,B>AN & ,SWEEZY'S 0,MONOPOLY ,CAPITAL0 

,PEOPLE 3 

,AU?OR 3 ,PAUL ,MATTICK 

,TEXT 3 

,S\RCE3 ,ANTI-,BOL%EVIK ,COMMUNISM BY ,PAUL ,MATTICK1 PUBLI%$ BY ,M]L9 ,PRESS1 #a#i#g#h2 
,TRANSCRIB$3 BY ,&Y ,BLUND51 = M>XI/S4ORG #b#c4 

,! AU?ORS ( ,MONOPOLY ,CAPITAL1.<#a.> ,PAUL ,A4 ,B>AN & ,PAUL ,M4 ,SWEEZY1 ATTEMPT TO OV]COME 
0! /AGNATION ( ,M>XIAN SOCIAL SCI5CE0 BY %IFT+ ! FOCUS ( 
ATT5TION FROM COMPETITIVE TO MONOPOLY CAPITAL4 ,! ,M>XIAN ANALYSIS ( 
CAPITALISM1 !Y SAY1 0/ILL RE/S ON ! ASSUMPTION ( A COMPETITIVE 
ECONOMY01 :I* HAS1 H[EV]1 9 ! MEANTIME1 UND]GONE A QUALITATIVE 
*ANGE BY TURN+ 9TO MONOPOLY CAPITALISM4 ,M>X1 ! AU?ORS RELATE1 
0TREAT$ MONOPOLIES NOT AS ESS5TIAL ELEM5TS ( CAPITALISM BUT RA!R AS 
REMNANTS ( ! FEUDAL M]CANTILI/ PA/ :I* HAD TO BE AB/RACT$ FROM 9 
ORD] TO ATTA9 ! CLE>E/ POSSIBLE VIEW ( ! BASIC /RUCTURE & 
T5D5CIES ( CAPITALISM0 7P4#d74 ,!IR [N BOOK TRIES TO REM$Y ?IS 
SITUATION & TO DO SO BY US+ ,M>X'S [N 0P[]FUL ANALYTICAL 
ME?OD04 

,M>X'S ANALYSIS ( CAPITALI/ DEVELOPM5T IS BAS$ ON ! LABOR 
!ORY ( VALUE & SURPLUS-VALUE4 ,H[EV]1 M>KET RELATIONS1 ,B>AN & ,SWEEZY 
PO9T \T1 0>E ESS5TIALLY PRICE RELATIONS0 & 9 !IR VIEW 
0! /UDY ( MONOPOLY CAPITALISM1 LIKE ?AT ( COMPETITIVE CAPITALISM1 
MU/ BEG9 ) ! WORK+S ( ! PRICE ME*ANISM0 7P4#e#c74 ,= ,M>X1 
PRICE RELATIONS D]IVE FROM VALUE RELATIONS & ! /UDY ( CAPITALISM MU/ 
!RE=E BEG9 ) VALUE RELATIONS4 ,! VALUE ANALYSIS ( CAPITALISM 
DISREG>DS COMPETITION1 = 9 ! SOCIAL AGGREGATE ALL PRICES EQUATE ) 
TOTAL VALUE4 ,CONTR>Y TO :AT ,B>AN & ,SWEEZY SAY1 ! ,M>XIAN ANALYSIS DOES 
NOT RE/ ON ! ASSUMPTION ( COMPETITIVE CAPITALISM BUT ON ! AB/RACT 
CONCEPT ( TOTAL CAPITAL4 ,IF ?IS CONCEPT IS AT ALL VALID1 IT IS SO REG>DLESS 
( :E!R ! ACTUAL CAPITAL /RUCTURE IS COMPETITIVE1 MONOPOLI/IC OR 
BO?4 

,M>X LIV$ 9 A HI<LY COMPETITIVE CAPITALISM1 TO BE SURE1 & HE KNEW ?AT 
PRICES1 NOT VALUES1 DET]M9E M>KET EV5TS -- EV5 ?\< M>KET EV5TS 
>E !MSELVES CIRCUMSCRIB$ BY ! SOCIAL RELATIONS AS VALUE RELATIONS4 ,! 
DESCRIPTIVE P>TS ( ,CAPITAL REF] TO CAPITAL COMPETITION & TO 
! ELIM9ATION ( COMPETITION BY WAY ( COMPETITION1 I4E4 TO ! 
C5TRALIZATION & CONC5TRATION ( CAPITAL4 ,:AT ,B>AN & ,SWEEZY MI<T 
POSSIBLY MEAN BY !IR ASS]TION ?AT ,M>X NEGLECT$ MONOPOLY -- I4E4 
ADM9I/]$ 9/EAD ( COMPETITIVE PRICES1 & A T5D5CY T[>D /AGNATION 
RA!R ?AN EXPANSION -- IS ?AT ,M>X DID NOT USE ! T]M 
MONOPOLY 9 ITS B\RGEOIS S5SE 9 OPPOSITION TO COMPETITION4 ,HIS 
!ORY ( CAPITAL COMPETITION IS AT ! SAME TIME A !ORY ( MONOPOLY1 & 
MONOPOLY1 9 ?IS S5SE1 ALWAYS REMA9S COMPETITIVE1 = A NONCOMPETITIVE 
MONOPOLY CAPITALISM IMPLIES ! 5D ( M>KET RELATIONS SU* AS SU/A9 
PRIVATE-PROP]TY CAPITALISM4 

,( C\RSE1 DUR+ CAPITALISM'S HEYDAY !RE IS MORE COMPETITION ?AN 
DUR+ ITS E>LY OR LATE /AGES4 0,:5 CAPITAL IS /ILL WEAK10 ,M>X 
PO9T$ \T1 0'IT T5DS TO LEAN ON ! CRUT*ES ( PA/ MODES ( 
PRODUCTION4 ,AS SOON AS CAPITAL FEELS ITSELF /RONG1 H[EV]1 ! CRUT*ES >E 
?R[N AWAY & CAPITALISM MOVES 9 ACCORDANCE ) ITS [N LAWS ( MOTION4 ,BUT 
AS SOON AS IT BEG9S TO FEEL ITSELF AS A B>RI] TO FUR!R DEVELOPM5T & IS 
RECOGNIZ$ AS SU*1 IT ADAPTS =MS ( BEHAVIOR ?R\< ! H>NESS+ ( 
COMPETITION :I* SEEM+LY 9DICATE ITS ABSOLUTE RULE BUT ACTUALLY PO9T TO 
ITS DECAY & DISSOLUTION40.<#b.> ,9 O!R WORDS1 ! 
PREVAL5CE ( MONOPOLY *>ACT]IZES ! 9FANTILE & ! S5ILE /AGES ( 
CAPITAL DEVELOPM5T4 ,APPE>ANCES TO ! CONTR>Y NOT)/&+1 :51 9/EAD 
( BE+ A =M ( COMPETITION1 MONOPOLY ELIM9ATES COMPETITION1 CAPITALISM 
F9DS ITSELF ON ! WAY \T4 

,= ,B>AN & ,SWEEZY1 ! ASS]T$ 'FUNDAM5TAL /RUCTURAL 
*ANGE' FROM COMPETITIVE TO MONOPOLY CAPITALISM DEM&S AN ALT]ATION 9 
! LAWS D]IV$ FROM ,M>X'S 'COMPETITIVE MODEL'1 AS1 = 
9/ANCE1 ?AT ( ! FALL+ RATE ( PR(IT4 ,BUT1 TO REPEAT1 ! ,M>XIAN MODEL 
( CAPITAL =MATION & ITS CONSEQU5CES IS BAS$ NOT ON COMPETITION BUT ON 
! APPLICATION ( ! LABOR !ORY ( VALUE TO ! ACCUMULATION PROCESS4 
,AL?\< CAPITAL ACCUMULATION IS ACTUALLY A COMPETITIVE PROCESS1 ! FALL+ 
RATE ( PR(IT DOES NOT DEP5D ON COMPETITION BUT ON ! %IFT+ VALUE 
RELATIONS ( CAPITAL EXPANSION4 

,TO RECALL ?IS LAW3 ACCORD+ TO ,M>X1 CAPITAL 9VE/$ 9 MEANS ( 
PRODUCTION ADVANCES RELATIVELY FA/] ?AN CAPITAL 9VE/$ 9 LABOR-P[]4 
,BECAUSE SURPLUS-VALUE IS SURPLUS-LABOR TIME1 ! R$UCTION ( LABOR TIME 
RELATIVE TO ! GR[+ MASS ( UNPRODUCTIVE CAPITAL LEADS TO A FALL ( ! 
RATE ( PR(IT1 S9CE ?IS RATE IS 'MEASUR$' ON TOTAL CAPITAL1 
I4E4 ON BO? ! CAPITAL 9VE/$ 9 MEANS ( PRODUCTION1 OR CON/ANT CAPITAL1 
& ?AT 9VE/$ 9 LABOR-P[]1 OR V>IABLE CAPITAL4 

,! T5D5TIAL FALL ( ! RATE ( PR(IT IS JU/ ANO!R EXPRESSION = ! 
ACCUMULATION ( CAPITAL & ! 9CREAS+ PRODUCTIVITY ( LABOR4 

,M>X SPEAKS ( A T5D5CY ( RATES ( PR(IT TO FALL BECAUSE ! 
SAME CAUSES 0:I* BR+ AB\T AN ABSOLUTE DECREASE ( SURPLUS-VALUE & 
PR(IT ON A GIV5 CAPITAL1 & CONSEQU5TLY 9 ! P]C5TAGE ( ! 
RATE ( PR(IT1 PRODUCE AN 9CREASE ( ! ABSOLUTE MASS ( SURPLUS-VALUE & 
PR(IT APPROPRIAT$ BY ! TOTAL CAPITAL40.<#c.> ,?IS IS 
SO1 BECAUSE 0:ILE ANY ALIQUOT P>T1 ANY HUNDR$ ( ! SOCIAL CAPITAL1 
ANY HUNDR$ ( AV]AGE SOCIAL COMPOSITION1 IS A GIV5 MAGNITUDE1 = :I* A 
FALL 9 ! RATE ( PR(IT IMPLIES A FALL 9 ! ABSOLUTE MAGNITUDE ( PR(IT 
JU/ BECAUSE ! CAPITAL :I* S]VES AS A /&>D ( MEASUREM5T IS A 
CON/ANT MAGNITUDE1 ! MAGNITUDE ( ! SOCIAL CAPITAL1 ON ! O!R H&1 AS 
WELL AS ?AT ( ! CAPITAL 9 ! H&S ( ! 9DIVIDUAL CAPITALI/S 444 
V>IES 9V]SELY TO ! DECREASE ( ITS V>IABLE PORTION40.<#d.> 

,NOT)/&+ ! T5D5TIAL FALL ( ! RATE ( PR(IT 0!RE MAY 
BE AN ABSOLUTE 9CREASE 9 ! NUMB] ( LABOR]S EMPLOY$ BY CAPITAL 444 AN 
ABSOLUTE 9CREASE ( ! MASS ( SURPLUS-VALUE ABSORB$1 & CONSEQU5TLY AN 
ABSOLUTE 9CREASE 9 ! MASS ( ! PRODUC$ PR(IT4 ,& ?IS 9CREASE MAY BE 
PROGRESSIVE4 ,& IT MAY NOT ONLY BE SO4 ,ON ! BASIS ( CAPITALI/ PRODUCTION1 
IT MU/ BE SO1 ASIDE FROM TEMPOR>Y FLUCTUATIONS04.<#e.> ,ALL ?AT ?IS REQUIRES IS ?AT 0CAPITAL GR[S AT A 
FA/] RATE ?AN ! RATE ( PR(IT FALLS04.<#f.> ,IT IS 
! ACCUMULATION PROCESS ITSELF :I* NULLIFIES ! IMM$IATE PRACTICAL 
IMPORTANCE ( ! DECL9+ RATE ( PR(IT4 

,ACCORD+ TO ,M>X1 H[EV]1 ACCUMULATION IS *>ACT]IZ$ BY3 0,FIR/1 
! 9CREASE ( SURPLUS-LABOR1 ?AT IS1 ! R$UCTION ( ! NECESS>Y LABOR 
TIME REQUIR$ = ! REPRODUCTION ( LABOR-P[]2 SECONDLY1 ! DECREASE ( 
! LABOR-P[] 7! NUMB] ( WORK]S7 EMPLOY$ 9 G5]AL = ! PURPOSE ( 
SETT+ 9 MOTION A GIV5 CAPITAL40.<#g.> ,!SE 
OCCURR5CES >E MUTUALLY CONDITION$ BY ONE ANO!R & AFFECT ! RATE ( 
PR(IT 9 OPPOSITE WAYS4 ,:ILE ! RATE ( SURPLUS-VALUE RISES 9 ONE 
DIRECTION1 ! NUMB] ( LABOR]S FALLS 9 ! OPPOSITE DIRECTION4 0,TO 
! EXT5T ?AT ! DEVELOPM5T ( ! PRODUCTIVE P[]S R$UCES ! PAID 
PORTION ( ! EMPLOY$ LABOR1 IT RAISES ! SURPLUS-VALUE BY RAIS+ ITS 
RATE2 BUT TO ! EXT5T ?AT IT R$UCES ! TOTAL MASS ( LABOR EMPLOY$ BY A 
C]TA9 CAPITAL1 IT R$UCES ! FACTOR ( NUMB]S ) :I* ! RATE ( 
SURPLUS-VALUE IS MULTIPLI$ 9 ORD] TO CALCULATE ITS MASS40.<#h.> 

,& ?US1 :ILE ! FALL ( ! RATE ( PR(IT IS *ECK$ BY ACCUMULATION IT 
CANNOT 5TIRELY BE PREV5T$1 = !RE >E DEF9ITE LIMITS BEYOND :I* ! 
ABSOLUTE LABOR-TIME CANNOT BE EXT5D$ & ! NECESS>Y LABOR-TIME1 I4E4 ! 
LABOR-TIME FALL+ TO ! WORK]S1 

