It would be good to get some discussion going on this issue, obviously a big one for the anti-capitalist left internationally anyway but an especially pertinent one in this country, where the working class remains almost perversely passive.

. . . and yet it survives. . .

. . . and yet it survives. . .

by Michael Roberts

Last weekend, I attended this year’s London version of the Historical Materialism conference (, which for those who don’t know is an annual gathering of mainly Marxist academics, students and activists organised by the Historical Materialism journal. A host of papers and book launch presentations are made, often bringing out new ideas in the analysis of capitalism.

This year’s main theme was “How Capitalism Survives” and was apparently attended by over 750 scholars, academics and activists. It’s not possible to attend all sessions, of course, so my review concentrates on the economics papers and even there is sometimes based on reading the papers presented rather than on actually attending the session (so be forewarned!).

How does capitalism survive? Well, according to John Weeks, emeritus professor at SOAS, it’s because the capitalist mode of production has had very few of what could be called proper crises (2014 Weeks_Crisis_Izmir). Weeks reckons that only the Great Depression of the 1930s and the recent Great Recession could be considered generalised crises (“episodes of severe contraction”) that affected the world capitalist economy for any length of time or to any depth. Other so-called crises were merely mild recessions or financial crashes that were short and limited to the national economy concerned.

As for the causes, Weeks argues that it was the breakdown in the circuit of capital and the realisation of money that was the problem and had nothing to do with the accumulation of value in the production process, as advocated by the ‘falling rate of profit’ theorists. As he puts it: “The typical ‘falling rate of profit’ mechanism fails to get out of the starting gate as a candidate for generating cross-country crises, much less global ones.” This is because Marx’s law of a rising organic composition of capital would only generate a gradual fall in profitability and there is no mechanism that decides “a critical value” of profit that could provoke a sudden collapse in production or investment or its simultaneous spread globally.

Well, I beg to differ. Starting with Henryk Grossman ( and continuing with the work of many scholars very recently, such as Tapia Granados (, including my own work and that of G Carchedi (The long roots of the present crisis), we find that there is a causal connection between the movement of profitability, profits and slumps in investment and GDP (and see my paper, The nature of current long depression).

It’s true that many financial crises are not accompanied by a slump or economic recession, as in the stock market crash of 1987, cited by Weeks as an example. But in that case, profitability in the major economies including the US was on the rise. So the crash was short-lived and quickly reversed. But that was not the case in 1974-5, the first worldwide simultaneous slump, triggered by the oil price jump, but after a decade or more of a profitability slide; or in 1980-2, again triggered by energy prices, but again after another decline in profitability. Anyway, I could go on, but I refer you to my paper here (Presentation to the Third Seminar of the FI on the economic crisis).

In the same session as Weeks, young economist Juan Pablo Mateo Tome from Kingston University presented a paper on Spain that showed the causal role that falling profitability in the productive sectors of the Spanish economy played in the Great Recession and the subsequent weak recovery (JPMT_Crisis Spain_HM_2014). Similarly, in another session paper, Aberlardo Marina Flores and Sergio Camara Izquierdo, analyse the development of the Mexican economy in the post-war period and find that Mexico’s immediate high post-war profitability deteriorated (The structural causes of the severity of the crisis in Mexico_AMFySCI_GEConLA). The neo-liberal period was designed to counteract that fall through the opening-up the economy to US investment, weakening the labour movement and expanding control of the surplus to the financial sector. The recessions in the US had a deep impact on Mexico as a result, contrary to Weeks’ view above, while ‘financialisation’ weakened the productive sectors.

Financialisation was a theme of another session where Tony Norfield presented his incisive analysis of the dominance of US and UK finance capital in the hierarchy of imperialism ((Norfield Tony-Finance_the_Rate_of_Profit_and_-Imperialism). The apparently huge profits of the late 1990s and early 2000s were really appropriations from the productive sectors of the major economies and were largely fictitious. Francois Chesnais, the French Marxist economist ( and still going strong at 82 years, argued that finance capital cannot be separated from capital in general, as ‘financialisation’ theorists suggest. Contemporary finance capital is a combination of productive capital lodged in transnational corporations, money capital centralised in very large financial conglomerates (financial capital) and merchant and commercial firms. This facilitates the distribution of surplus value generated by productive capital on a global scale. Both Norfield and Chesnais emphasised the parasitical nature of finance capital in modern capitalism. It helps capitalism survive but at great cost to profitability and investment in productive sectors.

Finance capital at the centre of imperialism was a theme of other papers that looked at hitherto unpublished (in English at any rate) manuscripts and notebooks by Marx on his developing ideas on imperialism and finance capital. Lucia Pradella launched her new book on Globalisation and the Critique of Political Economy: New Insights from Marx’s Writings (, in which she argued that, as imperialism and finance capital became an increasing feature of modern capitalism (with its productive potential becoming exhausted in the mature capitalist economies), Marx still preserved the continuity of his key categories in the capitalist mode of production. Imperialism and globalisation were counteracting factors to the deterioration of profitability and the extraction of more surplus value in the mature capitalist economies.

