Social Commitment and Social Analysis:
The Contribution of Paul Baran

by Doug Dowd

(A talk given at Stanford University, Spring 1974, for the symposium "The Political Economy of Growth: A Belated Tribute to Paul Baran and His Work." I have been helped by the critical comments of Chandler Morse, Paul Sweezy, and the editors of Politics and Society.)

I

It was just about twenty-five years ago that Paul Baran entered and upset the polite debates economists were having about what were then called “the backward areas.” The organizing and undisputed theme of those debates within the cathedral of conventional economics was and remains that, as with the poor and exploited at home, so with the poor and exploited countries abroad: blame the victims for their plight, mount programs of “assistance” and investment framed and directed by and for the rich and the powerful, suppress “misguided” or sinister liberation movements. The leading protagonist of these views came to be W. W. Rostow. His “anti-communist manifesto” subsequently assured him a niche as LBJ's chief foreign policy strategist; the ensuing shambles led to their removals from Washington and to their mutual exile in Texas. Baran opened the door to a different view: it was precisely the relationships between the poor and the rich peoples of the world that kept both the poor and the rich that way.

The time (1950), the place (the meetings of the American Economic Association), and the analysis (Marxian), combined to produce astonishment and scorn in most; for some of us, though, Baran's paper was a lightning flash, alternating heat with illumination. American imperialism had begun to shift into high gear, not without the enthusiastic cooperation of the academic establishment, greedy for the grants and plaudits dropped to them from the high table. Senator Joe McCarthy's campaigns against unbelievers synchronized neatly with the policies of the believers and with the renewed attempts, this time at Berkeley, to cleanse universities of “subversives,” with the substantial support fo what Veblen called “the captains of erudition” — if also, here and there, with a smidgeon of resistance, a murmur of disapproval. It was then that Baran began to teach at Stanford, as the Truman Administration plunged into war with Korea and tied the United States to the fortunes of Chiang Kai-Shek and to the French in Indochina. The map and even the minds of the world were being painted red, white, and blue wherever possible, by any means necessary; the rest was being “contained” : an inauspicious time in which to proclaim the United States as the most bristling leader yet of capitalist imperialism, now in the name of spreading freedom (as in Greece and Turkey) and promoting economic development (as in Asia).

Baran's informal 1950 statement was the direct and indirect forerunner of analyses now taken for granted by so many of us. It was followed by a fuller essay in 1952: “On the Political Economy of Backwardness.” A year later cam “Economic Progress and Economic Surplus,” which became the analytical core of The Political Economy of Growth and, still later (with Paul Sweezy), of Monopoly Capital. ¹

It will be argued below that the concept of the economic surplus, and all that it points to and connotes, is fundamental to any but a sentimental understanding of contemporary monopoly capitalism and imperialism. Baran came forth with this nourishing revision of Marxian theory in a period of general and serious decline of both left activity and analysis in industrial capitalist societies. In doing so, he was building a framework for simultaneously comprehending the functioning of advanced industrial capitalism and the associated roadblocks to development in the Third World; he was, that is, reviving and elaborating on Marx's basic view of capitalism as a global division of labor, working within and shaping a global structure of power. Flowing from this conception, clearly and urgently, was the necessity of analyzing capitalism in terms combining economic with political with sociological with historical relationships and processes, and national with international developments. It was heady stuff for those stifled by the arrogance and complacency of the Eisenhower era.

II

No social thinkers, however mediocre or great, stand alone; nor can any stand aside from their time, place, and social context. Baran depended first and foremost on Marx and Engels and Lenin, then on their numerous and diverse followers, and on a host of more conventional historians and social scientists. ²

His differences with classical Marxism, never those of aim or method, were compelled by his milieu and his personal history. Turbulent through Marx's own life was, he matured and developed his main views as bourgeois democracy and capitalism and industrialism were in the ascendant and gaining sway. Baran, born in 1910, grew up in counter-revolution; grew up in Russia, Poland, and Germany in the midst of decadence, revolution, and counter-revolution; he lived in Germany for all but two of the ten years preceding Hitler's seizure of power. There he saw at first hand the ferocity of capitalism at bay and, as well, the inadequacies of left theory and practice. His residence in the United States was established as American monopoly capitalism and its empire were solidifying and expanding in scope and power.

