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
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