The Political Economy of Growth

by Paul A. Baran

This classic of contemporary Marxist economics provocatively tackles a problem crucial to all economists and social scientists - the conditions for economic progress. How, in short, does a society generate and utilize its economic surplus? From this viewpoint Professor Baran, one of the authors of Monopoly Capital, analyses the economic development of both advanced and developing countries and shows that neither can be understood unless their global interdependence is taken into account. Economic development has always entailed big changes in the social and political structure of society and Professor Baran explains the present turmoil in the world as the necessary accompaniment of processes as radical as the transition from feudalism to capitalism.

Genres: Economics, Nonfiction, Academic, Philosophy

Paperback

First published January 1, 1957

About the author

Economist.

Reviews

[Aya Nader · Rating 5 out of 5]

Excellent read on the evils of capitalism.

The book discussed in detail the processes of change from a feudal to a capitalist system, how capitalists took control over states, investment opportunities and economic conditions in the capitalist system which lead to monopoly and more poverty.

Despite the differences in conditions of the underdeveloped countries, Baran pointed out that they have in common a history of imperialist penetration , internal and external obstacles to development because of this penetration, and low per capita income and low economic development. Imperialism entered underdeveloped countries, destroying native social formations and means of development, creating lasting conditions of dependency and subordinating them to developed countries in the international division of labor.

Baran showed the links between political, economic and social aspects before and under capitalism in both developed and backward countries.

The author showed how irrational and unjust the capitalist system is, challenging liberal economic theorists who claim that capitalism brings "freedom" about. No one escaped Baran’s sharp criticism; that includes professors, politicians, businessmen and economists. Baran called for anti-Westernization and put Marxism theories into effect. He gave concrete solutions to social and economic change.

[Mark Schulz · Rating 5 out of 5]

This book was very influential in my understanding of Marxist political economy and the world. I still remember the comparisons Baran made between the development path of China and India. It would be fascinating to reread this book today.

[Carlos Luso · Rating 1 out of 5]

The book was too technical for my taste. The author describes perfectly the past and current economic systems, the evolution of third world countries and how we need a new and better economic system. He shows the world need to be more equal in terms of productivity and retaining wealth.

I didn't like the comparison with the Auschwitz concentration camps.

[Victor Lopez · Rating 4 out of 5]

A very lucid explanation of many of the challenges that poor countries have to face in order to develop and give their populations a good standard of living, especially the legacy of imperialism . It wasn't super jargon-y and made use of historical examples such as Soviet industry industtialization to make its points.

[Karlo Mikhail · Rating 4 out of 5]

An engaging study of how modern imperialism imposes underdevelopment on the Third World countries. Many of the observations remain relevant to this day. A must-read.

[Zach Lassen · Rating 5 out of 5]

Very important Marxist analysis of growth especially in our current climate of arguing “degrowth va growth” in relation to climate change. Baran does an excellent job elucidating his conception of the economic surplus that is gathered from an economy and shows how under the developed capitalist stated this economic surplus isn’t invested in the most efficient way for growth. Once monopoly capital sets in its inefficient to introduce new machines and continue investment past a certain point and growth becomes unnecessary. In underdeveloped regions of the world the economic surplus is even a bigger waste bc even tho it’s a smaller amount quantitatively, most of the surplus is going towards comprador elements of the native bourgeois who spend luxuriously and don’t invest in industry, or the surplus leaves the country for western companies.

The first few chapters cover his idea of economic surplus then his theory of monopoly capital before transitioning to a theory of backwardness for the underdeveloped world. His comparisons between different countries and their levels of underdevelopment were insightful mostly his comparison between India as a country that was exploited by British capitalism and wasn’t allowed to industrialize and Japan which was a country that had no valuable resources and was much further away from Western Europe at a time when the Europeans were already overextended from their colonies. This meant that Japan could industrialize while India was left to the whims of British capital.

Baran then goes into a detailed analysis of how socialist development is the only viable option for the underdeveloped countries bc even more valuable terms of trade for their natural resources aren’t enough to get them out of their current impasse (this can be seen with countries that rely on oil and yet haven’t used the economic surplus for industrial development). He points out that Soviet industrialization was the fastest in history and much more remarkable than any time period of capitalist development and this was accompanied by revolutionary changes in agricultural production.

A great book that offers insight into the necessary developments that need to happen if we are to combat climate change and utilize the economic surplus of the developed world to invest in green technology and the development and industrialization of the undeveloped world

[Fin]

This book shows its age and the optimism of the 50s and 60s feels anachronistic when read in 2025, but it raises interesting questions and ways of thinking about economic surplus that were new to me. Capitalism and its market-mediated allocation of resources can often obscure the very fundamental questions of what is produced by an economy and why, stopping us from even asking ourselves whether this is something we agree with or believe in. Baran confronts us with this logic and ties it to the question of why some countries develop and others not; his answer, in short, being imperialist economic structures. I'm not sure to what extent these theorisations have proved themselves to be accurate, but the heterodox thinking was thought provoking and put me in a better position to to question more conventional theories that naturalise the gross global disparities in wealth and development.

[Kevin · Rating 2 out of 5]

The most interesting and most relevant part of this book was Baran's writing on the negative impact of monopoly profits on the economy. Bearing in mind this was written around 50 years ago and we are witnessing monopoly profits in many parts of teh global economy. Whereas other parts of the book, Baran's writings have aged.

[Martin · Rating 2 out of 5]

Book is old, some sections held up, some less so. Extremely tedious in terms of affect, style, and organization.

[Krit Chanwong · Rating 2 out of 5]

Poorly argued and too theoretical, and ultimately just wrong.