·'
76
MONOPOLY CAPITAL
corded pI·ofits with the theoretical ''share of profit." The lattei.
is really what we call surplus, the difference between total
output and the socially necessary costs of producing total out..:1
put. Under certain assumptions this will be equal to aggregate.
profits; but, as already noted, in the actual economy of monop~:
oly capitalism only part of the difference between output and.
costs of production appears as profits. In part, therefore•.
Kaldor's argument results f1·om a conceptual confusion.
But there is a second, even more important, flaw in his argu~:
ment. The process which he describes as ''the share of profit ...:
[going] on rising beyond the point where it covers investment'.'
needs and the consumption of capitalists'' is by its very natur~
self-limiting and cannot appear in the statistics as an actual\
continuing increase of profits as a share of total income. Keyne81:
and his followers, including Kaldor himself, have driven home
the point that profits which are neither invested nor consumed:.
are no profits at all. It may be legitimate to speak of the1
. -
potential profits which would be reaped if there were more
investment and capitalists' consumption, but such potential)
profits cannot be traced in the statistical record or rather they\
leave their traces in the statistical record in the paradoxical~
form of unemployment and excess capacity. If Kaldor had.:
looked in the American statistics for such indicators of a rising;
tendency of profits, his search would not have been in vain.,{
After all, the ''extraordinary severity and duration of the de-i
pression of the 1930's'' was hardly an accident, and the persist-,
ent rise in the unemployment rate in recent years lends strong~·
support to the view that the problem of realizing surplus value_:,
is indeed more chronic today than it was in Marx's time. The>
truth would seem to be that except in war and periods of war-'
related prosperity stagnation is now the normal state of the/
United States economy. 27
One final objection to the theory of rising st1rplus can be'
dealt with more briefly, namely, that labor unions are now
27
These are central themes of the next four chapters.
•
c TENDENCY OF SURPLUS TO RISE 77
.. Tll"'
ng enough to capture for their members increments in
stro . . . . d
rofits resulting from the combination of declining costs an
~onopoly pricing. This is the position ta~en,_ for exam?l~, by
John Strachey in his Contemporary Capitalism, and It IS of
ourse a common view in the labor movement.
c Unions certainly do play an important role in the determina-
tion of money wages, and the workers in more strongly organ-
. ized industries generally do better for themselves than workers
in less strongly organized branches of the economy. Thi~ ~oes
not mean, however, that the working class as a whole is In a
position to encroach on surplus or even to capture ~nc~ements
of surplus which, if realized, would benefit the cap1talist class
relative to the working class. 28 The reason is that under mo-
nopoly capitalism employers can and do pass ~n higher labor
costs in the form of higher prices. They are, in other words,
able to protect their profit margins in the face of higher wages
(and fringe benefits). I11 many cases in recent years, indeed,
they have been able to weave wage increases into their monop-
olistic pricing policies in such a way as to achieve a prompter
and closer approach to the theoretical monopoly price than
would otherwise have been possible. For the steel industry,
this was convincingly documented by the Kefauver Committee
in its hearings and more particularly in its important report on
the pricing practices of the big steel corporations; 29 and th~re
is no reason to assume that the experience of steel in the mid-
1950's is unique. And, whether or not it is common practice to
If trnions have the power which Strachey attributes ~o them, it is
28
not clear why they should be satisfied to pursue a policy of . merely
pre~enting capitalists from appropriating a larger share _of to~al 1~come,
which is \vhat Strachey claims they have succeeded 1n d?1n? 1n the
' hundred years or so• since Marx formulated his theory of cap1tal1sm. One
\Vould rather expejt them to capture a steadily i?creasi~g sh~re for the
Workers. That they have not done so is surely przma facie evidence that
' the~ do not in fact have any decisive influence over. the class dis~ribut~on
. of income but that this is determined by a combination of forces 1n which
the actions and policies of the corporations play a far more important
rol~ than those of unions.
Administered Prices: Steel.