It should not seem remarkable that one such as Baran, a Marxist already as a young man, would seek a full comprehension of society in ways that might seriously modify the leading ideas of Marx — whose world and hopes and fears could and did have such a different quality. But Baran was remarkable, for, as he lamented in his “The Commitment of the Intellectual,” there are all too few social scientists able “to transcend their private, selfish interests and to subordinate them to the interests of society as a whole.” In that essay, as in all his work, Baran displayed his close affinity with Marx, and not only in his reminder that the point of social interpretation is, after all, to change the world. Baran draws a telling distinction between “the intellect worker” and “the intellectual,” seeing Marx as the intellectual par excellence:

...under capitalism the intellect worker is typically the faithful servant, the agent, the functionary, and the spokesman of the capitalism system. Typically, he takes the existing order of things for granted and questions the prevailing state of affairs solely within the limited area of his immediate preoccupation...The concern with the whole becomes irrelevant to the individual intellect worker, and by leaving this concern to others he eo ipso accepts the existing structure of the whole as a datum and subscribes to the prevailing criteria of rationality, to the dominant values, and to the socially enforced yardsticks of efficiency, achievement, and success. ³

In high, middle, and low positions, commuting mentally and/or physically between academia, government, and business, these intellect workers are among those most deserving of C. Wright Mills's epithet for them: “crackpot realists.”

The intellectual, by contrast, is in essence and intent a conscious social critic, the thinker as participant. As Baran said in the closing paragraph of his Growth:

To contribute to the emergence of a society in which development will supplant stagnation, in which growth will take the place of decay, and in which culture will put an end to barbarism is the noblest, and, indeed, the only true function of intellectual endeavor.

Viewed as an abstract proposition, few if any would disagree with those words. But few indeed are those, nor are social scientists exceptional, who ever see clearly where it is their nation, their class, their social system that stands in the way of development, that is barbaric; quite the contrary, when a Baran steps forth to analyze such matters with clarity, with objectivity (which is not to say, neutrality), and with honesty, he is attacked as being “political.”

But all social analysis is political. Who would wish to know or try to learn from one who even seeks to be neutral, indifferent to what society is and means? To equate objectivity with neutrality, as is the custom is academia, is to equate physical balance with death: except that everyone must die, nobody can be neutral. Social analysis, the more meaningful it is, tends to maintain and strengthen or to alter the status quo; either is a political act. Sane and health intellect workers can become intellectuals if and when they recognize this and integrate their analytical and political lives — consciously, openly, fearlessly. Baran did all that. For his efforts, and especially for his successes, he was scorned, mocked, reviled, and mistreated by almost all of his intellect worker colleagues, throughout his fifteen years at Stanford. ⁴

As the consummate intellectual, Marx, more fully than any before or since his time, sought to grasp the whole. His life's work was to lay bare the entirety of social relationship and processes that make society what it is and becomes. He sought to put understanding at the service of human needs; his legacy to us is unmatched, whether in its richness or in the obligations for continuing work implied by it. Marx showed clearly and unequivocally that capitalist development deepened and depended upon ruthless exploitation, heedless expansion, and oligarchic rule; that the endless search for profit and power of the capitalist class meant that, over time, far from these needs lessening, they would instead entail more intensive and extensive exploitation, more expansion, and a heightened concentration and centralization of power.

Marx also showed that class conflict, not the harmony of classes, was as much a product of capitalist development as is its ever advancing technology and production; and he argued that the combination of class conflict and the intermittent and unavoidable economic crises of the capitalist process meant capitalism would do itself in, to be replaced by socialism through working class revolution. It has been plausibly argued that Marx expected the happier stages of this process to be well under way, at the latest, by the early years of this century. But however much light is shed on the main developments of the twentieth century by classical Marxism — including the major advances made by Lenin — only by the most tortuous reasoning can it be argued that the works of Marx, Engels, and Lenin constitute an adequate body of analyses of today's industrial capitalist societies. If an effective strategy for the left in these societies is to be developed, it requires an analysis that explicitly and systematically deals with and relates to each other the nature, functioning, and consequences of the contemporary capitalist State, contemporary imperialism, and contemporary socio-political tendencies. For such purposes, the aims, the method, and much of the content of classical Marxism are of course necessary, but also inadequate; the works of Baran and, by now, of many others promise that Marxism can become sufficient as well as necessary.