CANNOT BE ANY FUR!R %ORT5$ 9 FAVOR ( SURPLUS-LABOR TIME4 ,TO SPEAK 
9 EXTREMES3 ! ABSOLUTE WORK+-TIME DUR+ ANY ONE DAY CANNOT EXCE$ #bd 
H\RS1 & ! NECESS>Y LABOR-TIME CANNOT BE R$UC$ TO Z]O4 ,! 
COMP5SATION ( ! RELATIVE R$UCTION 9 ! NUMB] ( WORK]S BY !IR 
9CREAS$ EXPLOITATION CANNOT GO ON '=EV]'4 ,:ATEV] ! MASS ( 
LABOR-P[] 9 ! REAL CAPITALI/ WORLD1 9 RELATION TO ! PROGRESSIVELY 
FA/] GR[+ CON/ANT CAPITAL IT MU/ BECOME A DIM9I%+ QUANTITY4 ,?\<T 
\T TO ITS 'LOGICAL 5D'1 A CONT9U\SLY ACCEL]AT+ CAPITAL 
EXPANSION WILL *ANGE ! LAT5T DECL9E ( ! RATE ( PR(IT 9TO ITS ACTUAL 
DECL9E BECAUSE ( A LACK ( SURPLUS-VALUE ) RESPECT TO ! SWOLL5 MASS ( 
TOTAL CAPITAL4 ,AT SU* A PO9T1 REALITY W\LD CORRESPOND TO ,M>X'S 
MODEL ( CAPITAL ACCUMULATION4 

,!RE IS A PO9T ( ACCUMULATION :]E ! DECREAS$ V>IABLE CAPITAL CANNOT 
F9D COMP5SATION 9 AN 9CREASE ( SURPLUS-VALUE L>GE 5\< TO YIELD 
SUFFICI5T PR(ITS ON TOTAL CAPITAL4 ,AT ?IS PO9T ! RATE ( PR(IT FALLS 
BEL[ :AT IS NECESS>Y TO CONT9UE ! EXPANSION PROCESS4 ,! >RIVAL ( ?IS 
PO9T 9 CONCRETE REALITY IS NOT PR$ICTABLE1 BUT ! T5D5CY 9 ?IS 
DIRECTION EXPLA9S = ,M>X ! RECURR5T CRISES & ! 9CREAS+ DIFFICULTY 
( OV]COM+ P]IODS ( CAPITAL /AGNATION ?R\< *ANGES 9 ! CONDITIONS 
( PRODUCTION :I* RAISE ! RATE ( SURPLUS-VALUE4 ,H[EV]1 AS LONG AS 
CAPITAL ACCUMULATES IT DOES SO BECAUSE IT IS /ILL ABLE TO 9CREASE ! MASS ( 
SURPLUS-VALUE4 ,UND] SU* CONDITIONS !RE IS NO PO9T 9 REJECT+ ! !ORY 
( ! FALL+ RATE ( PR(IT BECAUSE ( AN OBS]VABLE 9CREASE 9 ! MASS ( 
SURPLUS-VALUE2 ?IS DOES NOT AFFECT ,M>X'S !ORY4 

,B>AN & ,SWEEZY ?9K IT NECESS>Y TO SUB/ITUTE 0! LAW ( 
RIS+ SURPLUS = ! LAW ( FALL+ PR(IT01 APP>5TLY UNAW>E ( ! 
FACT ?AT = ,M>X1 TOO1 & = ALL PRACTICAL PURPOSES1 A RIS+ SURPLUS-VALUE 
CANCELS ! ACTUAL FALL ( ! RATE ( PR(IT4 ,BY 5GAG+ 9 ?IS SUP]FLU\S 
TASK1 ,B>AN & ,SWEEZY SAY !Y >E NOT 0REJECT+ OR REVIS+ A 
TIME-HONOR$ !OREM ( POLITICAL ECONOMY01 BUT >E SIMPLY 0TAK+ 
ACC\NT ( ! UND\BT$ FACT ?AT ! /RUCTURE ( ! CAPITALI/ ECONOMY HAS 
UND]GONE A FUNDAM5TAL *ANGE S9CE ?IS !OREM WAS =MULAT$0 7P4#g#b74 
,= !M1 ! M]E '*ANGE' FROM COMPETITION TO MONOPOLY SUFFIC$ 
TO SET ASIDE ,M>X'S IMMAN5T LAW ( CAPITAL EXPANSION4 ,! 
'PRO(' = ?IS ASS]TION IS ! APP>5T ABUNDANCE ( 
SURPLUS-VALUE 9 ! ,UNIT$ ,/ATES4 ,ASSUM+1 = ! MOM5T1 ?AT ,B>AN & 
,SWEEZY >E RI<T1 !Y W\LD /ILL ONLY REPEAT :AT ,M>X HIMSELF PO9T$ \T1 
NAMELY1 ?AT A SUFFICI5T RATE ( EXPLOITATION TEMPOR>ILY B>S ! FALL ( ! 
RATE ( PR(IT4 

,B>AN & ,SWEEZY NOT ONLY SUB/ITUTE 0! LAW ( RIS+ SURPLUS = 
! LAW ( FALL+ PR(IT01 BUT ALSO SURPLUS = SURPLUS-VALUE4 0,WE 
PREF] ! CONCEPT 'SURPLUS' TO ! TRADITIONAL ,M>XIAN 
'SURPLUS-VALUE'10 !Y SAY1 0S9CE ! LATT] IS 
PROBABLY ID5TIFI$ 9 ! M9DS ( MO/ PEOPLE FAMILI> ) ,M>XIAN ECONOMIC 
!ORY AS EQUAL TO ! SUM ( PR(IT-9T]E/-R5T40 ,IT IS TRUE1 !Y 
CONT9UE1 0?AT ,M>X DEMON/RATES ?AT SURPLUS-VALUE ALSO COMPRISES O!R 
ITEMS SU* AS ! REV5UES ( /ATE & *UR*1 ! EXP5SE ( TRANS=M+ 
COMMODITIES 9TO MONEY1 & ! WAGES ( UNPRODUCTIVE WORK]S4 ,9 G5]AL1 
H[EV]1 HE TREAT$ !SE AS SECOND>Y FACTORS & EXCLUD$ !M FROM HIS BASIC 
!ORETICAL S*EMA0 7P4#a74 ,ACCORD+ TO ,B>AN & ,SWEEZY1 SU* 
0PROC$URE IS NO LONG] JU/IFI$01 & !Y EXPRESS ! HOPE ?AT 
!IR *ANGE ( T]M9OLOGY1 ! SUB/ITUTION ( SURPLUS = SURPLUS-VALUE 
0WILL HELP AFFECT ! NE$$ %IFT 9 !ORETICAL POSITION0 7P4 
#a74 

,BECAUSE = ,M>X 0! RELATION BETWE5 WAGE-LABOR & CAPITAL 
DET]M9ES ! 5TIRE *>ACT] ( ! CAPITALI/ MODE ( PRODUCTION01.<#i.> HIS CAPITAL ANALYSIS IS 9 T]MS ( VALUE & SURPLUS-VALUE4 
,EV5 ! DIVISION ( SURPLUS-VALUE 9TO PR(IT1 9T]E/ & R5T DISAPPE>S 9 
HIS VALUE ANALYSIS4 ,! BE/ PO9TS 9 ,CAPITAL1 ,M>X WROTE TO 
,5GELS1 0>E #a7 ! TW(OLD *>ACT] ( LABOR1 ACCORD+ TO :E!R IT 
IS EXPRESS$ 9 USE-VALUE OR EX*ANGE-VALUE 7ALL UND]/&+ ( ! FACTS 
DEP5DS UPON ?IS72 & #b7 ! TREATM5T ( SURPLUS-VALUE 9DEP5D5TLY ( ITS 
P>TICUL> =M ( PR(IT1 9T]E/1 GR\ND R5T1 ETC40.<#a.> ,BY OBS]V+ ! RELATION ( SURPLUS-VALUE TO TOTAL 
CAPITAL1 ,M>X SUCCE$$ :]E ,RIC>DO HAD FAIL$1 NAMELY1 9 RECOGNIZ+ 9 ! 
FALL+ RATE ( PR(IT AN IMMAN5T LAW ( CAPITAL ACCUMULATION2 A LAW1 :I* 
= ,M>X1 0WAS ! MO/ IMPORTANT ( POLITICAL ECONOMY040 ,IF 
!RE IS NO PO9T 9 CONSID]+ 9T]E/ & R5T 9 ! VALUE ANALYSIS ( 
CAPITAL DEVELOPM5T1 !RE IS EV5 LESS 9 CONSID]+ ! ADDITIONAL ITEMS 
5UM]AT$ BY ,B>AN & ,SWEEZY 9TO :I* SURPLUS-VALUE IS DIVID$ 9 
CAPITALI/ SOCIETY -- EXCEPT ?AT ?IS DI/RIBUTION WILL AFFECT ! RATE 
( ACCUMULATION 9 CASE TOO MU* SURPLUS-VALUE IS CONSUM$ 9/EAD ( BE+ 
CAPITALIZ$4 

,EV5 9 ,B>AN & ,SWEEZY'S DEF9ITION ( SURPLUS AS CON/ITUT+ 
0! DIFF]5CE BETWE5 :AT SOCIETY PRODUCES & ! CO/S ( PRODUC+ 
IT01 7P4#i7 WE /ILL HAVE ONLY VALUE & SURPLUS-VALUE4 ,IF SURPLUS-VALUE 
IS N[ SIMPLY CALL$ 'SURPLUS' BY ,B>AN & ,SWEEZY1 IT IS BECAUSE 
09 ! ACTUAL ECONOMY ( MONOPOLY CAPITALISM ONLY P>T ( ! DIFF]5CE 
BETWE5 \TPUT & CO/ ( PRODUCTION APPE>S AS PR(IT0 7P4#g#f74 ,BUT ?IS 
WAS EQUALLY TRUE = COMPETITIVE CAPITALISM4 ,! SUB/ITUTION HAS BE5 MADE 
BECAUSE ,B>AN & ,SWEEZY HAVE SWIT*$ FROM ,M>XIAN TO B\RGEOIS ECONOMIC 
ANALYSIS1 :I* DOES NOT OP]ATE ) CLASS T]MS SU* AS VALUE & 
SURPLUS-VALUE BUT ) ! AMALGAM NATIONAL 9COME1 ! CONCEPT ( 
'EFFECTIVE DEM&'1 & ! ,KEYNESIAN REM$IES = CAPITAL 
/AGNATION4 ,IT W\LD 9DE$ BE A /RANGE K9D ( ',M>XISM' :I* 
PAID MORE ATT5TION TO ! DI/RIBUTION ( SURPLUS-VALUE AMONG ! CAPITALI/S 
& !IR RETA9]S ?AN TO ! DIVISION ( ! SOCIAL PRODUCT BETWE5 LABOR 
& CAPITAL4 ,BUT IF !RE IS JU/ 9COME & JU/ 'SURPLUS' 9/EAD 
( SURPLUS-VALUE1 !RE IS ( C\RSE NO FALL+ RATE ( PR(IT AS A CONSEQU5CE 
( ! VALUE RELATIONS ( CAPITAL PRODUCTION & NO IMMAN5T B>RI] TO PR(IT 
PRODUCTION4 ,IF !RE IS /AGNATION NONE!LESS1 IT IS DUE NOT TO ! PRODUCTION 
RELATIONS AS CAPITAL-LABOR RELATIONS1 BUT TO SOME?+ ELSE &1 9 
,B>AN'S & ,SWEEZY'S VIEW1 TO ! MONOPOLY /RUCTURE ( PRES5T-DAY 
CAPITALISM4 

,9 ,B>AN'S & ,SWEEZY'S VIEW1 ! DIFFICULTIES ( MONOPOLY 
CAPITAL >E CAUS$ NOT BY A LACK ( PR(IT BUT BY AN UNABSORBABLE 
'SURPLUS'4 ,! MAGNITUDE ( ! 'SURPLUS' 9 ! ,UNIT$ 
,/ATES1 !Y PO9T \T ) ! AID ( ,JOSEPH ,D4 ,PHILLIPS1 0AM\NT$ TO 
#d#f4#i P] C5T ( ,GROSS ,NATIONAL ,PRODUCT 9 #aibi & REA*$ #e#f4#a P] C5T 9 
#a#i#f#c4 ,BUT ! PORTION ( ! SURPLUS :I* IS USUALLY ID5TIFI$ ) 
SURPLUS-VALUE1 I4E4 PR(IT1 9T]E/ & R5T1 DECL9$ %>PLY 9 ! SAME 
P]IOD4 ,9 #aibi ?IS PROP]TY-9COME WAS #e#g4#e P] C5T ( TOTAL SURPLUS1 & 9 
#aifc IT WAS ONLY #c#a4#i P] C5T40 9 VIEW ( !SE FACTS1 ,B>AN & ,SWEEZY 
?9K ?AT 0NOT ONLY ! =CES DET]M9+ ! TOTAL AM\NT ( SURPLUS 
NE$ TO BE ANALYZ$ BUT ALSO ?OSE GOV]N+ ITS DIFF]5TIATIONS & ! 
V>Y+ RATES ( GR[? ( ! COMPON5TS0 7P4 #a#a74 

