SUBTITLED 'HOW IT HAPPENED, WHY IT HAPPENED AND WHAT HAPPENS NEXT', MICHAEL ROBERTS’ book is a comprehensive review of the world economy. Roberts is a respected blogger (at https://thenextrecession.wordpress.com/) and writes regularly for Labour Briefing. His basic argument is that the Great Recession of 2008 has transformed itself into a Long Depression.
There has certainly been a long, slow recovery since the crash hit the depths in 2008-9 - slower than when the world began to grow again after the 1929 Great Depression hit bottom in 1933. Roberts argues persuasively that the world economy has hit the third Great Depression since the birth of capitalism. The first he dates to 1873-97. The second began in 1929 and went on till 1939, arguably only truncated by the outbreak of world war, thus exchanging one horror for another.
We may well be at the outset of the third Great Depression, a protracted period of below average growth and stagnant working class living standards. Not good news! Roberts argues persuasively that, apart from the boom-slump cycle lasting approximately ten years, there are longer eras of prosperity and stagnation under capitalism with their own distinct characteristics. The post-war boom of 1948-73 was a prosperous era; the time ahead is likely to be very different. In understanding the cyclical crises of capitalism there are different levels of causation involved. Roberts does not deny that there was crazy speculation before what is generally called the banking crash broke out in 2008. He argues that this was just a trigger for a deeper crisis already in preparation, and integrates the ‘credit crunch’ into his general analysis.
He shows that the fundamental cause of crisis is that, since capitalism is a system of production for profit dependent upon the accumulation of capital, there is a persistent and inevitable tendential fall in the rate of profit. Marx proclaimed “the most important law of political economy is that the rate of profit has a tendency to fall with the progress of capitalist production”. He also provides the empirical evidence to show that is what has been happening. This tendency does not operate in a unilinear fashion. For instance, alarmed at falling profits in the 1970s, the capitalist class internationally launched a neoliberal assault on workers’ living standards, thus raising the rate of exploitation and temporarily increasing profit rates (analysed in a chapter entitled ‘The Profitability Crisis and the Neoliberal Response’).
The book provides a broad sweep of capitalism over the past 200 years, pointing out national peculiarities and idiosyncrasies, such as the relative decline of British capitalism beginning in the late 19th century. He also demonstrates that the Euro crisis is part of the overall crisis of capitalism, not just the product of misguided ideologues who had a mistaken idea as to how to design a new currency (though that was part of the problem). The book provides valuable economic background to political developments such as the recent failed coup attempt in Turkey.
This year has been an annus mirabilis for Marxian political economy. It has to be said that some of the other writings do not make easy reading for the general reader. Roberts’ book is fairly accessible to the non-specialist. It’s your best bet.
Roberts shows that neither the Keynesians nor the monetarists or neoliberals have the solution to restoring full employment and prosperity. The chapter ‘Cycles within cycles’ may well be controversial as it tries to use the interaction of these different cycles (Kondratiev, Kitchin, Juglar and real estate prices among others) as an explanation for the development of capitalism as a whole. The book concludes by presenting a problem. Is the system ‘past its use-by date’? For instance why are there no flying cars in the 21st century, as we were promised decades ago, not only in science fiction but also in mainstream programmes such as Tomorrow’s World? Is innovation under capitalism slowing down? Is the system going into decline, as the slave mode of capitalism and feudalism did in their time? This is the question of questions.
Roberts is an unapologetic Marxist. All Marxists are aware that capitalism will not just collapse; it must be overthrown. But the system’s weakness provides the labour movement’s opportunity to transform society and get the fetters of the capitalist system off our backs. Nobody said it would be easy. There is much food for thought here.
The Long Depression is published by Haymarket Books at £13.
Michael Roberts will be speaking about his book at Momentum’s Liverpool festival ‘The World Transformed’ at The Black-E, on Tuesday 27th September, 11am in the Gallery.