A Marxist in the City of London: Michael Roberts on The Long Depression

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Speaker 4: It's both, isn't it?

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It, it's, uh … There's a certain
contradiction, uh, psychologically with

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when you're dealing with people that
are only interested in making money and

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exploiting others and advising them.

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And on the other hand, you actually
see how capitalism works, particularly

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finance capital, in the, uh, the
belly of the financial beast.

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Uh, I g- I got a very good idea, but
it's a conflict, a caste conflict between

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workers' wages and capitalist profits.

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That's the system.

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Why do we have … That's
why we have un- inequality.

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That's why we still have poverty around
the world, because that system creates

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those grotesques levels of inequality.

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Capitalism is a system
of booms and slumps.

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It's terrible for ordinary working people
because they- they're doing well for

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a while and then suddenly everything
goes crashing and they have to recover.

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Perhaps they won't recover.

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Speaker 3: Hi, welcome to Notions of
Progress, the show that traces ideas of

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progress from antiquity to the age of AI.

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This is the first of a three-part
conversation with the Marxist economist

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Michael Roberts, built around his
2016 book, The Long Depression.

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In this part, Roberts lays out his central
argument, which is that the 2008 crash

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wasn't an ordinary recession at all,
but the opening of a longer structural

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depression driven by capitalism's own
tendency towards falling profitability.

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Part two walks through the historical
record that the argument rests upon, the

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depressions of the 1870s and the 1930s,
and the rival explanations for both.

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And we conclude with part three, which
brings the argument into the present,

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what a falling rate of profit means
for a generation earning less than the

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one before it, and what role artificial
intelligence might play in the range of

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futures that Michael Roberts sees ahead.

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From another capitalist recovery to what
he calls borrowing the term from the

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fall of Rome, the risk of barbarism,

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Speaker: today we have
a very special guest.

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We have Michael Roberts.

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Michael worked in the City of
London as an economist for over

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thirty years before retiring.

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Uh, he's the author of several books, The
Great Recession: A Marxist View, 2009; The

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Long Depression from 2016; The World in
Crisis, joint editor in 2018; Marx 200:

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His Economics, 2018; uh, Engels 200: His
Economics, 2020; and jointly with, uh, C.

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Karshidi, uh, Capitalism
in the 21st Century, 2023.

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His new book is Time Is Running
Out: The World Economy in the

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2020s, and that's gonna be coming
in December of 2026, we hope.

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Um, Michael has a regular blog at
thenextrecession.wordpress.com.

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I'll put everything into the show notes
Today, we're gonna primarily focus on The

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Long Depression, a book written in 2018 in
which Michael argues that the 2008 crash,

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it was not an ordinary recession, but
the opening of a longer depression, and

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we're gonna go through those contours and
try to understand better what he means.

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Um, this, this, this particular
period is comparable, he argues in

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the book, to the 1870s and the 1930s,
and it's driven by capitalism's own

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tendency towards falling profitability.

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So that's a brief, brief,
uh, introduction, Michael.

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And like I said, it's an absolute
pleasure to meet you, and I'm looking

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forward to chatting with you today.

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Speaker 2: Well, Marshall, that
was a very comprehensive coverage.

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I mean, you've, you've
done the job already.

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Speaker: It, it's you, my friend, that's
doing the comprehensive work here.

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So anyway, I, uh, as, as I mentioned
to you offline, I thought… I

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found your book to be very, uh,
thought-provoking and very helpful.

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And, you know, just to kind of
set the table, Michael, a little

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bit, you know, the, the purpose of
this particular program, this, my

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podcast in general, is to understand
the drivers of human progress.

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Mm-hmm.

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And actually not always human, the
drivers of progress in general.

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So your book, I thought, was particularly
helpful in trying to understand capitalism

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as a force for pro- for progress or not.

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Speaker 2: Mm-hmm.

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Speaker: I think it's an open question,
and I wanna just kind of dive in, and

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we can explore that, that very question,
uh, as we go through the interview.

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Mm-hmm.

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So Michael, why don't we just start off
with a little bit and just, just tell

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me a little bit more about your, about
your background at the city as well

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as kind of like your… what brought
you to the work that you're doing now.

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Speaker 2: Well, uh, everybody
should know that I come from the UK.

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I was born into a, a fairly
standard middle class family.

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Uh, all of them were… my
relatives were all doctors.

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Um, generally on the conservative
side of the political spectrum, uh,

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except my father, who was a bit of
a, what do you call it, a black sheep

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of the, the family, and was a bit
of a rebel against the rest of them.

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Um, and so I suppose, and my mother
similarly was a bit of a bohemian

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character, so that's probably
changed the, the, the way I'm

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thinking, 'cause I was brought up
in an absolutely middle class area.