,:ATEV] !SE /ATI/ICS MAY BE WOR?1 & !Y >E ADMITT$LY NOT WOR? 
MU*1 !Y DO NOT RELATE TO ! ,M>XIAN PROBLEM ( ! DET]M9ATION ( ! 
RATE ( PR(IT1 BUT TO ! CAPITALI/ PROBLEM ( ! DIVISION ( RECORD$ 
9COME -- O!R ?AN WAGES -- AMONG ! V>I\S 9T]E/ GR\PS 
LIV+ ON ! SURPLUS-PRODUCT4 ,!Y SIMPLY TELL US :AT IS OBVI\S1 NAMELY1 
?AT 9 A FEW CAPITALI/ NATIONS ! PRODUCTIVITY ( LABOR HAS 5ORM\SLY 
9CREAS$ 9 ORD] TO ALL[ = A GREAT AM\NT ( WA/E-PRODUCTION AS WELL AS 
= HI<] LIV+ /&>DS EV5 UND] CONDITIONS ( RELATIVE CAPITAL 
/AGNATION4 ,!Y ALSO 9DICATE ?AT GOV]NM5T REQUIRES & RECEIVES AN EV] 
GREAT] %>E ( ! ,GROSS ,NATIONAL ,PRODUCT4 ,APP>5TLY1 ALL IS WELL ) 
CAPITALI/ SOCIETY AS F> AS ! RATE ( EXPLOITATION IS CONC]N$4 ,ONLY ! 
UTILIZATION ( ! 'SURPLUS' PROVIDES DIFFICULTIES & REQUIRES 
SU* OBNOXI\S ITEMS AS ADV]TIS+1 GOV]NM5T EXPANSION1 >MAM5TS1 
IMP]IALISM & W>4 

,LOOK$ AT FROM ,M>X'S !ORY ( ! FALL+ RATE ( PR(IT1 ,B>AN & 
,SWEEZY WRITE1 0! B>RI]S ( CAPITALI/ EXPANSION APPE>$ TO LIE MORE 
9 A %ORTAGE ( SURPLUS TO MA9TA9 ! MOM5TUM ( ACCUMULATION ?AN 9 ANY 
9SUFFICI5CY 9 ! *>ACT]I/IC MODES ( SURPLUS UTILIZATION0 7P4#a#c74 
,BUT UND] MONOPOLY CAPITALISM & 0) ! LAW ( RIS+ SURPLUS 
REPLAC+ ! LAW ( ! FALL+ T5D5CY ( ! RATE ( PR(IT1 & ) ! 
NORMAL MODES ( SURPLUS UTILIZATION PAT5TLY UNABLE TO ABSORB A RIS+ SURPLUS1 
! QUE/ION ( O!R MODES ( SURPLUS UTILIZATION ASSUMES CRUCIAL 
IMPORTANCE0 7P4 #a#a#d74 

,ACCORD+ TO ,B>AN & ,SWEEZY1 ! NORMAL MODES ( SURPLUS UTILIZATION >E 
CAPITALI/ CONSUMPTION & 9VE/M5T -- AUGM5T$ BY UNAVOIDABLE EXP5SES 
( ! CIRCULATION PROCESS & BY NECESS>Y BUT UNPRODUCTIVE ACTIVITIES4 ,9 
MONOPOLY CAPITALISM1 H[EV]1 !SE NORMAL MODES ( SURPLUS UTILIZATION NO 
LONG] SUFFICE BECAUSE PRODUCTION \TRUNS ! EFFECTIVE DEM&4 ,& S9CE 
'SURPLUS' CAN NO LONG] BE ABSORB$ IT WILL NOT BE PRODUC$4 ,! 
NORMAL /ATE ( MONOPOLY CAPITAL IS ?US /AGNATION4 0,) A GIV5 /OCK 
( CAPITAL & A GIV5 CO/ & PRICE /RUCTURE1 ! SY/EM'S OP]AT+ 
RATES CANNOT RISE ABOVE ! PO9T AT :I* ! AM\NT ( SURPLUS PRODUC$ CAN 
F9D ! NECESS>Y \TLETS4 ,& ?IS MEANS UND]-UTILIZATION ( AVAILABLE HUMAN 
& MAT]IAL RES\RCES4 ,OR TO PUT ! PO9T 9 SLI<TLY DIFF]5T T]MS1 ! 
SY/EM MU/ OP]ATE AT A PO9T L[ 5\< ON ITS PR(ITABILITY S*$ULE NOT TO 
G5]ATE MORE SURPLUS ?AN CAN BE ABSORB$0 7P4#a#h74 ,:AT ,B>AN & 
,SWEEZY HAVE ?US F> SAID IS ?AT IT DOES NOT PAY 'MONOPOLY 
CAPITAL' TO 9CREASE PRODUCTION BEYOND ! PO9T :]E IT CEASES TO BE 
PR(ITABLE4 ,?IS WAS EQUALLY TRUE = 'COMPETITIVE CAPITALISM'1 AS 
! RECURR5T P]IODS ( DEPRESSION TE/IFY4 ,ONLY1 :AT US$ TO BE A P]IOD ( 
/AGNATION )9 ! BUS9ESS CYCLE HAS SEEM+LY BECOME ! NORMAL /ATE ( 
AFFAIRS4 ,BECAUSE P]IODS ( /AGNATION >E CRISIS CONDITIONS1 ONE C\LD SAY 
?AT ! TEMPOR>Y CRISIS HAS BECOME P]MAN5T4 

,! UNABSORBABLE 'SURPLUS'1 ( :I* ,B>AN & ,SWEEZY SPEAK1 
DOES NOT REALLY EXI/ BECAUSE PRODUCTION /OPS AT ! PO9T ( LOSS ( 
PR(ITABILITY4 ,9/EAD1 !RE >E UNUS$ HUMAN & MAT]IAL RES\RCES4 ,IT IS1 
!N1 NOT AN ACTUAL 'SURPLUS' :I* TR\BLES MONOPOLY CAPITAL BUT 
M]ELY A POT5TIAL SURPLUS1 :I* C\LD BE1 BUT IS NOT1 PRODUC$4 ,MONOPOLY 
CAPITAL1 ,B>AN & ,SWEEZY WRITE1 0LEFT TO ITSELF1 ?AT IS TO SAY1 9 ! 
ABS5CE ( C\NT]ACT+ =CES :I* >E NO P>T ( :AT MAY BE CALL$ ! 
'ELEM5T>Y LOGIC' ( ! SY/EM1 W\LD S9K DEEP] & DEEP] 9TO 
A BOG ( ECONOMIC DEPRESSION0 7P4#a#h74 ,& ON ! BASIS ( !IR !ORY 
IT C\LD NOT BE O!RWISE1 = IF MONOPOLY CAPITAL IS NO LONG] ABLE TO 
'ABSORB' ! 'SURPLUS' IT IS CAPABLE ( PRODUC+1 ANY 
FUR!R 9CREASE 9 ! PRODUCTIVITY ( LABOR1 :I* W\LD 5L>GE ! 
'SURPLUS' /ILL FUR!R1 W\LD =CE MONOPOLY CAPITAL 9TO /ILL 
MORE EXT5SIVE RE/RICTIONS ( PRODUCTION4 ,) ! RESULTANT GR[? ( IDLE 
RES\RCES1 CAPITAL ACCUMULATION1 ?AT IS1 ! CAPITALI/ MODE ( PRODUCTION1 
W\LD COME TO AN 5D4 

,= ALL PRACTICAL PURPOSES IT IS QUITE IMMAT]IAL :E!R A LACK ( 
EFFECTIVE DEM& IS MADE TO EXPLA9 A RE/RICTION ( PRODUCTION1 OR A LACK ( 
PR(ITABILITY IS SE5 AS ! CAUSE = A RE/RICTION ( PRODUCTION & A 
CONSEQU5T LACK ( EFFECTIVE DEM&4 ,9 ! ONE CASE ! PROBLEM IS APPROA*$ 
FROM ! M>KET ANGLE & 9 ! O!R FROM ?AT ( PRODUCTION1 BUT 9 BO? 
!RE IS RE/RICTION ( PRODUCTION4 ,9 ANY CASE1 IT IS ONLY UND] CONDITIONS ( 
RAPID CAPITAL ACCUMULATION ?AT DEM& EXP&S SUFFICI5TLY TO 5ABLE ! 
REALIZATION & CAPITALIZATION ( SURPLUS-VALUE4 

,BECAUSE PRODUCTIVITY 9CREASES EV5 9 ! ABS5CE ( ACCUMULATION1 IT IS 
QUITE 9DEP5D5T ( ! PRODUCTION PROCESS AS A CAPITAL-EXPANSION PROCESS4 
,) ACCUMULATION A GO+ CONC]N1 H[EV]1 ! 9CREAS+ PRODUCTIVITY ( 
LABOR GOES H& 9 H& ) ! VALUE-EXPANSION ( CAPITAL4 ,CON/ANT & 
V>IABLE CAPITAL 9 !IR VALUE =M >E 9EXTRICABLY 9T]TW9$ ) ! 
MAT]IAL CONDITIONS ( PRODUCTION1 I4E4 ! MEANS ( PRODUCTION & LABOR 
P[]4 ,M>X DI/+UI%$ BETWE5 ! VALUE COMPOSITION & ! MAT]IAL 
7TE*NICAL7 COMPOSITION ( CAPITAL4 ,BETWE5 ! TWO1 HE WROTE1 0!RE IS 
A /RICT CORRELATION4 ,TO EXPRESS ?IS1 ,I CALL ! VALUE COMPOSITION1 9 SO F> 
AS IT IS DET]M9$ BY ! TE*NICAL COMPOSITION & MIRRORS ! *ANGES ( ! 
LATT]1 ! ORGANIC COMPOSITION ( CAPITAL4.<#a#b.> ,! CONCEPT 
( ! ORGANIC COMPOSITION ( CAPITAL PO9TS TO ! ID5TITY & ! 
DIFF]5CE BETWE5 ! MAT]IAL & VALUE PRODUCTION & REPEATS1 ON 
! L>G] SOCIAL SCALE1 ! CONCEPT ( VALUE AS ! ID5TITY & ! 
DIFF]5CE ( USE-& EX*ANGE-VALUE -- ! BASIC CONTRADICTION ( CAPITAL 
PRODUCTION4 ,= ,M>X1 IT IS A DISCREPANCY BETWE5 MAT]IAL & VALUE PRODUCTION 
:I* LEADS TO DIFFICULTIES 9 ! ACCUMULATION PROCESS1 BUT :I* ALSO ALL[S 
= ITS RESUMPTION & EXPANSION ?R\< *ANGES 9 ! MAT]IAL-TE*NICAL 
CONDITIONS ( PRODUCTION :I* RAISE ! PRODUCTIVITY ( LABOR & !RE) 
! RATE ( SURPLUS-VALUE & PR(IT4 ,:]E & :5 ?IS IS NO LONG] 
POSSIBLE1 9VE/M5TS WILL BE UNPR(ITABLE & CONSEQU5TLY WILL NOT BE 
MADE4 

,ACCORD+ TO ,M>X1 MOREOV]1 ! PR(ITABILITY ( ANY P>TICUL> CAPITAL 
DEP5DS ON ! PR(ITABILITY ( ! CAPITALI/ SY/EM AS A :OLE4 ,! LATT] IS 
AN UNKN[N QUANTITY4 ,! ONLY 9DICATION AS TO :E!R IT IS RIS+ OR FALL+ 
IS GIV5 BY M>KET EV5TS4 ,IT IS1 !N1 ! /ATE ( ! M>KET :I* DECIDES 
= ANY P>TICUL> CAPITAL :E!R IT %\LD EXP&1 CONTRACT OR LEAVE 
PRODUCTION AT A GIV5 LEVEL4 ,TO 9CREASE !IR %>ES ( A GIV5 M>KET1 OR TO 
MA9TA9 !IR PR(ITABILITY 9 A %R9K+ M>KET1 ! DIFF]5T CAPITALS WILL 
TRY TO *EAP5 !IR PRODUCTION 9 ORD] TO MA9TA9 OR 9CREASE !IR 
COMPETITIVE ABILITY4 ,!Y DO SO ALL ALONG2 BUT UND] CONDITIONS ( ECONOMIC 
CONTRACTION1 WEAK] CAPITALS SUCCUMB MORE QUICKLY TO /RONG] ONES1 & ! 
*ANGES 9 ! SPH]E ( PRODUCTION >E ACCOMPANI$ BY *ANGES 9 ! M>KET 
SPH]E4 ,CAPITAL WILL NOT ONLY BE MORE PRODUCTIVE BUT ALSO MORE CONC5TRAT$ & 
C5TRALIZ$4 ,FEW] CAPITALI/S WILL HAVE A L>G] M>KET TO !MSELVES1 & 
?\< ?IS *ANGE '= ! BETT]' IS DUE TO *ANGES 9 ! 
CONDITIONS ( PRODUCTION1 IT APPE>S1 & IS RECOGNIZ$1 AS A *ANGE 9 M>KET 
CONDITIONS1 AS ! RE/ORATION ( AN EFFECTIVE DEM& ALL[+ = ! 
RESUMPTION ( ! ACCUMULATION PROCESS4 

,= ,B>AN & ,SWEEZY1 H[EV]1 CAPITALI/ PROBLEMS >E EXCLUSIVELY M>KET 
PROBLEMS4 ,NOT ! PRODUCTION BUT ! REALIZATION ( ! 
'SURPLUS' IS CAPITALISM'S CURR5T DILEMMA4 ,A LACK ( 
EFFECTIVE DEM& RELATIVE TO ! PRODUCTION POT5TIAL LEADS TO UNUS$ 
RES\RCES4 ,IT IS CLE>1 9 ?AT CASE1 ?AT IF PRODUCTION W]E LESS EFFECTIVE 
! DEM& W\LD BE RELATIVELY GREAT]4 ,& S9CE ! RIS+ 
'SURPLUS' & ! LACK+ DEM& >E ONE & ! SAME PH5OM5ON1 
! ONE CANNOT S]VE AS AN EXPLANATION = ! O!R2 RA!R1 ?IS TWO-SID$ 
BUT S+LE PH5OM5ON IS ITSELF 9 NE$ ( EXPLANATION4 ,OBVI\SLY1 IF MONOPOLY 
CAPITAL W]E ABLE TO SELL A L>G] PRODUCT IT W\LD DO SO4 ,& IT W\LD BE ABLE 
TO SELL A L>G] PRODUCT IF CAPITAL W\LD ACCUMULATE & ?US 9CREASE ! 
EFFECTIVE DEM&4 ,BUT CAPITAL DOES NOT EXP& BECAUSE IT W\LD NOT BE 
PR(ITABLE4 ,! COMPLA9T AB\T ! LACK ( DEM& IS !N1 ACTUALLY1 A 
COMPLA9T AB\T 9SUFFICI5T PR(ITABILITY4 