Thus, as we face the last quarter of this century, there are many vital questions unanswerable through classical Marxism alone, among the most demanding of which are

(1) What explains the great resiliency of capitalism, shaken but as much strengthened as weakened by the social, economic, political and military earthquakes of this century?

(2) Why, until very recently at least, has there been a growing rather than a shrinking acceptance of capitalist means and ends in the advanced capitalist nations; how to explain, in Gramsci's terminology, the spread of “bourgeois ideological hegemony”?

(3) Why is it that socialist revolutions have taken place not in the developed but in the underdeveloped, in the colonial (or, as in the case of Russia, semi-colonial) societies?

(4) why have there been such strong and, more to the point, successful and continuing tendencies toward fascism or quasi-fascism in the industrial capitalist nations for the past half-century?

(5) What could constitute a promising strategy for socialist revolution in the United States, among other powerful capitalist societies?

At the risk of being tedious, it is of course true to argue that without the fundamental analysis of capitalism laid out in classical Marxism we could not even begin to approach such questions; nor did Paul Baran provide adequate answers to them. But in having the courage and the commitment to deal not only with society but with Marxism critically, Baran enhanced the possibility that such answers can be found. His concept of the economic surplus, and the manner in which he (and, later, Sweezy) related that to contemporary capitalist imperialism and the contemporary capitalist State constitute the core of his contribution to those possibilities. Let us now examine that core.

III

The concept of the economic surplus, as developed by Baran and as published further by Baran and Sweezy, is to their work what the theory of value and surplus value is in Marx. Far from these analyses being in conflict with each other, Baran and Sweezy's is fully dependent upon that of Marx. The theory of value and surplus value operates as the necessary basis for grasping the essence of capitalism as and mode of production; departing from that, Baran and Sweezy's analysis functions on and lower level of abstraction determined by their own time and place — and, therefore as a more realistic basis for contemporary application. Sweezy sought to clarify this often misunderstood point recently, saying in part:

...in capitalist reality, values as determined by socially necessary labor time are subject to two kinds of modification: first, values are transformed into prices of production, as Marx recognized in Volume 3: and second, values (or prices of production) are transformed into monopoly prices in the monopoly stage of capitalism, a subject which Marx barely mentioned, for the obvious reason that all of Capital was written well before the onset of the monopoly capitalist period. At no time did Baran and I explicitly or implicitly reject the theories of value and surplus value but sought only to analyze the modifications which became necessary as the result of the concentration and centralization of capital.⁵

The economic surplus is approached by Baran as “actual, potential, and planned.” We shall have more to say about all of these shortly, after delineating the relationship between Marx's surplus and Baran's “actual economic surplus.” The latter is defined by Baran as “the difference between society's actual current output and its actual current consumption. It is thus identical with current saving or accumulation, and finds its embodiment in assets of various kinds added to society's wealth during the period in question: productive facilities and equipment, inventories, foreign balances, and gold hoards . . . ” (Growth, pp. 22–23) This is what economists call a “macro” concept — measuring total, economy-wide aggregate output, consumption, savings, investment, etc. Marx's analysis of surplus value was effectively a “micro” concept, focusing first for theoretical purposes on the individual firm. He sought to show how and why the capitalist's profit depended upon his ability to purchase and use exploitable labor power — i.e., to hire workers forced to provide unpaid labor. Analytically, it is a simple matter to transform this micro to a macro or aggregative approach, to “aggregate” surplus value. Such a measure, “aggregated surplus value,” less the consumption of the capitalist class, and less government spending on administrative and military activities (but still including the unproductive labor and consumption noted both by Marx and Baran, to be commented on further below) equals Baran's actual economic surplus, as Baran notes at the outset of his discussion of the concept of the surplus (Growth, pp. 22–23). ⁶

The vital differences between Marx's and Baran's approaches to surplus value and the economic surplus are not those of measurement and definition, however; they are in the qualitative, structural, and dynamic changes in capitalism that took place in the century intervening between Marx's and Baran's worlds. Most critical among these is that in Marx's time the capitalist class had all it could do to extract surplus value sufficient for accumulation from an exploitable working class still in the process of its early creation and socialization and, by comparison with today, a primitive industrial technology. The capitalist's problem in the mid-nineteenth century therefore centered principally on the point of production and on the power needed to make capitalist production feasible and profitable. At the point of production, one may say, surplus value is created; but profits are taken at the point of realization, where goods are sold. Great Britain was in its heyday when Marx wrote; its superiority in the world economy was unchallenged, and that world economy was expanding and industrializing at rapid rates providing Great Britain with adequate supplies of foodstuffs and raw materials, and buoyant markets for its consumer and capital goods (and capital exports). The “realization problem” was minimal; Marx had no good reason to occupy himself with it.