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You might call it the stop rotor
belt of South, Southern London.

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Um, so you wouldn't expect, uh, to- me to
develop the views that I developed over

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the last, uh- period since I was an adult.

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Um, so that was, I suppose, I started
to have an intellectual conversion

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from basically what everybody
thinks about society at the moment.

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It's sort of okay.

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Uh, nothing particularly going
to bother middle-class people.

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To change my views gradually over a period
of time, partly intellectually, I think.

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I, at, at, uh, school, uh, at high
school as you would say, I studied,

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uh, economic history and so on, and
I was absolutely struck by, um, the

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understanding of how economies progress,
how history changes, particularly

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from, uh, books by economic historians
who I later found out were Marxists.

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They presented what, uh, Marx calls
the materialist conception of history.

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So they say that progress for
human beings doesn't pl- take place

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between, necessarily between kings
fighting kings or a change of leaders

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or some political ideas alone.

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What's driving it is what's going on with
the economic foundations of a society,

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uh, how it's, uh, it's progressing, what
form it takes, what forms of inequality

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and exploitation take place in that
process which produces both progress

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and the contradictory situation of,
uh, misery for some and ma- maybe all.

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Um, so that led to me to start
to become a Marxist, by the time

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I got to, uh, university I had
considered myself a Marxist.

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Uh, yeah.

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And perhaps I'm gonna say quickly now,
Marshall, that- Please … yeah, uh,

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that, um, here is a, a young Marxist adult
at university doing a bit of activism,

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as you can imagine back in the…

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These are the days of the
late '60s and early '70s.

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Um, but- I eventually ended up working
for big financial institutions and banks.

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How is this possible, you guys might
think, uh, if you're a Marxist?

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Well, there's a certain schizophrenic,
uh, situation here that, uh, i- in

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order to make a living, I didn't
go into academia, which a lot

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of people do in that situation.

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I went into the private sector and
into particularly to the financial

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sector, and ended up doing advisory
work in economics for big institutions.

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Not personal finance for people
like you and me, but the big

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companies, the hedge funds and so on.

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Uh, advising them whether they should
buy the dollar, sell the dollar,

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um, get out of the Japanese yen.

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How can we make money?

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That's the sort of thing.

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So, so the daytime, in the
daytime, I was doing that.

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Outside of work, I was considering
my understanding of what the, the

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society is like as a whole from a
more socialist Marxist point of view.

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And I was able to, eventually when I
retired, to concentrate entirely on

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developing my ideas of, uh, the economy
in r- relative to the concepts and

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theories of Marxism Which as you've
mentioned in the beginning, culminated

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in particular in the book that I wrote
in 2016 called The Long Depression.

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So that's my personal journey, as
it were, at least in intellectual

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terms, uh, to see to where we are now.

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Speaker: Well, Michael, before we start
d- diving into the book, which is gonna

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be the main part of our study today, I
mean, just to, just to follow up on one

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of the, one of your previous statements
there, is it such a conflict in terms

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of understanding Marx, understanding
capitalism from the inside as a Marxist?

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I mean, is that, is that a, you know
… Being in the machine, if you will- Yeah

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… and understanding how things work?

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It seems like there's, on its face,
it might be a conflict, but in

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other ways it seems like it's fairly
consistent- Right … with just

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understanding how capitalism works.

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Speaker 2: I think you're
absolutely right, Marshall.

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It's both, isn't it?

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It, it's a, there's a certain
contradiction, uh, psychologically with,

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when you're dealing with people that
are only interested in making money and

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exploiting others and advising them.

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And on the other hand, you
actually see how capitalism works,

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particularly finance capital.

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In the, uh, the belly of the financial
beast, uh, I g- I got a very good idea.

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Uh, there'd be a better understanding
of the trends and processes going

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on in, uh, capitalism, particularly
modern capitalism in the late 20th

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century and the early 21st century.

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I think that may have been an advantage
over somebody who perhaps went into become

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a professor of economics, even if they're
on the left, i- in a university, because

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they're not connected so easily to those
in day-to-day events that take place.

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So I think if, uh, your viewers
actually see or, uh, my blog and

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read my blog, they will see that I'm
looking at what's going on right now.

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Uh, how do we analyze that?

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What do we make of that?

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Not some great long screed of Marxist
theory, uh, locked away with quotations.

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I'm trying to deal with things
that affect us now, uh, ordinary

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people, and how we can understand
the, the economic processes.

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And I think working in the finance
sector for all that time certainly

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helped, gave me an advantage.

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Speaker: Fantastic.

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A- and like I said, I, I, I very
much want to, as we go through this,

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and you can dictate to me what,
when you think it makes sense to

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talk in a theoretical perspective
versus actually talking about…

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Because I, what I would like to, to
do today, Michael, if possible, is to

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understand the main thesis of your book,
and then look at the other periods that

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you're connecting to and understand
the differences and where things align.