,9 ,B>AN'S & ,SWEEZY'S EXPOSITION IT IS ! %E] CAPACITY TO 
PRODUCE :I* 5=CES ! RE/RICTION ( PRODUCTION4 ,?IS !ORY DISREG>DS 
! VALUE-*>ACT] ( CAPITALI/ PRODUCTION4 ,! 'SURPLUS' IS SE5 
NOT AS SURPLUS-VALUE BUT SIMPLY AS SURPLUS PRODUCTION4 ,9 CAPITALISM ! 
9CREAS+ MASS ( COMMODITIES 7AS USE-VALUES7 APPE>1 H[EV]1 AS 
EX*ANGE-VALUES4 ,S9CE ! MASS ( EX*ANGE-VALUE DECL9ES ) ! GR[+ 
PRODUCTIVITY ( LABOR1 CAPITAL ACCUMULATION REQUIRES A FA/] GR[+ MASS ( 
USE-VALUES4 ,IT IS ONLY ?R\< ! GR[+ CAPACITY TO PRODUCE ?AT TOTAL 
EX*ANGE-VALUE IS 5L>G$ & CAPITAL ACCUMULAT$4 ,9 FACT1 ! CAPACITY TO 
PRODUCE 9CREASES P>TICUL>LY 9 CRISIS SITUATIONS 9 ORD] TO EFFECT A 
RESUMPTION ( ! ACCUMULATION PROCESS4 ,IT IS PRECISELY ! COMPULSION TO 
9CREASE ! CAPACITY TO PRODUCE :I* PO9TS TO ! REALITY ( ! T5D5TIAL 
DECL9E ( ! RATE ( PR(IT4 ,IT IS ALSO ! ONLY AVAILABLE MEANS TO >RE/ 
?IS DECL9E4 ,IT IS !N ! EX*ANGE-VALUE ( ! SURPLUS PRODUCTS1 NOT ! 
PRODUCTS !MSELVES1 :I* MU/ BE RELAT$ TO ! VALUE ( TOTAL CAPITAL 9 
ORD] TO DET]M9E ! SUFFICI5CY OR 9SUFFICI5CY ( PR(ITABILITY4 ,S9CE ! 
CAPITALI/ CAPACITY TO PRODUCE RELATES NOT TO A DEF9ITE QUANTITY ( 
COMMODITIES BUT TO ! EX*ANGE-VALUE ( ?IS QUANTITY1 ,B>AN & ,SWEEZY W\LD 
HAVE TO PROVE !IR POSITION NOT ) REF]5CE TO ! 9CREAS+ CAPACITY TO 
PRODUCE COMMODITIES BUT ) AN 9CREAS+ CAPACITY TO PRODUCE 
EX*ANGE-VALUE4 

,9 CAPITALISM ALL 'SURPLUS' IS SURPLUS-VALUE OR IT IS NOT A 
SURPLUS BUT A LOSS4 ,ACCORD+ TO ,B>AN & ,SWEEZY1 'MONOPOLY 
CAPITAL' PREV5TS ! LOSS BY LIMIT+ ! 'SURPLUS' ?R\< 
! LIMITATION ( PRODUCTION4 ,9 REALITY1 H[EV]1 CAPITAL1 NO MATT] :AT ITS 
/RUCTURE1 REL5TLESSLY ATTEMPTS TO 9CREASE SURPLUS-VALUE UND] CONDITIONS ( 
EI!R A FULL OR A P>TIAL USE ( PRODUCTIVE RES\RCES4 ,:5 RES\RCES REMA9 
IDLE IT IS NOT BECAUSE !Y >E TOO PRODUCTIVE BUT BECAUSE !Y >E NOT 
PRODUCTIVE 5\<4 ,! 9CREAS+ RATE ( OBSOLESC5CE 9DICATES ! QUICK5+ 
PACE 9 :I* MEANS ( PRODUCTION LOSE !IR PR(IT-PRODUC+ CAPACITY4 ,IT IS 
(T5 ONLY ! MO/ EFFICI5T PRODUCTIVE APP>ATUS :I* WILL SECURE ! 
PR(ITABILITY ( CAPITAL4 ,MOREOV]1 9SATIABLE AS IT IS 9 ITS QUE/ = 
PR(ITS1 CAPITAL GOES \T ( ITS WAY TO EXTRACT SURPLUS-VALUE FROM ALL ! 
CORN]S ( ! WORLD 9 ORD] TO AUGM5T ! PR(ITS MADE AT HOME4 

,:Y ?IS 5ORM\S APPETITE = SURPLUS-VALUE & PR(IT :51 ACCORD+ TO 
,B>AN & ,SWEEZY1 'MONOPOLY CAPITAL' IS ALREADY *OK+ ON ! 
AVAILABLE 'SURPLUS'8 ,ACTUALLY1 !RE CAN NEV] BE 5\< SURPLUS-VALUE 
& PR(IT1 BECAUSE ( ! DIM9I%+ PR(ITABILITY 9 ! C\RSE ( CAPITAL 
EXPANSION4 ,! SURPLUS-VALUE EMBODI$ 9 COMMODITIES IS SURPLUS-LABOR TIME4 
,:ATEV] ! 'SURPLUS' 9 ITS PHYSICAL =M1 ) RESPECT TO ! 
CAPITALI/ SY/EM IT IS JU/ A DEF9ITE QUANTITY ( SURPLUS-LABOR TIME -- 
P>T ( ! TOTAL LABOR TIME4 ,NO MATT] H[ MU* ! 'SURPLUS' MAY 
BE 9CREAS$ 9 ITS COMMODITY =M1 ! SURPLUS-LABOR TIME DIM9I%ES ) ! 
DIM9I%+ TOTAL LABOR TIME 9 ! C\RSE ( ! RIS+ ORGANIC COMPOSITION 
( CAPITAL4 ,IT IS NOT ! MASS ( COMMODITIES AS A GR[+ 
'SURPLUS' :I* DET]M9ES ! RATE ( PR(IT1 BUT ! VALUE 
RELATIONS BETWE5 'DEAD' & 'LIV+' LABOR2 ?AT IS1 
! *ANG+ RELATION%IP BETWE5 CON/ANT & V>IABLE CAPITAL MODIFI$ BY ! 
RATE ( EXPLOITATION4 ,! RATE ( PR(IT CAN FALL 9 SPITE & BECAUSE ( A 
'RIS+ SURPLUS'1 SE5 AS JU/ A MASS ( COMMODITIES4 ,9 ?AT CASE1 
! 'SURPLUS' ITSELF EXPRESSES ! FALL ( ! RATE ( PR(IT 9 
ITS CONCRETE MANIFE/ATIONS 9 ! CRISIS ( OV]-PRODUCTION1 OR1 MORE 
REC5TLY1 9 ! SEMI-P]MAN5T UND]UTILIZATION ( PRODUCTIVE RES\RCES4 ,BO? 
SITUATIONS 9DICATE ?AT ! RATE ( PR(IT ON CAPITAL IS SU* AS TO 
DISC\RAGE1 OR EV5 EXCLUDE1 ADDITIONAL CAPITAL 9VE/M5TS ON A SCALE L>GE 
5\< TO BR+ =? AN EFFECTIVE DEM& :I* W\LD ASSURE ! REALIZATION ( 
SURPLUS-VALUE ON A L>G] PRODUCTION4 

,TO ?9K ONCE MORE 9 EXTREMES3 ASSUME ?AT A ?OR\<GO+ AUTOMATION ( 
PRODUCTION R$UCES ! V>IABLE CAPITAL TO AN 9SIGNIFICANT P>T ( ! TOTAL 
CAPITAL4 ,! PRODUCTIVITY ( LABOR W\LD !N TURN1 SO TO SPEAK1 9TO ! 
'PRODUCTIVITY ( CAPITAL'4 ,!RE W\LD BE AN 5ORM\S AM\NT ( 
PRODUCTION BUT LITTLE DIRECT LABOR & !RE=E LITTLE SURPLUS-LABOR4 
,BECAUSE ! DISPLAC$ WORK+ POPULATION W\LD /ILL BE !RE1 IT W\LD HAVE TO 
BE SUPPORT$ \T ( ! AUTOMAT$ PRODUCTION2 CAPITAL W\LD FE$ LABOR 9/EAD 
( LABOR FE$+ CAPITAL4 ,! CONDITIONS ( CAPITALISM W\LD HAVE BE5 
COMPLETELY REV]S$4 ,VALUE & SURPLUS-VALUE PRODUCTION W\LD NO LONG] BE 
POSSIBLE4 

,IT IS = ?IS REASON1 ( C\RSE1 ?AT SU* A SITUATION CANNOT COME TO PASS 
)9 ! FRAMEWORK ( CAPITALISM4 ,= SO LONG AS EX*ANGE-VALUE IS ! GOAL 
( PRODUCTION1 LABOR-TIME QUANTITIES REMA9 ! S\RCE & MEASURE ( 
CAPITALI/ WEAL?4 0,AL?\< ! V]Y DEVELOPM5T ( ! MOD]N MEANS ( 
PRODUCTION10 ,M>X WROTE1 09DICATES TO :AT A L>GE DEGREE ! 
G5]AL KN[L$GE ( SOCIETY HAS BECOME A DIRECT PRODUCTIVE P[]1 :I* 
CONDITIONS ! SOCIAL LIFE & DET]M9ES ITS TRANS=MATIONS10.<#a#c.> CAPITALISM'S P>TICUL> CONTRIBUTION TO ?IS /ATE 
( AFFAIRS CONSI/S ( NO MORE 0?AN 9 ITS USE ( ALL ! M$IA ( ! 
>TS & SCI5CES TO 9CREASE ! SURPLUS-LABOR1 BECAUSE ITS WEAL?1 9 VALUE 
=M1 IS NO?+ BUT ! APPROPRIATION ( SURPLUS-LABOR TIME40.<#a#d.> 

,M>X'S MODEL ( CAPITAL ACCUMULATION REPRES5TS A CLOS$ HOMOG5E\S 
SY/EM 9 :I* ! RIS+ ORGANIC COMPOSITION ( CAPITAL RESULTS 9 ! FALL 
( ! PR(IT :5 ! LIMITS ( SURPLUS-VALUE EXTRACTION >E REA*$4 ,IF A 
HI<LY 9DU/RIALLY-ADVANC$ C\NTRY SU* AS ! ,UNIT$ ,/ATES -- :I* 
UND]LIES ! :OLE REASON+ ( ,B>AN & ,SWEEZY -- C\LD BE CONSID]$ A 
CLOS$ SY/EM1 !N1 9 ! ,M>XIAN VIEW1 ITS RATE ( PR(IT %\LD FALL ) 
ITS 9CREAS+ ORGANIC COMPOSITION ( CAPITAL1 UNLESS (FSET BY AN 9CREAS$ 
RATE ( SURPLUS-VALUE EXPRESS$ 9 AN ACCEL]AT$ CAPITAL EXPANSION4 ,BUT IT IS 
NOT A CLOS$ SY/EM1 & IS ?US ABLE NOT ONLY TO SLACK5 ITS RIS+ ORGANIC 
COMPOSITION ( CAPITAL1 BY WAY ( CAPITAL EXPORTS1 = 9/ANCE1 BUT1 VIA ! 
WORLD M>KET1 TO 9CREASE ITS PR(ITS ?R\< ! IMPORTATION ( PR(ITS FROM 
ABROAD4 ,H[EV]1 CAPITAL EXPORTS HAVE NOT SIGNIFICANTLY H9D]$ ! RISE ( 
! ORGANIC COMPOSITION ( CAPITAL1 & PR(IT IMPORTS HAVE ?US F> NOT BE5 
L>GE 5\< TO EXPLA9 ,AM]ICA'S APP>5T PR(IT SUFFICI5CY4 ,9 ! 
MA91 IT IS ! 9CREAS+ PRODUCTIVITY ( LABOR :I* ACC\NTS = H] 
9CREAS$ PRODUCTION4 

,CONSID]+ ! WORLD AS A :OLE1 H[EV]1 IT IS SELF-EVID5T ?AT IT DOES 
NOT SUFF] FROM 'SURPLUSES' BUT FROM '%ORTAGES'4 ,! 
'POT5TIAL SURPLUS' ( 'MONOPOLY CAPITAL' IS MORE ?AN 
MAT*$ BY ! ACTUAL LACK ( EV]Y?+ 9 ! CAPITAL-POOR NATIONS4 ,! 
OV]PRODUCTION ( CAPITAL 9 ONE P>T ( ! WORLD CONFRONTS ! 
UND]CAPITALIZATION 9 ANO!R4 

,CONSID]+ CAPITALISM AS A :OLE -- AS A WORLD M>KET SY/EM -- 
! 'SURPLUS' DISAPPE>S & 9/EAD !RE IS A GREAT LACK ( 
SURPLUS-VALUE4 

