Table Of Content

|\ Z I A N | A Paul A. Baran The Political Economy of Growth with an Introduction by R. B. Sutcliffe Penguin Books w Pelican Bools The Political Economy of Growth UntQ his death in 1954 Pant Baran was Professor of Economics at Stanford University. He was bom at < Nikolaev on the Black Sea. and educated in Germany and at the Plokhanov Institute of Economics in Moscow,-He moved to the United States in 1939 and received his M.A. from Harvard in 1941. After wartime military service he worked with the Federal Reserve Bank of New York, leaving to join Stanford University in 1949. He was co-author, with Paul Sweezy, of Monopoly Capital, x also available in Pelicans. Contents Baran never wrote chapter heading» for The Political Economy if Growth; this table of contents therefore is only a suggested one. It may however help readers to find their way around the book. Preface to the First Edition 13 Foreword to 1962 Printing 19 1 Consumer sovereignty and the liberal and conservative attitudes to monopoly capitalism 19 2 Clarification of the nature of the surplus, waste and poverty 28 3 Alternatives for the underdeveloped countries 37 4 Some problems of socialist construction 44 Introduction 59 Some Suggestions for Further Reading 103 THE POLITICAL ECONOMY OF GROWTH One A General View 1 The growth of political economy and the crises of capitalism 107 2 Decolonization and the growth of the socialist challenge 117 3 Economics in league with imperialism 123 4 The definition and measurement of growth 127 Two The Concept of the Economic Surplus 1 Actual and potential economic surplus 132 2 Rationality and waste 134 3 Productive and unproductive labour 143 4 Planned economic surplus 155 Three Standstill and Movement Under Monopoly Capitalism, I 1 The classical economists’ view of capitalist growth 158 8 Contents 2 Use of resources in the age of monopoly capitalism 165 3 Tbe surplus under monopoly capitalism 170 4 Investment, technical progress, and population growth 178 5 The use of the surplus in competitive capitalism 191 6 Investment and excess capacity under monopoly capitalism 196 7 Capitalism once progressive now retrograde 207 Four Standstill and Movement Under Monopoly Capitalism, II 1 Possibilities of surplus absorption : consumption and unproductive labour 209 2 The role of the state in monopoly capitalism 215 3 Possible state action to maintain demand 225 4 Foreign trade and investment and imperialist rivalry 235 5 Foreign economic relations, labour aristocracy, and tbe full significance of imperialism 243 6 Short-term stabilization 248 7 Inflation, taxation, and the expanding surplus 252 8 Imperialism and War 258 Five On the Roots of Backwardness 1 The common historical roots of capitalist development and underdevelopment 265 2 The case of Indian underdevelopment 277 3 The case of Japanese development 285 4 The strangulation of development 298 Six Towards a Morphology of Backwardness, I 1 The size and utilization of the surplus in underdeveloped countries; agricultural revolution and counter revolution, and the illusion of land reform 300 2 Non-agricultural sectors (a): Merchants and money-lenders 308 3 Non-agricultural sectors (b): industry; the failure of independent capitalist industrialization 312 4 Non-agricultural sectors (c): foreign enterprise (mining) 317 Contents 9 5 The direct impact of foreign investment: alleged benefits: (i) and (il) 325 6 The indirect impact of foreign capital: alleged benefits (iii) 332 7 Foreign capital, social structure and the restriction of industrialization 337 $ The official support of private capital 342 Seven Towards a Morphology of Backwardness, II 1 Non-agricultural sectors (d): the state and alleged benefits of foreign investment (iv) 345 2 Foreign investment and the policy of the state - comprador régimes 350 3 Foreign investment and state expenditure in New-Deal régimes 366 4 Corollary (i) : potential surplus is targe. The illusion of the terms of trade 375 5 Corollary (ii) : the fallacy of the lack of entrepreneurship 384 6 Corollary (iii) : the three fallacies of Malthusianism 388 Eight The Steep Ascent 1 The essential social revolution encounters the hostility of imperialism 402 2 Social revolution; the direct effects of imperialist foreign policy: war, cold war, and the cost to socialist countries 410 3 The economic tasks and problems of the social revolution; towards planned economic surplus 416 4 Central issues of socialist economic construction (i) : the relations of industry and agriculture 428 5 Central issues of socialist economic construction (ii): producer and consumer goods 443 6 Central issues of socialist economic construction (iii): capital-intensive or labour-intensive methods of production 445 7 Foreign economic