Greenspan on out-of-control money and the future of U.S. capitalism - Alan Greenspan

Federal Reserve pronouncements usually yield little insight into the real functions and limitations of monetary policy or into ruling-class thinking on the prospects for U.S. capitalism. During financial crises, the Fed may affirm its "readiness as a source of liquidity to support the economic and financial system," as Chairman Alan Greenspan put it following the October 1987 crash. But even such emergency bulletins are more designed to allay public fears and boost market confidence than to inform citizens about the inner workings of the system and Fed policy. They are somewhat akin to the assurances of "no danger to the public" routinely churned out by the authorities after nuclear-reactor accidents. In more normal times, Fed statements utilize the jargons of market analysts and neoclassical economists which have grown increasingly similar in the recent years of exploding finance and stagnating productive activity. This reinforces the aura of elite expertise and control separating Fed personnel and operations from the general public.

In this setting, it is not surprising that Greenspan's announcement last fall of a new long-run guideline for Fed policy, while duly noted by the business press and hardcore Fed-watchers in academia and economic consulting firms, caused little if any public stir. ["Statement to the Congress (July 20, 1993)," Federal Reserve Bulletin, September 1993, pp.849-855.] In one sense, this was as it should have been. Greenspan's statement did not follow on the heels of a major short-term financial crisis, and its practical implications for the Fed's day-to-day operations were minimal. Yet on a different level it revealed a great deal about the long-run socioeconomic crisis we are facing and the type of mainstream response likely to become more common in the near future as ruling-class spokespeople redefine the reality of crisis in line with the changing requirements of capitalist ideology.

The first theme that jumps out of Greenspan's statement is his admission that: (1) the Fed cannot control the quantity of money in the economy; (2) there is no stable or predictable relation between the quantity of money and the economic variables which are supposed to be the ultimate targets of Fed policy. According to Greenspan, the "monetary aggregates" have been showing "persistent and sizable deviations . . . from expectations," and the "historical relationships between money and income and between money and the price level have largely broken down, depriving the aggregates of much of their usefulness as guides to policy." Greenspan's frank conclusion that money must be "downgraded as a reliable indicator of financial conditions" is notable because the Fed, supported by most mainstream economists, has long thought and taught that it influences economic conditions primarily by controlling the money supply.

If money is no longer a reliable indicator, what should replace it as a policy guide? This brings us to Greenspan's second main theme:

In these circumstances, it is especially prudent to focus on longer-term policy guides. One important guidepost is real interest rates. . . . In assessing real rates the central issue is their relationship to an equilibrium interest rate, specifically the real level that, if maintained, would keep the economy at its production potential over time. . . . Maintaining the real rate around its equilibrium level should have a stabilizing effect on the economy, directing production toward its long-term potential.

Even before delving further into the equilibrium interest rate, we can see that the significance of this new approach depends on how Greenspan relates the economy's long-term potential to current circumstances. Crudely stated, if the new interest rate guidepost is to keep production at its long-term potential, the Fed must pursue some combination of two options: (1) move current circumstances, i.e. the actual performance of the economy, closer to the system's potential (however defined); (2) redefine long-term potential to make it conform more closely to current circumstances. Notice that the definition of long-term potential is crucial under either option, since it is the ideal against which reality is measured. Whether the economy is moving toward its long- term potential depends on one's view of what that potential is. It can even be argued that the concept of long-term potential is the single most crucial indicator of the class-ideological basis of any long-term outlook for the economy and policy.

Of course, even mainstream concepts of long-term potential cannot be plucked out of thin air. They must have some basis in reality in order to help legitimize the system as it currently exists. Mainstream ideologies, and associated concepts of long-term potential, must therefore adjust to changing circumstances. Rather than ignoring real world developments, they redefine or mystify these developments in line with the ruling class's view of what is most imperative for reproduction of the system and hence its own power at any point in history. Hence changes in mainstream ideology can shed light on the direction of ruling-class thinking, and even on where the system is headed to the extent that historical developments are determined by the ruling-class's public and private initiatives.

