Review: "The Long Depression" by Michael Roberts

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I've now completed Michael Roberts's book. I'm struck by how much of the material in it was previously aired on his prolific (and excellent) blog.

Here's the review from Socialist Review.

"Michael Roberts provides a most convincing explanation of how we got to the current economic situation: the “law” developed by Karl Marx that recurrent capitalist crises arise out of contradictions within capitalism that lead to crises of profitability.

Using data to validate this classical Marxist theory, Roberts shows how, “the behaviour of the profit rate confirms the predictions Marx made about the historical trend of the mode of production. There is a tendency for the rate of profit to fall.”

In The Long Depression Roberts brings together much of the analysis he provides on his blog, The Next Recession. In a series of well argued chapters, Roberts provides both a comprehensive history of capitalist crises and an analysis of the current state of the world economy. He uses clear graphs and charts to illustrate and validate his arguments.

Alternative Marxist explanations that claim crises are due not to a crisis of profitability but to under-consumption are countered theoretically. Roberts backs his arguments up with empirical data throughout.

He explains why debt matters; how the slump of 2008 developed into a depression; the crawling recovery in America; the failings of the Euro project.

In no part of the world economy today are there signs of recovery. Japan is still facing stagnation. The emerging markets will not save the world if the West slides back into recession, as Roberts points out.

With the largest economies now growing at well below the previous rate of output, and levels of profitability still low, we are living in a period Roberts describes as the “Long Depression”. There have been two previous long depressions under capitalism — one in the late 19th century, the other in the mid-20th century.

The depression of the 1880-90s ended only after the “bankruptcy of many companies, a huge rise in unemployment, and the destruction of things and people in the millions.” It took the massive destruction of capital in the Second World War for the Great Depression of the 1930s to end."

This book is not an easy read - it's rather dry. You are overwhelmed by graphs, statistics and deep, deep dives into economic history. On the other hand, the writing is intelligent, you sense the sophistication of the analytic hinterland and you really do need to know these things to understand the world we live in.

Roberts explains (p. 6):

"this book is not theoretical, although the different theories presented to explain economic depressions are discussed and criticised on their merits from a Marxist viewpoint. But the critique is mainly based on using empirical evidence. I leave the theoretical debates and, in particular, the theoretical defense of Marx's crisis theory to other authors and another day."

His note here points to "Crisis Theory, the Law of the Tendency of the Profit Rate to Fall, and Marx’s Studies in the 1870s" by Michael Heinrich.

As someone who was seeking a clear conceptual framework to understand the dynamics of our present predicament, I was disappointed at the amount of conceptual reverse engineering I had to do on the text. So on balance a good factual and statistical account of the economic state of the world and its trend behaviour, supporting a compelling paradigm. It needs to be augmented by a high-quality theoretical exposition of Marx's crisis theory, which the author suggests Heinrich can provide.*

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* I'm somewhat surprised by this reference of Roberts, as on the substantive issues of the origins of capitalist crises he and Heinrich appear to be at loggerheads.