,= CAPITALISM AS A :OLE1 ( C\RSE1 ! ORGANIC COMPOSITION IS NOT HI< 
5\< TO ACC\NT = A RATE ( PR(IT TOO L[ TO 9DUCE FUR!R RAPID CAPITAL 
EXPANSION4 ,BUT ! ACCUMULATION PROCESS IS AT ! SAME TIME A CAPITAL 
CONC5TRATION PROCESS1 & JU/ AS IT T5DS TO PLAY ! ACCUMULAT+ CAPITAL 
9TO FEW] H&S 9 EA* NATION1 SO DOES IT CONC5TRATE ! WORLD CAPITAL 9TO 
A FEW C\NTRIES4 ,= IT IS ! VALUE-EXPANSION ( ! EXI/+ CAPITAL ?AT 
MATT]S1 NOT ITS EXT5SION 9 O SPACE1 & ! LATT] TAKES PLACE ONLY TO ! 
EXT5T ?AT IT 5HANCES ! VALUE-EXPANSION ( ! CONC5TRAT$ & DOM9AT+ 
CAPITALS4 ,MONOPOLIZATION 9 ?IS S5SE DIVIDES ! WORLD 9TO DIFF]5T 
NATIONAL SY/EMS ) RESPECT TO !IR ORGANIC CAPITAL COMPOSITIONS4 ,IF 
CAPITALISM C\LD EXP& G5]ALLY1 IF ! ACCUMULATION PROCESS W\LD NOT 
SIMULTANE\SLY BE A CAPITAL CONC5TRATION PROCESS1 ! 'POT5TIAL 
SURPLUS' 9 A FEW 9DU/RIALLY ADVANC$ NATIONS1 EV5 IF TURN$ 9TO AN 
ACTUAL SURPLUS1 W\LD H>DLY SUFFICE TO TAKE C>E ( ! CAPITALIZATION NE$S 
( WORLD CAPITALISM4 ,! CONTRADICTION ( CAPITAL PRODUCTION ]ECTS B>RI]S TO 
ITS EXPANSION LONG BE=E ! AB/RACT BORD]S ( ,M>X'S !ORY ( 
CAPITAL DEVELOPM5T F9D SOME K9D ( APPROXIMATION 9 REALITY4 

,M>X PR$ICT$ ?AT CAPITALISM1 :ILE ONCE RAPIDLY DEVELOP+ ! SOCIAL 
P[]S ( PRODUCTION1 W\LD COME TO FETT] !M1 & ?AT ITS FUR!R EXI/5CE 
W\LD !N NECESSITATE NOT ONLY P]IODS ( CRISES & /AGNATION BUT ! 
\TRI<T DE/RUCTION ( CAPITAL4 ,! 9ABILITY ( CAPITALISM TO CAPITALIZE 
WORLD PRODUCTION IS EVID5T 9 ! 'POT5TIAL SURPLUS' 9 
CAPITALI/ICALLY ADVANC$ NATIONS & 9 ! 9CREAS+ MIS]Y 9 ! RE/ ( 
! WORLD4 ,FROM ! M>KET PO9T ( VIEW1 ?IS 9ABILITY APPE>S AS A 
PR(IT-REALIZATION PROBLEM4 ,:ILE 'MONOPOLY CAPITAL' IS UNABLE TO 
SELL :AT IT IS POT5TIALLY CAPABLE ( PRODUC+1 ! RE/ ( ! WORLD1 DUE TO 
! RET>DATION ( ITS PRODUCTIVE P[]S1 CANNOT BUY = LACK ( SURPLUS-VALUE4 
,:AT APPE>S AS A PR(IT-REALIZATION PROBLEM 9 ONE P>T ( ! WORLD1 IS A 
PR(IT-PRODUC+ PROBLEM 9 ANO!R4 ,CONSID]+ ! SY/EM AS A :OLE1 
H[EV]1 IT IS A G5]AL LACK ( SURPLUS-VALUE :I* ACC\NTS = ITS SL[ RATE 
( EXPANSION4 

,9 PR9CIPLE1 IT IS NOT DIFF]5T 9 ANY P>TICUL> CAPITALI/ C\NTRY4 ,! 
9CREAS+ DISUSE ( PRODUCTIVE RES\RCES RESULT+ FROM A LACK ( 
PR(ITABILITY CAN ONLY 9CREASE ! DE>? ( PR(ITS RELATIVE TO ! 
CAPITALI/ ACCUMULATION NE$S4 ,9S(> AS ! UNUS$ RES\RCES REPRES5T 
CON/ANT CAPITAL1 !Y LOSE !IR CAPITAL *>ACT] ?R\< !IR DISUSE1 I4E4 
!Y DO NOT FUNCTION AS SURPLUS-VALUE-PRODUC+ CAPITAL4 ,TO ! EXT5T ?AT 
CAPITAL LOSES ITS CAPITAL *>ACT]1 ! PR(ITABILITY ( TOTAL CAPITAL -- 
:ATEV] IT MAY BE -- WILL BE IMPAIR$1 & ! SURPLUS-VALUE1 H[EV] 
GREAT1 WILL BE SMALL] ?AN IT W\LD BE UND] CONDITIONS ( FULL USE ( 
PRODUCTIVE CAPACITY4 

,9 ,B>AN'S & ,SWEEZY'S VIEW1 H[EV]1 0MONOPOLY CAPITAL 
444 T5DS TO G5]ATE EV] MORE SURPLUS1 YET FAILS TO PROVIDE ! CONSUMPTION 
& 9VE/M5T \TLETS REQUIR$ = ! ABSORPTION ( ! RIS+ SURPLUS & 
H5CE = ! SMOO? WORK+ ( ! SY/EM0 7P4#a#h74 ,:AT MAKES 
'MONOPOLY CAPITAL' SO EXTRAORD9>ILY PR(ITABLE8 0,DECL9+ 
CO/S10 ,B>AN & ,SWEEZY SAY1 0:I* IMPLY CONT9U\SLY WID5+ 
PR(IT M>G9S0 7P4#g#a74 ,?IS WAS ( C\RSE TRUE ?R\<\T CAPITALI/ 
DEVELOPM5T & EXPLA9S ?IS DEVELOPM5T4 ,ACCORD+ TO ,B>AN & ,SWEEZY1 
H[EV]1 !RE IS A DIFF]5CE ) RESPECT TO 'MONOPOLY CAPITAL'1 
:I*1 9 DI/9CTION TO 'COMPETITIVE CAPITAL'1 IS NO LONG] A 
'PRICE TAK]' BUT A 'PRICE MAK]' 7P4#e#d71 & 
0[+ TO ! NATURE ( ! PRICE & CO/ POLICIES ( ! GIANT 
CORPORATIONS1 !RE IS A /RONG & SY/EMATIC T5D5CY = SURPLUS TO 
RISE0 7P4#g#i74 ,9 BRIEF1 IT IS SIMPLY BY ADM9I/]$ PRICES1 ?AT IS1 BY 
KEEP+ !M >TIFICIALLY HI< :ILE CO/S >E L[]$1 ?AT 
'SURPLUS' IS PIL$ UP4 

,AT ONE PO9T 9 ,B>AN'S & ,SWEEZY'S EXPOSITION1 A 
'SURPLUS' >ISES BECAUSE ! ECONOMY'S CAPACITY TO PRODUCE 
GR[S TOO RAPIDLY4 ,N[1 IT IS DUE TO ! IMP]FECTION ( COMPETITION UND] 
MONOPOLY CONDITIONS4 ,?R\< 9CREAS+ PRODUCTIVITY & ! P[] TO MAKE ITS 
[N PRICES1 'MONOPOLY CAPITAL' SUCCE$S 9 SECUR+ & 5L>G+ 
ITS PR(ITS EV5 UND] CONDITIONS ( RELATIVE CAPITAL /AGNATION4 ,BECAUSE1 BY 
& L>GE1 ! EXI/+ PRODUCTIVE APP>ATUS IS MORE ?AN ADEQUATE TO TAKE C>E 
( ! GIV5 'EFFECTIVE DEM&'1 !RE IS NO PO9T 9 MAK+ 
SIGNIFICANT NEW CAPITAL 9VE/M5TS4 ,DEPRECIATION *>GES L>GELY SUFFICE TO 
F9ANCE ! TE*NICAL 9NOVATIONS (1 & ! ADDITIONS TO1 ! PRODUCTIVE 
APP>ATUS1 :I*1 ) A SL[ RATE ( EXPANSION1 IS EFFECTIVE 5\< TO PROVIDE 
AN 9CREAS+ NATIONAL 9COME & AN EV5 FA/] RISE ( PR(ITS4 ,:ILE 
PRODUCTION1 PRODUCTIVITY & PR(ITS SO>1 ! RATE ( 9VE/M5TS DECL9ES4 ,9 
%ORT1 ! CAPACITY TO PRODUCE A GR[+ 'SURPLUS' DIM9I%ES ! 
ACCUMULATION ( CAPITAL4 

,CAPITALI/ICALLY1 H[EV]1 ! GR[? ( PRODUCTION & PRODUCTIVITY MAKES 
'S5SE' ONLY :5 IT 5L>GES ! EXI/+ CAPITAL4 ,9S(> AS IT 
IS NOT CONSUM$1 SURPLUS-VALUE MU/ BECOME ADDITIONAL CAPITAL4 ,!RE W\LD BE 
NO PO9T 9 9CREAS+ PRODUCTION IF ! RATE ( ACCUMULATION W]E TO DIM9I%4 
,! RATE ( ACCUMULATION IS ! DET]M9+1 NOT ! DET]M9$ FACTOR ) 
REG>D TO PRODUCTION4 ,! BASIC REASON = ! EXPANSION OR CONTRACTION ( ! 
ECONOMIC SY/EM IS TO BE F\ND 9 CAPITAL-LABOR1 OR WAGE-PR(IT1 RELATIONS 
-- NOT 9 ! TE*NICAL CAPACITY TO PRODUCE4 ,IGNOR+ ?IS BASIC SOCIAL 
RELATION%IP1 ,B>AN & ,SWEEZY MAKE POSSIBLE ! CAPITALI/ICALLY IMPOSSIBLE BY 
COMB9+ AN 9CREAS+ 'SURPLUS' ) A DIM9I%+ RATE ( 
ACCUMULATION4 

,!Y CAN DO SO ONLY1 H[EV]1 BY ACCEPT+ ! CURR5T ILLUSION ?AT 
9COME-TRANSF]S & EXP5SES CAN BE C\NT$ AS 9COME SO LONG AS !Y >E 
GOV]NM5T TRANSF]S & EXP5SES4 ,!Y EV5 GO ONE BETT] BY EXT5D+ ?IS 
CURI\S IDEA TO PRIVATE CAPITAL2 NOT ONLY BY ASS]T+ ?AT MONOPOLY PR(ITS 
5L>GE ! SOCIAL 'SURPLUS'1 BUT BY DISCOV]+ A WAY ( 
ACCUMULAT+ CAPITAL BY WAY ( ADV]TIS+4 ,AS REG>DS MONOPOLY PR(ITS SECUR$ 
BY PRICE MANIPULATIONS1 IT %\LD BE CLE> ?AT !Y CAN BE GA9$ ONLY ?R\< 
CORRESPOND+ PR(IT-LOSSES ON ! P>T ( ! NON-MONOPOLI/IC CAPITAL -- 
,NO MATT] :AT ! /RUCTURE ( CAPITALISM1 !RE IS1 AT ANY GIV5 TIME1 A 
DEF9ITE AM\NT ( NATIONAL & 9T]NATIONAL 9COME D]IV$ FROM 
SURPLUS-VALUE4 ,IF 'MONOPOLY CAPITAL' IS ABLE TO 5L>GE ITS %>E 
( ?IS TOTAL BY SELL+ F> ABOVE ! AV]AGE RATE ( PR(IT1 IT CAN DO SO 
ONLY AT ! EXP5SE ( CAPITALS UNABLE TO DO LIKEWISE2 CONSEQU5TLY1 ! LATT] 
HAVE TO DIVIDE AMONG !MSELVES A CORRESPOND+LY SMALL] P>T ( ! TOTAL 
9COME FALL+ TO TOTAL CAPITAL4 

,MONOPOLY PR(ITS R$UCE ! COMPETITIVELY E/ABLI%$ AV]AGE RATE ( PR(IT 
& !RE) LEAD TO ! PROGRESSIVE DECL9E ( ! QUANTITY ( PR(ITS 
TRANSF]ABLE TO MONOPOLY CAPITAL4 ,9 ! NOT-SO-LONG RUN1 ! EXTRACTION ( 
MONOPOLY PR(ITS IS A SELF-DEFEAT+ PROCESS1 B\ND TO AFFECT NEGATIVELY BO? 
! MONOPOLY-RATE & ! COMPETITIVE RATE ( PR(IT4 ,ONLY UND] CONDITIONS ( 
RAPID CAPITAL EXPANSION W\LD IT BE POSSIBLE TO MA9TA9 MONOPOLY PR(ITS 
)\T R$UC+ SIMULTANE\SLY ! ABSOLUTE RATE ( PR(IT ( 
COMPETITIVE CAPITAL4 ,CONDITIONS ( /AGNATION1 UND] :I* ,B>AN'S & 
,SWEEZY'S 'MONOPOLY CAPITAL' OP]ATES1 EXCLUDE ?IS 
POSSIBILITY4 

,IF 'MONOPOLY CAPITAL'1 AS ,B>AN & ,SWEEZY SAY1 T5DS TO 
G5]ATE EV] MORE SURPLUS'1 :Y %\LD IT /ILL 9SI/ UPON PRICE 
POLICIES :I* DIM9I% ! PR(ITS ( COMPETITIVE CAPITAL8 ,BUT1 !N1 ,B>AN 
& ,SWEEZY ALSO SAY ?AT 'MONOPOLY CAPITAL' DOES NOT REALLY 
G5]ATE A 'SURPLUS'1 = IT /OPS PRODUC+ BE=E A 
'SURPLUS' >ISES1 AS ILLU/RAT$ BY ! GR[+ IDLE RES\RCES4 
,NONE!LESS1 EV5 ?\< !RE IS NO 'SURPLUS'1 9 !IR VIEW1 A 
FI]CE COMPETITIVE /RUGGLE 5SUES = ! REALIZATION ( ! 
'SURPLUS'1 :I*1 DUE TO ! MONOPOLY *>ACT] ( CAPITAL1 IS N[ 
WAG$ BY SALESMAN%IP RA!R ?AN BY PRICE-CUTT+4 ,AL?\< !RE IS NO REAL1 
BUT ONLY A POT5TIAL 'SURPLUS'1 CAPITAL'S RATIONALE D]IVES1 
JU/ ! SAME1 0FROM ! SIMPLE FACT ?AT ! OBV]SE ( 'TOO 
MU*' ON ! SUPPLY SIDE IS 'TOO LITTLE' ON ! DEM& SIDE2 
9/EAD ( CUTT+ BACK SUPPLY !Y ,AM AT /IMULAT+ DEM&0 
7P4#a#a74 

