Tuesday, August 23, 2016

The Long Depression: A Review


 
Michael Roberts new book The Long Depression (TLD) brings together much of his previous work from his blog and articles. It follows his previous book The Great Recession (TGR) that looked at the causes and effects of the so-called Global Financial Crisis (GFC) of 2008. There will be no surprises in the book for those already familiar with his work but for those whose knowledge of Marxism is scanty or distorted by misrepresentation, it is a great read.

Roberts develops his argument that the GFC was not an accident or result of wrong decisions by central banks, or greedy Wall St traders. It was not an aberration of 'financialisation' where financial speculation undermined profits and created massive debt. It was necessary symptom of a crisis-ridden capitalism which since the end of the post-war boom entered a long period of stagnation, despite periodic ups and downs, signifying the increasing stagnation of global capitalism.

According to Roberts (and many others) what the GFC did was prove Marx correct. Long-term declining profits generate a massive surplus of money that loses its value unless capitalists speculate in existing asset markets creating bubbles from housing to commodities to bonds. Not until those bubbles burst and wipe out the fictitious value of inflated asset prices are the conditions for a return to profitable investment possible. The period of falling profits and the stagnation of growth which precedes the GFC and ends only with massive devaluation of trillions of surplus capital to restore profitable investment is the broad definition of what Roberts calls The Long Depression.

In scientific terms, for a theory to work it has to explain not only past and present events better than its rivals but also offer predictions on future outcomes. Marxism does this well because while all change in capitalist society is explained as determined in broad terms by 'economics', society, culture and politics are factored into the analysis to account for variation in possible outcomes.

No other theory can trace changes in ideas and politics back to economics as clearly and convincingly. So in the first chapters of TLD Roberts shows how Marx's theory of falling profits, the Tendency of the Rate of  Profit to Fall, (TRPF) is a law which underpins all the booms and busts from the Long Depression of the 1880s, the Great Depression of the 1930s and now the Long Depression of the 2000s.

Great events such as wars and depression which shape our history and our lives are not only explicable but inform our understanding and our actions. Not the caricature of Marxism which reduces all human activity to 'economism' in which individuals are reduced to ciphers or automatons with no freedom of action. On the contrary Marxism proves that it is class struggle over the share of value that propels humanity (as represented by the proletariat that produces the wealth) to rid itself of the increasingly destructive capitalist system that ultimately threatens climate collapse and human extinction.

It is this point that is the key to our liberation. Roberts touches on it but does not develop it. Capitalism is an historical society that can last only so long as it can produce to meet human needs efficiently. It came into existence with the rise of the bourgeoisie who harnessed productive labor to reduce the necessary labor time needed to produce commodities. The reduction of necessary labor time was historically 'progressive' yet racked by contradictions. Under capitalism 'progress' is expropriated as rising surplus labor time (exploitation) in the form of profits by the class that owns the means of production. This contradiction causes the TRPF where the drive for profits meets the inevitable resistance of the proletariat over the share of value intensifying the class struggle and threatening to resolve crises by revolution. 

So how do we predict the course of TLD today? While 'economics' accounts for the crisis and its severity, already built into 'economics' is the class struggle complete with class ideas and class actions most notably wars and revolutions. Each historic boom and bust cycle is therefore the product of class struggle. Each bust gets stronger and each boom weaker as we can see by tracking them.

The Long Depression of the 1880s which led to a weak boom until WW1 threw the proletariat into the trenches and stimulated new production in the victors and destroyed the industry of the losing capitalist states. But war brought with it the threat of revolution and there was no guarantee that the crisis would be solved and capitalism 'stabilised'. It was resolved temporarily (outside Russia) by the power of bourgeois ideology and politicians who disarmed and trapped workers in parliaments, and where that failed unleashed fascist counterrevolution.

But the post-war boom was weak and the crisis returned in The Great Depression of the 30's. This led to another World War in which the victors boosted production and developed new techniques while destroying the economies of the defeated states stimulating the renewed capitalist accumulation known as the post-war boom. The potential for revolution in Europe was smothered by the allied troops (including the by now Stalinist Soviet Union) or steered into 'neo-colonisation' in the 'third world'. Once more the boom was short lived and a period stagnation followed.

Again the TRPF munched into profits which slumped from the early 1960s until the equivalent of a new World War, the neo-liberal counter-revolution, rescued capitalism in the 1980s from its impending demise. Neo-liberalism in the name of the 'free market' openly attacked workers resistance to rising exploitation, restored capitalism in the Soviet Union and China, and everywhere destroyed state assets to revive the rate of profit. Yet as Roberts shows, the upturn of the neo-liberal 1980s and 1990s was too weak to restore profit rates to post-war boom levels. The result was 'financialisation' as the surplus capital had no place to go except into speculation in existing assets.

