Michael Roberts. D. R.
You wrote the book « The Great Recession ». Why do you think capitalism always generates crises?
Crises in capitalism, or in other words slumps in production, investment and jobs, happen on a regular and recurring basis. Indeed such slumps have taken place every 8-10 years since capitalism became the dominant mode of production over feudalism and slavery since the late 18th and early 19th century in Europe.
Capitalism does not expand the productive forces (ie output and the productivity of human labour) in a steady and harmonious way but only unevenly in cycles of booms and slumps. The main reason is that capitalism is a system of production for the profit not for social need. The owners of the means of production (the capitalists) only employ the rest of us or invest in new technology to raise productivity if they can make a profit. Profit comes from the labour of their employees which the capitalists get when they sell the goods and services that we have produced for them. We don’t own or control the produce of our labour, the capitalists do.
But the capitalists have a problem. They are not only trying to squeeze as much profit out of their workers, they are also competing with each other to get a bigger share. They must compete or face ruin as others take over the market. The best way to compete is to keep costs of production (particularly labour costs/wages) as low as possible per unit of output.
Compared to others so a capitalist can undercut in prices other capitalists. So the capitalist with the best technology can get a larger share of the profit extracted from labour. But technology costs money. Indeed there is tendency for the costs of technology (factories, equipment, etc.) to outstrip the overall profit extracted from workers ie what Marx called the tendency for the rate of profit to fall.
Every so often profitability falls back so much it stops total profit rising. Then capitalists are forced to stop investing more and start to lay off workers – a slump ensues until enough workers and weaker capitalists are removed so that the stronger capitalists can raise profitability and start again.
The great recession of 2008-9 is an example of this process. Although it appeared on the surface that this deepest slump in capitalist production globally since the 1930s started with a housing and banking crash in the US that spread to the rest of the world, the financial crash only happened because of falling profit rates in the major economies.
What this tells you is that capitalism will continue to have regular crises and indeed in another book of mine, The Long Depression, I argue that it is getting increasingly difficult for capitalists to get a recovery in profitability going. That shows that capitalism has a limited shelf life as a way for humanity to organise their livelihoods. It needs to be replaced by production for social need based on common ownership of the means of production and planned democratically.
You predicted the 2008 crisis several years before it happened. Are we really past the 2008 crisis?
I predicted the 2008 crisis in my book written in 2005-6 because of three things. First there was a downward cycle in commodity and production prices (called the Kondratiev cycle after a Russian economist of the 1920s) that would reach a bottom in 2008. Second, there was a downward cycle in profitability for the reasons I mentioned above. And there was a peak in the construction cycle in the major economies. All three cycles were coming together – something not seen since the 1930s and 1870s.p
The 2008 crash and the great recession should have laid the basis for a new upward cycle by raising profitability. But it has not done so. Why? Because governments and their central banks have not allowed all the weak companies to go bust or allow unemployment to rise enough. So what are called zombie companies have stayed in the market, unable to grow but just hanging in there because cost of borrowing (interest rates) are so low. So instead of the slump being followed by a boom, we have had stagnation, what I call a long depression. In a sense the crisis of 2008 has been elongated for a further ten years – and then covid came along.
In your opinion, doesn’t capitalism carry the seeds of its own end?
Capitalism has two Achilles heels. The first is that it cannot sustain the profitability of capitalist production; and profitability is the very point of capitalist production. There is a growing contradiction between improving the productive forces so that human beings can move to a world without poverty, inequality and wars; and the increasing difficulty of capitalism to sustain profitability.
The second Achilles heel is that capitalism, in expanding the productive forces throughout the world, ended feudalism and the peasantry, but instead created a new class – the working class. This is now much bigger than the peasantry. It lives in cities and towns and not in the country ; it works with others in offices and factories. And this class owns nothing but its ability to sell its labour. It is the only class that has a vested interest in replacing private ownership with common ownership and cooperative production.
The working class has never been larger in human history. It may not be growing in the major economies of the global North but it is getting larger in the global South and in the Middle East. This is the Nemesis of capital.
You wrote « Marx 200 – a review of Marx’s economics 200 years after his birth ». In your opinion, why should we reread Marx?
Working people who want to change the world for the better need to understand why things are the way they are. Why is there huge poverty with nearly 4 billion on the poverty line? Why are there huge inequalities of wealth and income in every country? Why do we have periodic slumps and crises in production and jobs? Why do we have continual wars between nations and within nations?
Many people in the past have offered answers to these questions but in my opinion only Marx (and Engels) have provided what they called a scientific explanation on how capitalism (ie private owners of the means of production) exploit the rest of us. It is not easy to see why on the surface but Marx and Engels delve beneath the surface to show how things really operate to cause these things.