If Greenspan's two themes are interpreted along such ideological lines, they can be seen as a logical capitalist response to the impasse faced by the Fed and other government policymakers in an age of long-run economic stagnation, finance- and debt-led accumulation, and intensified global competition. Greenspan is right about the breakdown of received mainstream wisdom on the role of money and of monetary policy in the economy. But rather than directly grappling with the underlying causes of this bankruptcy, his new equilibrium interest rate approach simply redefines the economy's long-term potential in line with the socially-irrational imperatives of finance-led accumulation and capitalist competitiveness. Greenspan's new philosophy is retrogressive because it hinges on a particularly vulgar version of the long-bankrupt Say's Law. Nonetheless, it represents an improvement in the clarity of mainstream ideology. By revealing that U.S. capitalism is no longer able to legitimize itself on the strength of its ability to satisfy majority needs, Greenspan's proposal clarifies the choices currently facing society.

Money, Credit, and Monetary Policy

To see the kernel of truth in Greenspan's argument, it is necessary to consider why the traditional mainstream view of monetary policy has broken down. Basically, this view holds that the Fed can control the money supply and influence economic conditions by controlling the level of reserves in the banking system(1) Suppose the Fed wants to increase the money supply and stimulate real economic activity. It can write checks on itself and then use this new money to buy bonds in the open market. The money then shows up as an increase in bank reserves, as the bond sellers deposit the Fed's checks into their bank accounts. Alternatively, the Fed can lower the discount rate charged on its loans to the banks, or scrutinize banks' loan requests less thoroughly, making it easier for the banks to increase their reserves. In either case, the banks use the new reserves to make new loans which in turn end up being mostly re-deposited in the banking system, re-lent by the receiving banks, re-deposited again, etc. The extent to which banks can multiply new reserves in this fashion is supposedly determined by the minimum reserve/deposit ratios set by the Fed and the relatively stable (or at least predictable) excess reserve ratios of the banks.

The link between such Fed operations and the real economy is completed by the assumption of a predictable relationship between productive investment and credit conditions. Here, an expansion of bank lending makes it easier and/or less costly for businesses with potentially profitable investment opportunities to obtain the required funds. This boost to investment will then lead to some combination of increased production and employment or rising prices, with the extent of price inflation depending on how close the economy is to its full-employment or potential output level. This whole process could, of course, be conceived in the opposite direction. If the Fed had wanted to reduce growth of money and credit and rein in real economic activity (e.g., to reduce inflationary pressures), it could have sold bonds or made it more difficult for the banks to borrow reserves from the Fed. There are, however, two basic problems with this traditional view. They concern what really determines: (1) the quantity of money; (2) the uses of money and credit. Moreover, these two problems are inseparable from each other. They are both related to developments in the sphere of capital accumulation. Let us consider each of them singly before turning to their mutual relationship to the capital accumulation process.(2)

The traditional view is half right, in that money is in fact a by-product of credit creation by banks and other financial institutions. But in the real world, Fed policies are designed to accommodate the needs of this credit-creation process, not to control it. This does not mean that Fed policies are completely passive or non-discretionary. Accommodating the needs of the financial system means, for instance, bailing out this system when speculative excesses and imbalances drive it to the brink of collapse. Moreover, as the credit-creation process develops historically, taking on new institutional forms and generating new kinds of financial assets and debts, the Fed must adjust its policy strategies and regulatory instruments in order to accommodate the changing needs of the system. But however the Fed responds, it is always reacting to prior developments in the credit-creation process which are not subject to its control, which means of course that it does not in any meaningful sense control the quantity of money and credit.

Especially from the late-1960s onward, banks devised new methods for obtaining loanable funds independent of the Fed. Indeed, they were forced to do so by intensified competition from alternative outlets for household and business savings such as money market funds, insurance companies, and pension funds. Temporarily idle reserves were more rapidly shifted among banks, both in the domestic federal funds market and in the international inter-bank market for U.S. dollar deposits fed by U.S. balance-of-payments deficits. Banks engaged in "liability management" by restructuring their liabilities toward deposits with lower reserve requirements or even toward new unregulated deposit instruments (eg, by offering higher interest rates on these deposits or extending checking services to previously non-checkable deposits). Such credit- and money-expanding innovations were not controlled by the Fed. Rather, they were accommodated by the Fed's and other authorities' deregulation policies and by the Fed's ongoing lender-of-last resort operations.

