Global economics: Top ten posts of 2017: Venezuela, Capital and class

Michael Roberts.

So what were the ten top posts in terms of viewings on my blog in 2017?

The winner by some distance was my post last August on the tragic deterioration of the Chavista revolution in Venezuela.  Venezuela had been a beacon for hope in Latin America and elsewhere for the last ten years, but it now seemed to have all gone wrong.  I argued that the recent huge reversal of the gains of the working class in Venezuela was mainly due to Venezuela’s isolation in the ocean of capitalism and because the Chavista revolution had stopped ‘at less than halfway’, leaving the economy still predominantly in the control of capital.  This conclusion was controversial and many commentators on my post disagreed, blaming the forces of reaction for disrupting the revolution and the international media and institutions for distorting the story. No doubt true, but anybody who looks at the state of the economy knows that there is more to it than that.

Coming second was an equally controversial post on China and the recent ‘re-election’ of Chinese president Xi.  In my post, I asked the question: is China is a capitalist state or not?  The majority of Marxist political economists agree with mainstream economics in assuming or accepting that China is.  However, I am not one of them. I argued in the post that China is not capitalist (yet). In China, public ownership of the means of production and state planning remain dominant and the Communist party’s power base is rooted in public ownership.  So China’s economic rise has been achieved without the capitalist mode of production being dominant.

In the post, I added new data to back up my view. Using recently published IMF data, I found that China there are nearly three times as much stock of public productive assets to private capitalist sector assets in China.  In the US and the UK, public assets are less than 50% of private assets.  This shows that in China public ownership in the means of production is dominant – unlike any other major economy in the world.

The third most read post was on global poverty.  Is global poverty falling or rising?  Many mainstream economists continue to argue that the battle against global poverty was being won, as those living on less than $1.25 day (the official World Bank threshold, recently revised) had been cut by half since 1990.  But in the post, I show that any improvement in poverty levels, however measured, is down mainly to rising incomes in state-controlled China and any improvement in the quality and length of life comes from the application of science and knowledge through state spending on education, on sewage, clean water, disease prevention and protection, hospitals and better child development.  These are things that do not come from capitalism but from the common weal.

2017 marked 150 years since Marx published his analysis of the capitalist system.  In a post I critiqued the views of leading Keynesian economist Jonathan Portes on where Marx was right or wrong about capitalism.  For Portes, what is wrong with capitalism is not its exploitative essence or its failure to eliminate poverty or inequality or meet the basic needs of billions in peace and security, as Marx argued.  No, it was ‘excessive consumption’: i.e. too many things! I failed to see that excessive or endemic ‘consumerism’ was an issue for billions in the world or even millions in the UK, Europe or the US – it’s the opposite: the lack of consumption, including ‘social goods’ (public services, health, education, pensions, social care etc).

And in 2017, there were a host of studies revealing the growing inequality of income and wealth globally between nations and within them – along with scandals of the tax havens (Panama papers etc).  In another popular post, I recounted the development of these inequalities since Marx wrote Capital in 1867.  One important explanation for rising inequality is the control of wealth through capital, rather than through unequal incomes from work.  The US Economic Policy Institute found that the top 1% of society derives an increasing portion of income gains from capital.  So they are not rich because they are smarter or better educated.  It is because they are lucky (like Donald Trump) and inherited their wealth from the parents or relatives.

Contrary to the optimism and apologia of the mainstream economists, poverty for billions around the world remains the norm with little sign of improvement, while inequality within the major capitalist economies increases as capital is accumulated and concentrated in ever smaller groups. So Marx’s prediction 150 years ago that capitalism would lead to greater concentration and centralisation of wealth, in particular in the means of production and finance, has been borne out.

