The three contradictions of the Long Depression

One of my basic theses about modern capitalism is that since 2008, the major capitalist economies have been in what I call a Long Depression.  In my book of 2016 of the same name, I distinguish between what economists call recessions or slumps in production, investment and employment; and depressions.  Under the capitalist mode of production (ie production for profit appropriated from human labour (power) by a small group of owners of the means of production), there have been regular and recurring slumps every 8-10 years since the early 19th century.  After each slump, capitalist production revives and expands for several years, before slipping back into a new slump. 

However, depressions are different.  Instead of coming out of a slump, capitalist economies stay depressed with lower output, investment and employment growth than before for a longish period.

From the Long Depression introduction

There have been three such depressions in capitalism: the first was in the late 19th century in the US and Europe, lasting more or less from about 1873 to 1897, depending on the country.  During that long depression, there were short periods of upswing but also a succession of slumps.  Overall, output and investment growth remained much weaker than in the previous expansion period of 1850-73. 

The second depression was the so-called Great Depression lasting from 1929-1941 up to WW2, mainly in the US and Europe, but also in Asia and South America. 

The third depression began after the Global Financial Crash of 2007-8 and the ensuing Great Recession of 2008-9.  This depression (as defined) lasted for a decade up to 2019 until it seemed that the major economies were not only growing much more slowly than before 2007, but were heading into an outright slump. 

Then the COVID pandemic slump happened and the world economy suffered a severe contraction. 

Now, just as the major economies were staggering out of the pandemic, the world has been hit again by the Russia-Ukraine conflict and its ramifications for economic growth, trade, inflation and the environment.

The contradictions in the capitalist mode of production have intensified in the 21st century.  Now there are three components.  There is the economic: with the Global Financial Crash of unprecedented proportions occurring in 2007-8, followed by the Great Recession of the 2008-9 (the biggest economic slump since the 1930s). 

Then there is the environmental, with the COVID pandemic as capitalism’s rapacious drive for profit led to uncontrolled urbanisation, energy and minerals exploitation, along with industrial farming.  This eventually led to the release of dangerous pathogens previously locked into animals in remote regions for thousands of years.  These pathogens have now escaped across farm animals and from (possibly) laboratories into humans with devastating results. 

And don’t forget the impending global warming nightmare descending on the poor and vulnerable globally. 

Third, there is the geopolitical contradiction amid the struggle for profit among capitalists in this depressed economic period.  Competition has intensified between the imperialist powers (G7-plus) and some economies which have resisted the bidding of the imperialist bloc, like Russia and China.  So, in the 21st century; from Iraq to Afghanistan and onto Yemen and Ukraine, geopolitical conflicts are increasingly being conducted through war.  And the big battle between the US and China/Taiwan is coming closer.

The Long Depression of the 21st century may have begun in 2009, but the economic forces that caused it were underway as early as 1997 onwards.  It was then that the average rate of profit on capital in the major capitalist economies began to fall and, despite some small bursts of recovery (mainly driven by economic slumps and huge credit injections), the profitability of capital remains near all-time lows. 

Penn World Tables, author calculation

Profit drives investment in capitalism; and so falling and low profitability has led to slow growth in productive investment.  Instead, capitalist institutions have increasingly speculated in financial assets in the fantasy world of stock and bond markets and cryptocurrencies.  And the imperialist bloc increasingly looks to compensate for weakness in the ‘global north’ by exploiting further the ‘global south’.

So far, there is little sign that capitalism can get out of this Long Depression, even if the current Ukraine disaster is resolved.  To end the depression would require a cleansing of the economic system through a slump that liquidates the zombie companies that reduce profitability and productivity growth and increase debt burdens. 

Also, it seems that recalcitrant economic powers like Russia and China must be tamed or crushed if the major capitalist economies can have a new lease of life.  That’s a frightening prospect.  The only hope of escape from the impact of the Long Depression and more wars is for the coming to power of democratic socialist governments based on working people, which can sponsor a real united nations to end economic crises; reverse environmental disasters for the planet; and achieve a peaceful development of human society.

33 thoughts on “The three contradictions of the Long Depression

  1. It’s important to remember that the 73-97 depression resulted in the end of the British unipolar world order. No amount of romanticism about Queen Victoria can change that.

    Also, both WWs were the result of the British Empire, in a last desperate attempt, to preserve its sole superpower status.

    It is possible that the imminent victory of Russia against the Ukraine will ratify the decline of the American Empire. De-dollarization is only accelerating, and the Russian oligarchs are begging Putin to stop the war and return things as they were (Potanin recently spoke out against Russia’s confiscation of foreign assets under the argument that it would go back to 1917). I maintain my opinion that Putin is a textbook transition leader, and that his legacy can either be a full return to Yeltsin or what I call the “resovietization” of Russia,which would basically mean the attempt of the Russian economy to return where it stopped after the failure of Perestroika.