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But understand Marxism as a theoretical
framework to ex- as an explanatory

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model to understand, A, your main
thesis, and then to start to kind

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of work through and, and, and take
our time and work through those

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historical precedents that you raise.

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Hmm.

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Um, does that make, does
that make sense, Michael?

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Speaker 2: Absolutely fine, yes.

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It's, uh, yeah.

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Speaker: Brilliant.

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Um, so why don't we start with
the, with the, the main point.

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What, what is the basic thesis
that you're arguing in this book

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regarding the Long Depression?

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Speaker 2: Okay, well, let's start with
the basic ideas of Marxist economics as

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opposed to what you generally get when
you read in the newspapers and so on

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about what's going on in the economy.

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I think there are two things that
Marx offered to explain, uh, how-

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Uh, human society has developed
particularly in what he called

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the capitalist mode of production.

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And what is the capitalist
mode of production?

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His fundamental point was, yes,
we, we choose things because we

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need them, and we, we have to,
uh, use them as best we can.

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But most things we produce,
we don't use ourselves.

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We actually exchange them.

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Uh, whether in a company, we
might produce a, a machine, but

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we don't use that machine at home.

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Uh, what that… the company gets
that machine, if it's made by you,

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and it s- it sells it in the market,
so there's an exchange taking place.

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It gets money for that, it pays you your
wages, and then you go out to the shops or

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you pay your electricity bill accordingly.

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So what we have is a development of
capitalist economy where things people

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need become only achieved through
the process of exchange and through

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selling goods and services on the
market for money, and that's, that's…

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That process leads to a very important
conclusion that Marx reached, was that

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actually it's an exploitive process.

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It's, it's the owners of
the means of production.

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Uh, I don't own the means of production.

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I don't own huge companies.

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I don't own the, the assets
that they've got in them.

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I don't employ other workers.

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But these owners of the means of
production are in control really of

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not only our wages and our work, but
everything really in terms of the

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investment in the economy, in terms
of where they're going to employ

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people, whether they're going to move
to Latin America or they're gonna

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build a factory in Pennsylvania.

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They make those decisions, uh, and
bec- and they make those decisions

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if they think it's profitable.

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That's the really big point that
we, that Marx wants to make.

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This society, money makes money, but it,
it runs on the basis of increasing profit

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for the owners of the means of production.

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And who are the owners of
the means of production?

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They're a very, very tiny,
small number of people.

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Uh, yes, there's lots of small
businesses, so there's, you know, tens

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00:13:30,461 --> 00:13:34,341
of thousands, maybe even hundreds of
thousands in the US who ha- own their

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own businesses and perhaps work for
themselves or employ a few people.

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But the vast control of the biggest assets
are in the hand of a very tiny number of

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people, a very tiny number of companies.

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We only have to read it every day
now about the AI companies, the tech

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companies, these big mogul companies
which dominate, uh, the economy, as well

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as the banks and the energy companies.

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And these are, the owners
of these are 0.01% of the

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population of the United States.

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They're a very tiny, small group
who are making all the decisions.

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So that's the fundamental argument
that Marx would make about

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the nature of our capitalist
economy It's has some advantages.

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It boosts, uh, uh, productivity
perhaps if capitalists go out and

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invest, uh, in order to make profit.

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There's a increase in productivity,
much better than it was in, say, feudal

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societies where people just worked
on the land and they didn't develop,

237
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uh, new technologies and so on.

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Capitalism took that forward.

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Uh, for those who don't know,
Marx was very, uh, keen to, uh,

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argue that capitalism did take
human, uh, humanity forward.

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It was a progressive thing to begin
with in transforming the situation, the

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productivity and living standards of lots
of people to enable us, more people to,

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to live and more people to live better.

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But it was also shockingly unequal,
shockingly unfair to the vast

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00:14:54,435 --> 00:14:57,925
majority of, of people and they
were not in control of their lives.

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00:14:57,925 --> 00:15:01,455
Only the, uh, means of production
owners were in control.

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And if they make a decision that would
be the, that things aren't going well

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for them, the profitability isn't
going well, then what do they do?

249
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They lay off their employees,
they close down their businesses,

250
00:15:13,625 --> 00:15:15,215
and, uh, you're out of work.

251
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You don't have any control over that.

252
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And that's the point that he
wants to make about the nature

253
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of the capitalist economy.

254
00:15:21,955 --> 00:15:25,325
Human progress through
capitalism has been immense.

255
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We've improved, uh, life expectancy.

256
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We've improved living
standards for sizable sections

257
00:15:31,825 --> 00:15:33,015
of the world's population.