relations of the socialist economy 448 Index 465 10 Contenu Tables 1 Industrial concentration in the United States of America 73 2 World income distribution in 1969 75 3 World income distribution in 1949 267 4 Dividends of Dutch corporations 1922-37 378 5 Earnings of U.S. enterprises at home and in underdeveloped countries 379 6 Population densities 390 7 Consumption of energy, and national income 391 Figure Developed and underdeveloped countries in the capitalist system 87 What social science needs is less use of elaborate techniques and more courage to tackle, rather than dodge, the central issues. But to demand that is to ignore the social reasons that have made social science What it is. J. D. Bernal, Science in History Preface to the First Edition The manuscript of the present volume was completed in the autumn of 1955. Much that has since happened in the world bears a direct relation to a number of themes dealt with here. Resisting for obvious reasons the strong temptation to insert some of the relevant considerations into the galley proofs, I decided to attempt to summarize them briefly in this preface. The events in the Near East which culminated in the Anglo- French military action against Egypt provide corroboration of one of the main theses of this book: the 'unreformed' nature of contemporary imperialism and its inherent animosity towards all genuine initiative at economic development on the part of the underdeveloped countries. The role played in this conflict by the United States demonstrates the unabated rivalry among the imperialist countries as well as the growing inability of the old imperialist nations to hold their own in face of the Am erican quest for expanded influence and power. In the bitter words of the Loudon Economist. ‘We must learn that we are not the Americans’ equals now, and cannot be. We have a right to state our minimum national interests and expect the Am ericans to respect them. But this done, we must look for their lead.' (17 November, 1956.) While the assertion of American supremacy in the 'free' world implies the reduction of Britain and France (not to speak of Belgium, Holland, and Portugal) to the status of junior parti ners of American imperialism, this shift may well have certain favourable consequences for the underdeveloped countries. Transferring as it were from service is an impoverished business to employment in a prosperous enterprise, the colonial and dependent countries may expect their new principal to be 14 Preface less rapacious, more generous, and more forward-looking. Al though it is most doubtful whether this change will make any serious difference in the basic issues of economic and social development in the backward areas, some improvement in their fate is not unlikely. Recent developments in the socialist countries of Europe are even more germane to the propositions advanced in (and under lying) this study. Khrushchev’s revelations concerning seme aspects of Stalin’s rule and the subsequent events in Poland and Hungary have brought into the open with renewed force the steepness of the backward countries’ ascent to a better and richer society. But it is merely the ‘cult of personality’ in reverse to ascribe all the crimes and errors committed in the Soviet Union before the Second World War and in all of Eastern and South-eastern Europe after it to the evil personalities of Stalin, Beria, and their associates. Matters are not so simple; and the general feeling is wholly understandable that it is indeed the ‘entire system’ that must be held responsible for what was per petrated by the leadership. Yet it is a grievous fallacy to con clude from this that socialism is the ‘entire system’ that needs to be repudiated. For it is not socialism that can be fairly charged with the misdeeds of Stalin and his puppets - it is the political system that evolved from the drive to develop at breakneck speed a backward country threatened by foreign aggression and In face of internal resistance. The emergence of such a political system under the unique circumstances prevailing in Russia after Hitler’s seizure of power and in the countries bf Eastern and South-eastern Europe during the frightening years of the cold war does not ‘prove’ that socialism is inherently a system of terror and repression. What it does mean - and this is a historical lesson of paramount importance - is that socialism In backward and underdeveloped countries has a powerful ten dency to become a backward and underdeveloped socialism. What has happened in the Soviet Union and the socialist coun tries of Eastern Europe confirms the fundamental Marxian proposition that it is the degree of maturity of society’s pro ductive resources that determines ‘the general character of