This seemed to me to be an important answer to the question of how capitalism survives: through a global search for more labour to exploit and through the centralisation and concentration of capital in finance. Both developments have a finite end, however, while causing increasing recurrent crises of production.

The attempt to claim that Marx did change his theory of crisis in later years as capitalism matured and finance capital grew in dominance has been a familiar theme in recent years, based on the scholarship of those Marx’s manuscripts and notebooks in the MEGA project. It is claimed that Engels’ editing of Marx’s Capital was a distortion and, in particular, Marx’s law of the tendency of the rate of profit to fall had been dropped by him in later works, but Engels reinstated it in his editing. See Michael Heinrich’s work ( and the reply to (and debate with) Heinrich by Carchedi and me (

Well, Fred Moseley introduced a new translation into English of Marx’s four drafts for Volume 3 of Capital by Regina Roth, where Marx’s law of profitability is developed and showing how Engels edited those drafts for Capital (Moseley intro on Marx’s writings). Contrary to the view of Heinrich and others, Moseley shows that much-maligned Engels did a solid job of interpreting Marx’s drafts and there was no real distortion. “One can, therefore, surmise that Engels’ interventions were made on the basis that he wished to make Marx’s statements appear sharper and thus more useful for contemporary political and societal debate, for instance, in the third chapter, on the tendency of the rate of profit to fall.”

Talking of scholarship on Capital, after the end of the HM conference, I spoke as part of a panel that included Chris Arthur, the renowned Marxist philosopher, at the launch of Alex Callinicos’ new book, Deciphering Capital.  I reviewed Callinicos’ book in a recent post ( At the launch, I concentrated on Callinicos’ account of Marx’s theory of crisis and how that could be ‘deciphered’ pretty clearly in Capital (my speech is here, Callinicos speech).

Every year, at the HM conference, the Isaac and Tamara Deutscher memorial prize for the best Marxist book of the year is awarded ( And the author of last year’s winner delivers a lecture. Last year’s winner was The making of global capitalism: the political economy of the American Empire by Leo Panitch and Sam Gindin ( Gindin is the former Research Director of the Canadian Autoworkers Union and Packer Visiting Chair in Social Justice at York University and Panitch is Canada Research Chair in Comparative Political Economy and Distinguished Research Professor of Political Science at York University. The two have worked together on many books and publications.

I missed their speech but from the book I can glean their main arguments. Panitch and Gindin challenge the widespread notion that globalisation has led to the retreat of the state. The argument that states still have a role in directing global capitalism is obviously right. America is still the leading imperialist power and leads the other imperialist powers in an ‘informal empire’. But in addition, Panitch and Gindin maintain that workers are generally weaker now and the American state has greatly strengthened since the post-1973-83 crisis.

I disagree. Is American imperialism actually stronger now than 50 years ago? Contrary to Panitch and Gindin’s view, the neoliberal period was not a Golden Age like the post-war period, if we mean by that fast growth in GDP, high profitability and productive investment. Sure, growth in the 1980s and 1990s was faster than in the crisis period of the late 1960s and 1970s, but it was still slower than in the first Golden Age and investment was way less productive. Just because in the neoliberal period the finance sector had a bonanza and thus so did American imperialism does not mean it was a golden age.

Another area where I have a strong disagreement is with Panitch and Gindin’s explanation of capitalist crisis as expounded in their book. They argue that the crisis that erupted in 2007 was not caused by a profit squeeze or collapse in investment due to overaccumulation. Instead, the authors prefer to explain the Great Recession as a result of stagnating wages, rising mortgage debt and then collapsing housing prices, causing “a dramatic fall in consumer spending”. In my view, as I have expounded in several posts (, this common and dominant view (in the mainstream and post-Keynesian economic circles) about the Great Recession being caused by rising inequality and debt does not bear up to the facts.

That this view has become mainstream is confirmed by the news that Thomas Piketty has won the Financial Times best business book of the year for his monumental Capital in the 21st century, a title pinched from Marx but actually not a critique of capital or the capitalist mode of production at all, but an analysis of the recent rising inequality of wealth in modern capitalist economies (see my post, Inequality, not crises, is the buzz word about capitalism.

This year’s Deutscher prize winner was entirely different. It went to Roland Boer for his book, In the Vale of Tears, ( the concluding volume of a five-volume series, The criticism of heaven and earth, a critical commentary on the interactions between Marxism and theology in the work of the major figures of Western Marxism. Boer is from Australia, now a professor at Renmin University, Beijing, and considers himself a Christian Communist. His speech next year should be interesting.

By the way, Piketty gets £30,000 for his prize, Boer £500.