258
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But it's also been hugely unequal,
and we still have billions

259
00:15:37,545 --> 00:15:39,805
of people in the world, eight
billion people in the world now.

260
00:15:40,215 --> 00:15:43,725
The latest figures on any reasonable
estimate would say that about at least

261
00:15:44,055 --> 00:15:47,425
four and a half to five billion of
those are basically at a poverty level.

262
00:15:47,995 --> 00:15:51,615
Uh, they're not in a position to have
any, uh, improvement in their living

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00:15:51,615 --> 00:15:55,885
standards, which we in the, uh, US
and Europe and so on would regard

264
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as a reasonable standard of living.

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00:15:57,875 --> 00:16:02,145
And of course, even within the US and
Europe and the other big countries of

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00:16:02,145 --> 00:16:06,475
the northern hemisphere, there are still
a significant section of people who

267
00:16:06,475 --> 00:16:12,603
are on the poverty line And struggling
to get, and relying on welfare and

268
00:16:12,813 --> 00:16:15,943
not on the possibility of having
a decent job with a decent career.

269
00:16:16,273 --> 00:16:20,643
So things have progressed, but they've
also progressed in a completely

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00:16:21,053 --> 00:16:24,433
distorted and, uh, exploitive way.

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Speaker: Very good.

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00:16:26,113 --> 00:16:29,993
And, you know, again, as we go through
this, we, you know, the, you, you use some

273
00:16:29,993 --> 00:16:33,753
terms in the book and it's, you, you point
at some specific, uh, historical periods.

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00:16:33,753 --> 00:16:36,083
Even at the end, you, you
talk a little bit about Rome.

275
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So the concept of- Yeah … progress
versus regress comes in very handy,

276
00:16:40,113 --> 00:16:41,713
uh, as a, as a, as a framework.

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00:16:41,923 --> 00:16:46,083
But I also as- I'd like to go forward
and kind of talk about the, the

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00:16:46,083 --> 00:16:47,993
specifics about this long depression.

279
00:16:47,993 --> 00:16:50,933
Like, I wanna understand… Because
one of the things that I wanna, I wanna

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00:16:50,983 --> 00:16:54,603
get from you, Michael, if possible, is
to understand whether or not it's the

281
00:16:54,603 --> 00:16:57,983
way that capitalism as you, as you put
it, the way it operates or the way…

282
00:16:58,013 --> 00:17:02,223
Or is it baked into the cake that
this is an exploitative, uh, function?

283
00:17:02,243 --> 00:17:05,353
You, you know, in other words, if
the, uh… 'Cause you talk about

284
00:17:05,353 --> 00:17:07,293
these measures, and again, we'll,
we'll go through them 'cause

285
00:17:07,293 --> 00:17:08,363
they're really, really helpful.

286
00:17:08,573 --> 00:17:12,083
Um, is it just the fact that the
people aren't compensated fairly,

287
00:17:12,183 --> 00:17:15,703
or the fact that just baked into
this system, eventually it, it

288
00:17:15,703 --> 00:17:17,143
doesn't, it's almost irrelevant by…

289
00:17:17,153 --> 00:17:18,903
It's like auto, auto-fill.

290
00:17:18,933 --> 00:17:23,003
It's going to f- it's going to run its
course regardless of whether people,

291
00:17:23,173 --> 00:17:29,063
you know, engage in these, in these a-
abuses and, uh, uh, of, of capitalism

292
00:17:29,801 --> 00:17:31,711
Speaker 2: Well, think about
it this way, Marshall, um, that

293
00:17:32,281 --> 00:17:34,161
everybody would like more equality.

294
00:17:34,301 --> 00:17:35,691
We'd like to get rid of poverty.

295
00:17:35,691 --> 00:17:39,601
We'd like to get a situation where
people are more equal, uh, uh, y-

296
00:17:39,601 --> 00:17:42,971
in terms of their income, their
opportunities in life and so on.

297
00:17:43,401 --> 00:17:46,321
Everybody's a bit different, so they
would be doing something differently.

298
00:17:46,321 --> 00:17:49,611
But, uh, we have grotesque levels
of inequality at the moment.

299
00:17:49,961 --> 00:17:53,211
Now, the question I often get when I
talk to some people who say, "Yes, we

300
00:17:53,211 --> 00:17:57,961
need to change this situation, so what
sh- what we need to do is tax the very

301
00:17:57,971 --> 00:18:02,231
rich, or we've got to increase the
wages of people, uh, who are down the

302
00:18:02,231 --> 00:18:07,181
bottom, or we've got to f- uh, get the
government to come in and sort out the

303
00:18:07,191 --> 00:18:10,171
monopolies and, uh, abuses and so on."

