Sweezy came from a prosperous East Coast American family: his father was the Vice-President of the First National Bank of New York. He was rich, brilliant, and extraordinarily handsome. (Alice Thorner, the well-known scholar on contemporary India who was a friend of Sweezy, was a part of the Monthly Review family, and belonged, with her late husband Daniel, to the same circle of East Coast radicals as Sweezy, before being forced to emigrate during the McCarthy years, describes him as having the stunning looks of a "Greek God"). He went to Harvard as a matter of course, where he and the renowned "mainstream" economist Paul Samuelson, were among the favourite students of Joseph Schumpeter. His doctoral dissertation on Monopoly and Competition in the English Coal Trade 1550-1850 (which was published in the same Harvard series as Samuelson's Foundations of Economic Analysis) was much more than an excursus into economic history; it was a critical and brilliant examination of Alfred Marshall's "biological" theory explaining the rise and decline of firms, which was so influential at the time.

It was common for the children of the East Coast establishment to have a stint in England, preferably at the London School of Economics, before settling down to their chosen careers, and accordingly Sweezy went for a while from Harvard to LSE. (John F. Kennedy for instance was to do the same some years later). At LSE he duly enrolled to attend the lectures of Friedrich Von Hayek, whom Lionel Robbins had brought from the continent to counter the influence of Keynes in English intellectual life. Hayek's strong and persistent attacks on Marx in the course of his lectures persuaded Sweezy to make a proper study of Marxism. At the end of that study he was a Marxist! And the result of that study was his magnum opus, The Theory of Capitalist Development (1942), its title inspired by his old teacher Joseph Schumpeter's book, The Theory of Economic Development. (The English edition of Sweezy's book with a foreword by Maurice Dobb was published in 1946.)

Meanwhile Sweezy had joined the economics faculty at Harvard; but when the time came for Harvard to take the "up or out" decision in the case of Sweezy, the clear pointer was towards an "out" decision, his Marxist predilections having become apparent meanwhile. Sweezy did not wait for the decision; he resigned from the Harvard faculty. It is ironical that both Sweezy and Samuelson, representing very different ideological positions, had to suffer victimization at Harvard, though each for a different reason: Sweezy for his Marxism, and Samuelson allegedly for his Jewishness. But while Samuelson migrated only a few hundred meters to join and build up the economics faculty at MIT, Sweezy gave up his academic career altogether, and set up, along with his friend Leo Huberman (well-known for his excellent introduction to Marxism, Man's Worldly Goods), a journal Monthly Review, which, it would be no exaggeration to say, became the most significant socialist journal anywhere in the world in the English language. (Among its first set of contributors was Albert Einstein with his essay "Why Socialism"?)

The popularity of Monthly Review arose from its simplicity, its concreteness, and its concern with the third world. It did not have any of the narcissism, the Euro-centrism, and the penchant for "smartness", for "high-browism", and for coquetry with words that one often finds in many European Left journals. The reason for this contrast lay partly in its American-ness (which in "highbrow" European Left circles is often referred to as American "moralism" but one of whose constituents is a very large dose of honesty); it lay partly in the predominance of economics in MR, a subject, which though technical, does not easily lend itself to highbrowism (and MR's economics got a solid anchorage in empirical research once Harry Magdoff, a reputed applied economist of the Left and a former member of the Roosevelt administration joined Sweezy as a co-editor); it lay partly in Sweezy's own extraordinary clarity of mind; but it lay above all in the centrality of imperialism in MR's overall theoretical perspective. No other Marxist journal in the English language (and that naturally excludes Jean-Paul Sartre's Les Temps Moderne) kept imperialism so firmly in the centre of the picture as MR (and Harry Magdoff was to write an extremely influential book on the subject The Age of Imperialism), which is hardly surprising, since it was a journal coming out of the leading metropolis of the leading imperialist power of the post-war period.

Of particular interest to MR readers were the "Notes of the Month" which the editors used to write in every issue of MR, which gave a remarkable insight inter alia into the functioning of American capitalism. (These have been collected in several volumes under the co-authorship of Sweezy and Magdoff and published by Monthly Review Press).

