Max, I think you might very helpful the discussion of O'Connor in John Bellamy Foster's chapter on the state in The Theory of Monopoly Capitalism: An Elaboration of Marxian Political Economy and his chapter "Marxian Economics and the State" in his edited book The Faltering Economy: The Problem of Accumulation Under Monopoly Capitalism.
Foster wants to free the Sweezy monopoly capital/overexploitation theory from any charge of reformism. While emphasizing the growth in the potential surplus and thus need for a Keynesian programme to maintain full employment, he attempts to show that in the face of the power of monopoly capital both the regime of taxation and the composition of social spending cannot be optimal towards the end of full employment. Taxes weigh heavily on the working class (Foster criticizes O Connor's treatment here) and military spending is large though it contributes to the long term stagnation of the economy. Moreover, monopoly firms may respond to the Keynesian stimulus through price, rather than output, increases. I am being very sketchy. Foster thus attempts to lay out a theory of the state for a monopolized already mechanized capitalist economy. He argues that there is a need to go beyond Marx whose theory of the falling rate of profit fit for a competitive, mechanizing (i.e, labor rather than capital saving) early capitalism. Now the potential surplus is massive while the inducement to invest has been weakened by the monopolization of the economy. Foster thus subjects Mattick, Cogoy and Yaffe to criticism. At this point, I would like to point out that I think Foster misunderstands the provisional acceptance of Say's Law by Grossmann and Mattick for a commitment to its actual validity. That is, Marx himself in fact provisionally accepted Say's Law at times in order to develop a theory of crises and cycles that is based on inadequate profits *independent* of any shortage of demand, a consequence of more fundamental contradictions than those arising from the non fufillment of Say's Law. David Yaffe whom Foster criticizes in detail for example handles Say's Law in just this way. Yaffe relies heavily here on Bernice Shoul, " Karl Marx and Say's Law" Quaterly Journal of Economics (Nov 1957), and Foster does not grapple with her argument. So the debates in marxist crisis theory seem not to have been resolved. We still have monopoly capital/overexploitation theory, disproportionality theories, now Brenner's vertical overcompetition theory (which in essence may be a neo schumpeterian theory of insufficient exit of inefficient capital, i think), simple underconsumption theories, falling rate and mass of profit theories. Max, we are all counting on you to resolve these debates once and for all in your review of O Connor. thanks, rakesh