You wrote another book « Engels 200 – his contribution to political economy ». Why do you think it is more than necessary to know the work of Engels?
Lots of academics including marxist academics have dismissed or ignored Engels’ contribution to understanding capitalism and the socialist alternative. And yet Engels was a communist before Marx and many of Marx’s key ideas were first expounded by Engels. Engels sacrificed his own contribution to do paid work in his father’s firm in order to fund Marx’s studies. But when he retired he again made significant contributions: predicting imperialism and world war; and explaining the nature of socialism in a clear way.
How do you explain the absence of organizations to supervise the struggles of the workers?
It is not easy to make a revolution. And it is not easy for workers to see that they have more in common with each other than with the rulers of their own nation or even with their bosses at work.
But eventually capitalism’s inherent contradictions which I have already referred to come to the surface and economic crises force workers to organise and even consider ending the rule of capital. These moments do not happen often but they do happen and when they do, the decisions of the workers parties and their leaders become decisive.
Unfortunately the history of such moments has usually ended in defeats because of the wrong decisions of the leaders – but not always!
After defeat there are recriminations and confusions in parties and workers in general become subdued. And if capitalism has a boom for a while, the objective conditions for revolution are negative.
But that cannot last forever – the class struggle never ends in the workplace and in society as a whole and capitalism cannot deliver for the many. So new struggles will erupt.
In all these ups and downs, building up workers organisations is very difficult. But it is necessary. The best chance of making them successful starts with understanding capitalism and its trends, so that workers become clear on what to do.
Where did the fighting spirit of the trade union movement go?
When I was young adult, trade unions were strong and there class struggles globally – in the major capitalist economies and in revolutions against colonial rule in Asia, Latin America and the Middle East, but that was the 1970s when capitalism was suffering a profitability crisis.
The slumps of the 1980s and defeats of various union struggles allowed capital to smash trade union organisations, keep wages down and privatise public services with the aim of raising profitability. That was been the experience of the last two decades of the 20th century. Trade unions became controlled by officials who were not interested in struggling against employers but only in avoiding the worst damage to members.
Now workers are not sure that if they take industrial action or strike that they can win with government legislation and trade union officials against them.
Also many new industries in technology, media and communications have sprung up while old basic industries have declined (at least in the global North) where unions used to be built. The new industries have not been organised eg Amazon.
In the face of neoliberalism’s disastrous offensives, shouldn’t the peoples of the earth unite to bring down hideous capitalism and criminal imperialism?
The answer is obviously yes, in my opinion. But the issues andproblems involved, I have pointed out in previous questilns.
How do you think we could effectively resist imperialism and capitalism?
Imperialism can only be defeated internationally because capitalism is global. But of course we cannot expect a simultaneous uprising. Things will start in one place or country and then hopefully spread. So the first task is to fight your own capitalist class in your own country. Do not blame foreign imperialism for poverty, inequality and crises in your country alone – start with your own capitalist class.
So we need movements in the global South against their own capitalist classes and of course movements by the working class in the imperialist countries..
Isn’t the capitalist system a permanent danger for humanity, with its capitalist wars and its harmful effect on the climate?
As we go further into the 21st century, it is becoming ever more clear that capitalism is on its last legs. There are permanent wars engendered by capitalist nations competing over resources and markets. And capitalism is unable to stop global warming which is changing the climate globally and making many parts uninhabitable within ten years. The degradation of nature and natural resources continues at a pace. And there are dangerous new revalries on a global scale between US imperialism and it allies and the rising economic power of China that risks a new world war.
As human beings, have we not failed in not finding an alternative to the capitalism that enslaves all of humanity?
We as human beings have not failed. There is ‘them’ and there is ‘us’. They are the few and we are the many. Capitalism took the productive forces forward in a great leap not seen before with previous modes of production (slavery, feudalism, asian absolutism). But it also created new inequalities, injustices and poverty as we have discussed above.
Capitalism is not old in human history – just about 250 years as the dominant mode of human organisation. Slave economies lasted for thousands of years; feudalism lasted a thousand years. But the world has got faster – capitalism will not last another 250 years. Indeed time is much shorter than that. Either ‘us’ gets rid of the system controlled by ‘them’ soon or capitalism will destroy the planet and drive humanity back into the dark ages.
Interview realized by Mohsen Abdelmoumen
Who is Michael Roberts?
Michael Roberts worked in the City of London as an economist for over 40 years. He has closely observed the machinations of global capitalism from within the dragon’s den. At the same time, he was a political activist in the labour movement for decades. Since retiring, he has written several books. The Great Recession – a Marxist view (2009); The Long Depression (2016); Marx 200: a review of Marx’s economics (2018): and jointly with Guglielmo Carchedi as editors of World in Crisis (2018). He has published numerous papers in various academic economic journals and articles in leftist publications.