In another post, I referred yet again to the latest annual report by Credit Suisse on global personal wealth.  Every year my post on this report makes the top ten.  The bank’s economists found that top 1% of personal wealth holders globally now have over 50% of the world’s personal wealth – up from 45% ten years ago. And on current trends, this inequality will rise further. In the US, the three richest people in the US – Bill Gates, Jeff Bezos and Warren Buffett – own as much wealth as the bottom half of the US population, or 160 million people.

2017 was marked by the huge rise in the value of stock markets globally – driven by cheap borrowing as central banks pumped in more credit.  Rich investors went mad looking to make a quick buck.  There were new credit bubbles galore.  One of the most newsworthy was the crypto-currency craze, particularly in bitcoin.  The dollar price of bitcoin has risen 2000% and in the last year had quadrupled.  But as I write, in the last week it has fallen back 25%.  In my post last September, I argued that while the new technology behind these digital currencies, blockchain, may eventually find some productive use, cryptocurrencies would remain on the micro-periphery of global currencies, even if the crypto craze continued for a while longer.

2017 saw attempts by heterodox economists to organise against mainstream neoclassical orthodoxy in universities and there was a growing opposition to neoliberal economic policies adopted by incumbent governments.  But Keynesian economics still dominates the views on the left in the labour movement.  In a post I reckoned that this was because Keynes offers a third way.  In the 1920s and 1930s, Keynes feared that the ‘civilised world’ faced Marxist revolution or fascist dictatorship.  But socialism as an alternative to the capitalism of the Great Depression could well bring down ‘civilisation’, delivering instead ‘barbarism’ – the end of a better world, the collapse of technology and the rule of law, more wars etc.  But he thought that, through some modest fixing of ‘liberal capitalism’, it would be possible to make capitalism work without the need for socialist revolution.  There would no need to go where the angels of ‘civilisation’ fear to tread.  That was the Keynesian narrative and it remains dominant on the left.

The 150th anniversary of the publication of Capital was a feature of many of my most popular posts, including my account of September’s special conference held on Capital organised by this blog and Kings College, London.  In particular, I did a post on the two presentations that top Marxist scholar David Harvey and I made during the symposium.

David Harvey reckoned that the more crucial points of breakdown and class struggle are now to be found outside the traditional battle between workers and capitalists in the workplace or at the point of production.  Yes, that still goes on but the class struggle is much more to be found in battles in the sphere of circulation (for example, consumers fighting price-gouging by greedy pharma companies) ie. in the manipulation of people’s ‘wants, needs and desires’ in what they buy and think they need; and in distribution in battles over unaffordable rents with landlords or unrepayable debts like Greece or student debt.  These are the new and more important areas of ‘anti-capitalist’ struggle outside the remit of Volume One of Capital.

In contrast, in my analysis still puts the class struggle in the workplace at the centre of capitalism because it is about the struggle over the division of value between surplus value and labour’s share, as Marx intended with the publication of Volume One.  This is not to deny that capitalism creates inequalities, conflicts and battles outside the workplace over rents, debt, taxes, the urban environment and pollution that Harvey focuses on, nor that the struggle does not enter the political plane through elections etc.

The theme of the relevance of Marx’s Capital was also part of my post on this year’s Historical Materialism conference in London.  The plenary speakers were Moishe Postone, Michael Heinrich and David Harvey – an impressive line-up of heavyweight Marxist academics.  Part of the discussion was over whether value is only created in exchange and also whether class struggle is not really centred (any longer) on workers and capitalists in the production process.  The plenary speakers seemed to adopt theories that crises under capitalism are now mainly caused by faults in the ‘circulation of money and credit’ and not in the contradictions of capitalism between productivity and profitability in the production of surplus value, as I think Marx argued in Capital.

In sum, my top ten most read posts in 2017 argued that Marx’s Capital still provides us with the clearest and most compelling analysis of the nature of the capitalist mode of production; and show why capitalism is transient and cannot last forever, contrary to what the apologists for capital claim.

michael roberts | December 24, 2017 at 9:11 am | Categories: capitalism, economics, marxism, Profitability | URL:

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