Sweezy did not keep himself confined to editing MR and writing outstanding books. He was an activist who threw himself into all the major political issues that came up during his eventful life, from the defence of the Soviet Union , to the fight against fascism, to the defence of the Cuban Revolution (Che Guevara was a personal friend of Baran and Sweezy), to the struggle against US aggression on Vietnam, to solidarity with the student upsurge of the late sixties.

In 1954, at the height of the McCarthyite witch-hunt, Sweezy was summoned on two occasions to appear before the Attorney General of New Hampshire who had been conferred wide-ranging powers to investigate "subversive activities". Upon his refusal to answer questions he was declared to have been in contempt of court and sent to the county jail (though he was released on bail). His appeal against the contempt verdict was turned down by the New Hampshire Supreme Court, but upheld eventually by the U.S. Supreme Court in 1957.

The revival of interest in Marxism on the campuses in the late sixties led to Sweezy's visiting several universities to lecture on Marxism, until he discovered that University administrations were using his visits as an excuse for denying tenure to young Marxist scholars. Their argument was that a tenured faculty of Marxist scholars was unnecessary in view of the availability of distinguished Marxists from outside. Upon learning this, Sweezy discontinued these visits. During the war, when the Left supported the war effort against fascism, Sweezy was associated with the Office of Strategic Security (OSS) which was to become the precursor of the CIA.

Someone once remarked that while Sweezy's The Theory of Capitalist Development was the most significant work on the Left produced in America in the decade of the forties, Paul Baran's The Political Economy of Growth was the most significant work on the Left produced in America in the decade of the fifties, and Baran and Sweezy's Monopoly Capital was the most significant work on the Left produced in America in the decade of the sixties. Monopoly Capital, dedicated to Che, took ten years to write, and Baran passed away before it was published. Sweezy not only brought out the joint work but lectured widely to spread the central message of the book. When he was invited to deliver the prestigious Marshall lectures at Cambridge University, U.K., the theme he chose was: "The Theory of Monopoly Capitalism".

After the programme of two lectures was over at Cambridge, there was the official reception, at which Joan Robinson happened to be discussing the lectures with a group of people that included myself. She ended the discussion by saying: "I disagree with Paul on several issues, but he is a real saint." The term may appear odd being applied to a Marxist, but what stood out about Paul Sweezy, in addition to his brilliance, his intellectual calibre and his profound commitment to the cause of socialism, was a nobility of character that is indeed extremely rare to find.

Sweezy's enduring contribution to "mainstream" economics is the so-called "kinked demand curve" which oligopolists are supposed to face. The idea that in oligopoly markets a reduction in price by any seller leads to retaliatory reductions by others while an increase in price does not lead to any corresponding increase, thus giving rise to a "kink" in the perceived demand curve of each seller at the prevailing price, was originally advanced to explain the stability in oligopoly price. But the idea is a powerful one which can be incorporated into a variety of theories about oligopoly pricing; it constitutes the primary explanation of why price competition is eschewed under oligopoly.

But Sweezy himself was rather dismissive about this paper even as he was writing it. And in any case, this contribution pales into insignificance in comparison with his awesome achievement, The Theory of Capitalist Development (TCD). TCD was remarkable for a number of reasons: first, it was an extraordinarily lucid presentation of Marx's ideas on economics, one which has remained unsurpassed in the more than six decades that have elapsed since it first appeared. Secondly, it was a convincing demonstration of the proposition that the essentials of Keynes' ideas which were then shaking the world were already embedded in Marx's writings, a proposition that was remarkably bold and original in a situation where orthodox Marxists were treating Keynesian theory with barely concealed animosity. Thirdly, it introduced to the English-speaking readers for the first time a whole range of Marxist economic ideas that had developed in the continent by thinkers from Kautsky, to Hilferding, to Grossman, to Rosa Luxemburg, to Tugan-Baranovsky, to Louis Boudin, to Otto Bauer, to Nikolai Bukharin. The fact that there was an extraordinarily rich literature in the Marxist economic tradition was brought home to the Anglo-Saxon world with a vengeance. Fourthly, it provided a cogent explanation of contemporary phenomena, such as inter-imperialist rivalry, and fascism, starting from the basics of Marxist economic theory, not as accidental or conjunctural occurrences, but as phenomena rooted in the political economy of capitalism. And finally, and most significantly, it advanced a theory of "underconsumption" which was to dominate the Marxist economic discourse thenceforth. Indeed both Baran's The Political Economy of Growth, and Baran and Sweezy's Monopoly Capital were basically re-iterations and refinements of the "under-consumptionist" theory first advanced in TCD.