We shall return to what determines the quantity of money. Let us now consider the second issue raised above, namely what really determines the uses of money and credit. The traditional textbook view has Fed-induced money and credit expansions stimulating the real economy via increases in productive investment. Here again, mainstream tradition & half right. During the long post-World War II boom of the U.S. and global capitalist economies, credit expansion was to a significant extent absorbed by business investments in productive capacity, although consumer credit also helped fuel the demand for goods and services in this period. Even though this credit expansion was more accommodated than controlled by the Fed, the traditional view had some correspondence with reality up until the late-1960s. From then on, however, the correspondence became increasingly tenuous. The prior competitive build-up of productive capacity and the inherent limits to wage-based demand under capitalism led to excess capacity in all the major industries which had driven the long global-capitalist expansion. A shortage of productive and profitable investment outlets developed. Under these stagnationary conditions, increases in money and credit tended merely to increase the level of monetary claims on the available output, not to increase productive investment and hence the size of the real pie to be divided among the major claimants (capital, labor, and government).

The first result of this stagnationary excess of monetary claims was stagflation, i.e. the combination of accelerating inflation, excess capacity, and unemployment which later sounded the death-knell of the Carter Administration. There was a large increase in the rate of inflation associated with any given degree of excess capacity and unemployment. The mainstream wisdom did not respond by abandoning the idea that the Fed controls money and credit or the notion that Fed policies can keep the economy near full employment or potential output. Rather, the response (led by the Monetarists, who quickly won over the mainstream Keynesians) was to redefine full employment or potential output as the situation where actual and expected inflation are equal. This new definition, labelled "natural" output, served two purposes. First, accelerating inflation could be simply blamed on over-expansionary policies and corresponding inflationary expectations, without reference to the systemic roots of the problem in stagnating productive capital accumulation. Second, since rational economic decision-makers presumably adjust their inflationary expectations in line with changes in the actual inflation process (including changes in relevant inflationary policies), it could be assumed that the economy more or less quickly adjusts to its natural equilibrium. Hence, any abnormal unemployment or economic slack remaining in this equilibrium could be blamed on impediments to the free operation of market forces and economic competitiveness. Among the obvious culprits were excessive taxes on corporations and the rich, government regulations, minimum wage laws, and other "distortions" and "rigidities" imposed by "special interests" such as trade unions and the environmental, civil rights, consumer safety, and women's movements.

The stagflation dilemma and the mainstream response thus set the stage for ongoing attacks on working-class living conditions under the banners of supply-side economics and economic competitiveness, beginning in the late-1970s. These attacks did not revitalize productive capital accumulation and thereby reestablish a correspondence between credit expansion and productive investment. Neither did they establish even a modicum of Fed control over money and credit. What they did do is alter the dominant form of excessive monetary claims on real output in such fashion as to give both the banks and Fed policy the appearance of hanging onto the rear of a run away train.

Especially after Reagan's election, the conservative turn in the government policy regime bolstered the confidence of propertied interests benefiting from upward redistribution of income and wealth. Given the shortage of productive investment opportunities, these animal spirits were expended largely on an acceleration of financial activity, and both credit growth and inflationary pressures were to a great extent transferred to the sphere of speculation. In this process, non-bank financial institutions and markets produced innovations that made overall credit expansion increasingly autonomous from the previously normal business-loan and deposit operations of banks. These innovations greatly accelerated the monetization of debts, i.e, the increased convertibility of marketable assets and liabilities into cash and checking balances or other speculative financial instruments. Through devices such as put and call options in the stock and bond markets (options to buy or sell at a given price in the future), financial derivatives linked to exchange rates, interest rates, or stock-price indices as well as swap arrangements in various financial instruments (all of which directly increase opportunities for speculative profit-making), individual and institutional speculators increased their ability to borrow paper assets or convert from one asset to another at a moment's notice. The erratic growth of such debt-monetization devices obviously tended to destabilize the relationship between traditional measures of the money supply, the turnover of financial wealth, and real economic activity. Indeed, die tenuous relationship between such devices and productive activity is verified by a recent New York Fed publication which outlines the causes of the recent growth of financial derivatives: the direction and speed of the derivatives' spread have been governed critically by particular demands for liquidity-enhancing and risk-transferring tools . . . . [There are] four developments giving rise to such demands: sustained shifts and temporary surges in market volatility, the emergence of important but relatively illiquid cash markets for government bonds, new inducements for financial institutions and nonfinancial firms to deal with interest rate risks, and the international diversification of institutional equity portfolios . . . . [T]he primary economic function of exchange-traded derivatives appears to be the provision of liquidity in excess of the liquidity in the cash markets.(3)