So the historical record shows that each crisis gets stronger and each upturn weaker because the worsening contradiction between the owners of the means of production and those who produce value leads capitalism to an inevitable decline. It cannot use its expropriated wealth to generate new wealth without destroying more wealth. 
 
Here we come to the most interesting final chapters of Roberts book.  He spends some time speculating about Kondratiev Curves (K Curves) which Trotsky rubbished in the 1920s as a blind alley and nothing to do with Marxism and which I don't propose to debate here. Much more relevant is his argument about whether or not the current Long Depression is the 'terminal' crisis.

This is an old argument among Marxists. Always keen to predict the inevitable fall of capitalism, Marxists have tended to see every crisis as the last one before socialism must replace it. The general rule of thumb is that capitalism must decline but it cannot fall unless pushed by the proletariat. As we have seen every crisis is caused by class struggle in which the relative strength of the two classes determines the outcome. Roberts takes this position and argues that if the capitalist ruling class can resolve the current crisis by defeating workers then a new boom of capital accumulation is possible. While this 'possibility' cannot be excluded it is more likely that the destruction of the 'forces of production' required to exit TLD into an historically weak boom will be so extreme that the TLD will become the last, or terminal, crisis, whose outcome must be either human extinction or socialism.

Briefly in summary, in every crisis, capital has to destroy more wealth to create new wealth. As the destruction gets worse, the ability of capitalism to survive is reduced. As more and more workers are thrown out of production, as their lives become more intolerable, they rise up and "blowback". As more and more of the forces of nature are destroyed including the pre-conditions for human life in the biosphere, then a qualitative shift takes place in the resistance of labor. As the current crisis get worse the quality of revolutionary knowledge and action will advance. The class struggle throws up mass experience of struggle that tests the limits of capital and as class consciousness grows validates Marxism as the critique of capital and the promise of socialism. The proletariat adopts Marxism as its revolutionary program and representing humanity becomes the agent of the last revolutionary transformation before capitalism kills us all.

That is the prediction; whether it comes true or not is up to you.

Michael Roberts, The Long Depression: How it happened, Why it happened, and what happens next. Haymarket Books, Chicago, 2016

Tuesday, July 26, 2016

Monday, June 27, 2016

Worker Socialist: Appeal of the Workers' Socialist Party

Worker Socialist: Appeal of the Workers' Socialist Party: Transform the Indefinite Nationwide Strike of July 11 into a General Political Strike Carry Forward the Struggle For Establishment...

Wednesday, June 22, 2016

Aotearoa/NZ: The Fudget Fiddles while Capitalism Burns

Screen Shot 2016-05-24 at 9.48.29 am
Bill English, New Zealand's Minister of Finance
"The NACTS budget is really a fudget for trying to hide the growing weakness of NZ’s neo-colonial economy behind a veil of spin. The Key regime hopes to promote business confidence in a climate of falling profits by ‘tax cuts’ made possible by cuts to public spending on the ‘social wage’ and by ‘dividends’ created by privatising state assets and plundering public resources such as water and fisheries."

http://thedailyblog.co.nz/2016/06/16/guest-blog-comrade-dave-brownz-the-fudget-fiddles-while-capitalism-burns/

Orlando and the Right to Bear Arms

New Black Panther Party carrying weapons
The mass killing of 50 gay people in the Pulse nightclub in Orlando, Florida, has once again thrown the question or the right to bear arms into the limelight. The reaction to this crime is to blame it on homophobia, Islamic ‘terrorism’ and freely accessible guns. This builds support for the ruling class agenda to disarm the working class or anyone profiled as a potential “terrorist”. We disagree. The right to bear arms is a fundamental democratic right that we must defend as the capitalist ruling classes everywhere resort to armed repression to force the working masses to pay for the terminal crisis of capitalism with their livelihoods and their lives.

Two examples of reactions to the Orlando shooting calling for gun control:

“It's that outmoded part of the constitution allowing the citizenry to bear arms that's the big stumbling block.” And: “Our constitution is antiquated and obsolete. The constitution should have been altered several times...now it's more of a slave to the wealthy and powerful to use against the very people it was intended to protect.”

