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Marxism predicts that left to its own devises capitalism tends toward monopoly. Let's call this the 'monopoly capitalism thesis.' I suspect the most famous articulation of this thesis was develop in the context of debates over the nature and fate of early twentieth century imperialism. For, both (recall; and here) Hobson (not a Marxist) and Lenin noticed that (militaristic) imperialism and monopoly were mutually reinforcing. For Hobson (in his 1902 Imperialism), monopoly capitalism was the effect of rent-seeking political behavior (by corrupt, imperial, financial interests). Lenin (ca 1916) didn't deny this, but while drawing on German data, especially, thought that capitalism had an inevitable tendency toward monopoly and cartels, and that imperialism (the search for monopoly markets overseas) is an effect of this tendency.
Arguably, (recall) Schumpeter (in Capitalism, Socialism, and Democracy (1942) synthesized the two positions by suggesting that in conditions of modernization, monopoly would be caused (perhaps not by an internal logic of market economies, but rather) by, the "concentration of decision-making centers of the administration and the state" who seek out social counterparts in capitalist enterprises, who in turn take advantage of rents. While Burnham (in The Managerial Revolution 1941) is not interested in exploring the dynamics of the monopoly capitalism thesis, one can find a similar conclusion in it (see also my comment about Berle & Means below).
In what follows, I don't mean to suggest that the theoretical structure of the monopoly capitalism thesis was not developed after mid-century. Arguably Joan Robinson, Paul Sweezy and Baran, and Ernest Mandel all did so in various ways, and have inspired renewed work. From the left one could mention (recall this post) Durand, Cédric Durand's (2017) Fictitious capital: How finance is appropriating our future; from the more libertarian right one could mention Eric A., Posner and E. Glen Weyl (2018) Radical Markets: Uprooting Capitalism and Democracy for a Just Society, which strongly implies our age is characterized by monopoly capitalism.
As an aside, with the revival of scholarly interest in the roots of neoliberalism, it is quite natural to come away thinking that the major point of contention between Marxists and liberals within political economy centered on the socialist calculation debate. This debate is theoretically very interesting because it brings together epistemology, social theory, political economy, and (after Oskar Lange) artificial intelligence. And because Hayek got an early Nobel (in part) for his contribution to it, and Austrian economics shaped American libertarianism, there has been impressive continued interest in it even after central planning lost its luster. But even critics of Marxism can acknowledge the soviet style central planning and administrative pricing need not be the only way really existing Marxism can be tried out. This observation made me return to the fate monopoly capitalism thesis: why did it not haunt mid twentieth century economics?
Now, a key part of the answer has to be in the success of Keynes & Keynesianism and also the very idea of a mixed economy (the genealogy of which I have not studied, but I assume involves Samuelson). But in a way this pushes the problem back a level--why think a mixed economy is stable so as to block the monopoly capitalism thesis (or road to serfdom thesis)?
Part of the answer can be found in a number of empirical, inductive studies associated with 'Chicago economics,' especially Warren Nutter’s (1951) The Extent of Enterprise Monopoly in the United States, 1899–1939, which originated in his (1949) dissertation and the fifth lecture, “Competition in the United States,” of George Stigler's (1949) Five lectures on economics problems first delivered at LSE at the behest of Robbins. (For detailed description of the material I am about to discuss see my paper, but back then I studied it through lens of paradigm building.)
I doubt I need to re-introduce Stigler (a future Nobel), who was at Columbia, to my audience. But despite the recent political and polemical focus on the Virginia School, Nutter is understudied (even his Wikipedia page is scarce), and only Daniel Kuehn has written much on him. Nutter, who during the cold war was one of the pre-eminent scholars of the Soviet economy Stateside (together with my very teacher Franklyn Holtzman), was at Yale when his dissertation work made an impact on American public life (it was featured in Fortune magazine). He later joined and co-founded the Virginia school of public choice and ended up a significant figure in the Nixon administration. In 1969, he published an extension of the dissertation with Henry Einhorn: The Extent of Enterprise Monopoly: 1899-1958.
