Paul Sweezy

[Louis Proyect]

Memorial Service for Paul Marlor Sweezy (1910-2004)

A memorial service for Paul Sweezy will be held on Saturday, April 17, 
3-6pm at Landmark on the Park, 160 Central Park West (at 76th Street). 
Please call (212) 691-2555 for further details.

by John Bellamy Foster

Referred to by The Wall Street Journal in 1972 as “the ‘dean’ of radical 
economists,” Paul M. Sweezy was, in the words of John Kenneth Galbraith, 
“the most noted American Marxist scholar” of the second half of the 
twentieth century.(1) Sweezy’s intellectual influence, which was global 
in its reach, lay chiefly in two areas: as a leading radical economist 
(and sociologist), and as the principal originator of a distinct North 
American brand of socialist thought in his position as co-founder and 
co-editor of Monthly Review magazine. Like both Marx and Schumpeter, to 
whose thought his work was closely related, Sweezy provided a historical 
analysis and crtique of capitalist economic development, encompassing a 
theory of the origins, development and eventual decline of the system.

Sweezy was born April 10, 1910 in New York. His father, Everett B. 
Sweezy was vice president of First National Bank of New York headed by 
George F. Baker, a close partner of J.P. Morgan and Company. His mother, 
Caroline (Wilson) Sweezy was in the first graduating class from Goucher 
College in Baltimore. He had two older brothers, Everett, born 1901, and 
Alan, born 1907. All three brothers went to Exeter and then to Harvard. 
In the early years, Paul followed in the footsteps of his brother Alan. 
Both Alan and Paul were editors of the Exonian and then later presidents 
of the Harvard Crimson. Both studied economics at the undergraduate and 
graduate levels at Harvard. Paul had all but completed his senior year 
at Harvard when his father died in 1931, interrupting his studies. 
Consequently, he did not graduate officially (magna cum laude) until the 
following year in 1932. In 1931-32, however, having already finished his 
undergraduate studies, he began graduate courses in economics at 
Harvard. It was at this time of intense study that his interests shifted 
decisively from journalism to economics.

In 1932 Sweezy left for England for a year’s study at the London School 
of Economics (during student breaks he also spent several months 
studying in Vienna). As a result of his experiences in Britain his life 
was to change considerably. Like many he had been shaken by the onset of 
the Great Depression. His father had lost the greater part of his 
fortune in the 1929 Crash, although enough remained to ensure a 
comfortable existence. In Britain Sweezy was awakened by the 
intellectual and political ferment of what was a turning point in world 
history. Not only did the depression deepen in this period but Hitler 
also came to power in Germany. His initial intention in attending the 
London School was to work with the conservative economist Friedrich 
Hayek. However, in the heated debates then taking place, particularly 
among younger scholars, Sweezy found himself increasingly attracted to 
Marxism. Key influences inducing this change in perspective were 
lectures he attended by Harold Laski at the London School and reading 
Leon Trotsky’s History of the Russian Revolution, which had just been 
translated into English. Sweezy was also affected by the rapid 
developments in economics in England in this period. It was at this time 
that he became acquainted with some of the younger, left-leaning 
Cambridge economists, including Joan Robinson.

In 1933 Sweezy returned to do graduate studies in economics at Harvard. 
He found the intellectual climate dramatically transformed. Marxism, 
which in his prior years at Harvard had played no part in his education, 
had by then become a topic of discussion in some of the larger 
universities. One big change was the arrival at Harvard of Joseph 
Schumpeter, one of the foremost economists of the twentieth century. A 
conservative economist, Schumpeter nonetheless had enormous respect for 
the economics of Karl Marx, even going so far—as Sweezy once put it—“to 
build a structure of thought which was to rival Marx. In other words he 
took Marx as a model in a way.”(2) Schumpeter had a small seminar of 
around a half dozen students in which Sweezy took part. Over the years 
the two became fast, even legendary friends, engaged in continual 
intellectual discussions and debates, in which other notable figures 
such as Oskar Lange and Wassily Leontiev and later Paul Samuelson also 
took part. Sweezy was for two years Schumpeter’s teaching assistant in 
his graduate course in economic theory.

During these years at Harvard Sweezy co-founded the journal Review of 
Economic Studies and published a series of important economic essays on 
issues of imperfect competition, the role of expectations in Keynesian 
analysis and economic stagnation. He was deeply affected by the 
revolution in economics introduced by John Maynard Keynes and 
incorporated aspects of Keynes’ analysis into his thought while 
remaining a Marxian critic.