    For the shorter term, I think it will begin with a secular fall of Europe. As Russia asserts its dominance over the subcontinent and the resources of the USA continue to dwindle, the tendency is for the American Empire to cut its losses by essentially abandoning Europe and focusing on the existential threat of socialist (Marxist-Leninist) China. Long story short, I think we will witness the fall of the Eastern American Empire (i.e. Europe). The USA will then enter into a “Byzantine” phase, focused on its West Coast, Australia, Japan, South Korea, Oceania and Taiwan. It will be a poorer, but still formidable international empire, for centuries to come; it will still have a claim to be “universal” because it will still probably retain Israel, and NATO will still exist.

    History won’t be kind with the American working class. This disaster wouldn’t have happened if the American working class toppled its government and made a communist revolution, thus turning the USA socialist. Instead, they chose a mix of pro-war center-leftism (“liberals”) and far-right populism (“alt-right”, traditionalism, libertarianism) in order to pretend they don’t have control of the situation and play blind to the incursions of the Empire, ultimately propping up the American Empire.

    1. Aren’t you exaggerating the role of the British empire in the breaking out of the two world wars?

  2. Excellent synopsis of capitalism’s (and humanity’s) dilemma. But the observation below seems to be written from capital’s point of view.

    “it seems that recalcitrant powers like Russia and China must be tamed or crushed if the major capitalist economies can have a new lease on life.”

    Rhetorically, you seem to suggest here that a third global holocaust might really be a final solution for imperialism’s terminal illness.

    Maybe Russia and China are better (more positively) described, not as “recalcitrant”, but as “resisting” being tamed or crushed. “The coming to power of democratic socialist govenments” is not in the offing from the imperialist states, WAR is–and against the two “recalcitrant ecomic powers” that are supporting actually existing socialist states. What has imperialism done for the working class anywhere but beat us down?

  3. Michael,

    Could define what you mean by “democratic socialist governments based on working people”.

  4. “Recalcitrant economic powers like Russia and China must be tamed or crushed if the major capitalist economies can have a new lease of life.” China is a major capitalist economy, too. Its monopoly capital must crack established U.S. imperialism if it is to thrive. You cannot win the allegiance of the working class in the U.S. by implying or outright stating that China is not a capitalist country.

    “The big battle between the US and China/Taiwan is coming closer.” What is the slash between China and Taiwan supposed to mean? The island has evolved into a separate country. Its people do not want to become part of the PRC. Its culture has evolved apart from mainland culture. It uses a different set of Chinese characters than the PRC.

    1. “The island has evolved into a separate country….” No, the “evolution” has been the product of a rigid occupation of the island by US capital and houses the largest US military base in Southeast Asia. It functions as the most serious nuclear threat to China in the region. What has “evolved” is a frankensein monster (such as the US is trying to make of Ukraine) not a separate country.

  5. Do you think China is an imperialist state? what’s your opinions about World Systerm Theory? There are huge theoretical differences with Chinese left on these issues.

  6. Excellent article and analysis. 👍

    On Sun, Mar 13, 2022, 4:59 PM Michael Roberts Blog wrote:

    > michael roberts posted: ” One of my basic theses about modern capitalism > is that since 2008, the major capitalist economies have been in what I call > a Long Depression. In my book of 2016 of the same name, I distinguish > between what economists call recessions or slumps in product” >

  7. I would argue that there are four contradictions, with the fourth centering on the contradiction between the forces and relations of production namely machine learning. As I have argued repeatedly these four compounding contradictions are beyond the capacity of capitalism to resolve.

    Where I would again disagree with you is your proposition that the world economy has been in a depression since 2008. That proposition is Western centric. It ignores the dynamic growth of the Pacific region especially China, which inter-alia gave rise to the commodity super cycle up to 2014. If we consider World Bank Global GDP data in constant 2015 dollars, between 2002 and 2008 global GDP grew by $12.4 trillion and between 2009 and 2015 (the same period) it grew by $13.2 trillion. Adjusting for anomalies there was a slight acceleration in growth in the latter period.

    I will never tire of pointing out that the current period, post 2019, has more to do with the pseudo recession at the end of 2015, or to put it another way, the evading of that recession via cheap money, than it has to do with 2008.

  8. “The three contradictions of the Long Depression” -> FOUR contradictions, the forgotten one being THE contradiction: “Global conventional crude oil production peaked in 2008 at 69.5 mb/d and has since fallen by around 2.5 mb/d.” Page 45 of the World Energy Outlook 2018 by the International Energy Agency. We are running out of oil, we are running out of (industrial) economy, we are running out of everything.

  9. ‘Also, it seems that recalcitrant economic powers like Russia and China must be tamed or crushed if the major capitalist economies can have a new lease of life’…Can you elaborate on this point? It seems to be that Russia and China are fully incorporated into the global economy already.

