I began this blog eleven years ago. Over those years, I have posted over 1000 times with over 4 million viewings. There are currently 6100 regular followers of the blog up from 5300 last year; and 11500 followers (up from 10500 last year) of the Michael Roberts Facebook site, which I started six years ago. On that Facebook site, I put short daily items of information or comment on economics and economic events.
And at the beginning of 2020, I launched the Michael Roberts You Tube channel, https://www.youtube.com/channel/UCYM7I0m-I9EVB-5gaBqiqbg/. This now has 2100 subscribers, up from 1200 in its first year. If you haven’t joined up yet, have a look at the channel, which includes presentations by me on a variety of economic subjects; interviews with other Marxist economists; and some zoom debates in which I participated. This year there are sessions on Marx’s theory of value; his law of accumulation; and the law of profitability; also Marx’s reproduction schema as outlined in Volume Two of Capital; and an interview with Rick Kuhn on Henryk Grossman; as well as critiques of Modern Monetary Theory and imperialism.
As for the blog, 2021 has seen 540,000 views. That’s down from 683,000 in the first year of the COVID in 2020. But I did 82 posts in that year compared with 73 this year, the lowest yearly total since I started the blog. So viewings per post this year actually rose to a new high. Maybe I’m getting old, but my other excuse for fewer posts is the increased demand on my time in doing presentations, interviews, articles and, above all, in completing a new book with Guglielmo Carchedi, (entitled Capitalism in the 21st century: through the prism of value) to be published by Pluto Press in 2022.
Where do my blog viewers come from? From over 170 countries globally! Led by 140k yearly viewings in the US (or about 25%); 68k from UK (12%); then a whole range of Spanish-speaking countries led by Spain; and there were 30k viewings from Brazil, fourth largest group. Then Canada, Australia. India is among the top ten countries. Right at the other end of the spectrum, I have had viewings from the Cook Islands, Rwanda, Madagascar, Guadaloupe and even the Vatican City! Also viewings from war-torn Yemen, Afghanistan, Haiti, Syria, and Kosovo. There were nearly 300 viewings from Cuba, over 1000 from Vietnam, but only 1800 from China.
And yet China has been the main focus of interest by blog viewers in 2021. The top post was an analysis of the membership of the Chinese Communist Party. New research found that of the 95m CPC members, the majority are not manual workers or peasants, but nor are they capitalists or small business people. The main contingent are professional workers. Professionals are defined as “all the professional and technical personnel working in science-related sectors (e.g., science, engineering, agriculture, medical care) and social science-related sector (e.g., economics, finance, law, education, press and publication, religion)”. So the CPC is not controlled by a capitalist class, but neither is it a party of manual workers or peasants.
And other China posts made the top ten. Viewers were keen to learn about the impending bust of the Evergrande Group, the second largest property developer in China, which is saddled with almost Rmb2tn of total liabilities or over $300bn. The explosion of the Chinese real estate sector has been driven by the need to house the influx of urban workers to the cities. Real estate construction now accounts for 13% of the economy from just 5% in 1995 and for about 28% of the nation’s total lending. But housing projects have been implemented through private developers for sale, not public projects for rent. And these developers and their billionaire owners have racked up huge amounts of debt.
In the post, I argued that that there was not going to be a financial crash in China. The government controls banking, including the central bank, the big four state-owned commercial banks which are the largest banks in the world, and the so-called ‘bad banks’, which absorb bad loans, big asset managers, most of the largest companies. So the government can tell state-owned asset managers and pension funds to buy shares and bonds to prop up property prices and to fund property companies. And it can tell the central bank, the People’s Bank of China, to do ‘whatever it takes’. And it can tell the state bad banks to buy bad debt from commercial banks.
Nevertheless, the Evergrande mess is a symptom that the growing size and influence of the capitalist sector in China has weakened the performance of the economy and widened inequalities. The Chinese economy is now strong enough not to rely on foreign investment or on unproductive capitalist sectors like property for growth. So increasing the role of planning and state-led investment, the main basis of China’s economic success over the 70 years of the People’s Republic, has never been more compelling.
In another top ten post, I discussed the new policy shift of the CPC in vowing to end what it called a “disorderly expansion of capital”. The Chinese leadership was responding to a public backlash over increasing inequality, the cost of education and healthcare and conspicuous consumption.
