Shaikh's Marxian theory of 'real competition' explains wage disparities without monopoly power and shows that organizing efficient firms can raise wages industry-wide
Source: Howard Botwinick. "Anwar Shaikh’s Analysis of Capitalism Is Vital for the Left." October 9, 2026. jacobin.com
The Gist
Botwinick says Marx was always describing a fierce, war-like competition among big companies, not the 'tiny firms' of textbook economics, so the idea that giant corporations escaped competition is wrong. He argues this competition itself splits workers into better- and worse-paid groups. It also means unions that organize the most efficient firms in an industry can lift wages for everyone in it.
Conclusion
Anwar Shaikh's reading of Marx, in which capitalist competition is a continuing, war-like struggle among large capitals, is a more accurate and useful framework for the Left than monopoly-capital or neoclassical approaches. It explains persistent wage inequality within the working class, and it implies that organizing the most efficient (price-setting) firms in an industry can raise wages industry-wide, which gives workers a practical strategy.
Premises
- Marx's analysis of competition was never about tiny price-taking firms. It concerned large firms with heavy fixed capital, imperfect information, and uncertainty, which fight one another for market share.
- In Marx's account, growing firm size and power do not reduce competition. Firms must expand to capture economies of scale, which brings them into conflict with other expanding capitals, and the larger the firms, the more vicious the battle.
- Monopoly-capital theorists (Sweezy and others) wrongly assumed that Marx's competition meant perfect competition. They concluded that corporate mergers made his analysis obsolete and that a new stage of capitalism requires new theories such as labor market segmentation.
- Competition itself, through constant capital and labor mobility between industries, produces differential wages and splits the working class into better- and worse-paid groups, so no monopoly power or market blockage is needed to explain the gaps.
- Shaikh's method is rigorous. It moves carefully from Marx's abstract categories in Capital to concrete conditions, and it tests Marx's theories empirically, incorporating Keynesian or classical insights only selectively. This avoids both dogmatic Marxism and eclectic mixing with neoclassical theory.
- Industry-specific structural factors, such as capital mobility and the ease of relocating labor-intensive plants, determine whether union organizing can succeed. If the lowest-cost, price-regulating firms in an industry are unionized, their higher wage costs set the standard for all competitors.
Assumptions
- The Shaikh/Botwinick reading of Marx is the correct interpretation of Marx and of how capitalism actually works.
- Real-world competition operates through price-setting by lowest-cost (most efficient) firms, so unionizing them forces industry-wide wage increases.
- Capital can be prevented from simply relocating or substituting away from organized firms, or else organizing the efficient firms is possible despite capital mobility.
- Wage differentials among similarly skilled workers are best explained by competitive dynamics rather than by monopoly power, discrimination, or labor market institutions.
- Empirical testing supports Shaikh's framework over rival theories.
- Class-wide solidarity is a feasible and desirable strategy for workers, with no deep structural barrier such as a labor aristocracy.