304
00:18:10,651 --> 00:18:14,151
Nothing particularly wrong with that,
but I always ask the question, well,

305
00:18:14,151 --> 00:18:17,721
how did we get into this position where
it was so unequal in the first place?

306
00:18:18,031 --> 00:18:22,901
What you're really doing is saying,
how can we get the plaster out and fix

307
00:18:22,901 --> 00:18:27,641
the running sore which exists on the
body of, of humanity under capitalism?

308
00:18:27,901 --> 00:18:30,831
Rather than saying, "What's wrong?
Why have we got this sore? Why

309
00:18:30,861 --> 00:18:36,111
can't we transform the picture to a
society of progress where everybody

310
00:18:36,571 --> 00:18:40,201
has control over their lives through
common ownership?" That's what we

311
00:18:40,201 --> 00:18:42,321
would say as Marxist or socialists.

312
00:18:42,571 --> 00:18:46,231
Common ownership of the means of
production with democratic control of

313
00:18:46,231 --> 00:18:50,371
that so that the resources that we produce
and the production that we make will

314
00:18:50,371 --> 00:18:55,581
be used in the interest of the whole of
the population, democratically decided.

315
00:18:55,801 --> 00:18:59,081
Maybe they'll make mistakes,
but, uh, it will be up to

316
00:18:59,081 --> 00:19:00,171
them to decide what happened.

317
00:19:00,171 --> 00:19:04,881
At the moment, basically everything
is decided by this tiny, tiny minority

318
00:19:05,161 --> 00:19:09,451
and the political, uh, leaders who
s- who support them i- in doing so.

319
00:19:09,451 --> 00:19:14,401
So, uh, what we have there is
the fundamental point about human

320
00:19:14,401 --> 00:19:18,991
progress and how we have to recognize
that it's not just a question of

321
00:19:19,011 --> 00:19:23,721
trying to change equality to the
better through measures of taxation.

322
00:19:24,081 --> 00:19:27,201
I'm not opposed to taxing the
rich if it would help, but this is

323
00:19:27,201 --> 00:19:30,481
the point that comes out of that,
Marshall, and it's correct in a way.

324
00:19:30,481 --> 00:19:31,331
The capitalists are correct.

325
00:19:31,551 --> 00:19:36,327
If you tax us If you take our profits
away and tax us too much, then

326
00:19:36,327 --> 00:19:37,877
we'll just close our factory down.

327
00:19:38,287 --> 00:19:42,077
We'll lay off our workers because
you, we can't make a profit anymore.

328
00:19:42,727 --> 00:19:45,887
Uh, uh, so what, what do
you do in that situation?

329
00:19:45,887 --> 00:19:49,647
Well, it, it clearly means… I would
say that what that means is we, we

330
00:19:49,647 --> 00:19:53,417
don't want a system where you decide
the control of the means of production,

331
00:19:53,667 --> 00:19:54,997
whether you're making a profit or not.

332
00:19:55,277 --> 00:19:58,927
We want a system where everybody
can decide based on common

333
00:19:58,937 --> 00:20:00,317
ownership and democratic control.

334
00:20:00,567 --> 00:20:04,237
So just taxation or wage incre-
you know, increased wages.

335
00:20:04,277 --> 00:20:05,007
You hear it every day.

336
00:20:05,297 --> 00:20:07,217
Wages are rising too fast.

337
00:20:07,477 --> 00:20:07,987
Why?

338
00:20:08,127 --> 00:20:11,227
Because they're reducing the
profitability for the capitalists.

339
00:20:11,377 --> 00:20:14,477
Of course, right at the moment,
it's the opposite situation where

340
00:20:14,487 --> 00:20:18,027
profitability, profits are rising
sharply in the US and other countries.

341
00:20:18,027 --> 00:20:21,767
But it's a conflict, a class
conflict between workers'

342
00:20:21,767 --> 00:20:23,767
wages and capitalist profits.

343
00:20:24,087 --> 00:20:25,027
That's the system.

344
00:20:25,247 --> 00:20:28,007
Why do we have… That's
why we have un- inequality.

345
00:20:28,147 --> 00:20:32,177
That's why we still have poverty around
the world, because that system creates

346
00:20:32,177 --> 00:20:34,237
those grotesque levels of inequality.

347
00:20:35,267 --> 00:20:38,147
Speaker: Yeah, and, and you, uh… And
I wanna get, actually, I wanna kinda,

348
00:20:38,147 --> 00:20:41,977
like, dig into the central thesis of
your book regarding this particular

349
00:20:42,017 --> 00:20:43,497
depression or recession that we're in.

350
00:20:43,497 --> 00:20:43,567
Yeah.

