Modern Imperialism, Monopoly Finance Capital, and Marx's Law of Value. Samir Amin

      This “roundabout” solution is absurd since the balance between consumption and capital equipment must be obtained from one phase to the next and cannot be indefinitely postponed. If each phase corresponds to the life of the capital equipment, this period coincides exactly with the “planning” period for investment decisions. Capital goods will be produced in the course of one phase only if in the following phase the output of consumer goods which they bring about finds an outlet. Thus, in fact, if hourly wages are stagnant, there will be an overproduction crisis as from Phase 2, with the equipment produced in Phase 1 remaining unused, while that proportion of it that does get used will only give rise to a reduced demand for labor. This is the Keynesian problem and the source of the Great Depression: the system has broken down (available equipment and unemployment) and can only be started up again by a rise in wages.

      Oddly, the Tugan-Baranovsky solution, absurd in a real capitalism, can be envisaged in the hypothetical case of a planned statism, which would have the means to allow itself to push ever outward the consumption horizon that, under capitalism, governs profitability and investment decisions. Indeed, that was the case in the Soviet system during the Stalinist epoch.

      The absurd part of it can be avoided if the surplus-value is consumed. In our very simple scheme, the entire surplus-value is “saved”; but if we assume that a constant proportion of it is consumed, there will be no change in the nature of the equilibria. Hence, if real hourly wages remain stagnant or increase at a lower rate than productivity, an increasing proportion of the surplus-value must be consumed in order to maintain a dynamic equilibrium. For there are no “insurmountable” contradictions—the thesis of catastrophic collapse, of a “general crisis,” etc.—but only different alternative ways of overcoming them: capitalist alternatives that preserve the essential features of the system and socialist alternatives that go beyond them.

      Under capitalism the question is to be answered through one of the three following solutions:

      1. The first “solution”—the individual consumption of an increasing proportion of the surplus-value by the capitalist—is not “normal” since competition among capitalists requires “savings” and the ideology of the system, which reflects the features of the capitalist mode, is opposed to it.

      2. The second “solution” is one discovered by the central system itself in order to overcome its contradictions. We have already noted that there are no “insurmountable” contradictions—the theory of catastrophic collapse, of “general crisis,” etc.—but only different alternatives to overcome them: those of capitalism that maintain the essential features of the system and those of socialism, which supersede them right from the start. Monopolistic competition, the inclusion of “selling costs” in the price of the product, and the subsequent development of tertiary parasitism, which were well described long ago by Chamberlin and Joan Robinson, constitute, as Baran and Sweezy have said, the “spontaneous” solution of the system.²

      3. The third “solution” involves direct intervention by the state in the absorption: public, civil, and military expenditure. Paul Baran’s great intuition was to understand that henceforth the analysis of dynamic equilibrium could not be made within the framework of the “pure” two-sector model but within a new framework—with three sectors (the third sector in fact being the state, consumer of an increasing proportion of the surplus). This analysis, which corresponds to reality, required the introduction of a concept wider than that of surplus-value and directly linked with the productivity of productive labor. The concept is that of surplus.

      Does the introduction of these “solutions,” the third in particular, remove the objective status of labor-power? The answer is yes, for those who regard this status from an economistic point of view. But in actual fact, these “solutions” remind us only of the existence of a dialectic between subjective and objective forces; for state intervention must be placed within the context of the class struggle that gives it its meaning.

      Dialectic does not mean juxtaposition of autonomous elements. Class struggle, in all its varied manifestations outlined here, does not “reveal” the objective necessities of equilibrium by a lucky chance. Class struggle modifies the objective conditions. The model is necessarily unilateral, but reality is not. The results of class struggle alter the conditions of the “model”: they act upon the allocation of resources, the rates of growth of productivity, etc. Objective conditions and subjective forces act and react upon each other.

      A final remark: the preceding analysis of dynamic equilibrium did not contain assumptions regarding the trend of the profit rate. We will return to this question later, in relation to the stages of the evolution of the capitalist system and the related question of the falling rate of profit. I will not here enter into the discussions about the “law of the falling tendency of the rate of profit.” Following Paul Sweezy, I have in my turn dared to offer several reflections going beyond what Marx wrote on the question. Thus I entered the discussion to suggest that the facts that can be acknowledged concerning changes in the profit rate be placed in the context of a concrete historical framework defining successive phases characterized by particular combinations of the indicators (lambda, λ, and gamma, γ) of the growth of productivity in each of the two sections modeled in Marx’s line of argument.

      4.FROM PRICES OF PRODUCTION TO MARKET PRICES

      As the competition among segments of capital is enough to account for the transformation of values into prices of production, we have now to consider a third family of operative realities, which in their turn transform prices of production into market prices. The first element to be considered here is the existence of oligopolies, which wipe out the liberal hypothesis of “competition.” These oligopolies, which have defined contemporary capitalism since the end of the nineteenth century, are positioned to bleed off monopoly rents from the overall mass of surplus-value, guaranteeing them rates of profit higher than those obtained by the segments of capital subordinate to them. The contributions of Baran, Sweezy, and Magdoff have brought about a qualitative advance in this domain. They alone allow an understanding of the nature of capitalism in our time, both its tendency to stagnate and the ways in which it tries to overcome that tendency (especially financialization).

      Extending that analysis, I have put forward the thesis that the advanced degree of centralization of capital, henceforward characteristic of contemporary capitalism, made it worthwhile to speak, for the first time, of a system of generalized, globalized, and financialized oligopolies—the basis for the crystallization of a collective imperialism of the triad of the United States, Europe, and Japan.³

      The second intervening element in the determination of market prices calls for a theoretical analysis of the functions