As has become customary since I started this blog, here is the annual summary of content on my blog this year. This year, there have been 450,000 viewings of the blog site, with the last quarter hitting a record number of viewings since I began the blog back almost exactly ten years ago. Over those ten years, I have posted 882 times with just under 3 million viewings. There are 4300 regular followers.
The Michael Roberts Facebook site, which I started exactly five years ago has just under 8000 followers. On the Facebook site, I put short daily items of information or comment on economics and economic events.
How are my efforts received? Well, here is a review of my work by Danish economist Karen Helveg Petersen.
You can make up your own mind.
Anyway, here are the top ten posts from my blog this year, as measured by the number of viewings. And as you might expect from a blog that concentrates on Marxist economics and on a Marxist perspective on the world capitalist economy, my blog viewers are mostly interested in Marxist economic theory and its critique of political economy.
The top posts of the year were on Modern Monetary Theory (MMT). MMT has become the flavour of the year as the economic theory of anti-austerity economics, if not anti-capitalist.
Having been confined to the esoteric fringe of even heterodox economics, MMT really kicked off when the US left-wing Democrat Alexandria Ocasio-Cortez started promoting the theory as the basis for economic policy; and a leading MMT exponent discussed the theory with UK Labour’s left-wing economics and finance leader, John McDonnell.
MMT now has some traction in the left as it appears to offer theoretical support for policies of fiscal spending funded by central bank money and running up budget deficits and public debt without fear of crises – and thus backing policies of government spending on infrastructure projects, job creation and industry in direct contrast to neoliberal mainstream policies of austerity and minimal government intervention.
So, in a series of posts, I analysed MMT from what I consider is a Marxist perspective. I argued that separating money from value and indeed making money the primary force for change in capitalism fails to recognise the reality of social relations under capitalism and production for profit. MMT ignores or denies a theory of value. So MMT enters a fictitious economic world, where the state can issue debt and have it converted into credits on the state account by a central bank at will and with no limit or repercussions in the real world of productive capital.
In contrast, Marx’s law of value integrates money and credit into the capitalist mode of production and shows that money is not the decisive flaw in the capitalist mode of production and that sorting out finance is not enough. So it can explain why the Keynesian solutions (and MMT is a variant of Keynesian economics) do not work either to sustain economic prosperity or avoid crises. I covered MMT in several posts, two of which made the top ten. Digital Commons has collated my posts into one paper which you can read here.
But the debate on MMT continues.
Rising government spending and unemployment are positively correlated in the OECD – the opposite of what MMT expects.
Also the debate that I conducted on the blog with Professor David Harvey on Marx’s law of value was in the top ten.
I argue that DH’s interpretation of Marx’s law of value is incorrect when he suggests that Marx did not have a ‘labour’ theory of value and that value only exists in ‘the market’. From this flows the view that crises in capitalism are caused by a failure to ‘realise’ value through dislocation in the market ie underconsumption; and are not due to the failure to appropriate enough surplus value in production. In the debate, DH strongly refutes my interpretation of his position and suggests my own view on crises is far too narrowly based as an explanation. As I said in the post, this debate could be considered like a medieval religious debate about how many angels there are on the head of a pin; but it may be that it leads to something really worth knowing. As it has made the top ten, it seems viewers think the latter.
Investment not consumption is the main swing factor in slumps – contrary to the underconsumption view –
% chg in personal consumption, business investment and GDP
The debate between David Harvey and me on the relevance of Marx’s law of the tendency of the rate of profit to fall was continued in person at the recent Historical Materialism conference in London. You can read my report on that session here.
The other theoretical discussion that made the top ten was on the economics of imperialism. In another session which I organised at the Historical Materialism conference, John Smith, author of Imperialism in the 21st century, a widely praised and important book, presented with Andy Higginbottom of Kingston University, Sam King from the University of Victoria, Australia and myself on the economic foundations of modern imperialism.
