Economics has always recognized surplus absorption methods outside of capitalist consumption and investment. Absorption by the State, the Church, and Marx’s ‘costs of circulation’ have all been noted, but treated as secondary, peripheral factors. That’s because, under competitive capitalism recently freed from feudal constraints, all three of these factors were decreasing steadily, leaving more and more surplus in capitalist control. 

Marx was more concerned with the ‘tendency of the rate of profit to fall,’ a shrinking surplus, but we have seen how this is turned on its head under monopoly capitalism’s ‘tendency of the surplus to rise.’ This chapter therefore examines Marx’s ‘costs of circulation’ in a new main monopoly capitalist form: the sales effort. With price competition ruled out, the sales effort, through advertising, financing schemes, product variety, and more, becomes central, invasive, and wildly expensive, under monopoly capitalism. 

In a competitive context with interchangeable products, advertising becomes a rather burdensome cost compared to its value. In an oligopolistic context, giant corporations ‘establish and maintain profound a difference between their products and those of their competitors,’ through naming, branding, packaging, and marketing. The minute differences between the actual products expand and concretize in the consumer’s mind, thanks to the relentless sales effort. 

Advertising not only retains demand for certain companies’ products; it also creates demand for new products, manipulating consumer demand through latent psychological laws. As noted by Scitovsky, “the secular rise in advertising expenditures is a sign of a secular rise of profit margins and decline of price competition.” This coincides with the shift from competitive to monopoly capitalism; from 1890 - 1929, what could be called the first American ‘consumerist’ boom, advertising expenditure increased 10x. 

Notification about new products became persuasion, wrapped up in advances in public relations, market research, design, and most of all, mass media like radio and television. Advertising went from a burdensome waste under competitive capitalism, to both a shield and weapon under monopoly capitalism, helping giant corporations retain and expand their oligopolistic positions. No matter what you personally believe, advertising works, which is why giant corporations justify these gargantuan investments in the sales effort. 

Ongoing debates about ‘good/constructive’ versus ‘bad/manipulative’ advertising make it seem as though advertising could be gotten rid of. This is false. Rather, the sales effort is an integral part of the monopoly capitalism system. This gets to B+S’s primary point here, in connection to the surplus absorption problem: without the sales effort bombarding us with new models, catchy slogans, or psychosexual desires, demand would crater. People would buy based on real need, not their ‘perceived’ need, as crafted by advertisers. People would use their products until the end of their useful life, rather than throwing away last year’s still useful model for this year’s new one. The sales effort is bankrolled not because it informs consumers to make better choices, but because it boosts aggregate demand. It leads to people making more choices and purchases, regardless of quality. 

The sales effort and its costs are a method of attempting to overcome monopoly capitalism’s chronic stagnation, by enticing consumers to buy what they can’t afford. While these costs may appear in the same way as necessary production and distribution costs, they are in fact a component of the surplus. The sales effort portion of the surplus is composed of two separate elements. 

• First, is the part of sales effort expenses paid for by raising the consumer goods prices paid by productive workers. Workers’ real wages go down as prices rise (as they always do because of advertising costs), meaning more surplus accumulates to capitalists. 

• Second, is the portion paid for by capitalists themselves, as well as ‘unproductive’ workers (like those who earn their living in sales effort industries). Capitalists and unproductive workers both pay higher prices for consumer goods as well, due to sales effort costs. These individuals, who live off the surplus to begin with, lose a fraction of this income to higher prices, to support the growing class of 'unproductive' workers in these sales effort industries. 

There are two other indirect ways (not directly affecting income generation and surplus absorption) that the sales effort affects a monopoly capitalism economy: 1) how it shapes the availability and nature of investment opportunities, and 2) how it shapes the social division between consumption and saving. 

• Re: investment, advertising functions like innovation, in its ability to create demand and markets. Unlike innovation, advertising creates new demand or markets for old, existing products. This waste of resources is made possible by monopoly capitalism’s chronic underemployment and undercapacity. 

• Re: consumption and savings, the sales effort has created a well-off white collar workforce of advertising and media professionals able to achieve high levels of consumption. The logic of the sales effort creates a ‘war against saving,’ the relentless, high-intensity pressure to always consume more new goods with which everyone in monopoly capitalist societies is all too aware. 

Much of the sales effort’s lauded ‘newness,’ however, is pure marketing. True innovations in production are few and far between. Yet advertisers turn up the volume on every minute difference until consumers believe it, feel it, need it. To grasp this idea, think of the real shockwave sent through the cellphone market by the original iPhone. Then think of the way each ‘new’ (but functionally identical) version is touted. New colours or minor features are proclaimed as as revolutionary as the product’s initial conception and release. 

Whatever innovations are made focus on ‘salability’ rather than the more difficult, costly, time-consuming fundamental R&D that leads to technological revolutions in the first place. This shift in emphasis from production to sales leads to cheaper, shottier products, which must be replaced more often by ‘new’ models. This is ‘planned obsolescence,’ like a sugar rush for the stagnant monopoly capitalist economy. It breeds dynamic economic waste rather than sustainable economic well-being. 

Economically-speaking, the institutionalization of the sales effort under monopoly capitalism means that ‘socially necessary’ production costs now incorporate huge outlays on the sales effort that are far from socially necessary. These costs stem from the surplus, are used to defend and weaponize oligopolist market positions, and are always borne by the consumer. Since these costs become inseparable from necessary production costs, sales and production melding into one another, how do we decipher a product’s real socially necessary cost? 

Marx dealt with non-production costs like rent and interest, but the costs of the sales effort cannot be untangled as such. The only possible method for doing so would be to take a giant corporation’s production cost, sales effort costs included, and compare it to a hypothetical product built in the safest and most efficient matter possible, without the ‘salable’ features. As a hypothetical possibility, this method shows the lie that capitalism, especially under its monopoly form, is the most efficient and effective production method. Rather, as always, it is simply the most profitable. Free market dogma that maintains that consumer ‘free choice’ (which in these conditions we can understand as extremely manipulated) is the only relevant aspect. So little if any study attempting to untangle socially necessary and bloated sales effort costs has been undertaken. B+S examine one such 1949 study on the strictly socially necessary costs of a hypothetical automobile, on pages 135-138.

B+S conclude this chapter by briefly discussing the finance, insurance, and real estate (FIRE) industries. While there are socially necessary elements of these industries, the costs/spending in these industries is even more exorbitant than the sales effort. There is the enormous army of bankers, agents, lawyers, and peddlers, who add costs at every step of the process. If we were to do away with these industries tomorrow, the monopoly capitalist economic system would collapse. As B+S note, this means that, in monopoly capitalist society, these industries, and their accompanying surplus absorption, are in fact socially necessary. The socially unnecessary element then, the burden on human well-being and productivity, is the monopoly capitalist economic system itself, which must be replaced by a socialist economic system.