We reject this argument. The US constitution empowered property owners which included slave owners to own and bear arms in popular militias to defend a ‘free state’. It represented the bourgeois constitution that legitimates the ruling class to shoot the property-less when they rise up. Now that bourgeois democracy extends to all citizens as property owners including workers who own their 'labor' to sell, all can bear arms.

To suppress that right for all will not take it away from the state which is now routinely executing unarmed people on the streets. The response from black activists is to bear arms in public to assert that right which communists support. This is the embryo of a workers militia and workers defence committees against the police attempts to execute blacks and the bosses’ attempts to hire thugs to shoot militants to smash strikes and occupations.

The fact is that the US has created conditions at home and abroad in which 'lone wolves' (individuals acting alone motivated by ‘terrorists’ or not) kill scores of people. These killings cannot be stopped by banning guns. Nor will a ban stop deaths from gun crime which kills more people a year in, for example, Chicago than in Libya. Gun crimes are overwhelmingly the result of ‘crimes against property’ which are endemic in capitalist class society where the proletariat is driven into poverty.

This is not about individual 'psychology' but class power. As the crisis of US imperialism develops the state will arm more paramilitaries to wipe out popular resistance as 'crime' or 'terrorism'. Do we give up the right to arms and surrender, or organise armed resistance? We don't deny that right to those oppressed by the US abroad, why deny it in the US itself where the US working class has the potential power to change the system?

The solution is to defend the right to bear arms so that the exploited and oppressed working majority can overthrow the militarised state and impose a workers' state which can be defended from armed counter-revolution!

Against those who have little faith in workers not shooting one another or executing non-workers arbitrarily, this wilfully ignores the reality. The capitalist state employs police and the military to execute scores of worker every day.

Workers need to be armed to defend their class despite being divided and driven by capitalism to kill one another. With capitalism in terminal crisis attacks on workers can only get worse so that they need armed militias to defend themselves.

If we take historical examples, the Russian revolution would not have succeeded without the arming of the proletariat. The Tsar in 1905 proved that when he shot down the unarmed masses. Kornilov who tried to smash the revolution in 1917 failed because the workers were armed and his own ranks mutinied and joined the revolution. The coup against Allende in 1973 drives home the fact that unless armed, workers united will always be defeated.

Of course being armed is not sufficient as the revolution in Germany 1919 proved. The armed masses who mutinied were fooled by the abdication of the emperor and by the treacherous Social Democratic Party into disarming and voting for a new republic. The proletariat needs to be organised and led by revolutionaries to build workers militias.

Meanwhile those who are fighting for basic democratic rights as in Syria are forced to take up arms to defend themselves from imperialism and its reactionary agents. That is the principle at stake: the right to bear arms in self-defence from the armed force of the capitalist state!

RCEP with China and India




The RCEP is the Regional Comprehensive Economic Partnership sponsored by China to create an Asian sphere of interest separate from the US dominated TPPA. We can view it as an enlarged BRICS for Southern Asia but which includes South Korea and Japan, the other regional imperialist power, as well as Australia and New Zealand (see graph above).

Is it an instrument of Chinese imperialism? Yes, but Japan and South Korea are trying to act as stalking horses for US imperialism in inserting corporate investor provisions into the RCEP.

NZ has already capitulated to the TPPA as a semi-colony of the US. Now the NZ ruling class wants to join the RCEP. Like the TPPA we need to add the RCEP to the list of imperialist attacks on NZ economic sovereignty and fight to reject it as a tool of Chinese corporate dominance of the region. We need to take our cue from India the largest semi-colony in the region that is already subordinated to China in the BRICS.

India is holding the line against imperialism rejecting the role of Corporates dominating national sovereignty. If the ‘investor protection’ rules are included then big pharma will attempt to stop India being the main provider of generic drugs eating into their profits. 

So we have here an insight into the relative roles of China and India in the world economy. Obama has just visited India to promote a ‘strategic partnership’ with the US. So India as a oppressed country is increasingly subject to rival pressures from the two big imperialist blocs to plunder its resources and extract superprofits.

We can see this reflected in the politics of the ruling Modi Government which is using rabid Hindutva nationalism to divide and rule the masses. As we argued in our last issue the pressure to solve the crisis of imperialism at the expense of the semi-colonies is transmitted downwards by the national bourgeoisies onto the working people.

One of the main demands of the labor movement in all the countries subjected to TPPA and RCEP type ‘partnerships’ must be the rejection of all such agreements as tools of either, or both, US and Chinese imperialism, and a determination to mobilise and coordinate international strike action to stop them! 

For a Socialist United States of the Asia-Pacific!
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