,CONCEPTUALLY1 ,B>AN & ,SWEEZY WRITE1 ! SALES EF=T 0IS ID5TICAL 
) ,M>X'S EXP5SES ( CIRCULATION4 ,BUT 9 ! EPO* ( MONOPOLY 
CAPITAL1 IT HAS COME TO PLAY A ROLE1 BO? QUANTITATIVELY & QUALITATIVELY1 
BEYOND ANY?+ ,M>X EV] DREAM$ (0 7P4 #a#a#d74 ,! SALES EF=T1 !Y GO 
ON TO SAY1 0TURNS \T TO BE A P[]FUL ANTIDOTE TO MONOPOLY 
CAPITALISM'S T5D5CY TO S9K 9 A /ATE ( *RONIC DEPRESSION0 
7P4#a#c#a71 = IT 0ABSORBS1 DIRECTLY & 9DIRECTLY1 A L>GE AM\NT ( 
SURPLUS :I* O!RWISE W\LD NOT HAVE BE5 PRODUC$0 7P4#a#d#b74 ,BY 
9CREAS+ ! 'EFFECTIVE DEM&'1 ADV]TIS+ 9CREASES ! LEVEL 
( 9COME & EMPLOYM5T1 SO ?AT 0! DIRECT IMPACT ( ! SALES EF=T 
ON ! 9COME & \TPUT /RUCTURE ( ! ECONOMY IS SIMIL> TO ?AT ( 
GOV]NM5T SP5D+ F9ANC$ BY TAX REV5UE0 7P4#a#b#f74 ,F9ALLY1 
0) REG>D TO 9VE/M5T OPPORTUNITIES1 ADV]TIS+ PLAYS A ROLE 
SIMIL> TO ?AT :I* HAS TRADITIONALLY BE5 ASSIGN$ TO 9NOVATIONS4 ,BY MAK+ 
IT POSSIBLE TO CREATE ! DEM& = A PRODUCT1 ADV]TIS+ 5C\RAGES 
9VE/M5TS 9 PLANTS & EQUIPM5T :I* O!RWISE W\LD NOT TAKE PLACE0 
7P4 #a#b#f74 

,ACCORD+ TO ?IS !ORY1 ADV]TIS+ ACCOMPLI%ES A NUMB] ( CONTRADICTORY 
?+S2 :ILE IT IS AN EXP5SE ( CIRCULATION1 IT ALSO IS A CREATOR ( 9COME1 
& :ILE IT 'ABSORBS' P>T ( ! 'SURPLUS'1 IT ALSO 
5L>GES ! 'SURPLUS' BY 9DUC+ NEW 9VE/M5TS4 ,OBVI\SLY1 A 
LOT ( PEOPLE MAKE !IR LIV+ BY SELL+ & ADV]TIS+1 :ILE O!RS LOSE 
P>T ( !IR 9COMES BY PAY+ HI<] PRICES -- PRICES :I* 9CLUDE ! 
CO/S ( ADV]TIS+4 ,?IS HAS ALWAYS BE5 SO1 BUT1 ACCORD+ TO ,B>AN & 
,SWEEZY1 ITS QUANTITATIVE EXT5SION UND] 'MONOPOLY CAPITAL' GIVES 
IT A QUALITATIVE DIFF]5CE1 I4E4 IF ! EXP5SE IS L>GE 5\< IT BECOMES A 
=M ( ADDITIONAL 9COME4 ,BECAUSE CONSUMPTION IS 9CREAS$ ?R\< 
EXHORTATIONS1 ! 5L>G$ CONSUMPTION LEADS TO 9CREAS$ PRODUCTION & 
9VE/M5TS4 ,?IS IS1 ( C\RSE1 ,KEYNES' 9CREAS+ 'PROP5SITY TO 
CONSUME' AS A POSSIBLE M$IUM = AN EXP&$ PRODUCTION UND] CONDITIONS 
( DECREAS+ 9VE/M5TS4 ,BUT :ILE ,KEYNES' SUGGE/ION 7UNREALIZABLE 
)9 CAPITALISM7 RELATES TO TOTAL NATIONAL 9COME1 ,B>AN & ,SWEEZY RELATE IT 
ONLY TO ! 'SURPLUS'1 ?AT IS1 TO ?AT P>T ( SOCIAL PRODUCTION 
:I* FALLS TO ! CAPITALI/S4 

,ADV]TIS+ P5ETRATES ! :OLE M>KET1 NOT ONLY ?AT P>T :I* CAT]S TO 
CAPITALI/ CONSUMPTION4 ,EV]YBODY IS ADVIS$ TO SP5D MORE EV5 ?\<1 
ACCORD+ TO ,B>AN & ,SWEEZY1 IT IS ONLY ! 'SURPLUS' :I* HAS 
TO BE GOTT5 RID (4 ,! 'SURPLUS' IS !RE 7& IS AS L>GE AS IT 
MAY BE7 BECAUSE ! CO/S ( PRODUCTION1 ?AT IS1 ! 9COME ( ! WORK]S1 IS 
AS SMALL AS IT IS 9 COMP>ISON ) ! 'SURPLUS'4 ,TO HAVE ?AT 
'SURPLUS' MEANS TO HAVE CORRESPOND+LY L[ CO/S ( PRODUCTION1 
= :I* REASON IT W\LD NOT DO TO 9CREASE ! 'PROP5SITY TO 
CONSUME' BY WAY ( HI<] WAGES4 ,UNLESS TAK5 FROM ! WORK]S1 !RE IS 
NO 'SURPLUS'1 & ! LATT]1 9 ORD] TO BE SU*1 MU/ FIR/ BE 
REALIZ$ ON ! M>KET4 ,IF NOT REALIZ$ !RE IS NO 'SURPLUS' BUT A 
LOSS4 ,CAPITALI/S 9T5SIFY !IR SALES EF=TS SO AS TO AVOID LOSSES1 NOT TO 
GET RID ( ! 'SURPLUS'4 ,:5 IT IS NOT POSSIBLE TO CONV]T ALL 
PRODUC$ COMMODITIES 9TO MONEY1 IT IS NOT POSSIBLE TO REALIZE ! PR(ITS 
BAS$ ON ?AT P>T ( PRODUCTION :I* FALLS TO ! CAPITALI/S4 ,! 
'SALES EF=T' F9DS ITS EMPHASIS NOT 9 AN 9CREAS+ 
'SURPLUS' BUT 9 ! M>KET SITUATION AS A :OLE AS DET]M9$ BY A 
DECL9+ RATE ( ACCUMULATION4 

,ADV]TIS+ CANNOT 'CREATE' ANY?+ BUT ADV]TISEM5TS4 ,NEW 
PRODUCTS1 CAT]+ TO NEW WANTS1 >E NOT ADV]TISEM5TS1 EV5 ?\< !Y MAY 
BE ADV]TIS$4 ,! CONT9U\S CREATION ( NEW WANTS IS A *>ACT]I/IC ( ! 
M>KET ECONOMY & ONE REASON = ITS EXPANSION & EXT5SION4 ,ADV]TIS+ AS 
SU* CANNOT 9CREASE ! 'EFFECTIVE DEM&' &1 VIA ?IS DEM&1 
5L>GE PRODUCTION4 ,CAPITAL MU/ ACCUMULATE 9 ORD] NOT ONLY TO REMA9 
COMPETITIVE BUT TO RETA9 ITS CAPITAL-VALUE4 ,CAPITALI/S CANNOT CONSUME ALL ( 
!IR PR(ITS1 = BY DO+ SO1 !Y W\LD SOON CEASE BE+ CAPITALI/S4 
,ADV]TIS+ CANNOT AFFECT ?IS COMPULSIVE NE$ TO ACCUMULATE1 & ACCUMULATION 
DET]M9ES ! 'EFFECTIVE DEM&' ) RESPECT TO CONSUMPTION GOODS 
FROM ?IS QU>T]4 ,NO ADV]TIS+ C\LD 5L>GE ! OBJECTIVELY DET]M9$ 
'EFFECTIVE DEM&'1 AL?\< IT MAY AFFECT IT 9 FAVOR ( ONE 
OR ANO!R PRODUCT1 OR ONE OR ANO!R SELL] ( ID5TICAL COMMODITIES4 
,ADV]TIS+ CAN AFFECT ! DI/RIBUTION ( ! AVAILABLE SURPLUS-VALUE1 BUT IT 
CANNOT ADD TO ITS SIZE1 = IT IS ITSELF ONLY A P>T ( ! AVAILABLE TOTAL 
SURPLUS-VALUE4 

,B>AN'S & ,SWEEZY'S CURI\S REASON+ ) RESPECT TO 
ADV]TIS+ RE/S ON ! ILLUSION ?AT PRODUCTION \TSIDE ! 
'SELF-LIMIT+' CONF9ES ( 'MONOPOLY CAPITAL'1 I4E4 
PRODUCTION :I* IS ACTUALLY UND]TAK5 BUT W\LD NOT BE =?COM+ W]E IT 
NOT = ADV]TIS+ & GOV]NM5T PUR*ASES1 C\LD ACTUALLY B5EFIT 
'MONOPOLY CAPITAL'1 &1 BY CREAT+ 9COME & EMPLOYM5T1 ! 
:OLE ( SOCIETY4 ,!RE IS1 !N1 AFT] ALL1 A GR[+ 'SURPLUS' 
:I* DOES NOT NE$ TO ISSUE 9TO PROTRACT$ /AGNATION1 & FULL EMPLOYM5T 
COMB9ES ) AN 'ABSORPTION' ( ! 'SURPLUS' ?R\< 
GOV]NM5T -- & ADV]TIS+ -- AG5CIES4 ,:AT REMA9S REGRETTABLE 
9 ,B>AN'S & ,SWEEZY'S VIEW1 H[EV]1 >E ! IRRATIONAL USES TO 
:I* ! L>G] P>T ( ! 'SURPLUS' IS PUT BY BO? !SE 
AG5CIES4 

,! 'SURPLUS' 9 EVID5CE 9 ! 'AFFLU5T SOCIETY' 
IS1 !N1 NOT A 'SURPLUS' PRODUC$ BY MONOPOLY CAPITAL BUT 9 SPITE 
( IT4 ,IT IS 9 FACT BR\<T =?1 AS ,B>AN & ,SWEEZY PO9T \T1 BY 
GOV]NM5T PUR*ASES :I* 9CREASE ! 'EFFECTIVE DEM&' & ?US 
PREV5T CRISIS CONDITIONS4 ,! CRISIS IS SET ASIDE BY ! 0COLOSSAL 
CAPACITY TO G5]ATE PRIVATE & PUBLIC WA/E0 7P4#c74 ,TO WA/E ! 
'SURPLUS' IS ONE WAY ( 'ABSORB+' IT1 H[EV]1 & AS 
!RE >E NO LIMITS TO ! G5]ATION ( WA/E1 !RE IS NO NE$ = A 
'SURPLUS' TO >ISE & ?US ALSO NO 
'SURPLUS-UTILIZATION' PROBLEM4 ,P>TICUL>LY NOT1 BECAUSE1 9 
,B>AN'S & ,SWEEZY'S VIEW1 ! WA/E DOES NOT R$UCE ! PR(ITS ( 
'MONOPOLY CAPITAL'1 = IT CON/ITUTES ?AT P>T ( ! 
'SURPLUS' OV] & ABOVE ! 'SURPLUS' REALIZ$ AS 
PR(IT4 ,JU/ AS ! 'SALES EF=T' ABSORBS 0A L>GE AM\NT ( 
SURPLUS :I* W\LD O!RWISE NOT HAVE BE5 PRODUC$01 SO 
0GOV]NM5T PLAYS A SIMIL> ROLE BUT ON A L>G] SCALE0 7P4#a#d#b74 
,:5 IDLE RES\RCES >E PUT TO WORK1 0!Y CAN PRODUCE NOT ONLY NECESS>Y 
MEANS ( SUBSI/5CE = ! PRODUC]S BUT ALSO ADDITIONAL AM\NTS ( SURPLUS4 
,H5CE IF GOV]NM5T CREATES MORE EFFECTIVE DEM&1 IT CAN 9CREASE ITS COMM& 
OV] GOODS & S]VICES )\T 5CROA*+ ON ! 9COME ( ITS 
CITIZ5S0 7P4#a#d#c74 

,BY TREAT+ SURPLUS-VALUE AS 'SURPLUS'1 ,B>AN & ,SWEEZY MANAGE 
TO LOOK UPON CAPITALISM AS IF IT W]E SOME?+ O!R ?AN ITSELF4 0,! 
SIZE ( ! SURPLUS10 !Y WRITE1 0IS AN 9DEX ( PRODUCTIVITY & 
WEAL?1 ( H[ MU* FRE$OM A SOCIETY HAS TO ACCOMPLI% :ATEV] GOALS IT MAY 
SET = ITSELF0 7P4#i74 ,?IS IS TO SEE SOCIETY 9 ! AB/RACT1 NOT AS A 
SPECIFIC SOCIETY2 AT ANY RATE1 NOT AS CAPITALI/ SOCIETY4 ,9 ! LATT]1 ! 
MEANS ( PRODUCTION BELONG TO A SPECIFIC CLASS -- NOT TO ! GOV]NM5T 
& NOT TO ! 'CITIZ5S'4 ,! IDLE RES\RCES -- EV5 9 !IR 
IDL5ESS -- REMA9 CAPITALI/ PROP]TY4 ,UNLESS CONFISCAT$1 !Y CAN BE 
UTILIZ$ BY GOV]NM5T ONLY ?R\< ITS PUR*ASES1 & ! MONEY US$ 9 !SE 
TRANSACTIONS MU/ FIR/ BE EXTRACT$ FROM PRIVATE CAPITAL EI!R BY TAXATION OR 
?R\< BORR[+S4 ,F9ANC$ 9 ?IS MANN]1 GOV]NM5T-9DUC$ PRODUCTION DOES 
NOT 9CREASE ! QUANTITY ( M>KETABLE COMMODITIES & CAN ?US NOT 
BE TURN$ 9TO EX*ANGE-VALUE &1 CONSEQU5TLY1 NOT 9TO SURPLUS-VALUE4 ,NO 
MATT] H[ MU* EMPLOYM5T & 9COME IT MAY G5]ATE1 ! F9AL 
PRODUCT ( GOV]NM5T-9DUC$ PRODUCTION1 SU* AS PUBLIC WORKS ( A USEFUL 
OR WA/EFUL NATURE1 IS NOT A M>KETABLE PRODUCT1 :]EAS ! REAL 9COME 9 
CAPITALI/ SOCIETY HAS TO BE REALIZ$ VIA ! CIRCULATION ( COMMODITIES4 ,:ILE 
9CREAS+ ! TOTAL MASS ( LABOR & ( PRODUCTS1 IT DOES NOT 9CREASE ! 
MASS ( SURPLUS-VALUE & REPRES5TS1 !RE=E1 A LOSS RA!R ?AN A GA9 
-- A LOSS SIMIL> TO ?AT SUFF]$ BY OV]PRODUCTION :5 P>T ( ! 
PRODUC$ COMMODITIES CANNOT BE CONV]T$ 9TO MONEY4 