In September 1936 Sweezy and Abba Lerner, a young economist at the 
London School of Economics, wrote a letter to the New Statesman and 
Nation responding an earlier article by Keynes on British foreign 
policy” in that publication. They argued that the failure of Britain to 
oppose the fascist powers in Ethiopia and Spain was a product of the 
class interest of the British ruling class, which, while opposed to 
fascism generally, put the defense of private property ahead of its 
national interests. Any other interpretation but the Marxist one, they 
argued, would leave analysts like Keynes himself in his article merely 
“surprised at the incredible stupidity that must be attributed to the 
British Foreign Office.” The two young economists ended their letter by 
indicating their “very highest admiration for Mr. Keynes’ work in our 
field. We think he has done more than any other writer in our time 
towards laying bare one of the deepest contradictions of the capitalist 
economy, the coexistence of willing hands and open mouths.” Keynes 
replied that the explanation for these shortcomings of British foreign 
policy was the “unqualified pacifism” of much of the British public. 
“Those who fail to observe it and interpret everything in terms of 
Capitalist and Communist theory are blind to their surroundings.”(3)

After John Maynard Keynes’ General Theory of Employment, Interest and 
Money was published in 1936 Sweezy became a very active participant in 
the Harvard discussions surrounding the Keynesian Revolution in economic 
theory. At the same time he married a young economist, Maxine Yaple. 
During this period he was working for various New Deal agencies. In 1937 
he carried out an important study of “Interest Groups in the American 
Economy” for the National Resources Committee, which was published in 
1939 as an appendix to the NRC’s well-known report, The Structure of the 
American Economy. In opposition to Berle and Means’ claim that a large 
number of U.S. firms were management controlled, Sweezy argued that it 
was possible to discern eight leading “interest groups” consisting of 
industrial and financial alliances. In the first group he listed the 
investment banking firm of J.P. Morgan and Co. and its alliance with the 
First National Bank, in which his father had worked. Sweezy also carried 
out research in this period for the Security and Exchange Commission on 
their study of monopoly in 1939 and for the Temporary National Economic 
Committee charged with analyzing the U.S. economy, particularly with 
respect to issues of competition and monopoly in 1940.

Sweezy’s first formal economic publication was “Professor Pigou’s Theory 
of Unemployment” published in the Journal of Political Economy in 1934. 
Over the course of the 1930s he wrote more than twenty-five articles and 
reviews on economic topics. Two of the papers that he authored in this 
period were to be of lasting importance for his work. The first was his 
article “Expectations and the Scope of Economics” in the Review of 
Economic Studies in June 1938. The second was his classic article, 
“Demand Under Conditions of Oligopoly,” in the Journal of Political 
Economy, August 1939. The earlier article reflected the Keynesian 
concern with expectations under conditions of economic disequilibrium 
and uncertainty. The second introduced the famous “kinked demand curve” 
theory of oligopolistic pricing, which explained why oligopolistic 
prices tend to go only one way—up. Both of these themes were to play a 
large role in the later theory of monopoly capital, as developed by 
Sweezy and Paul Baran. The kinked demand curve hypothesis originally 
developed out of Sweezy’s 1927 dissertation Monopoly and Competition in 
the English Coal Industry, 1550-1850, which won the David A. Wells prize 
and was published in the following year by Harvard University Press. 
Schumpeter was on Sweezy’s dissertation committee.

In 1938 Sweezy became an Instructor at Harvard. During these years he 
and his brother Alan helped in the founding of the Harvard Teacher’s 
Union, as a branch of the American Federation of Teachers. In addition 
to teaching the principles of economics and a course on corporations, he 
took over a course on the economics of socialism formerly taught by 
Edward Mason. It was in the process over a number of years of developing 
the lectures for this course that he wrote his seminal work The Theory 
of Capitalist Development: Principles of Marxian Political Economy 
(1942). He later explained that it had required an enormous struggle on 
his part to shift from the marginal utility analysis that he had learned 
through classic texts by figures like Harvard’s Frank Taussig, to Marx’s 
labor theory of value—a shift in thinking that could not be accomplished 
in a day or even a year, since these frameworks raised entirely 
different sets of questions. In drafting the manuscript for the The 
Theory of Capitalist Development he received help from the Japanese 
economist Shigeto Tsuru, who was then studying at Harvard and provided 
an appendix for the book on Marx’s reproduction schemes. This classic 
work is still used to teach Marxian economics to students in economics. 
More than simply a textbook it made a number of pioneering 
contributions, including: its emphasis on the qualitative (not simply 
quantitative) value problem in Marx’s treatment of the labor theory of 
value, its elaboration of the Bortkiewicz solution to the transformation 
problem; and its discussions of crisis theory and monopoly capitalism. 
It also provided in the introduction of the book what was to be an 
influential explanation of Marx’s method.

The most important conclusion of the The Theory of Capitalist 
Development had to do with the long-run stagnation of investment under 
capitalism arising from an in-built tendency in the system toward the 
overaccumulation of capital. “Stagnation of production, in the sense of 
less-than-capacity utilization of productive resources”--Sweezy was to 
write, evoking a theme that was to repeat itself again and again in his 
work,-- “is to be regarded as the normal state of affairs under 
capitalist conditions. If this view is adopted the whole crisis problem 
appears in a new light. Emphasis shifts from the question: ‘What brings 
on crisis and depression?’ to its opposite: ‘What brings on expansion?’” 
The Theory of Capitalist Development appeared in the same year as 
Schumpeter’s Capitalism, Socialism and Democracy and the two works can 
be seen as two sides of a complex debate on the future of capitalism and 
socialism. Schumpeter referred numerous times to Sweezy, and in 
particular to The Theory of Capitalist Development, in his History of 
Economic Analysis (1951), where he “strongly recommended” Sweezy’s book, 
“as an admirable presentation of Marx’s (and most of the neo-Marxists’) 
economic thought.”

full: http://www.monthlyreview.org/paulsweezy.htm

--

The Marxism list: www.marxmail.org