The CPC has launched a crackdown on the consumer tech and media giants and introduced curbs on private education and speculative property development. It has also banned cryptocurrency operations. The contradiction between China’s party/state-controlled economy alongside a large and growing capitalist sector has intensified during the COVID pandemic. That contradiction is manifested in how to raise productivity to meet the social needs of 1.4bn people, in the face of vagaries of the profitability of its increasingly unproductive capitalist sector. China’s workforce is falling in size; productivity growth has been slowing and China faces a technology and trade war with the US and its imperialist allies. These are the challenges for China over the next decade or so.
Apart from China, blog readers were also interested in issues relating to Marxist economic theory. Second in the list of ten posts was one about the role of the rate and mass of profit in capitalist crises. This post centred on the criticism made by David Harvey, the prominent Marxist scholar, of Marx’s law of profitability, as presented by me in particular. Harvey claims that the movement of the mass of profit is ignored by ‘profitability promoters’ like myself. In the post, I outlined my answer to this charge and showed that it is not the case. Marx’s ‘double-edge’ law of the connection between the rate and mass of profit is not a refutation of the law of profitability as the underlying cause of crises; on the contrary, it is integrally connected. And alternative ‘multiple’ causes (like underconsumption, ‘too much surplus to absorb’, disproportion, financial fragility etc) remain unconvincing and unproven in comparison.
A world rate of profit (%): is the rate or the mass of profit that matters in crises?
The next most popular post was on the relative decline of US imperialism, as exposed in the ignominius US withdrawal from Afghanistan after 20 years of occupation. In this post, I argued that the relative decline of the dollar will continue even if the Afghanistan debacle is not a tipping point.
During the year of the COVID 2020, output, investment and employment in nearly all the economies of the world plummeted, as lockdowns, social isolation and collapsing international trade contracted output and spending. And yet the opposite was the case for the stock and bond markets of the major economies. The US stock market indexes (along with others) ended 2020 at all-time highs and repeated that result in 2021. In another top ten post, I explained the reasons for this and the role of what Marx called ‘fictitious capital’. As Engels first said, speculating in financial markets is a major counteracting factor to falling profitability in the ‘real economy’. But all good things must come to an end.
And in another popular post, I discussed the profusion of financial scandals and busts that took place over the year. In particular, the GameStop saga showed that company and personal pension funds run by the ‘smart people’ are really a rip-off for working people. What is needed are state-funded pensions not subject to the volatility of the financial game. As Marx said, the financial system “develops the motive of capitalist production”, namely “enrichment by exploitation of others’ labour, into the purest and most colossal system of gambling and swindling and restricts even more the already small number of exploiters of social wealth”.
Alongside rocketing stock markets, the ‘real’ economy has started to experience rising inflation of the prices of goods and services. In several posts, I discussed the inadequacies of mainstream economics explanations and tried to present a Marxist theory of inflation. One post concluded that the US monetary and fiscal authorities may think they can control inflation (although the evidence is clear that they did not in the 1970s and have not controlled ‘disinflation’ in the last ten years). But they can do little to get the US economy onto a sustained strong pace of growth in GDP, investment and employment. So the US economy over the next few years is more likely to suffer from stagflation, than from inflationary ‘overheating’.
US annual consumer goods and services inflation rate %
China may have its problems in sustaining economic growth, improving living standards and reducing inequality, but that is nothing to what faces US President Biden in the remainder of his presidency. Biden’s plan to boost the economy with infrastructure spending and fiscal stimulus has been floundering. And my post earlier in the year predicted the failure of such policies to put the US economy onto a path of sustained higher growth. If disillusionment in Biden’s policies rises, as it has, that could lay the political base for the return of something like Trumpism.
The last top ten post was on a long term view of productivity growth under capitalism. It has been the historic mission of the capitalist mode of production to develop the “productive forces” (namely the technology and labour necessary to increase the output of things and services that human society needs or wants). Indeed, it is the main claim of supporters of capitalism that it is the best (even only) system of social organisation able to develop scientific knowledge, technology and human ‘capital’, all through ‘the market’.
But productivity growth in the major economies has been slowing for decades. That’s because there is a basic contradiction in capitalist production. Production is for profit, not social need. And increased investment in technology that replaces value-creating labour leads to a tendency for profitability to fall. And the falling profitability of capital accumulation eventually comes into conflict with developing the productive forces. The long-term decline in the profitability of capital globally has lowered growth in productive investment and thus labour productivity growth. Capitalism is finding it ever more difficult to expand the ‘productive forces’. It is failing in its ‘historic mission’ that Keynes was so confident of 90 years ago.