,ACCORD+ TO ,B>AN & ,SWEEZY1 0! VA/ & GR[+ AM\NTS ( 
SURPLUS ABSORB$ BY GOV]NM5T 9 REC5T DECADES >E NOT D$UCTIONS FROM :AT 
W\LD O!RWISE BE AVAILABLE TO CORPORATIONS & 9DIVIDUALS = !IR PRIVATE 
PURPOSES0 7P4#a#d#g74 ,H[EV]1 ,B>AN & ,SWEEZY1 !MSELVES1 HAVE PO9T$ 
\T ?AT ?AT PORTION ( ! SURPLUS USUALLY ID5TIFI$ ) SURPLUS-VALUE 
DECL9$ %>PLY FROM #aibi TO #a#i#f#c4 ,TO RECALL1 :ILE PROP]TY-9COME WAS #e#g4#e 
P] C5T ( TOTAL SURPLUS 9 #a#i#b#i1 IT WAS ONLY #c#a4#i P] C5T 9 #a#i#f#c4 ,ACCORD+ 
TO !SE /ATI/ICS1 ! 'SURPLUS' ABSORB$ BY GOV]NM5T GREW 
FA/] ?AN ?AT FALL+ TO PROP]TY [N]S4 ,! R$UCTION ( SURPLUS-VALUE HAS 
SOME CONNECTION ) ! GR[? ( GOV]NM5T EXP5SES1 OR1 9 ,B>AN'S 
& ,SWEEZY'S T]MS1 ) ! 'ABSORPTION' ( 
'SURPLUS' BY GOV]NM5T4 

,TO BE SURE1 ,B>AN & ,SWEEZY MA9TA9 ?AT ?IS PROP]TY-9COME W\LD NOT 
HAVE BE5 ANY GREAT] )\T GOV]NM5T-9DUC$ PRODUCTION4 ,?IS IS MO/ 
PROBABLY SO1 BECAUSE GOV]NM5T-9DUC$ PRODUCTION IS 5L>G$ TO COMP5SATE 
= ! DECL9+ PRIVATE PRODUCTION1 9 ORD] TO AMELIORATE ! SOCIAL 
CONSEQU5CES ( PROLONG$ CRISIS CONDITIONS4 ,BUT ?IS DOES NOT ALT] ! FACT 
?AT ! UTILIZATION ( PRODUCTIVE RES\RCES BY GOV]NM5T IS ! 
UTILIZATION ( PRIVATELY-[N$ PRODUCTIVE RES\RCES4 ,& AS ! 
GOV]NM5T HAS NO?+ TO GIVE 9 EX*ANGE BUT ! MONEY IT EXTRACTS \T ( ! 
ECONOMY1 ! UTILIZATION ( PRIVATE PRODUCTIVE RES\RCES BY GOV]NM5T EQUATES 
-- AS F> AS PRIVATE CAPITAL IS CONC]N$ -- ) !IR 
NON-UTILIZATION 9 !IR PREVI\S /ATE ( IDL5ESS4 

,TRUE1 GOV]NM5T PUR*ASES ACTUALLY DO 9CREASE PRODUCTION G5]ALLY1 = 
! NON-M>KETABLE F9AL PRODUCTS REQUIRE 9T]M$I>Y PRODUCTIVE 
ACTIVITIES1 SU* AS ! PRODUCTION ( RAW MAT]IALS1 ! CONSUMPTION NE$S ( 
9CREAS$ EMPLOYM5T1 & ! REQUIR$ ADDITIONS & *ANGES 9 ! PRODUCTIVE 
MA*9]Y4 ,BUT ALL !SE ITEMS >E CO/-(-PRODUCTION ITEMS :I* >E NOT 
RECOV]ABLE 9 SALES-PRICES ON ! M>KET1 =1 ) 9SIGNIFICANT EXCEPTIONS1 
! PRODUCTS PRODUC$ = GOV]NM5T FALL \T ( ! M>KET SY/EM4 ,P>T ( 
TOTAL PRODUCTION IS ?US NO LONG] CAPITALI/ PRODUCTION1 & ) ! 
RELATIVELY FA/] GR[? ( ?IS NON-PR(ITABLE P>T ( TOTAL PRODUCTION1 ! 
DECL9+ PR(ITABLE P>T CAN ONLY 9CREASE ! DIFFICULTIES ?AT BESET ! 
CAPITALI/ ACCUMULATION PROCESS4 

,/ILL1 ,B>AN & ,SWEEZY 9SI/ ?AT GOV]NM5T ABSORPTION ( 
'SURPLUS' IS 9 ADDITION TO1 NOT SUBTRACT$ FROM1 PRIVATE SURPLUS4 
,EV5 MORE3 0,S9CE A L>G] VOLUME ( GOV]NM5T SP5D+ PU%ES ! 
ECONOMY NE>] TO CAPACITY PRODUCTION1 & S9CE UP TO ?IS PO9T SURPLUS GR[S 
MORE RAPIDLY ?AN EFFECTIVE DEM& AS A :OLE1 IT FOLL[S ?AT BO? ! 
GOV]NM5T & ! PRIVATE SEGM5TS ( SURPLUS CAN & 9DE$ TYPICALLY DO GR[ 
SIMULTANE\SLY0 7P4 #a#d#h74 ,& SO IT SEEMS2 BUT IT DOES NOT %[ UP 9 ! 
RATE ( CAPITAL EXPANSION1 ONLY 9 ! SIZE ( ! ,GROSS ,NATIONAL ,PRODUCT1 ( 
:I* A GR[+ P>T IS NO LONG] PR(ITABLE4 ,?IS FACT IS HIDD51 H[EV]1 BY 
! MONEY-VEIL ?AT COV]S CAPITALI/ PRODUCTION & EX*ANGE1 & QUITE 
SUCCESSFULLY SO1 S9CE EV5 CRITICS ( 'MONOPOLY CAPITAL' >E TAK5 
9 BY IT4 

0,IF :AT GOV]NM5T TAKES W\LD O!RWISE NOT HAVE BE5 PRODUC$ AT 
ALL10 ,B>AN & ,SWEEZY WRITE1 0IT CANNOT BE SAID TO HAVE BE5 
SQUEEZ$ \T ( ANYBODY4 ,GOV]NM5T SP5D+ & TAX+1 :I* US$ TO BE 
PRIM>ILY A ME*ANISM = TRANSF]R+ 9COME1 HAVE BECOME 9 L>GE MEASURE A 
ME*ANISM = CREAT+ 9COME BY BR++ IDLE CAPITAL & LABOR 9TO 
PRODUCTION0 7P4#a#e74 ,IT IS ?R\< ?IS 'NEW ME*ANISM' ?AT 
0:AT ! GOV]NM5T TAKES 9 TAXES IS AN ADDITION TO1 NOT A SUBTRACTION 
FROM1 PRIVATE SURPLUS0 7P4#a#d#i74 ,! GOV]NM5T HAS NOT SUCCE$$1 
H[EV]1 9 CONV9C+ ! CAPITALI/S ?AT ?IS IS ACTUALLY SO1 =1 N[ AS 
BE=E1 CAPITAL DOES OBJECT TO ! 9CREASE 9 TAXES & ! GR[? ( ! 
NATIONAL DEBT AS BE+ DETRIM5TAL TO ITS [N PR(ITABILITY & ACCUMULATION 
REQUIREM5TS4 

,:AT DOES ! GOV]NM5T ACTUALLY DO BY BR++ TOGE!R LABOR & IDLE 
CAPITAL = ! PRODUCTION ( NON-M>KETABLE GOODS8 ,TAXES >E A P>T ( 
REALIZ$ 9COME ?R\< M>KET TRANSACTIONS2 IF TAK5 FROM CAPITAL !Y DO 
R$UCE ITS PR(ITS1 REG>DLESS ( :E!R OR NOT !SE PR(ITS W\LD HAVE BE5 
CONSUM$ OR RE9VE/$ 9TO ADDITIONAL CAPITAL4 ,IF NOT1 IDLE CAPITAL 9 ITS 
MONEY =M W\LD EXI/ AS A PRIVATE HO>D4 ,AS SU* IT CANNOT FUNCTION 
CAPITALI/IC ALLY2 BUT NEI!R CAN IT FUNCTION CAPITALI/IC ALLY :5 TAK5 BY 
GOV]NM5T TO F9ANCE ! NON-PR(ITABLE PRODUCTION ( PUBLIC WORKS & 
GOV]NM5T WA/E4 ,9/EAD ( A CAPITALI/ICALLY-USELESS MONEY HO>D !RE IS 
!N A CAPITALI/ICALLY-USELESS PRODUCTION ( GOODS & S]VICES4 ,!RE IS A 
DIFF]5CE1 H[EV]3 :]EAS )\T TAXATION CAPITAL W\LD BE 9 POSSESSION ( 
A MONEY HO>D1 ) TAXATION -- = PURPOSES ( PUBLIC SP5D+ -- 
CAPITAL IS ACTUALLY EXPROPRIAT$ TO ! EXT5T ( ! O!RWISE POSSIBLE MONEY 
HO>D4 

,:5 US$ = GOV]NM5T PUR*ASES1 TAXES TAK5 FROM CAPITAL FL[ BACK TO 
! CAPITALI/S 9 =M ( GOV]NM5T CONTRACTS4 ,! PRODUCTION RESULT+ FROM 
!SE CONTRACTS IS BE+ PAID = BY ! CAPITALI/S ?R\< !IR TAXES4 
,GETT+ !IR MONEY BACK ?R\< GOV]NM5T ORD]S1 ! CAPITALI/S PROVIDE ! 
GOV]NM5T ) AN EQUIVAL5T QUANTITY ( PRODUCTS4 ,IT IS ?IS QUANTITY ( 
PRODUCTS :I* ! GOV]NM5T 'EXPROPRIATES' FROM CAPITAL4 ,! SIZE 
( ?IS QUANTITY DET]M9ES ! EXT5T TO :I* PRODUCTION HAS CEAS$ BE+ 
CAPITAL PRODUCTION1 & ! GR[? ( PRODUCTION BY WAY ( TAXATION 9DICATES 
! DECL9E ( ! CAPITALI/ SY/EM AS A PR(IT-DET]M9$ PRIVATE 5T]PRISE 
SY/EM4 ,NOT ONLY IS ?IS TYPE ( PRODUCTION NON-PR(ITABLE1 IT IS MADE POSSIBLE 
ONLY ?R\< ?AT P>T ( TOTAL PRODUCTION :I* IS /ILL SUFFICI5TLY 
PR(ITABLE TO YIELD TAXES L>GE 5\< TO EXT5D GOV]NM5T PRODUCTION BY WAY 
( TAXATION4 ,) ! DECL9E ( PR(ITABILITY IT BECOMES 9CREAS+LY MORE 
DIFFICULT TO EXP& PRODUCTION 9 ?IS P>TICUL> WAY4 

,BUT GOV]NM5T CAN BORR[ ADDITIONAL FUNDS4 ,!SE FUNDS ALSO FL[ BACK TO 
! CAPITALI/S AS PAYM5TS = PRODUCTION CONTRACT$ BY GOV]NM5T4 ,! 
EXP5SE ( GOV]NM5T-9DUC$ PRODUCTION PILES UP1 9 P>T1 AS ! NATIONAL 
DEBT4 ,! 9CREASE ( ! DEBT IS HELD TO BE QUITE H>MLESS AS LONG AS ! 
NATIONAL 9COME 9CREASES FA/] ?AN ! DEBT4 ,! GR[+ NATIONAL DEBT IS 
!N USUALLY COMP>$ ) ! GR[+ NATIONAL 9COME1 :I* SUB/ANTIATES ! 
CLAIM ?AT DEFICIT-F9ANC+ WILL BE ACCOMPANI$ BY A RIS+ NATIONAL 9COME4 
,?IS CLAIM RE/S1 H[EV]1 ON A CURI\S WAY ( ACC\NT+1 =1 ACTUALLY1 ! 
GR[+ NATIONAL DEBT CANNOT BE RELAT$ TO TOTAL NATIONAL 9COME1 BUT ONLY TO 
?AT P>T ( ! TOTAL :I* HAS NOT BE5 9JECT$ BY GOV]NM5T 9TO ! 
ECONOMY4 ,IT IS BY C\NT+ AN EXP5SE AS AN 9COME ?AT ! 
ILLUSION >ISES ?AT A GR[+ NATIONAL DEBT IS NEUTRALIZ$ BY A RIS+ 
NATIONAL 9COME4 