Now, as my comments above suggest, the 'monopoly capitalism thesis' drifted out of Marxism into mainstream-ish opinion during the Great Depression. Nutter's official target the “hypothesis that monopoly is automatically generated in a private-enterprise system” was also defended by Arthur R. Burns "in his book, The Decline of Competition.” Burns was an institutionalist economist at Columbia. (This Burns should not be confused with another economist at Columbia, Arthur F. Burns, who became more prominent as Chair of the Federal Reserve.) In his book, our Burns argues that technological developments alongside patent laws (which generate rents) made monopoly inevitable (and that anti-trust was imperfect).
Another, politically more important target (for Nutter and Stigler) is The Modern Corporation and Private Property (1932), co-authored by A.A. Berle and Gardiner Means. This was a major work that shaped the New Deal, corporate governance, and corporate law for a generation. Berle and Means analytically (and legally) separated corporate ownership (which, under modern conditions, was diffused) from corporate control (which was concentrated). They thereby anticipate Schumpeter and Burnham's focus on a relatively narrow managerial-corporate class (albeit not to be identical simply with capital in a Marxist sense).
Nutter and Stigler have different empirical ways of tackling the underlying question, and they use different proxies to get a handle on the empirical problems (of operationalization concentrations within a industry and measuring its change over time, and of the whole economy). And their empirical findings don't always agree. But in a rather critical review (1953) article, "Is monopoly increasing?" Solomon Fabricant (an economist associated with NBER [see this portrait drawn by Lipsey]), who notes Nutter's and Stigler's partiality toward competition, and hostility to anti-trust policy, and implies they may be systematically biased, concludes, nevertheless, “Yet, whatever the outcome, by the essential validity of their conclusion must stand. All the doubts that can be raised do not destroy, rather they support, the conclusion that there is no basis for believing that the economy of the United States is largely monopolistic and has been growing more monopolistic.” (92. Nutter himself had suggested there might have been very modest growth in monopoly, but mostly as an effect of government policy.)
That is to say, by the early 1950s the economics profession thought the monopoly capitalism thesis was, if not empirically falsified, then at least decidedly unpromising empirically. This is especially notable because the data they covered included the impact of the Great Depression and all the New Deal activity.
In work (1951) that covered later time-series data for manufacturing through 1949, "The measurement of industrial concentration," another economist, M.A. Adelman, also decried the imperfection of the data (although he praised Nutter's measures explicitly) and diagnoses underdetermination of theory by data. (He also acknowledges that Nutter is more interested in monopoly, while he is more interested in concentration.) At the end of his survey Adelman concludes:
Adelman has, I think, attracted no scholarly attention. But he became one of pillars of the MIT economics department that Samuelson built to pre-eminence. (After his early work in anti-trust he became somewhat well known in the 1970s as a leading expert of energy economics and how to tackle the oil crisis.) And so he very much represents the middle of the road of the economics profession of the era.
I quote Adelman's passage at length because it gives a sense of how he takes the empirical results to license considerable de-politicization. (One can also find this in Fabricant's conclusion.) While economists remained highly interested in theories of monopoly and imperfect competition, and how to deal with (ant-trust) policy questions emanating from actual monopolies and economic concentration (and a whole range of potentially fascinating technical questions), the monopoly capitalism thesis was effectively dead, or at least temporarily pushed to the margins.
As I noted in my original paper, this conclusion remained intact even if this inductive approach to the question of monopoly as pursued by Nutter and Stigler got displaced by a very different approach articulated by Harberger in “Monopoly and Resource Allocation.” (1954) And while this, in turn, was quite consequential for the shape of American anti-trust (not the least compared with the Ordoliberal approach), it was unconcerned with the monopoly capitalism thesis.
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