"Underconsumptionism", which refers to the view that a shift in the distribution of social income away from the workers to the capitalists, produces, through shrinking demand, a tendency towards stagnation under capitalism, was of course an old idea. It had been advanced by a host of writers from Sismondi to Hobson, to Luxemburg, to Otto Bauer. Sweezy's, and Baran's, contribution was to argue that "underconsumptionism" was an ex ante tendency (which I shall explain shortly), and to eliminate thereby a whole range of confusions surrounding the theory. The theory for the first time acquired a rigorous totality.

The standard objections to "underconsumptionism" were two-fold: first, there was no perceived tendency towards secular stagnation in the capitalist world. True, the inter-war years had witnessed the "Great Depression" which had persisted until the start of re-armament (in fascist countries earlier, and in liberal capitalist countries under the fascist threat), but this did not amount to a secular tendency, since post-war capitalism had experienced remarkable growth rates. Secondly, there was not even any statistical evidence to show that the share of profits in output was rising in the advanced capitalist countries as predicted by the underconsumptionist argument. (Nicholas Kaldor had made this point in a review of Paul Baran's book).

Baran and Sweezy's ingenious answer to these objections can be explained with a simple arithmetical example. Suppose the total output is 100, of which wages constitute 50 and profits 50; workers' consumption is 50, capitalists' consumption is 25 and investment is 25. Now suppose that the distribution changes to 40:60 between wages and profits, and that capitalists' consumption and investment remain unchanged. Since workers cannot consume beyond their wages, total demand in the economy would be only 90 compared to 100 earlier. But if the State chips in with an expenditure of 10 which it raises through a tax on profits, then we shall once again have an output of 100, and (post-tax) profits of 50 (though the wage bill would be 40).Neither the total output nor the share of post-tax profits in it would have changed compared to the initial situation, even though clearly there has been an ex-ante tendency towards underconsumption. In other words, the ex ante tendency towards underconsumption, which underlies the new situation, is not (and indeed is scarcely ever) directly visible: it has called forth and is therefore camouflaged by State intervention. This, Baran and Sweezy argued, is exactly what was happening in post-war capitalism, where State intervention, taking the form of larger military expenditure, had prevented the realization of the ex ante tendency towards underconsumption.

This argument whose empirical merit we need not go into here, had however the following implications: first, since advanced capitalism had succeeded to a large extent in manipulating its internal contradictions, the main resistance to it could come only from the "outlying regions" of the third world where its military might was being put to use for imposing a new imperial order (in which, as Magdoff was to argue, the need for raw materials played a crucial role); secondly, it is its oppressiveness and irrationality, as opposed to any internal politico-economic crisis arising from its unworkability on account of the playing out of its immanent laws, that constituted the real flaw of contemporary capitalism. The system in other words was not one that got bogged down in crises and stagnation, but one that worked by wasting huge amounts of resources on maintaining a military machine for terrorizing the world, especially the third world.

