For
some time, William I. Robinson
has been one of the most adept observers of, and commentators on, global
structural change. In his latest book Can
Global Capitalism Endure? (Clarity Press, 2022), he analyses the
current crisis of overaccumulation as a result of the tendence of the falling
rate of profit. Most dangerously, in capital’s ever more desperate search for
profitable investment opportunities, global economic crisis is spilling over
into geo-political confrontation. In this blog post, I will discuss some of the
book’s key contributions.
In
Capital, Vol.3, Marx outlines the tendency of the falling rate of profit as an
inevitable outcome of the way capitalist production is organised around wage
labour and the private ownership of the means of production. Involved in
relentless competition with each other for market share, capitalists constantly
employ new technologies in order to increase labour productivity and, thereby,
gain an advantage over their competitors. Such advantages, however, are only
ever temporary, as competitors are compelled to catch up with productivity
increases on their side or go under. Hence, there is a general increase in the
organic composition of capital, i.e. while constant capital in the form of
technology and machinery is increased, variable capital, living labour is
replaced.
Because
it is only variable labour which can produce surplus value, the rate of profit
inevitably declines. ‘With the progressive decline in the variable capital in
relation to the constant capital, this tendency leads to a rising organic
composition of the total capital, and the direct result of this is that the
rate of surplus-value, with the level of exploitation of labour remaining the
same or even rising, is expressed in a steadily falling general rate of profit’
(Marx 1894/1981: 318-19).
Capitalism enters a crisis of overaccumulation, in which surplus profits and
surplus labour, i.e. unemployed workers, can no longer be brought fruitfully
together.
Robinson’s
first key contribution is to highlight clearly that it is precisely such
an aggravated crisis of overaccumulation, in which the global capitalist
economy currently finds itself. There has been a persistent decline in the rate
of profit from about 15 per cent in the post-WWII period to ten per cent by the
end of the 1980s and six per cent in 2017 (P.13). Against this background, ‘the
total cash held in reserves of the world’s 2,000 biggest non-financial
corporations increased from $6.6 trillion in 2010 to $14.2 trillion in 2020 …
as the global economy stagnated’ (PP.16-17). While corporations have reaped
record profits, overall capital investment has declined due to a lack of
profitable investment opportunities.
Of
course, capitalism has always several options at its disposal to counter
economic crisis. Increasing financialization is clearly one way of continuing
profit-making, including speculatory investment in currency markets,
cryptocurrencies, stock markets and futures markets to name a few. Increasing
financialization is heavily based on record debt levels, be it private,
corporate or state debt. And national responses to the Covid-19 crisis have
further fuelled financial speculation. ‘Recycled into further speculative
activity, the injection of state funding into the global financial system
during the pandemic expanded even further the gap between the productive
economy and fictitious capital as bubbles kept the capitalist economy afloat’
(P.22). In the end, however, only the exploitation of living labour in the
productive economy can generate the surplus value, on which financial
speculation is based. ‘The entire financial edifice rests on the exploitation
of labor in the “real” economy’ (P.36) and any further expansion of fictitious
capital will only aggravate the underlying structural crisis of global
capitalism.
The second key contribution of Robinson’s book is his evaluation of ‘the second information age’. Yet again, capital presents new technology as the solution to its problems. Unsurprisingly, surplus capital flows into those corporations, which are involved in cutting edge technological development, resulting in a gap between these companies’ material assets and their market capitalization. ‘Apple and Microsoft registered an astounding market capitalization of $1.4 trillion each in early 2020, on the eve of the contagion. By the end of that year this figure had jumped to $2.08 trillion and $1.63 trillion, respectively. Amazon’s capitalization stood at $1.04 trillion going into the pandemic and had climbed to $1.58 trillion by the end of 2020. Alphabet (Google’s parent company) registered a $1.2 trillion capitalization, Samsung $983 billion, Facebook $799 billion, and Alibaba and Tencent some $700 billion each. To give an idea of just how rapidly these tech behemoths have grown, Google’s market capitalization went from under $200 billion in 2008 to over one $1 trillion in 2020, or a 500 percent increase over the decade’ (PP.43-4). Of course, new technology, digitalisation has significantly transformed the way goods and services are being produced. New technology, however, has also further increased the organic composition of capital, putting further downward pressure on the rate of profit.
In
other words, new technology can stave off temporarily crisis by providing new profitable
investment opportunities. Ultimately, however, ‘any such expansion will run up
against the problems that an increase in the organic composition of capital
presents for the system, namely the tendency for the rate of profit to fall, a
contraction of aggregate demand, and the amassing of profits that cannot be
profitably reinvested’ (P.49). Over time, the capitalist crisis of
overaccumulation is going to deepen resulting in a general crisis of capitalist
rule.
It
is here, that Robinson makes his third key contribution by linking the
crisis of capitalism to rising geo-political confrontations reflected in the
Ukraine war and the increasing tensions between China and the US. As Nicos
Poulantzas has pointed out, its relative autonomy allows the state to
adjudicate between conflicting interests of various capitalist fractions by
sacrificing the interests of a particular fraction at times in order to ensure
the continuation of overall capitalist accumulation. At the global level, no
such state organization exists. As Robinson argues, what he describes as the
transnational state apparatus is too fragmented to impose any coherence on
rival transnational capitalist class fractions.
Thus,
war suddenly becomes an option for states, partly as an outlet of surplus
capital – witness the increasing national spendings on arms and related rising
fortunes of arms manufacturers – partly as a way ‘to externalize social and
political tensions as they seek to hold together the social order inside the
nation-state’ (P.67). In short, ‘the breakdown of the political organization of
world capitalism is not the cause but the consequence of contradictions
internal to a globally integrated system of capital accumulation’ (P.69).
Finally,
Robinson discusses the global climate emergency and related large migratory
flows. ‘The ecological crisis makes it very questionable that capitalism can
continue to reproduce itself as a global system’ (P.77). And while he may
underestimate capitalism’s ability to generate profits in the short term in
responding to the climate crisis and thus endure longer – see the discussions
around ‘green growth’ or ‘green capitalism’ – his fourth and final
contribution is the clarity in which he rejects capitalism as a whole. In
line with his Marxist approach, he comprehends that the capitalist mode of
production must be changed, full stop. The crisis of capitalism ‘is existential
for humanity and for capitalism. If humanity is to survive there is no
alternative other than to overthrow global capitalism’ (P.82).
This
is rarely spelled out so clearly and it is this final conclusion, which makes
Robinson’s book so important. I strongly recommend it!
Andreas Bieler
30 September 2023
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