The discussion revolved around how value is transferred from the periphery (or the ‘global south’, if you prefer) to the imperialist centre (the ‘global north’), through transfer pricing, international trade, and capital flows. In particular, we debated the relevance of the concept of ‘super-exploitation’ in the south as the main source of value transfer. Again, the debate on this continues.
% of GDP of value transfer between major emerging economies and the G7
It was not just Marxist economic theory that attracted viewings of my posts but also analyses of the current state of the world capitalist economy. Recessions, monetary easing and fiscal stimulus got into the top ten, I suppose, because it summed up my view of the likelihood of a new global recession and whether the official economic policies of central banks and governments were working to get capitalism out its low growth, low investment stagnation and could avoid a new slump. My final sentence was: “Another recession is on its way and neither monetary nor fiscal measures can stop it.”
I’ll revisit this story in a future post on the prospects for the world economy in 2020.
Global business profits are stagnating
One of the developments in the world economy in 2019 was the emerging trade and technology war between Trump’s America and Xi’s China. This war, even if temporarily in truce, will break out again in 2020 and has already had detrimental effects on the world economy. In a post that made the top ten, I argued last May this war would be one of the triggers for a new global slump “before the year is out”.
Well, that ain’t happened. But, in my view, it remains at the heart of any future dislocation of the world capitalist economy.
Global trade is declining
One post that I do every year and which always makes the top ten is Credit Suisse’s annual measure of the degree of inequality of wealth globally. Once again, the report revealed the staggering degree of wealth inequality in the world. The top 1% of adults own 45% of all global personal wealth; 10% own 82%; the bottom 50% own less than 1%. So poor are the bottom 50% (they own no wealth at all), that it means that the likes of you and me who might own (partly) a house or flat in the advanced capitalist economies are actually in the top 10% of wealth holders!
I did quite a few book reviews during 2019. See my post: https://thenextrecession.wordpress.com/2019/12/18/books-of-2019/
But only one review made the top ten posts. That was Stolen! by young British economist and activist, Grace Blakeley. This book on the cause of crises in capitalism and policies for solving it in Britain was widely circulated and sold, not only in the UK but in Europe and the US.
“All our wealth has been stolen by big finance and in doing so big finance has brought our economy to its knees. So we must save ourselves from big finance.” That is the shorthand message of the book. Unfortunately, like most post-Keynesian analyses, Blakeley ignores Marx’s law of value in explaining the contradictions in modern capitalist economies and instead leans on the Keynesian analysis that the root of all evil is money, credit and finance. As a result, in my view, because this analysis is faulty, her policy proposals are also inadequate.
Indeed, Joel Rabinovich of the University of Paris has conducted a meticulous analysis of the argument that now non-financial companies get most of their profits from ‘extraction’ of interest, rent or capital gains and not from the exploitation of the workforces they employ. He found that: “contrary to the financial rentieralization hypothesis, financial income averages (just) 2.5% of total income since the ‘80s while net financial profit gets more negative as percentage of total profit for nonfinancial corporations. In terms of assets, some of the alleged financial assets actually reflect other activities in which nonfinancial corporations have been increasingly engaging: internationalization of production, activities refocusing and M&As.” Here is his graph below.
The debate on the right policies for the left in Britain has become somewhat academic with the victory of the hard-right Conservative government in the December general election. I don’t usually post much on the UK because it is not the most important capitalist economy, but how and why the opposition leftist Labour party failed to win is under hot debate at the moment. So my short response immediately after the election result on Brexit and on the underlying economic consequences made the top ten this year.
It is the economic situation that will become the testing ground for the Conservative government in 2020 if a global slump should emerge.
The economic well-being index (chg in real disposable income minus unemployment rate) shows that when the index is rising before an election, the incumbent government usually wins.
Finally, there is Venezuela. It has disappeared off the media headlines in recent months now that the attempted coup organised by the US to overthrow the Maduro regime failed (unlike in Bolivia, where it succeeded). What is interesting is that my post on Venezuela was written in 2017!
But viewers picked up that old post to get my understanding of why the Chavista revolution has failed. In 2020, we shall see if Maduro can survive another year.
Venezuela real GDP falling near 30% since 2012.