The first volume of Capital appeared in 1867; it was just about then the world began to move toward a different combination of technology, economics, and politics, just then that the competitive capitalism marking Britain's economy began to come face to face with heavy industrialization, monopolistic structures, and imperialistic rivalries now so familiar, and that Britain found itself faced with what came to be the stronger economies of Germany, the United States and, later, Japan. The realization problem, before the twentieth century began, had joined the production problem in clear importance; the urgencies of expansion and of exploitation rose together; the time when the absorption of the surplus would take precedence over the generation of the surplus was, as the life of social systems is measured, close at hand. It is necessary to be more specific about the developing differences between the era of competitive and of monopoly capitalism, between the realistic focus of Marx and that of Baran.

The fundamental economic differences — which in turn have greatly altered political and social relationships — inhere principally in the realms of technology and of business organization:

(1) in Marx' time, industrial technology was still in its infancy. The era of cheap metals, fuels, transport and communications and, therefore, of true and pervasive mass-produced capital and consumer goods had just appeared on the horizon: coal and steel (Bessemer converter steel), the railroad and the steamship, and machine production were the dramatic symbols of then modern production. In our day, machine production has been greatly speeded up, refined, and transformed by rapid-fire improvements, connected with and much enhanced by innumerable developments in the broad areas of electrical and chemical technology: the jet plane, synthetics, and the computer are technological heroes now, infiltrating all aspects of economic, social, political, and military life, nationally and internationally;

(2) what may be called the second and third industrial revolutions (in the decades before World War I and since World War II, respectively) made possible and, in a capitalist world, necessary, the displacement of competition by monopoly. And these in turn made necessary and possible today's extraordinary degrees of concentration and centralization of production and power.

The combination of contemporary technology and monopoly makes for an ever-rising level of productivity and production. This provides one obvious basis for the tendency of the surplus to rise. Less obvious but equally important in causing the surplus to rise is the highly unequal distribution of income, wealth, and power that assures a rising share of total output will be at the instance and the disposal of those in the upper reaches of society: those who own and control the giant corporations, and those in business, government, and the academy who serve as their conscious or unknowing “intellect workers.” how much of what goods and services are produced, and how it will be divided between consumption and surplus — i.e., the generation of the economic surplus — and how much of consumption and of the surplus will be devoted to what uses — i.e., the absorption of the surplus — becomes the key to understanding the nature and the dynamics of modern society. Now we shall look more closely still at the concept of the economic surplus, its basis for rising, and the consequences of its doing so.

IV

Earlier we noted that Baran distinguished between three definitions of the economic surplus: actual, potential, and planned. The definition of actual economic surplus was then put forth. All three versions of the surplus refer to quantitative matters; they are different ways of viewing the actual or possible excess of goods and services produced over the quantities needed to maintain the actual or some possible rate of growth. But these definitional and quantitative approaches rest upon and point to substantial qualitative, dynamic, and socio-ideological questions. Thus it is not even to the point here to examine serious “the planned surplus” for, as Baran says, “it is relevant only to comprehensive planning under socialism.” (Growth, p. 41) The actual and the potential surplus, on the other hand, refer to what is and what is not produced under capitalist conditions, quantitatively and qualitative, in what proportions, and why. The actual surplus, it will be recalled, is the difference between society's actual current output and its actual current consumption.

Potential economic surplus is 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. Its realization presupposes a more or less drastic reorganization of the production and distribution of social output, and implies far-reaching changes in the structure of society. (Growth, pp. 23–24)

The differences between the actual and the potential are due to

(1) excess consumption on the part of upper and middle income groups, on the one hand, and

(2) output lost due to unproductive workers, the irrational and wasteful organization of the existing productive apparatus, and unemployment.

The surplus is reduced by wasteful consumption and waste in the broad realm of production.

