class to carry out so obvious a program to capitalist greed: “the deeply ingrained capitalist abhorrence of giving anything away without receiving in return an immediately related and measurable quid pro quo.”

To conclude, the “obvious” fact that foreign investment exacerbates the surplus absorption problem forces one of two conclusions: the capitalists are blind to what’s obvious and as a result have been undermining their own system for over a century—or the theory that sees absorption as the chief problem is wrong.

The classical Marxist analysts of imperialism—Luxemburg, Bukharin, Lenin and others—despite their different theories, all regarded capitalism as driven by its laws of motion to extend its sway to the whole world, thereby devastating the conquered continents and threatening world war. Baran and Sweezy replaced Marxism with a superficial construction that credited imperialism’s super-exploitation and horrendous wars to a “greed” that was “obviously” self-destructive and for that reason ought to have been able to be reformed out of existence.

If Marx was absent in 1968, Baran and Sweezy bear much of the responsibility. The only positive side is that the attempt to junk Marxism only proves that Marxism is more necessary than ever.

Walter Daum lives in New York City.