Monopoly Capitalism

Abstract

Monopoly capitalism pertains to the stage in the development of capitalist development when the process of concentration and centralization of capital has led to the emergence of oligopoly in significant sectors of the economy. Although a theory of monopoly capitalism has been presented by other theorists, it is an expression employed among Marxian economists that has been associated with the stage of capitalism that began in the final quarter of the nineteenth century and attained full maturity in the latter half of the twentieth century. Marx understood that in a system where commodities are produced by industries that all consist of a large number of firms all of whom respond to price and profit signals that are induced by market forces, such a system would be inherently unstable and lacking in permanence. However, in the capitalist mode of production competition forces firms to cut costs and to expand their production, necessitating perpetual accumulation and the introduction of new technological and organizational methods. Marx explains this as follows:

[N]ot only are accumulation and the concentration accompanying it scattered over many points, but the increase of each functioning capital is thwarted by the formation of new capitals and the subdivision of the old. Accumulation, therefore, presents itself on one hand as increasing concentration of the means of production, and of the command over labour; and on the other hand as repulsion of many individual capitals from one another.