The theory that big business exploits smaller business has been a constant theme of radical economics. So Baran and Sweezy struggle to limit the responsibility of the small capitalist with rhetorical terms:
'Smaller business is on the receiving end ... From the point of view of a theory of monopoly capitalism, smaller business should be treated as a part of the environment within which big business operates rather than as an actor on the stage.' Baran and Sweezy, Monopoly Capital, p52-3
It was the Stalinist Varga who first argued that Marx's law of profit no longer applied:
'the economic theory of Marx in general and his theory of crisis in particular is based upon industrial capitalism, upon the capitalism of free competition. Present day capitalism, however, is monopoly capitalism - imperialism.'
Had Marx lived longer he would have noticed 'a new element in the development of capitalism: monopoly profit, the artificial rise of the share of monopoly capital in the total profit at the expense of the income of the smaller capitalists and the independent producers still operating'
E Varga, The Great Crisis and Its Political Consequences, London, 1935, pp26-7
Here for the view that small capitalists are being exploited takes hold. Berlioz milked this theme for all it was worth:
'Are we now not contemporaries of a new feudal order whose actual power and aspirations run counter to liberty, small property and the national interest.'
J Berlioz 'Big business against the nation' International Press Correspondence Vol 17, no 1, Jan 1937 p6
In this way the Stalinists theorised an opportunist 'alliance' with small businesses as the 'victims' of monopoly. The British author of the 'Alternative Economic Strategy' agreed that it was big business exploiting 'industry' that was the problem:
'The state machinery acting in the interests of the most powerful capitalist groups, subjects the entire economy and resources within its reach to the interests of monopoly capital.'
Sam Aaronovitch, Monopoly in Britain. NY 1955, p75
Meanwhile the American Stalinist Welland pushed the theory of exploited capitalists to its reductio ad absurdem:
'It is apparent that maximum profits are not secured alone from the more intensive exploitation of the working class. Monopoly capital is able to "milk" the entire domestic economy so as to exploit the majority of the population. This includes the small producers, especailly the working farmers as well as the city middle class (professionals, shop keepers etc) and even small industrial capitalists.'
C Welland 'On the Law of Maximum Profits' Political Affairs January 1954
Today the financial sector is a favourite target of such radical economists as Hutton (The State We're In), Greider ('The rentier's regime', One World, Ready or not) and Chossudovsky ('The Rentier economy'). All tend to see the productive sector as victim of the depredations of financial speculation rather that the growth of speculative capital as consequent upon industrial stagnation.
Greider, in his excellent account tends sadly to repeat this fetishisation of the 'handful of financial predators':
'The new communications technology has created a small, elite community of international finance - perhaps no more than 200 000 traders around the world who all speak the same language and recognise a mutuality of interests despite their rivalries'. (Greider, One World Ready or Not, 245-6).
The problem with all of these economists is that they tend to see this or that group of capitalists rather than the system as a whole as the problem.
In message <v0213050b630c193ed295@[128.112.71.7]>, Rakesh Bhandari <bhandari at Princeton.EDU> writes
>I see here you are implicitly replying in critical fashion to my post in
>which I quoted Marx on isolating quasi monopolies in the world market.
>Perhaps you are saying that since any such isolation has politically
>suspect populist implications, one should simply not wonder whether there
>are any kinds of monopolies in the world market (even if Marx said never to
>forget it if we are better to understand how one nation can grow rich at
>the expense of another). Here we see in full force that fearless
>abandonment to science, no matter the political implications, you have
>championed.
>
>Now the monopoly capital theorists would be Sweezy and Baran? Why have you
>left them unnamed? Did B and S isolate monopoly from 'progressive
>capital'? Do they even use the latter term? Don't recall it all, but this
>is probably why you left the monopoly capital theorists unnamed. Boccara
>may be who you had in mind. I thought Baran and Sweezy were interested in
>the way big corporation had risen in all markets at the expense of
>numerous, price taking small firms and how that had changed Marx's laws of
>production price and motion (putatively based on competitive relations),
>not so much the relation of a "reactionary" sector of monopoly capital to a
>"progressive" sector of competitive capital.
>
>And in his critique of Monopoly Capital, Mattick Sr did not focus on the
>populist political implications of Baran and Sweezy's work. He criticized
>them as Marx had criticized Ricardo--that is, for not being abstract
>enough.Mattick never saw any reason to deny that there could be monopoly
>profits or that some capitals could stave falling profitability off through
>unequal exchange relations with other other capitals.
>
>What he was most interested to demonstrate is that the onset of stagnation,
>crisis or general overproduction could not be explained however by the
>monopoly nature of present capitalism but ultimately only by reference to
>capital-labor relations *in the system as a whole* the analysis of which
>required heroic abstraction from inter firm relations. Not tracing crisis
>to horizontal inter firm relations as Baran and Sweezy and now Brenner
>have it but by vertical relations as Mattick had it.
>
>Yours, Rakesh
>
>
-- Jim heartfield