If one can cut through the market-speak, it is evident that this roster of "developments giving rise to such demands" is confined to speculation in, and monetization of, financial instruments. However, although these developments basically invalidate the traditional view linking credit to productive activity, they did not proceed separately from the banks and the Fed. As the center of financial activity swung from traditional business loans toward more speculative markets in the 1980s, the banks themselves became major players.(4) Speculators make heavy use of bank credit lines, checking services, and other deposit facilities, not only to access additional funds for their gambling operations but also to hedge against the uncertainty and volatility of asset prices and trading opportunities inherent to these essentially fictitious capital markets. Such business can be quite profitable for the banks during "normal" times when speculative-asset prices are generally rising. But during market crises these linkages, basically involving the full monetization of speculative assets and debts by the banks, can place extreme pressure on bank credit and deposit facilities, i.e. the central payments system of the economy. In that event, the Fed may be forced to step in and provide financial-market operators, via the banks, with the hard cash required to prevent a complete collapse of the speculatively-inflated asset values which now underwrite much of the money issued by the banks themselves. It was the linkages of major banks with the stock and stock-index futures markets that forced the Fed to "support the economic and financial system" by flooding it with cash in October 1987. Considering the alternative, such bailouts constitute Fed control over the quantity of money and credit only in the most formalistic, counter-factual sense. This would be true even if each bailout did not essentially validate the speculative behavior that necessitated the bailout in the first place, thus ensuring the need for new bailouts in the future.

Greenspan's "New" Perspective: Back to the Future

The aforementioned developments forced even some mainstream economists to note the complete breakdown of any stable or predictable relationship between money, credit, and Fed policy on the one hand, and the real economy on the other. By 1988, Harvard economist Benjamin Friedman was asserting that "in the eyes of many economists, the Federal Reserve System has been steering without a rudder. . . ."(5)

At one level, therefore, Greenspan's recent pronouncement can be read as just a pragmatic, evasive, and retrogressive response to the Fed's policy dilemma from within the traditional mainstream wisdom. After all, the notion of an "equilibrium interest rate" which "if maintained, would keep the economy at its production potential over time" is nothing new. It is merely a modern rendition of the old "natural interest rate" theory of late-nineteenth and early-twentieth century neoclassical economics. This theory defended Say's Law, according to which supply creates its own demand near full employment, by positing a natural interest rate where the full-employment level of savings is equilibrated with investment demand. It assumed that an ample backlog of potentially profitable and productive investment opportunities always exists, but that the initiation of these investalents depends on the cost of obtaining the needed funds, which is in turn dependent on prior savings. Hence, if savings ever exceeded investment at full employment, the interest rate would be bid down to its natural level, and the excess savings removed by rising investment and consumption.

As Keynes observed, this "traditional analysis is faulty because it has failed to isolate correctly the independent variables of the system."(6) In the real world saving is con strained by prior investment, not the reverse. An excess of planned full-employment savings over investment shows up as an excess supply of goods, causing a decline of output and income and hence of saving. Saving is then equilibrated with investment, but with both at less than full-employment levels. More basically, regardless of how low the interest rate is, there is no reason to expect that profitable investment opportunities will be anywhere near sufficient to absorb the tremendous surplus of (personal and business) saving that the modern capitalist economy is capable of generating near full employment. Unfortunately, this elementary economic logic is quite unrespectable in mainstream circles nowadays because it gives the lie to the notion that productive investment is constrained by government deficits absorbing too much prior savings. Greenspan's perspective is wholly traditional in this regard. He simply asserts (contrary to logic and the historical evidence) that prospective cuts in military spending and other deficit reductions "will ultimately mean a freeing up of resources for more productive uses . . . an improved outlook for sustained lower long-term interest rates and a better environment for private sector investment." For good measure, Greenspan also stipulates that the economy's long-term production potential, to be achieved via the equilibrium interest rate, occurs when both inflation and inflationary expectations are stable (preferably low). This follows the now traditional mainstream response to monopoly capitalism's stagflation dilemma, namely the redefinition of excess capacity and unemployment as "natural" equilibrium outcomes.

