Falling Rate of profit and Sweezy

[bailey_187]

So Sweezy said that in monopolies/oligopolies, due to the end of price competition etc there would an increase in surpluses. Does this contradict the falling rate of profit tendency? Or should i diferetiate betwene profit and surplus somehow?

[flobdob]

The "economic surplus", in Baran and Sweezy's usage, is different to surplus value. In the Political Economy of Growth, Baran puts it as follows:

Actual economic surplus is the difference between society's actual current output and it's actual current consumption... It comprises obviously a lesser share of total output than that encompassed by Marx's notion of surplus value. The latter, it will be recalled, consists of the entire difference between aggregate net output and the real income of labour. The "actual economic surplus" as defined above is merely the part of surplus value that is being accumulated; it does not include, in other words, the consumption of the capitalist class, the government's spending on administration, military establishment and the like.
(It is interesting to note Baran's error here; Surplus value in Marx is the difference between aggregate net output and the real income of labour, but also aggregate cost of capital goods - all measured in value terms.)

Baran then says of potential economic surplus:


Potential economic surplus, i.e. the difference between the output that could be produced in a given natural and technological environment with the help of employable productive resources, and what might be regarded as essential consumption...This also refers to a different quantity of output than what would represent surplus value in Marx's sense. On the one hand, it excludes such elements of surplus value as what was called above essential consumption of capitalists, what could be considered essential outlays on government administration and the like; on the other hand, it comprises what is not covered by the concept of surplus value - the output lost in view of under-employment or misemployment of productive resources.

Both are therefore different concepts from surplus value. The point of whether increased monopolisation does "contradict" the falling rate of profit is not necessarily true, however; it certainly works as a countervailing tendency (David Harvey elaborates on this a lot, lot better than I ever can). However, the point has to be expressed like this; the assumption Baran and Sweezy drew re: Monopoly Capital theory is that, with the increasing monopolisation in the marketplace, values are no longer relevant to assessing prices - they pretty much drop this from their analysis. It does at least to me beg a few questions; firstly, how they can then adopt the profits=exploitation argument that Marx draws from his value theory, if for them value does not exist in market relations. Secondly, monopoly control has always been a fact of capitalism; pure competition is a purely theoretical concept which never existed in the real world, let alone in Marx -why then does this "stage" warrant an analysis so fundamentally different from the earlier capitalisms? Following from this, does the rise of big monopolies completely eliminate all competition across the market? Finally, is monopolistic pricing so different from competitive pricing that it plays literally no relation to supply/demand and value (as expressed through prices of production)?