Baran discusses the potential economic surplus not because he believed the “drastic reorganization” necessary can or will take place under capitalism, for both the rich and poor peoples of the world. While hundreds of millions of people go without dire necessities, some substantial amount of actual consumption is not essential for human well-being, thought it is essential for the system to continue. Included in that category are the familiars of daily existence: the goading of consumers into buying trivial goods, the regular and highly-touted style changes in autos and so many other commodities, the costs of protecting and enhancing property — costs (and incomes) which helped to create and now largely support the legal and financial sectors which serve so well the ruling class — and the enormous administrative and military apparatus for keeping “law and order” at home and abroad. And there is, of course, all the labor expended on the production of these and other system-maintaining “goods” and “services” — unproductive consumption and unproductive labor. Marx took note of both, but the degree of such activities today is and must be so much greater than a century ago that our existence is qualitatively different. It requires an analysis that is not only much more elaborate than Marx's but one that, probing deeply into the surplus as such, places clearly in view the appropriate social implications.

V

Marx taught us that capitalist production must continually expand in volume and scope; the concept of the economic surplus teaches us that under current technological and organizational conditions, the surplus must expand (which implies expanding total production). A shrinking surplus (i.e., a contracting economy) means capitalism in deep crisis. But for the surplus to expand, ever new means must be continually found to absorb its increase. Capitalism faces trouble either with a shrinking or an expanding surplus. Such a contradiction has to be overcome. In the classic Marxian view it could not be; in this century, despite all, so far it has been: indeed, the major catastrophes of this century — whether the obvious ones of war or the subtler ones of mind management and dehumanization — have been the ways that capitalism has invented or stumbled upon. Anything goes.

The dominating characteristics of capitalism in Marx's time are with us still: the need and the ability to exploit, to expand, and to rule over the conditions of exploitation and expansion. What has changed are the forms, the problems, and the possibilities of all these. The changes have occurred as monopoly capitalism has become the pattern of capitalism, whether in the United States or the other industrial capitalist nations. The major means through which these changes have been effected and made possible has been the transformation in the nature and role of the capitalist state. It is here that working with the concept of the economic surplus is most essential and most rewarding; as it is here that classical Marxism is most unsatisfactory.

When Marx observed that “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie” he was correct both for his time and ours. In his time, however, the tasks of that “committee” were substantially fewer and simpler than now. Simpler and fewer does not mean unimportant: the mid-nineteenth century British State, e.g., defended the rights of private property at home, herded and kept the working class in its place, and sent its flag both ahead of and behind expanding trade and investment abroad. Laissez-faire capitalism could do with no less; the State's functions were those of a “night watchman.” by comparison, today's capitalist State appears as an army of armored and airborne divisions. So it must be; the alternative is to allow capitalism to languish economically and thus to be torn apart politically, at home and abroad. But, it must ben seen, the deeper needs of system maintenance are the other side of a coin that shows the highest peaks ever of capitalist profit and power, even as, and in part because, its struggles mount. Through adversity, triumph — so far.

Of Marx's innumerable profound observations, one is peculiarly appropriate here: “…we always find that the problem itself arises only when the material conditions necessary for its solution already exist or are at least in the process of formation.” For capitalism in this century, and especially for American capitalism, the acute problem has been how to absorb the enormous productive capacity that has arisen along with monopoly capitalism. That “problem” has many aspects to it. Intensifying it as well as partially creating it is the highly unequal distribution of income and wealth essential and intrinsic to the aims and the functioning of the capitalist process. Because the mass of the population cannot possibly purchase all it produces, an ever-rising volume of investment is required — investment that further increases productive capacity and the surplus (already well over half of GNP and rising by 1966, according to Monopoly Capital) in the capitalist world. Domestic and foreign private investment go far, but not nearly far enough, to absorb the attendant surplus, what is also needed, if class strife and domestic and foreign competition are not to tear the system apart, are means that will maintain a minimal degree of “contentment” and “order” both at home and abroad. But the very technology, mass production, and concentrated power that created the problem also provided “the material conditions necessary for its solution”: mass consumption, mass communications and high-speed transportation, and the modern “democratic” and centralized state which, like its private counterpart, progenitor, and master, the corporate elite, dispenses ideas, feelings, goods and services, and coercion in appropriate measure. The resulting process is what has been called “the warfare-welfare state” — which, unstable, oppressive, and delicate in its balance though it may be, is a far, far better “solution” that any other available to modern capitalism if it is to continue to survive; i.e., if it is to continue to be able o generate and absorb an ever-rising surplus.⁷

All this was seen in clear outline by Baran when he argued in Growth that the surplus required the growth and positive intervention of the capitalist State to preside over an expanding international hegemony for American capitalism. To say this is to say that the public bureaucracy, the military-industrial complex, and a voracious imperialism that began to dominate social existence in the 1950s was the fully understandable, essential evolutionary process enabling American — and therefore world — capitalism to survive.

