; :
THE TENDENCY OF SURPLUS TO RISE 53
THE TENDENCY OF SURPLUS TO RISE
Monopoly capitalism is a system made up of giant corpora-
tions. This is not to say that there are no other elements in the
system or that it is useful to study monopoly capitalism by
abstracting from everything except giant corporations. It is
both more realistic and more enlightening to proceed from the
outset by including, alongside the corporate-monopoly sector,
a more or less extensive smaller-business sector, the reason
being that smaller business enters in many ways into the calcu-
lations and strategies of Big Business. To abstract from smaller
business would be to exclude from the field of investigation
some of the determinants of Big Business behavior.
One must, however, be careful not to fall into the trap of
assuming that Big Business and smaller business are qualita-
tively equal or of coordinate importance for the modus
operandi of the system. The dominant element, the prime
mover, is Big Business organized in giant corporations. These
corporations are profit maximizers and capital accumulators.
They are managed by company men whose fortunes are identi-
fied with the corporations' success or failure. They and here
the pronoun stands for both the corporations and the men-
look ahead and calculate with care. It is their initiative that
sets the economy in motion, their power that keeps it moving,
their policies that get it into difficulties and crises. Smaller
business is on the receiving end, reacting to the pressures of
Big Business, to a certain extent shaping and channeling them,
but without effective power to counter them and still less to
exercise an independent initiative of its own. From the point of
52
view of a theory of monopoly capitalism, smaller business
should properly be treated as a part of the environment within
which Big Business operates rather than as an actor on the
stage.
2
Within the corporation, relations are direct, hierarchical,
bureaucratic. Here genuine planning holds sway, with direc-
tives flowing from the top down and responsibility from the
bottom up. For the system as a whole, however, such relations
are absent. Not even the largest corporations produce more
than a very small fraction of society's total output. Take Gen-
eral Motors, for example, which, measured in terms of sales, is
the biggest industrial corporation in the country. In 1957,
GM's total of wages, overhead costs, and profits, which corre-
sponds closely to the company's contribution to the Gross Na-
tional Product, amounted to just over $4 billion, about 1 per-
cent of GNP for that year. It is of course true that several giant
· corporations often act in concert, but they do so for the pur-
pose of serving their own ends rather than for the purpose of
influencing, not to say controlling, the functioning of the sys-
tem as a whole.
Overall, monopoly capitalism is as unplanned as its competi-
tive predecesso . The big corporations relate to each other, to
consumers, to abor, to smaller business primarily through the
1
market. The way the system works is still the unintended out-
come of the self-regarding actions of the numerous units that
compose it. And since market relations are essentially price
relations, the study of monopoly capitalism, like that of com-
petitive capitalism, must begin with the workings of the price
mechanism. ·
The crucial difference between the two is well known and
can. be. summed up in the proposition that under competitive
cap1tal1sm the individual enterprise is a ''price taker," while
under monopoly capitalism the big corporation is a ''price