Oligopoly, distribution and the rate of profit

Abstract

This paper sets out to explore the division of national income between workers and capitalists in a world where monopoly capitalism dominates, both for its intrinsic interest and because of its relevance to the process of accumulation. Elsewhere, Cowling (1978), I have tried to substantiate the argument for regarding the contemporary capitalist world as essentially monopolistic rather than essentially competitive, but 1 will return to that theme at v-uious points in the paper. The basic point is that the major corporations art now organ&d in, often interlinked, oligopoly groups, in many cases wi:h an international base, and have captured dominant positions which are relatively unassailable. They will remain unassailable partly because these dominant oligopolies will logically invest in their maintenance in order to secure the benefits of the stream of monopoly rents associated with their position. Competition between and within national oligopoly groups will occasionally break out but these should be seen as transient elements in the accommodation of dilferent capitals to each other. The norm in such an oiigopolistic world will be collusion over output or plricing policies. with collusion being itself the product of potentially rivalruus behaviour a seemingly paradoxical result which we will seek to subslantiate. Agents have substantial economic power and will use it in a variety of ways which has to be recognired in any discussion of the distribution of national income. This point was obviously clearly recognised by Kalecki (1971), Steindl (1952) and Baran and Sweezy (1966), and the present paper follows closely on their work. The starting point will be an attempt to complete Kalecki’s model of distribution by specifying the relationship between elements of market structure and the share of gross capitalist income plus salaries in value added. This will allow us to precisely identify those processes which will lead