As usual at this time of the year, it’s the annual stock take for this blog. This year there have been 670,000 hits on the blog to date. That’s up 45% on 2019, another record! That may not match the millions that hit the sites of mainstream economists but it’s not bad for a Marxist.
I began this blog back over ten years ago. Over those ten years, I have posted 957 times with over three and half million viewings. There are currently 5,300 regular followers of the blog and 10,250 followers of the Michael Roberts Facebook site, which I started six years ago. On the Facebook site, I put short daily items of information or comment on economics and economic events.
And at the beginning of 2020, I launched the Michael Roberts You Tube channel, https://www.youtube.com/channel/UCYM7I0m-I9EVB-5gaBqiqbg/ which currently has 1200 ‘subscribers’. If you haven’t joined up yet, have a look at the channel, which includes presentations by me on a variety of economic subjects; interviews with other Marxist economists; and some zoom debates in which I participated, particularly on the COVID pandemic and on the 200th anniversary of the birth of Friedrich Engels, Marx’s life-time friend and close collaborator.
So what were ten most popular posts on my blog in 2020? Not surprisingly, the various posts on the causes and impact of the COVID pandemic topped the list. In my post, It was the virus that did it, posted last March at the start of pandemic slump, I forecast that:“when this disaster is over, mainstream economics and the authorities will claim that it was an exogenous crisis nothing to do with any inherent flaws in the capitalist mode of production and the social structure of society. It was the virus that did it.”
I argued instead that “even before the pandemic struck, in most major capitalist economies, economic activity was slowing to a stop, with some economies already contracting in national output and investment, and many others on the brink. COVID-19 was just the tipping point.” In that sense, the pandemic slump was “not really a ‘shock’ at all, but the inevitable outcome of capital’s drive for profit in agriculture and nature and from the already weak state of capitalist production in 2020.”
This early post on the pandemic topped the poll with 25,000 hits, but other posts on COVID also got into the top ten.
In an April post, I observed that the coronavirus pandemic marked the end of longest US economic expansion on record, and now would feature the sharpest economic contraction since WWII. I forecast that many companies, particularly smaller ones, would not return after the pandemic. “Before the lockdowns, there were anything between 10-20% of firms in the US and Europe that were barely making enough profit to cover running costs and debt servicing. These so-called ‘zombie’ firms may find the COVID winter is the last nail in their coffins.” I think 2021 will show that to be the case.
My conclusion was that: “The last ten years have been similar to the late 19th century. And now it seems that any recovery from the pandemic slump will be drawn out and also deliver an expansion that is below the previous trend for years to come. It will be another leg in the long depression we have experienced for the last ten years.”
Another popular post was on whether the lockdowns could have been avoided. Last April, I reckoned that they could have been. But they were not because governments ignored the warnings of emerging pandemics, taking a calculated risk that the chance of a pandemic was not high, so there was no need to spend on prevention and containment. Moreover, in the major economies health systems had been decimated of staff and resources or privatised, so they were hugely under-resourced to handle the hospital cases and there was little or no protection for the old and sick in social care. The situation was even worse in the poorest nations. So lockdowns became the only option if lives were to be saved.
In another post on COVID I argued against the idea that there was a trade-off between lives and livelihoods. Some right-wing ‘neoliberal’ experts have tried to argue that the COVID threat was overblown and that jobs and businesses were more important than saving old and sick people (who were already near death anyway). If we let the virus ‘rip’, we could achieve ‘herd immunity’ and the pandemic would subside without any huge damage to the economy.
Apart from the fact that the COVID-19 is way more deadly than annual flu, even if it hits mainly the old, sick and poor, it is now clear that speedy and effective lockdowns as in China, Vietnam, Taiwan and New Zealand can crush the virus and allow economies to recover much quicker than long drawn out ‘lite lockdowns’ that have left most major economies unable to recover. There is no trade-off between saving lives and livelihoods. Indeed, most capitalist governments can’t save either.
Not all of the top ten posts were on the COVID pandemic. Also popular among my followers was the latest data on the profitability of capital – a subject for which this blog is often viewed! It is important because the rate of profit is the best indicator of the ‘health’ of a capitalist economy. It provides significant predictive value on future investment and the likelihood of recession or slump. In a post, I took the opportunity to review my attempts of the past to measure a world rate of profit. A new database, the Penn World Tables 9.1, had developed a new time series called the internal rate of return on capital stock (IRR), which makes a very good proxy for the Marxian rate of profit. Using that database, I confirmed previous results that the rate of profit in the major imperialist economies has been in long-term decline for most of the major and larger economies), with various sub-periods.
Another economics post that interested blog readers was on a Marxist theory of inflation. Marx never developed a comprehensive theory of inflation, but now Italian Marxist economist, Guglielmo Carchedi has come up with one. He argues that inflation rates depend on the generation of new value created in production. New value commands the demand or purchasing power over the supply of commodities. New value is divided by the class struggle into wages and profits. Wages buy consumer goods and profits buy capital or investment goods.
Total value will decline relatively to use value production and new value will decline relatively to total value. So there is an underlying deflationary or disinflationary pressure on the prices of commodities over the long term. But there are counteracting factors that can exert an upward pressure on prices over the long term; in particular, the intervention of the monetary authorities with their attempts to control the supply of money.
The combination of the combined purchasing power (CPP) of wages and profits and changes in money supply (M2) leads to a value rate of inflation (VRI), which is a powerful indicator of consumer price inflation. Does VRI suggest that current low inflation will continue, or will there be a spike in 2021? If wages and profits recover from their sharp falls in 2020 and money growth stays high, then the VRI theory suggests that annual inflation rates will accelerate next year.
My review of a People’s Guide to Capitalism by Hadas Thier also attracted a lot of interest. It is not easy explaining relatively complex ideas in a simple and clear manner. Ask any teacher. It’s a skill lacking in many. Hadas succeeded with a straightforward and entertaining explanation of all Marx’s basic theoretical insights into the nature and development of capitalism.
Another well-read post was not on Marxist economics but on Modern Monetary Theory (MMT). In a new book The Deficit Myth, leading MMT proponent, Stephanie Kelton argued the case for MMT as the best way to understand macro-economics and to realise that governments can run large budget deficits because they are the issuers and controllers of their national currencies. In this post, I argued that it may be a myth that governments cannot run deficits and need to ‘balance the books’. But it is a delusion to reckon that the crisis-prone nature of capitalist production can be ‘managed’ by means of ‘money artistry’, that is, by the manipulation of money, credit and government deficits. That’s because the structural causes of the crises and under-capacity lie not in the financial or monetary sector or the fiscal sector, but in the system of globalized capitalist production.
Finally, there was the US presidential election and the defeat of Donald Trump. My post on the election results was well up the top ten list, as this was the most important event of the year in capitalist politics.
My analysis found that there was a very high voter turnout in comparison with other post-1945 elections, but non-voters still took the largest share of those eligible to vote beating both Biden and Trump. White male working class voters went for Trump by over two to one, but the working class as a whole showed a small majority (2.5%) for Biden because younger Americans voted for Biden sufficiently to overcome Trump majorities among older voters; working class women and ethnic minorities voted for him in sufficient numbers to overcome the votes of white males, small town business people and rural areas. They voted to get rid of Trump: but they may not expect much from Biden and they will be right.