351
00:20:43,567 --> 00:20:47,517
So I wanna understand, in these contexts,
what depression and recession, what

352
00:20:47,517 --> 00:20:52,347
the differences are, what this actually
means, and why is this depression long

353
00:20:52,537 --> 00:20:56,727
and different than… But not necessarily
different than the two periods that you

354
00:20:56,737 --> 00:21:00,237
have raised as, as, as great examples of
this, 'cause I think this is a really…

355
00:21:00,257 --> 00:21:03,707
And as you just, as you go through
Marxist, you, some of the Marxist

356
00:21:03,707 --> 00:21:07,247
theory, it helps as a framework
to understand your perspective as

357
00:21:07,247 --> 00:21:08,857
to why things are, are different.

358
00:21:08,887 --> 00:21:12,067
And I, and I would like to talk about
some of those contradictions as we go on.

359
00:21:12,247 --> 00:21:14,697
But now I think I'd like to… If
Michael, if it's okay, I'd like to give

360
00:21:14,697 --> 00:21:19,567
you the opportunity to talk about the
thesis itself, specifically about what

361
00:21:19,567 --> 00:21:23,997
the c- this, this current, what we're
gonna call this, the long depression.

362
00:21:24,347 --> 00:21:28,007
Uh, just talk about it from the, its
beginning, and just tell me what makes

363
00:21:28,007 --> 00:21:31,087
this different than something, if it
does, than what existed in the past.

364
00:21:31,777 --> 00:21:35,507
Speaker 2: Well, the, the fundamental
point to make about capitalism,

365
00:21:35,517 --> 00:21:40,687
apart from its inequalities, is
it doesn't progress humanity in

366
00:21:40,687 --> 00:21:42,937
a harmonious and steady manner.

367
00:21:43,177 --> 00:21:44,127
It is volatile.

368
00:21:44,697 --> 00:21:48,277
We have periods of big boom,
and then we have severe slumps.

369
00:21:48,577 --> 00:21:52,537
If you look just at the United States,
the history of the United States since,

370
00:21:52,977 --> 00:21:58,457
um, the Constitution was introduced or
the War of Independence, you can see

371
00:21:59,017 --> 00:22:04,227
successively periods of economic slump
where production goes down, investment

372
00:22:04,227 --> 00:22:06,147
goes down, employment goes down.

373
00:22:06,147 --> 00:22:09,647
Then there's a recovery for, say, another
10 years, and then you have another slump.

374
00:22:09,847 --> 00:22:12,557
Capitalism is a system
of booms and slumps.

375
00:22:13,037 --> 00:22:16,517
It's terrible for ordinary working people
because they- they're doing well for

376
00:22:16,517 --> 00:22:19,797
a while, and then suddenly everything
goes crashing and they have to recover.

377
00:22:19,817 --> 00:22:20,727
Perhaps they won't recover.

378
00:22:21,147 --> 00:22:25,407
Uh, it … So the capitalism
goes in a very unequal but

379
00:22:25,407 --> 00:22:27,847
also i- in unharmonious way.

380
00:22:27,897 --> 00:22:30,307
It doesn't progress steadily forward.

381
00:22:30,617 --> 00:22:34,137
So we can talk about booms and
slumps or booms and recessions.

382
00:22:34,157 --> 00:22:38,387
Ec- economists like to use the recession,
it sounds a little nicer than slumps.

383
00:22:38,607 --> 00:22:42,127
Uh, uh, so that hap-
happen on a regular basis.

384
00:22:42,157 --> 00:22:46,767
Now, what I, uh, I'll, I'll say in a
minute why that it happens, but let me

385
00:22:46,767 --> 00:22:52,469
just say I studied the period of the
United States and the major economies in

386
00:22:52,469 --> 00:22:56,209
this book from about the 1800s onwards.

387
00:22:56,209 --> 00:23:00,009
And I noticed that there were periods,
not just when there were booms and

388
00:23:00,009 --> 00:23:03,109
slumps every eight or 10 years, which
is approximately what happens, but

389
00:23:03,139 --> 00:23:07,679
there were periods when the slumps
didn't end, that the recession- Mm

390
00:23:07,689 --> 00:23:09,769
continued for a very long time.

391
00:23:10,169 --> 00:23:15,139
Uh, and it's noted in historians' books
and was noted in contemporary, uh,

392
00:23:15,139 --> 00:23:20,239
times in, in the US, for example, that
after a very big slump in 1873, which

393
00:23:20,239 --> 00:23:24,779
was bound around the railway mania
collapsing and so on, then the economy

394
00:23:24,779 --> 00:23:26,709
of the United States slowed down.

395
00:23:26,719 --> 00:23:30,769
It didn't go back to the same level
of growth that it had before the 1873.

396
00:23:31,189 --> 00:23:34,249
It didn't go back to the same
level of employment or investment.