VI

Baran was not alone in seeing this; had he been, it would not have happened. As James Weinstein, Gabriel Kolko and others have now shown, there was a growing consciousness of these needs before World War I; an explicit campaign to match consciousness with institutions mounted even more under FDR; it reached a crescendo as Baran was writing Growth. Such an outlook indeed became the hallmark of the liberal by that time, whether corporate liberal or academic liberal. It was the latter who did so much to put an acceptable political and moral gloss over the policies so necessary to maintain the harsh realities of capitalism; it was they who argued so gently about what the State can do, who deplored what it did not do, and so assiduously ignored or rationalized what it did do. Baran focused on what the State had to do; he quoted Joan Robinson's perceptive observation (made in 1936) on the foolishness of wishing for something else:

In the present age, any government which had both the power and the will to remedy the major defects of the capitalist system would have the will and the power to abolish it altogether, while governments which have the power to retain the system lack the will to remedy its defects. ⁸

To which one might add, those who have that power often see what we might call “defects” as virtues.

The role of the contemporary capitalist State is and must be multidimensional, in origin and in effects: economic, political, sociological, and military. In turn, each of these categories is many-sided, interacting with and dependent upon each other in its own and the other “dimensions”: the economic functions of the state comprehend offensive and defensive policies aimed at maintaining or creating a favorable context regarding trade, labor, taxes and expenditures by the State and, of course, for investments and profits. Whether the means and ends seek to avoid stagnation and/or inflation, to develop or maintain a secure and beneficial international trading and monetary system, to gain or tighten a hold on promising areas abroad, to contain reformist forces for some purposes and to encourage them for others, or, more usually, to do all this and more simultaneously — all is determined, consciously or not, by the elemental needs of the system to survive. The upshot is clear: the modern capitalist State is the guiding and shaping social influence, through which capitalist needs and power flow, by which possibilities are realized, without which the system would — as Marx correctly sensed — do itself in. The major steps toward our present condition were well under way by Wilson's second administration; by Nixon's second administration they had gone beyond the stage of perfection into putrefaction. We shall see what, if any, “material conditions” for the solution of capitalism's present crisis are at hand, or can be created; we shall see, also, if the solution needed and possible for human beings, as distinct from capitalism, can and will be developed by us.

If all or most of this seems familiar today, it is still not agreed to by most liberals or, worse, by many Marxists. The liberals cannot see it or accept it because to do so would be to reject the way of life made possible for them by the very system they would reject. But what of the many Marxists who scathingly characterize Baran, Sweezy, and their successors as “revisionists,” and their contributions as a form of intellectual or political brainlessness combined with heresy? Such Marxists, contenting themselves with exegeses of the texts of Marx, Engels and Lenin, mysteriously find it neither necessary nor acceptable to broaden and deepen the analysis of imperialism and the modern state, of the composition, functions, and consciousness of the contemporary working class, or, in general, of the “horizontal” relationships between “foundation and superstructure” illuminated by Baran and Sweezy, Frank, Braverman, O'Connor, Schiller, Magdoff, and others in the United States and elsewhere.

In sticking with the letter of classical Marxism, the critics of these recent advances are defying the spirit of Marxism. In a time of vast and deep social changes, a time clearly of transition — once more! — we need and we may expect vast and deep changes in social understanding, need and may expect more than we have already seen.

We need not make of Paul Baran a hero to acknowledge his intellectual and moral contribution, how much we owe him. Without him, the work he did would have had to be done by others, and probably it would have been. We can afford no loss of time, and we could not have afforded that loss. But Paul Baran we have lost, a marvelous human being who was, not least to me, a joy and an inspiration. He is missed.

