But, if we look at Roberts' conclusions from his thesis in more recent events, it becomes even more ludicrous. He says,
“Since then (2008), the world rate of profit has stagnated and was near its all-time low in 2019, before the global pandemic slump of 2020. Each post-war global slump has revived profitability, but not for long.”
Firstly, if The Law of the Tendency for the Rate of Profit to Fall is the driver of capital accumulation and crises, then shouldn't we assume on the basis that the world rate of profit is 25% lower than it was 80 years ago that capital accumulation should be lower today than it was 80 years ago, indeed that we should be in a state of permanent crisis, as capital refuses to invest? Roberts, of course, comes pretty close to such catastrophist conclusions in that he has been predicting a recession every year for the last ten years at least, recessions which never came. He had reveled in the recession in 2020, as confirming his prediction that had been looking more and more like a stopped clock, but, of course, that recession had nothing to do with his analysis, and prediction of recession based upon the operation of The Law of the Tendency for the Rate of Profit to Fall, but was artificially induced as a result of the crazy policy of lockdowns and lockouts that governments across the globe implemented, lockdowns and lockouts that Roberts himself, of course, fully endorsed and encouraged!
On the back of the fall in profits that these lockdowns and lockouts caused, Roberts, again concluded, in line with his thesis, that this would inevitably result in a post pandemic slump and repeated it again the following year, but, he was again proved completely wrong. Far from there being any such slump, as soon as restrictions were even slightly lifted, consumer demand soared, and firms responded accordingly, by scrambling to get their share of the increased market, similarly scrambling to accumulate additional capital, and employ additional workers to do so, leading not only to a surge in capital accumulation, output and employment, but also, given the oceans of liquidity sloshing around global economies, a surge in inflation too – indeed that was also a consequence that Roberts failed to predict, as he put forward a basically Keynesian theory of inflation, as against Marx's analysis of inflation as a monetary phenomena.
The only reason that this surge in economic growth was reined back in 2021, was not the effects of The Law of the Tendency for the Rate of Profit to Fall, but was again the actions of governments that reintroduced lock-downs and lockouts, supposedly in response to new variants of COVID, but almost certainly, really, because, as they saw economies and inflation surging, it also saw interest rates rising, with a consequent threat to the asset prices that today form the sole form of wealth of the ruling class. Roberts seems unaware that, in Theories of Surplus Value, Part 1 and 2, Marx devotes more than a dozen chapters to analysing changes in the rate of profit caused by changes in the value composition, rather than the technical/organic composition of capital. By lumping together falls in the rate of profit caused by changes in the value composition, as against the technical/organic composition, Roberts effectively abandons Marx's Law of the Tendency for the Rate of Profit to Fall and returns to the catastrophist theories of falling profits put forward by Smith, Malthus and Ricardo.
Because, he fails to make this distinction, leading to the same erroneous catastrophist conclusions as Marx's predecessors, Roberts also fails to understand what has actually been happening in the real world, and its implications in relation to interest rates, asset prices, inflation and so on, all of which he has again failed to analyse correctly. In the 1980's, and 90's, it was not just the rise in the annual rate of surplus value, created by sharply rising productivity, that led to the rise in the average annual rate of profit. As Marx describes, the technological revolutions that capital is induced to carry out, to resolve crises of overproduction of capital, also brings about a huge moral depreciation of fixed capital, which also raises the average annual rate of profit. It also creates a large release of capital, which is now available for accumulation or consumption, or, as happened in the 1980's, is thrown into money markets, causing interest rates to fall, and subsequently into speculation and gambling in asset markets, as the soaring prices of those assets create huge capital gains.
It was this latter fact that leads the ruling class, which now owns its wealth in the form of these assets, to seek its revenues from realising these capital gains, rather than from actual revenues in the form of interest/dividends and rent. Indeed, as asset prices rose faster than the actual revenues from those assets, the yield on those assets continually fell, so that, today, we have the ludicrous condition in which, across the globe, there are negative nominal yields on literally trillions of dollars of bonds. Any increase in interest rates causes asset prices to crash, a condition, which the ruling class cannot allow given that any such fall not only massively reduces its paper wealth, but also hugely diminishes its potential to obtain revenues from realising capital gains. And, that is the reason that every time economic activity has picked up, over the last 30 years, to a level whereby interest rates started to rise, the state has had to intervene both to print additional money tokens with which to buy up paper assets, but also to try to restrict economic growth, both to restrict the growth in employment that would lead to rising wages and a squeeze on profits, but also to limit the demand for money-capital for investment, which would cause the capitalised value of revenues on assets to crash.
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