,UNLESS ! NATIONAL DEBT IS ACTUALLY RECOV]$ ?R\< ADDITIONAL 9COME 9 
! PRIVATE SECTOR ( ! ECONOMY1 ?AT IS1 ADDITIONAL 9COME AP>T FROM 
?AT 9JECT$ 9TO ! ECONOMY BY GOV]NM5T1 ! '9COME' 
D]IV$ FROM ! LATT] PROC$URE REMA9S1 AS F> AS CAPITAL IS CONC]N$1 A 
M]E GOV]NM5T EXP5SE4 ,?IS 'EXP5SE' CONSI/S ( ! 
GOV]NM5T'S UTILIZATION ( PRIVATELY-[N$ PRODUCTIVE RES\RCES = 
NON-PR(ITABLE PURPOSES4 ,IT IS A P>TIAL 'EXPROPRIATION' ( 
CAPITAL1 EV5 ?\< ! 'EXPROPRIAT$' CAPITAL WAS NO LONG] ABLE 
TO FUNCTION CAPITALI/IC ALLY ON ITS [N BEHALF4 ,BUT ?AT DOES NOT PREV5T ! 
CAPITALI/S FROM DEM&+ COMP5SATION = ! GOV]NM5T'S USE ( 
!IR PRODUCTIVE RES\RCES4 ,! POSSIBILITY ( HONOR+ ! 
GOV]NM5T DEBT DEP5DS ON ! FUTURE PR(ITABILITY ( PRIVATE CAPITAL4 ,UNLESS 
?IS PR(ITABILITY ACTUALLY MAT]IALIZES1 ! DEBT CANNOT BE HONOR$ & 
TODAY'S ADDITIONAL 9COME BECOMES TOMORR['S LOSS ( 9COME4 ,! 
:OLE MATT] IS A CASE ( 'C\NT+ ONE'S *ICK5S BE=E !Y >E 
HAT*$'1 & GIV5 ! T5D5TIAL DECL9E ( ! RATE ( PR(IT 9 ! 
C\RSE ( CAPITAL EXPANSION1 !RE WILL BE NO *ICK5S4 

,IMM$IATELY1 ( C\RSE1 GOV]NM5T-9DUC$ PRODUCTION 9CREASES 9COME & 
EMPLOYM5T BEYOND :AT IT W\LD BE )\T ?IS 9T]V5TION4 ,!RE IS MORE 
PRODUCTION1 ALBEIT L>GELY WA/E-PRODUCTION1 & P>T ( ?IS PRODUCTION ,B>AN 
& ,SWEEZY REG>D AS A 'SURPLUS'4 ,?IS 'SURPLUS'1 
H[EV]1 DOES NOT CONTA9 SURPLUS-VALUE1 BUT EXI/S AS AN UNAVOIDABLE EXP5SE 
( SURPLUS-VALUE PRODUCTION4 0,GIV5 ! 9ABILITY ( MONOPOLY CAPITALISM 
TO PRIVATE USES = ! SURPLUS :I* IT CAN EASILY G5]ATE10 !Y 
WRITE1 0!RE CAN BE NO D\BT ?AT IT IS TO ! 9T]E/S ( ALL CLASSES 
-- ?\< NOT ( ALL ELEM5TS )9 !M -- ?AT GOV]NM5T %\LD 
/EADILY 9CREASE ITS SP5D+ & ITS TAX+0 7P4 #a#e#a74 ,IF ?IS IS SO1 
IT WILL ( C\RSE NOT ONLY 9CREASE ! PRODUCTION ( WA/E1 BUT SL[LY & 
SURELY DE/ROY ! PRIVATE-5T]PRISE SY/EM4 ,9 ! FIR/ PLACE1 GOV]NM5T 
SP5D+ MU/ BE RE/RICT$ TO PRODUCTION & S]VICES ?AT DO NOT 
COMPETE ) ?OSE ( PRIVATE CAPITAL1 = O!RWISE IT W\LD R$UCE ! 
'EFFECTIVE DEM&' )9 ! PRIVATE SECTOR ( ! ECONOMY TO ! 
SAME EXT5T TO :I* IT 9CREASES ! 'EFFECTIVE DEM&' ?R\< 
GOV]NM5T-9DUC$ PRODUCTION4 ,9 ORD] NOT TO DE/ROY PRIVATE CAPITAL1 
GOV]NM5T-9DUC$ PRODUCTION MU/ REMA9 NON-PR(ITABLE PRODUCTION4 ,9 ! 
SECOND PLACE1 GOV]NM5T-9DUC$ PRODUCTION MU/ REMA9 SMALL RELATIVE TO TOTAL 
PRODUCTION SO AS NOT TO DEPRIVE TOO MU* ( ! CAPITAL RES\RCES ( !IR 
CAPITAL *>ACT]1 I4E4 ( BE+ PR(IT-PRODUC+ MEANS ( PRODUCTION4 ,9 
BRIEF1 ! MA9T5ANCE ( ! PRIVATE-5T]PRISE SY/EM SETS DEF9ITE LIMITS TO 
! EXPANSION ( GOV]NM5T-9DUC$ PRODUCTION4 

,NOT SO1 H[EV]1 9 ,B>AN'S & ,SWEEZY'S OP9ION4 ,EV5 
,AM]ICA'S 0RUL+ CLASS ATTITUDE T[>D TAXATION & GOV]NM5T 
SP5D+10 !Y WRITE1 0HAS UND]GONE A FUNDAM5TAL *ANGE 444 ,TO 
! ,BIG ,BUS9ESSMAN 444 GOV]NM5T SP5D+ MEANS MORE EFFECTIVE DEM&1 & HE 
S5SES ?AT HE CAN %IFT MO/ ( ! ASSOCIAT$ TAXES =W>D ONTO CONSUM]S OR 
BACKW>D ONTO WORK]S0 7P4#a#d#i74 ,HE NOT ONLY 'S5SES' ?IS BUT 
ACTUALLY DOES SO1 :I*1 H[EV]1 CAN ONLY MEAN ?AT :ILE HE SECURES HIS [N 
PR(ITABILITY1 HE R$UCES ! 'EFFECTIVE DEM&' ?R\< HI<] 
PRICES4 ,?IS PROC$URE1 H[EV]1 IS PRECISELY ! WAY BY :I* P>T ( ! 
EXP5SE ( GOV]NM5T SP5D+ IS SPREAD OV] ALL ( SOCIETY4 ,:ILE P>T ( ! 
EXP5SE ( GOV]NM5T-9DUC$ PRODUCTION PILES UP AS ! NATIONAL DEBT1 ANO!R 
P>T IS CONT9U\SLY DI/RIBUT$ OV] ! :OLE ( ! ECONOMY & BE+ PAID 
= 9 HI<] PRICES BY MEANS ( 9FLATION4 

,! BUS9ESSMAN'S POSITIVE ATTITUDE T[>D GOV]NM5T SP5D+1 9 SO 
F> AS IT EXI/S1 IS DET]M9$ BY ! PR(IT REQUIREM5TS ( HIS P>TICUL> 
BUS9ESS4 ,:Y %\LD HE UND]/& ! CAPITALI/ ECONOMY ANY BETT] ?AN ,B>AN 
& ,SWEEZY1 :O1 EV5 BY CONSID]+ ! ECONOMY AS A :OLE & NOT M]ELY A 
P>TICUL> BUS9ESS )9 IT1 COME TO ! CONCLUSION ?AT GOV]NM5T SP5D+ 
W\LD SOLVE ! ECONOMIC PROBLEMS ( CAPITALISM & ( ALL ITS CLASSES8 ,BUT 
:ILE ! BUS9ESSMAN HAS ! EXCUSE1 AT LEA/1 ( HIS FL\RI%+ BUS9ESS1 
,B>AN & ,SWEEZY HAVE NO EXCUSE1 BECAUSE ! 'PROSP]ITY' CREAT$ 
BY WAY ( GOV]NM5T SP5D+ IS A FALSE PROSP]ITY1 CAPABLE ( PO/PON+1 BUT 
NOT ( ABOLI%+1 CRISIS CONDITIONS4 

,! 9DIVIDUAL BUS9ESSMAN IS NOT CONC]N$ ) ! NATURE ( ! 
'EFFECTIVE DEM&' :I* HE SUPPLIES4 ,TO HIM1 IT MAKES NO 
DIFF]5CE :E!R IT /EMS FROM GOV]NM5T OR FROM PRIVATE SP5D+4 ,LIKEWISE1 
! F9ANCI]S DO NOT C>E :E!R LOANS >E MADE TO PRIVATE 5TREPR5EURS OR 
TO GOV]NM5T1 SO LONG AS !Y >E SECURE & YIELD ! DESIR$ RATE ( 
9T]E/4 ,TO ! 9DIVIDUAL IT ALSO MAKES NO DIFF]5CE :E!R HE IS EMPLOY$ 
9 ! PRODUCTION ( WA/E OR 9 ?AT ( M>KETABLE COMMODITIES4 ,9 PRACTICE1 
NO DI/9CTION IS MADE BETWE5 ! PUBLIC & ! PRIVATE SECTOR ( ! 
ECONOMY1 & 9 BO? ALL TRANSACTIONS >E MONEY TRANSACTIONS4 ,9 MONEY T]MS1 
PRODUCTION ( WA/E IS JU/ AS1 OR EV5 MORE1 LUCRATIVE1 ?AN ! PRODUCTION ( 
COMMODITIES1 & -- UNTIL F9ALLY REPUDIAT$ -- ! ACCUMULATION ( 
! NATIONAL DEBT APPE>S AS ! ACCUMULATION ( CAPITAL4 ,CONSID]+ SOCIETY 
AS A :OLE1 H[EV]1 IT IS ONLY ! PRIVATE SECTOR :I* BR+S =? 
SURPLUS-VALUE & PR(IT4 ,ALL ! SOCIAL LAY]S :I* LIVE ON SURPLUS-VALUE1 AS 
WELL AS ! EXPANSION ( CAPITAL AS CAPITAL1 DEP5D ON ?IS SURPLUS-VALUE1 
:I*1 H[EV] MU* IT MAY BE 9CREAS$ ?R\< ! GR[+ PRODUCTIVITY ( 
LABOR1 IS AT ! SAME TIME ALSO DECREAS+ ?R\< ! RELATIVELY FA/] 
GR[? ( ! NON-PR(ITABLE RA!R ?AN ! PR(ITABLE SECTOR ( ! 
ECONOMY4 

,!RE IS NO D5Y+1 ( C\RSE1 ?AT 9 A FEW NATIONS & = A CONSID]ABLE 
TIME1 CAPITAL HAS BE5 ABLE TO PREV5T ! RISE ( DEPRESSIONS SU* AS PLAGU$ 
! WORLD PRIOR TO ,WORLD ,W> ,TWO4 ,& IT IS ( C\RSE TRUE ?AT ?IS WAS 
ACCOMPLI%$ BY GOV]NM5T 9T]V5TIONS 9 ! ECONOMY4 ,IT IS ?US ( GREAT 
IMPORTANCE TO CONSID] :E!R OR NOT !SE 9T]V5TIONS HAVE ACTUALLY SET 
ASIDE ! LAWS ( CAPITALI/ DEVELOPM5T AS SET =? BY ,M>X4 ,UND]TAK+S 
SU* AS ,B>AN'S & ,SWEEZY'S >E FULLY JU/IFI$1 ONLY1 9 !IR 
CASE1 !Y SAIL UND] A FALSE FLAG BY CLAIM+ TO AVAIL !MSELVES ( 
,M>X'S [N 'P[]FUL ANALYTICAL ME?OD'4 ,?IS IS PRECISELY 
:AT !Y DO NOT DO4 ,( C\RSE1 ,M>X'S 'ANALYTICAL ME?OD' 
MAY SEEM TO HAVE LO/ ITS RELEVANCE BECAUSE ( ! MODIFICATIONS BR\<T AB\T 
BY MONOPOLY CAPITAL & GOV]NM5T 9T]V5TIONS 9TO ! ECONOMY4 ,BUT H]E 
APPE>ANCES >E MISLEAD+ &1 9 ANY CASE1 W\LD NOT SUFFICE TO DE/ROY 
,M>X'S !ORY ( ! IMMAN5T LAWS ( CAPITAL ACCUMULATION4 

,! MODIFICATIONS ( ! CAPITALI/ SY/EM CAN JU/ AS WELL BE 9T]PRET$ 
AS POLITICAL REACTIONS TO UNCONTROLLABLE ECONOMIC EV5TS1 :I*1 LIKE O!R 
'C\NT]T5D5CIES' TO ! DOM9AT+ TR5D ( CAPITAL EXPANSION1 
S]VE1 = A TIME1 TO MA9TA9 SOCIAL /ABILITY ?R\< A PSEUDO-PROSP]ITY 
BAS$ ON WA/E PRODUCTION4 0,IF MILIT>Y SP5D+ W]E R$UC$ ONCE AGA9 
TO PRE-,SECOND ,WORLD ,W> PROPORTIONS10 ,B>AN & ,SWEEZY PO9T \T1 
0! NATION'S ECONOMY W\LD RETURN TO A /ATE ( PR(\ND 
DEPRESSION0 7P4#a#e#c74 ,9 O!R WORDS1 ! ECONOMY IS /ILL 9 A /ATE ( 
DEPRESSION1 C\NT]M&$ BY EXP5DITURES :I* BY NO /RET* ( ! 
IMAG9ATION CAN BE CALL$ AN ACCUMULATION ( CAPITAL4 ,)\T ! ACCUMULATION 
( CAPITAL1 H[EV]1 ! CAPITALI/ SY/EM CAN ONLY CONTRACT1 & IT CONTRACTS 
! FA/]1 ! MORE ITS PRODUCTION BECOMES UNPR(ITABLE4 ,UNLESS ! :OLE ( 
CAPITAL %\LD BE NATIONALIZ$ TO BE UTILIZ$ = O!R ?AN PRIVATE-5T]PRISE 
5DS1 GOV]NM5T 9T]V5TIONS 9 ! ECONOMY >E NECESS>ILY LIMIT$ BY ! 
NE$ TO SECURE ! PR(ITABILITY ( ! DOM9AT+ PRIVATE CAPITAL4 ,:5 !SE 
LIMITS >E REA*$ !Y WILL CEASE C\NT]M&+ ! CAPITALI/ CRISIS4 

#aiff 

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