As noted earlier, however, mainstream ideologies and associated concepts of long-term potential cannot totally ignore reality, but must respond to changing circumstances in order to legitimize the system as it currently exists. On this level, Greenspan is more honest and to the point. Our most notable current circumstance is a strange cyclical recovery characterized by extraordinarily slow growth of output, rising unemployment and underemployment, intensified competition among firms and even more among workers, and various financial stresses and strains stemming from the finance-led character of accumulation in recent years. Consider Greenspan's acknowledgement of such weird aspects of the current recovery:

As economic expansion has progressed somewhat fitfully, our earlier characterization of the economy as facing stiff headwinds has appeared increasingly appropriate. Doubtless the major headwind in this regard has been the combined efforts of households, businesses, and financial institutions to repair and rebuild their balance sheets after the damage inflicted in recent years as weakening asset values exposed excessive debt burdens. But there have been other headwinds as well. The builddown of national defense has cast a shadow over particular industries and regions of the nation. Spending on nonresidential real estate dropped dramatically in the face of overbuilding and high vacancy rates and has remained in the doldrums. At the same time, corporations across a wide range of industries have been making efforts to pare employment and expenses to improve productivity and their competitive positions. . . . However, their effect on jobs and wages through much of the expansion has also made households more cautious spenders.

One might think that this impressive catalogue of economic malfunctions (damaged balance sheets, weakening asset values, overbuilding, improved productivity leading to cautious spending, etc.) would totally preclude the applicability of Greenspan's prior analysis in which the equilibrium interest rate and other market forces move the system toward its production potential over time. In fact, to the extent that achieving "production potential" signifies developing and utilizing the system's capacity to satisfy human needs, one would be right. But to state this conclusion is to admit the historical bankruptcy not only of capitalist ideology but also of capitalism itself. To his credit, however, Greenspan does recognize the problem by identifying the system's long-term potential with the immediate imperatives of capitalist competitiveness and financial restructuring: With further waning of earlier restraints on growth the U.S. economy should eventually emerge healthier and more vibrant than in decades. The balance sheet restructuring of both financial and nonfinancial establishments in recent years should leave the various sectors of the economy in much better shape and better able to weather untoward developments. Similarly, the ongoing efforts by corporations to pare expenses are putting our firms and industries in a better position to compete both within the U.S. market and globaby.

The key point hem & not the accuracy, of Cheenspan's medical and meteorologjcal diagnoses of the prospects for corporate capital, but rather his outright identification of the system's potential with the degree to which it is competitive and financially robust. Even pre-Keynes versions of Say's Law viewed the system's market and financial mechanisms as institutional instruments for maximizing and reaching the system's real productive potential and, indirectly, satisfying human needs. In Greenspan's rendition, by contrast, "maxi-mizing and fulfilling the productive capacity of this nation" seems to be purely a matter of balance sheet restructuring and "putting our firms in a better position to compete," regardless of the social consequences. Greenspan's long-term potential is thus achieved precisely to the extent that government policies and workers' living conditions conform to the profit-driven logic of the system's financial and competitive mechanisms. If this requires declining majority living standards, growing poverty and unemployment alongside rising industrial productivity and healthier corporate and Wall Street balance sheets, so be it.

Nonetheless, Greenspan's perspective, however apologetic and socially-irrational, is more consistent and relevant than that of neoclassical Keynesian critics of Fed policy who have been urging Congress and the President to implement short-term expansionary measures to accelerate the current recovery, while glibly reconciling long-run capitalist priorities with social needs. For example, Nobel Laureate James Tobin recently suggested that "it does not make sense to oppose, on the ground that they will raise the deficit, fiscal measures which would stimulate demand, reduce unemployment, raise the GDP, and very likely raise private investment too." He goes on to argue that the Fed "can, and should, try harder" to ease credit conditions in order to pump up the economy. But what about the long-run shortage of profitable and productive investment opportunities relative to the full-employment level of savings? And what about the rising government debt, whose servicing absorbs an increasing share of Federal outlays, and which has resulted in a tremendous (and potentially destabilizing) overhang of U.S. government paper in global financial markets? No problem, according to Tobin, since his "viable path of recovery and growth. . . consists of expansionary fiscal policy and accommodative monetary policy for recovery, followed by deficit reduction and appropriately easy monetary policy in prosperity."(7)