  1. Don Franks says:

    Yes, we are at the moment ‘ almost perversely passive’. When will we wake up a bit, I don’t know. In the meantime, here’s a song for our side:


    by James Oppenheim

    Over his face his gray hair drifting, hides his Labor – glory in smoke,
    Strange through his breath the soot is sifting, his feet are buried in coal and coke.
    By night hands twisted and lured in fires, by day hands blackened with grime and oil,
    He toils at the foundries and never tires, and ever and ever his lot is toil.
    He speeds his soul till his body wrestles with terrible tonnage and terrible time,
    Out through the yards and over the trestles the flat – cars clank and the engines chime,
    His mills through windows seem eaten with fire,high cranes travel, his ingots roll,
    And billet and wheel and whistle and wire shriek with the speeding up of his soul.
    Lanterns with reds and greens a-glisten wave the way and the head-light glares,
    The back-bent laborers glance and listen and out through the night the tail-light flares—
    Deep in the m ills like a tipping cradle the huge converter turns on its wheel
    And sizzling spills in the ten-ton ladle a golden water of molten steel.

    Yet screwed with toil his low face searches shadow- edged fires and wilted pits,
    Gripping his levers his body lurches, grappling his irons he prods and hits,
    And deaf with the roll and clangor and rattle with Its sharp escaping staccato of steam,
    And blind with flame and worn with battle,into his tonnage he turns his dream.
    The world he had built rises around us, our wonder cities and weaving rails,
    Over his wires a marvel has found us, a glory rides In our wheeled mails,
    For the Earth grows small with strong Steel woven, and they come together who plotted apart—
    But he who has wrought this thing in his oven knows only toil and the tired heart.

  2. PhilF says:

    I guess one of the factors in its survival in NZ, at the objective level, is that there is still a certain amount of wriggle room. Most of the working class can still purchase various consumer goods that seem to keep them docile, even if they end up with lots of stuff on credit and perpetually facing the repo folks.

    At the subjective level, the consciousness of how stuffed the system is is completely out of whack with the degree to which it is materially exhausted.

    Almost every day, if I watch the news, there will be some item that shows how the market is just not capable of meeting human needs, even most basic ones. Yet most people accept that these limits are just the natural order of things, rather than the natural order of *capitalism*. It’s difficult to know what, if anything, will shake workers here out of their inertia.

    The system is so daft that it simply is not possible to make peace with it. But the opposition to it is virtually non-existent outside a few Marxists and class-struggle anarchists. Most of those who identify as being ‘left’ just want to manage it and that doesn’t really convince the working class in even electoral terms let alone terms of any real transformation of society.

    And so we have this impasse of an exhausted system and an exhausted working class. And in this exhaustedness a load of morbid symptoms appear which act to further debilitate the class.


  3. Gary MacLennan says:

    I read Roberts regularly and I very much like his work, though an understanding of the details of that TRPTF “thang” will always elude me. Crises mature and proliferate and in the mean time most of humanity is busy trying to “put food on the family” as the dear former President used to say.

    It is the gap between the rhythm of our personal life span and the rhythm of the economic/political time that has us wondering how capitalism can survive. If we step outside of our personal time and try to think ourselves into the political time, then a different picture emerges. Capitalism has not been going all that long and in its time has had at least two near death experiences. I would nominate the 1917 revolution and its aftermath as a close call and also the Great Depression as the close calls. In the first of these Social Democracy in Germany rode to the rescue and in the Great Depression Keynesianism and Stalinism were the vital factors that ensured the system’s survival.

    I also think a case could be made for the 60s as another near death experience. In any case, the vital negative role was again played by Stalinism in France.

    So that leaves us now and your post describes the situation on the surface with brutal accuracy. But you are stuck in personal time, comrade! It is true that politically we are journeying through purgatory. Since the Chilean counter revolution of 1973 inaugurated the neo-liberal era, the capitalist class has had a stunning series of victories. But as I have always said, the dialectic is remorseless and their victories are morphing inexorably into a situation where they will choke on their own gluttony. As they win, humanity loses and everywhere that idea is struggling to be born.

    It is impossible to predict a revolution. No one has ever come close. But the coming economic crisis, which Roberts predicts will occur in 2016 could herald another near death experience for capitalism. Political disorder could break out everywhere and from that a new order of humanity could (will?) emerge. Then if we are around we will all chorus “Brav gewühlt alter Maulwurf!”



  4. Phil F says:

    I think your point about personal time and political time is a good one.

    Capitalism took hundreds of years to become the predominant mode of production in any one country, let alone globally. Indeed, in some parts of the world it probably still isn’t.

    And socialism is quite new. We’re only talking about 100 years, or 140 if we go back to the Paris Commune. So maybe we have a couple of hundred years to go yet. . .

    2016 would certainly be a good year for you and me alike. I’ll be in Ireland preparing! Hey, you should head over for the 100th anniversary of the Rising yourself.


  5. Susanne says:

    I think you might be overly optimistic there with 2016! It seems to me to be decades off, if not longer. I think we are just one tiny wee link in the chain and our contribution just keeps things going but not much more. The resilience of capitalism is impressive, but so is the determination of the left to keep repeating the same mistakes. For instance, I suspect the left in New Zealand/Aotearoa is more nationalist now than 40 years ago. It is the ruling class that has become more cosmopolitan and internationalist, while still playing the nationalist card when they need to.