A similar view was held at the time by many; it was explicitly articulated by Herbert Marcuse, among others. Not surprisingly however it brought forth accusations against Baran and Sweezy in traditional Left circles in the advanced capitalist countries, which were disturbed at the absence of any explicit role of significance for the metropolitan proletariat in the latter's scheme of things, that they were being "moralists" and "third worldists". The reference to "moralism" as a trait of the American Left complemented this; even Joan Robinson's reference to Sweezy as a "saint" had a faint echo of this perception (its laudatoriness reflecting her own ideological position which was Left Keynesian). The other side of the same coin however was Baran and Sweezy's recognition of the pre-eminent role of imperialism, which, as already mentioned, scarcely gets the attention it deserves in traditional Marxist writings in the advanced capitalist countries. Baran and Sweezy's alleged "third worldism" in other words was but the obverse of the centrality of imperialism in their perception. There is a tension here which I shall take up later.

Of course advanced capitalism has developed a whole range of new contradictions, arising from the emergence of a new form of international finance capital and the globalization of finance that it promotes, which have undermined the scope for State intervention of the Keynesian kind that Baran and Sweezy had taken for granted in Monopoly Capital. Nonetheless the tendency towards underconsumption highlighted by them has to be reckoned with as a basic element in any analysis of contemporary capitalism. (This tendency however need not be analyzed only within the confines of the advanced capitalist world in isolation: a relative shift of income from the poor of the world to the rich can also contribute to this tendency).

The emphasis on underconsumptionism in Sweezy was not an isolated intellectual act; it was an integral part of Sweezy's Marxism. After the publication of Maurice Dobb's Studies in the Development of Capitalism, Sweezy had been involved in a famous debate with Dobb (a debate in which Rodney Hilton, Takahashi and Christopher Hill had joined later) on the transition from feudalism to capitalism (because of which the debate is sometimes referred to as the "Transition Debate"). That debate need not be reviewed here but the essential point of Sweezy's intervention, on the basis of Henri Pirenne's work, was that the opening up of Mediterranean trade had played a crucial role in the undermining of feudalism and the ushering in of capitalism. (Dobb's reply to this was that the impact of trade depended on the internal state of the mode of production under consideration, and that trade had even given rise to a "second serfdom" in Eastern Europe).

The real point about Sweezy's intervention to my mind however had been to underscore the role of demand-side factors; and even his underconsumptionism was concerned with demand-side factors. In other words there is a continuity of thought in Sweezy between his underconsumptionism and his stance in the transition debate. But since the question of demand is supposed to belong to the realm of circulation as distinct from the realm of production to which Marxism accords primacy, those Marxists who have been concerned with the demand-side have often been attacked for diluting Marxism, the classic example of which was Bukharin's attack on Rosa Luxemburg. At the same time however if one does not consider the demand-side and hence the sphere of circulation, and remains confined to the realm of production alone, then one necessarily remains focussed on an isolated capitalist economy, where the workers and the capitalists face one another in the production process, and there is no necessary role for imperialism, in the inclusive sense covering both the colonial and what Lenin called the imperial phases, in the process of capital accumulation. One can introduce imperialism into the analysis in such a case only as an empirical factor (e.g. the fact that capitalism cannot do without tropical raw materials), but it has no role in the Law of Motion of capitalism. It is not accidental that even a scholar like Maurice Dobb who was committed to the traditional Marxist emphasis on the production side could not incorporate the role of primitive accumulation of capital in the form of colonial loot into his analysis of the transition to capitalism.

Putting the matter differently there has been, as mentioned earlier, a tension within Marxist analysis between those who have given primacy to the production side to the exclusion of the demand side and hence willy-nilly missed the significance of imperialism, and those who have paid greater attention to the demand side, and therefore been more sensitive to the role of imperialism, but in the process willy-nilly deviated from many of the traditional Marxist emphases. It is not surprising then that the alleged weaknesses of Sweezy's Marxism can also be considered to be the real strength of his analysis, and have been so considered.

No doubt with further development of Marxist theory the tension just alluded to would get resolved in due course (through the emergence of a richer Marxist understanding); but to that further work, and indeed to the recognition of the need for that further work, Paul Sweezy would be celebrated as having made a seminal contribution. He would be celebrated not only as a saint but also as a sage.

March 16, 2004.