    1. Joe Yes, Russia and China are in the world trade network and also to some extent in the global financial network but China in particular does not allow the free rein of multi-national corporations in its domestic economy, on the contrary. And Russia operates its energy and resource companies in a way that benefits its capitalist class and not imperialist countries. Both try to preserve their national interests separate and often in opposition to imperialism. That’s the issue.

  10. Seems to me, Michael, that if the critical determinants of a “long depression” are reduced rates of GROWTH in investment, output, and employment, then the entire period 1970 or 71 to 2022 can be characterized as a long depression.

    And it might be valuable to examine what ended the long depression (and deflation) of 1873-1897. In the US we can point to a) war with Spain b) tremendous consolidation and centralization of capital c) persistent, if “moderate,” price inflation, are marked change in the price declines of the 1873-1897 period.

    But what about the UK and the rest of Europe and Japan?

    1. Yup, the real median earnings of workers in the U.S. peaked in 1973 and have stagnated and fallen ever since. Capitalism in the U.S. will never provide relative mass prosperity again. Since the tendency of the rate of profit to fall has operated since the beginning of industrial capitalism, about 1820 in the U.S, it cannot explain this entry into darkness. Capital accumulation has run into its final contradiction.

      1. ”Yes, the real median earnings of workers in the US peaked in 1973 and have stagnated and fallen ever since. Capitalism in the US will never again provide relative mass prosperity” ”cannot explain this entry into darkness.”
        The reduction in growth, investment, production and employment from 1970 to today that Anti-capital comments on and the reduction in the real median earnings of workers in the US and the rest of the planet that you comment on can be defined as a ”prolonged depression ”, but that definition will be true only if growth is expected to return to the previous level. Let it go back, to be exact, to the Golden Age with the OECD states growing at 5%. The problem for Capitalism is that this Golden Age in which the capitalist states grew in size from 10% of GDP to 60% of GDP and became the main real and planning engine of each economy only occurred as an indirect effect of the Russian and Chinese socialist revolutions. The Golden Age, it can be said without any mistake, is only embedded socialism inside (in the guts) of Capitalism. It is only the spatial impulse of socialism that extends from its country of origin to the rest. Impulse that loses strength as it moves away in space and time from its country of origin and initial date. Only a new socialist impulse (revolution) could create a new Golgen Agen. Golden Age that would exist only for the countries that stayed out of Socialism.
        And yes, it is true, the geopolitical contradiction of capitalism (the conflict-Russia/Ukraine/NATO, contradiction added to the rest of contradictions), as M. Roberts defines in his splendid and masterly article, is just and precisely the greatest historical trigger and more prone to a revolutionary event. In my point of view and based on the study of the revolutionary cycles, this socialist revolution is the only possible solution to the 3 main contradictions of Capitalism. And this revolution, which may take up to 20/30 years to take place depending on what the current and powerful States endure, has just begun its initial stage.

  11. Dear Michael,

    I consider your article one of the best, concise, brief and well proven and argumented, summaries of the current conjecture for the international capitalist/imperialist system.

    I have already translated it into Greek and I hope you allow us to post it in a marxist website in Greece (

    I may have my disagreements with you on the relative importance of monopoly and superexploitation for modern imperialism, but still, the data you present are very important, and I agree on the basic logic of the essence of contradictions between capitalistic countries as the struggle for profit, i.e., for a share of the world surplus value production, and the corresponding criterion for distinguishing between the few truly imperialist countries, and the rest.

    I don’t consider this only as an economic criterion. In some sense, the same way different concrete labours are all valorized and in the end reduced to money, and their exploitation measures by a single ratio, the surplus value ration, similarly, relations of imperialistic national oppression and exploitation are valorized by (super) profits and measured by the total net income flows and capital accumulation.

    It would be nice to start thinking about the logical connections between the contradictions you mention here, as well as others, such the ones mentioned above by ucanbpolitical, in order form a structured logic for the modern phase of the imperialistic stage of the history of the capitalistic mode of production.

    In my opinion, the root of all contradictions can be traced back to Marx’s Grundrisse, to the inability of capital to valorize via the extraction of relative surplus value due to automatism and the nature of creative, scientific, artistic etc labour.

  12. Michael, there is something about imperialism and value transfer i like to ask you. In your empirical studies, are you work around the supposition that the extraordinary surplus value who the advanced capitals obtain arises from the transfer of value from backward firms in the same industry? In other words, there is intra-industry value transfer and not only inter-industry value transfer? Because if the market value in a certain industry (say agricultural products) is determined by the worst conditions of production, then the total value of the industry cannot coincide with the total number of hours worked, so that the extra surplus value of the capitals medium and advanced, should come from their ability to generate more value in the same period of time (than the backward ones) and not from any transfer of value. Of course, between different industries, surplus value is transferred from industries with a low composition to industries with a high composition of capital if we assume that prices of production govern.

