Paul M. Sweezy

Monthly Review, Oct, 2004 by Michael A. Lebowitz

Rather than focus upon the Keynesian elements in Sweezy, the real question is how Keynes, working within the neoclassical framework, came up with an argument so easily absorbed within a Marxian framework. As Marx had argued that the political economists did not understand the underlying basis of their own laws (theories), so also did Sweezy consistently stress that the Keynesians knew what was occurring in the Depression but did not understand why. ("Hansen understands very well what is wrong with our present-day economy, and that is all to the good. But ask the question of this book: why have matters turned out as they have? You will not find much by way of answer." (31)) The inadequacy of proposed Keynesian solutions was, of course, the central problem.

The Keynesians, Sweezy indicated, did not see that the troubles were "manifestations of the real nature of the capitalist system itself." (32) Thus, while Keynes "was able to demonstrate that his fellow economists, by their unthinking acceptance of Say's Law, were in effect asserting the impossibility of what was actually happening," Sweezy argued that Keynes was unable to proceed to a critique of existing society. Why? Because Keynes attributed the problems to "a failure of intelligence and not to the breakdown of a social system." (33) "In general," Sweezy commented, "one can say that to the Keynesians the crisis of capitalism appears as a crisis of intelligence." (34)

Nevertheless, Sweezy emphasized that, when it came to a clarification of the "functioning of the capitalist mechanism," Marxists had much "to learn from the work of Keynes and his followers." (35) Indeed, some of Marx's work, he argued, "takes on a new meaning and fits into its proper place when read in the light of the Keynesian contributions." (36) And, he continues to stress today that Marxists should not be afraid to learn from Keynes since "most of the valuable Keynesian insights can be added" to the basic structure of Marxism. (37)

Yet, it was not many years before Sweezy would identify problems in The Theory of Capitalist Development as related to the general Keynesian intellectual environment in which he had been working. Initially, as he indicated in a 1950 response to Evsey Domar and several Japanese critics of his book, Sweezy declared his exposition of underconsumption crises in terms of net aggregates to be "one of the weakest parts of the book" and argued that his aggregative analysis (attributable to Keynesian influence) was not suitable for exploring the question of underconsumption. (38) In subsequent years, however, he became increasingly critical of Keynesian theory's failure precisely because it was "wholly on the macro level." (39) The missing micro-element was that of monopoly.

The General Theory in the Golden Age (40)

Upon Sweezy's return to Harvard after the war, it became clear that there were no prospects of being rehired with tenure after the completion of his existing contract. Although supported by Schumpeter for a tenure-track position, "there was never any chance that they would take a Marxist." Accordingly, financially secure enough that he did not have to rely upon an academic salary, Sweezy resigned his position and proceeded to work with Leo Huberman to establish Monthly Review. (41)