397
00:23:34,259 --> 00:23:38,709
So for the period, for approximately
nearly 25 years, we … There was

398
00:23:38,779 --> 00:23:43,209
ups and downs in that period, but not
until the middle of the 1890s could

399
00:23:43,209 --> 00:23:47,679
we say that this, uh, period of low
growth, low investment, which I call a

400
00:23:47,679 --> 00:23:50,369
depressionary period, uh, came to an end.

401
00:23:50,689 --> 00:23:55,899
And it was re- in most, uh, uh, historians
at the time called it the, uh, uh,

402
00:23:55,919 --> 00:23:58,999
depression, the, the, or the long
depression actually, i- because it was

403
00:23:58,999 --> 00:24:00,629
the first one that they really noticed.

404
00:24:01,109 --> 00:24:03,609
Of course, the other one, which
we probably all do know in our

405
00:24:03,629 --> 00:24:06,209
history books or learned at
school, was the Great Depression-

406
00:24:06,519 --> 00:24:06,759
Speaker: Mm

407
00:24:06,809 --> 00:24:11,709
Speaker 2: in the period from 1929
to the beginning of the war, 1941,

408
00:24:11,719 --> 00:24:13,519
'42, and we had the World War.

409
00:24:13,519 --> 00:24:17,989
So we had a period there of 13 years,
a bit shorter, but it was very severe.

410
00:24:18,369 --> 00:24:23,959
Huge drop in, uh, employment, in,
in production and investment, which

411
00:24:23,959 --> 00:24:25,609
was almost impossible to get out of.

412
00:24:25,809 --> 00:24:26,439
That's the point.

413
00:24:26,769 --> 00:24:29,319
Capitalism didn't seem to be able
to get out of this depression.

414
00:24:29,319 --> 00:24:33,329
It was … It, despite whatever it
did, whether it got the government to

415
00:24:33,389 --> 00:24:37,599
intervene, or whether it, uh, tried to
improve the level of profitability of

416
00:24:37,619 --> 00:24:41,529
those companies that survived, it stayed
in this depressed state right through

417
00:24:41,529 --> 00:24:43,529
t- till the Second World War started.

418
00:24:43,769 --> 00:24:48,609
I would argue, and I argue in the book,
that war made it possible for the US

419
00:24:48,609 --> 00:24:52,209
economy and other economies to come
out of this slump, this depression.

420
00:24:52,559 --> 00:24:56,159
Uh, because then the government intervened
to spend huge amounts of money on

421
00:24:56,189 --> 00:25:00,179
armaments and armaments manufacturers
and, and generally the government took

422
00:25:00,179 --> 00:25:03,859
over control of the investment during the
war, and that transformed the picture.

423
00:25:03,859 --> 00:25:08,199
They also extracted as much money they
could, could out of workers for bonds and

424
00:25:08,199 --> 00:25:10,319
so on, in order to finance the recovery.

425
00:25:10,679 --> 00:25:13,719
And that recovery enabled
that depression to end.

426
00:25:14,259 --> 00:25:20,203
Now, I found that- In the, if you
remember in 2008-'09, those of us who

427
00:25:20,203 --> 00:25:24,633
were s- who were around then, that
we had this absolutely huge global

428
00:25:24,633 --> 00:25:28,983
financial crash in the United States,
and it spread to the rest of the world.

429
00:25:29,533 --> 00:25:33,123
Uh, mortgage companies
collapsed, banks collapsed.

430
00:25:33,353 --> 00:25:36,813
It looks as though the financial sector
was going to disappear down a hole.

431
00:25:36,813 --> 00:25:37,873
It was going to melt away.

432
00:25:38,283 --> 00:25:39,753
And they had to try and save that.

433
00:25:40,053 --> 00:25:44,463
But as a result of this financial
collapse, we then, the United

434
00:25:44,463 --> 00:25:48,333
States and other countries,
entered a very severe slump.

435
00:25:48,723 --> 00:25:53,203
We call it the Great Recession, um,
when production for all the major

436
00:25:53,203 --> 00:25:57,743
economies didn't just drop a couple of
percentage points of output, they went

437
00:25:57,743 --> 00:26:03,053
down 4% or 5% or even more and, and
stayed down there for 18 months or more.

438
00:26:03,563 --> 00:26:08,463
And when they… that slump reached
the bottom and started to come out, it

439
00:26:08,483 --> 00:26:10,303
didn't come back at the same rate again.

440
00:26:10,343 --> 00:26:12,353
It was just like the
other two depressions.

441
00:26:12,603 --> 00:26:16,963
It stayed well below the previous
trend growth, uh, whether it was

442
00:26:16,963 --> 00:26:18,963
employment, investment or production.

443
00:26:19,373 --> 00:26:22,543
Uh, these are the key economic
measures that we can put.