  13. Dear Michael,
    Your “only hope of escape from more (and greater!) wars” – “the coming to power of democratic socialist goverments” – looks a bit too distant. Nearer is a non-aligned Ukraine, a non-aligned Germany and so on.
    Neither Russia nor NATO!
    Wal Buchenberg, Hannover

  14. Looks like Putin agrees with me:

    “BREAKING: West’s global political and economic dominance ends – Putin”

    ” The Russian President says that the “myth of the Western welfare state, of the so-called golden billion is crumbling.””

    The link is from RT, which is banned in the countries of most of you, so I won’t waste my time putting it here, but you can search and find the quote somewhere.

  15. Hello comrade, I absolutely agree with the analysis and the dynamics of the objective trends, also with the proposed solution, very good summary, greetings

  16. Michael I am sure you and your readers will agree, all these contradictions add up to only one conclusion, the 2020s is the “Decade of Revolution”. I sense we are heading towards a pre-revolutionary period as capitalist breakdown accelerates because the mass of society can no longer live this way. Globalisation is being torn apart and it will cause the major capitalist economies to bleed profit adding to the difficulties of capitalist reproduction and bearing down on workers. It is just one of may problems created by capitalism imperiling capitalism. This will form the content of my next post.

    ‘WAL’ I think the better slogan is “USA out of Europe, Russia out of Western Ukraine”. NATO is the military arm of the USA so substituting the USA for NATO is permissible and it maintains the harmony of the slogan. I have noticed on a number of international zoom meetings on the war that this slogan without “western” in it, is catching on. Why western Ukraine? Evidence is mounting in Eastern Ukraine of the pogrom of Russian speakers by the nationalist (including fascist groups) in places like Mariupol. It was they who closed the Russian initiated human corridors and its they who have kept the civilian population imprisoned. Of course it is the Russians who have been blamed for all the atrocities not the Ukrainian forces, and no doubt when Mariupol falls and there is a cascade of social media reports of what life was like by those who saw themselves as Russian not only during this war but since 2014, the free to lie Western Press will studiously ignore this dismissing this as fake Russian news generated by bots.

  17. “Evidence is mounting in Eastern Ukraine of the pogrom of Russian speakers by the nationalist (including fascist groups) in places like Mariupol. It was they who closed the Russian initiated human corridors and its they who have kept the civilian population imprisoned.”

    References for this “evidence” please? Other than RT or Global Research or the Assad Times.

    Seems to me if you believe what your wrote, and believe in a separate “East Ukraine” then you have to support the Russian military operation into Ukraine period to “end the pogrom” — unless of course you advocate a proletarian revolution in Ukraine, but I don’t think you advocate that because if you did, there would be no purpose in calling for a separation of east and west. You’ve snagged yourself right inside Putin’s greater Russian empire trick bag.
    There should be no support for secession, just as there should be no support to the Zelensky govt. Proletarian struggle is an international class struggle and there is no such thing as socialism in one oblast.

    It’s either “war without end,” or socialist revolution east and west. Nothing other than that revolution will end this conflict.

  18. Anti, unless Michael says otherwise this important debate on tactics and slogans needs to be held elsewhere.

    To conclude, the Ukraine was deliberately made poor by the West to make it pliable. In addition the Ukraine was being prepared militarily for the inevitable conflict with Russia the pre-meditated provocations by NATO and the USA would unleash. This much is clear from continuing leaks. Please see how deep the CIA and Pentagon involvement went:

    Also read the following post about the US biolabs in the Ukraine which were weaponizing local plague microbes for which documentary evidence has now been made available by Russia.

    The home of world reaction remains the USA. The biggest threat to the people of this world remains the USA. Your country Anti.

    1. “Evidence is mounting in Eastern Ukraine of the pogrom of Russian speakers by the nationalist (including fascist groups) in places like Mariupol. It was they who closed the Russian initiated human corridors and its they who have kept the civilian population imprisoned.”

      References for this “evidence” please?

      That’s what I asked. That’s what you are unable to answer. Instead you revert to “your country” reverse patriotism. If only I had been lucky enough to be born in a country of such lesser threat and less imperial history, like your country, Brian, Great Britain.

      Clearly you have no class analysis of the present situation. I’ll conclude my participation in this discussion with more shameless self-advertising.

      1. The difference between you and me is this. You only offer three course meals regardless of whether or not the customer actually requires CPR. Tactics is what separates revolutionaries in the here and now not gesture politics. And yes I threw in the USA angle deliberately. I was previously shocked by your position on Biden and his son and their pocketing of the proceeds from a coup which led to a failed state aka Ukraine. Oh yes, even the mainstream US media is now validating this exposure of the Biden family. So a bit of friendly advice, become less American.

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