Notes

1. The 1950 statement is reproduced as "Economic Progress" in Papers and Proceedings of the 63rd Annual Meeting of the American Economic Association (1950), and as "Economic Development of Backward Areas" in Monthly Review, Volume 3 (August 1951). The two subsequent essays on "backwardness" and the economic surplus, along with many other valuable contributions, are collected in (the posthumous) Paul Baran, The Longer View (New York, Monthly Review Press, 1969). A bibliography of Baran's writings may be found in the memorial issue of Monthly Review, Volume 16 (March 1965), also containing several essays by and many comments about Baran.The Political Economy of Growth (hereinafter: Growth) was published by Monthly Review Press in 1957; they also published Monopoly Capital in 1966, two years after Baran's death. return to text

2. Baran was masterful in his ability to digest and use the ideas of those with whom he partly or greatly disagreed, as well as those of his closest intellectual allies. Growth is both original and a synthetic work, as is always so of important social analysis. Among those Baran depended upon most, in addition to Marx, Engels, and Lenin, these seem to be the most prominent: Maurice Dobb, Rudolf Hilferding, Oskar Lange, Rosa Luxemburg, C. Wright Mills, Joan Robinson, J. A. Schumpeter, Josef Stendl, and Paul Sweezy. Very interesting in this connection is the apparent lack of explicit relationship between Thorstein Veblen. Yet Veblen's Theory of Economic Enterprise (1904) and his Absentee Ownership and Business Enterprise in Recent Times (1923) point squarely — if with different theoretical overtones — to the same major tendencies of American capitalism as Baran's Growth: toward, that is, monopoly, stagnation, and the protective/aggressive state. Monopoly Capital makes explicit reference to Veblen, due, probably, to Sweezy's influence. return to text

3. Monthly Review, Volume 13 (May 1961). Also contained in the memorial issue noted above and in The Longer View. return to text

4. Much of Baran's story at Stanford, as well as the broader disgrace of the profession's treatment of dissenters that continues to the present is well told by Lawrence S. Lifshultz in Ramparts, April 1974: "Could Karl Marx Teach Economics in America?" return to text

5. Monthly Review, Volume 26 (January 1974). Those who are essentially unfamiliar with the terms "surplus value" and "economic surplus" as technical terms may welcome some clarification before we proceed. As used by Marx, or by Baran and Sweezy, the "surplus" (whether preceded by economic or followed by value) does not connote a condition of "too much" or of excess, as popular usage does. Capitalism without surplus value is capitalism without profits; it is not capitalism at all. Capitalism without an economic surplus is capitalism without investment; without investment, no expansion; without expansion, sooner rather than later, no capitalism. Thus, the closest the United States economy has ever come to a condition of no economic surplus was at the pit of the depression in 1933, when net saving and net investment were both zero. In contemporary capitalist conditions there must not only be an economic surplus, it must tend to rise; the economy would not grow unless capitalists as a whole expected such a process and unless they expected their own share of that increase to rise also. The problem that Baran will point to, below, is this: unless the society finds ways to absorb the rising surplus, the surplus will not be generated; that is, the economy will cease to expand. return to text

6. In saying that "it is a simple matter to...aggregate surplus value," I do not mean to suggest that to do so would find agreement among all Marxists. For one of several different approaches suggesting the controversial quality of my observation, see the opening chapters of Paul Mattick, Marx and Keynes (Boston: Porter Sargent Publisher, 1969). return to text

7. See James O'Connor The Fiscal Crisis of the State (New York: St. Martin's Press, 1973), whose work owes much to Baran and Sweezy. Among many others whose analyses have clearly been shaped and facilitated by Baran's Growth and by Monopoly Capital and who are in turn shaping and facilitating the work of others, are Andre Gunder Frank and his essays on dependency and underdevelopment (e.g., in Latin America: Underdevelopment or Revolution [New York: Monthly Review Press, 1969], Harry Magdoff, in his Age of Imperialism (New York: Monthly Review Press, 1969), Herbert Schiller, in his Mass Communications and American Empire and The Mind Managers (Boston: Beacon, 1971 and 1973), and Harry Braverman, in his Labor and Monopoly Capital (New York: Monthly Review Press, 1974). return to text

8. Growth, p. 133, from Robinson's article in the December 1936 Economic Journal. return to text

June 24, 2003