444
00:26:22,543 --> 00:26:24,163
Mm. And it stayed well below.

445
00:26:24,183 --> 00:26:26,303
The trend, if you like, was well below.

446
00:26:26,323 --> 00:26:31,403
And this trend, this lower trend cont-
continued and continued right through,

447
00:26:31,763 --> 00:26:34,473
uh, to the end of the 2010s up to 2019.

448
00:26:34,853 --> 00:26:38,303
And then, of course, we've
just had in 2020 what we call

449
00:26:38,303 --> 00:26:40,113
the COVID pandemic slump.

450
00:26:40,223 --> 00:26:45,313
Another huge slump, shorter in
time, but even deeper actually than

451
00:26:45,403 --> 00:26:47,773
the Great Recession of 2008-'09.

452
00:26:47,773 --> 00:26:54,863
But so this period from 2008-'09
onwards to where we are now, uh, maybe

453
00:26:54,863 --> 00:26:58,643
this is going to change soon, we've
had another period of 15 years or

454
00:26:58,643 --> 00:27:01,473
more, uh, of what I call a depression.

455
00:27:01,603 --> 00:27:06,673
I called it a long depression, uh, to, to
trying to characterize the similarities

456
00:27:06,673 --> 00:27:08,373
with the two other depressions.

457
00:27:08,723 --> 00:27:12,493
And why do we get these depressions then
and not just have another booming slump?

458
00:27:12,833 --> 00:27:17,343
Well, in the book, I tried to analyze
other factors which bring about these

459
00:27:17,343 --> 00:27:19,423
slumps remaining in a depressed state.

460
00:27:19,523 --> 00:27:24,643
Uh, there's a question of, uh, just a
general fall in prices of commodities,

461
00:27:24,923 --> 00:27:28,983
uh, the ability to circulate commodities
in an effective way for capitalism.

462
00:27:29,393 --> 00:27:32,553
There's, uh… trade declines sharply.

463
00:27:32,913 --> 00:27:37,333
So international trade growth
dropped away sharply from 2018,

464
00:27:37,613 --> 00:27:41,133
20,000- 2008 up until now.

465
00:27:41,343 --> 00:27:45,873
Whereas world trade used to bomb
along back in the 1990s and 2000s,

466
00:27:46,113 --> 00:27:50,103
since then it's been growing slower
even than, uh, domestic production.

467
00:27:50,103 --> 00:27:54,363
So capitalists can't make any money
out of trade, out of exports really.

468
00:27:54,363 --> 00:27:55,083
So-

469
00:27:55,083 --> 00:27:57,193
Speaker: So Michael, let me, let me
stop you just for one second, my friend.

470
00:27:57,203 --> 00:27:57,223
Yeah.

471
00:27:57,513 --> 00:28:01,123
So just so I can understand
kind of like the quasi technical

472
00:28:01,123 --> 00:28:02,133
definition of this, right?

473
00:28:02,353 --> 00:28:04,983
What make… If I, if I'm understanding
what you're saying, what makes these

474
00:28:05,183 --> 00:28:10,749
quote unquote, these slumps and
recovery- are a depression is that

475
00:28:10,749 --> 00:28:13,639
when they actually recover, they don't
come- they don't reach the level of the

476
00:28:13,639 --> 00:28:17,209
previous, where it was before there was,
before these cycles started hitting.

477
00:28:17,209 --> 00:28:17,599
Is that a,

478
00:28:17,819 --> 00:28:18,389
Speaker 2: is that a fair statement?

479
00:28:18,389 --> 00:28:18,729
That's right.

480
00:28:18,759 --> 00:28:19,259
That's right.

481
00:28:19,259 --> 00:28:20,819
Yes, and that's exactly the point.

482
00:28:20,819 --> 00:28:24,099
This is what I've, I have
identified in, in this process.

483
00:28:24,099 --> 00:28:29,659
By the way, of course, not all
Marxist economists, let alone ordinary

484
00:28:29,659 --> 00:28:31,189
mainstream economists, agree with this

485
00:28:33,660 --> 00:28:36,270
Speaker 3: That's part one of our
conversation with Michael Roberts.

486
00:28:36,770 --> 00:28:41,230
In part two, we go back to where this
pattern begins, the depression of the

487
00:28:41,230 --> 00:28:45,510
1870s, and trace it forward through the
Great Depression of the 1930s, along

488
00:28:45,750 --> 00:28:49,120
with the arguments economists on the
left and the right have made about why

489
00:28:49,150 --> 00:28:51,090
capitalism falls into these slumps.

490
00:28:51,710 --> 00:28:53,450
Part two lands in two weeks.

491
00:28:53,570 --> 00:28:55,030
Looking forward to seeing you then