Tobin's proposal hearkens back to the Kennedy-Johnson years, when it was argued that government deficits (normally this took the form of tax cuts for the wealthy and/or rising military outlays) should be used to help the economy out of cyclical recessions. These deficits could then be balanced out with the surpluses ("fiscal dividends") obtained from rising tax revenues during cyclical booms. The difficulty, of course, was and is that this policy could succeed in "balancing the budget over the business cycle" only if cyclical expansions are as robust and prolonged as recessions. In an environment of long-run investment stagnation (weak cyclical expansions followed by more serious recessions), the pump-priming strategy leads to increasingly large deficits during recessions and increasingly small fiscal dividends during cyclical upturns. Indeed, from as early as the Vietnam War period it became necessary to run larger and larger deficits during cyclical upturns in order to prevent these upturns from quickly petering out and by the 1980s even the massive Reagan deficits were unable to move the system anywhere close to full employment although they did help fuel the explosion of speculative financial activity. In short, as long as monetary and fiscal policies are conducted within a framework dominated by capitalist interests, their projected success in Tobin's terms will hinge on a long-run recovery of productive private capital accumulation toward full-employment levels which in the real world is nowhere in sight.

If one properly discounts Tobin's wishful long-run thinking as the outmoded ideology it really is, it becomes clear that Greenspan's perspective, when stood on its head, points more clearly toward the only viable path out of the long-run crisis of U.S. capitalism. From a ruling-class point of view, it makes perfectly good sense to redefine the system's long-term potential in line with the constraints imposed by capitalist competition and the dominant role and fragility of finance, since the system's imperatives have now been fully severed from the development and utilization of its own real productive potential for satisfying the individual and collective needs of society as a whole. The plain truth, well- spoken by Greenspan, is that capitalist ideology can no longer be coherently based on any correspondence between capitalist imperatives and human needs. The only thing it has left is the blunt assertion that there is no alternative but to gear majority living conditions, and social aspirations, simply and solely to the demands of capitalist competitiveness and speculative financial pressures.

From a socialist perspective, on the other hand, this ideological impasse signifies that the competitive, profit-driven accumulation of capital no longer makes any sense as an organizational vehicle for society's material reproduction. What is needed instead is a harnessing, and as necessary, conversion of the system's productive structure and the tremendous surplus it is capable of generating, in the direct service of human needs--including the need for an ecologically sound material reproduction, in harmony with the forces of nature. If the financial and competitive pressures of capital stand in the way of such a socio-material reconstruction, then these outworn institutions should be scrapped in favor of collective-democratic control over the production and utilization of the system's surplus product. In this respect, "tinkering with the money supply or other traditional government mechanisms cannot produce what is needed. Rather, meaningful changes can only be achieved by reforms that challenge the ruling class's property and profit interests, with social goals taking precedence over private gain."(8)

NOTES

(1.) The Fed also influences the amount of cash and coins in circulation. However, such currency holdings comprise only a small portion of the total quantity of money (well less than 10 percent if checking balances, various savings and time deposits, and money market mutual funds are included) and are therefore a relatively minor concern of Fed policy. (2.) For further elaboration of these points, see "Money Out of Control," Monthly Review, December 1984, reprinted in Harry Magdoff and Paul M. Sweezy, Stagnation and the Financial Explosion (New York: Monthly Review Press, 1987), pp.118-29; and Robert Pollin, "Structural Change and Increasing Fragility in the U.S. Financial System," In The Imperiled Economy, Book 1. Macroeconomics from a Left Perspective (New York: URPE and Monthly Review Press, 1987), pp. 145-58. (3.) Eli M. Remolona, "The Recent Growth of Financial Derivative Markets," Quarterly Review, Federal Reserve Bank of New York, Winter 1992-92, pp. 2&29. (4.) For details see Joyce Kolko, Restructuring the World Economy (New York: Pantheon, 1988), Chapter 5. (5.) "Lessons on Monetary Policy from the 1980s," Journal of Economic Perspectives, Summer 1988, p. 52. (6.) John Maynard Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt Brace Jovanovich, 1964), p. 183. (7.) "Thinking Straight About Fiscal Stimulus and Deficit Reduction," Challenge, March-April 1993, pp. 15-18. (8.) Magdoff and Sweezy, op. cit., p. 129.

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