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You are here: The Platypus Affiliated Society/Engels’ contribution to the critique of political economy: An interview with Michael Roberts

Engels’ contribution to the critique of political economy: An interview with Michael Roberts

D.L. Jacobs and Marina Blumenschein

Platypus Review 133 | February 2021

On December 28, 2020, Daniel Jacobs and Marina Blumenschein interviewed economist Michael Roberts, author of Engels 200: his contribution to political economy, The Great Recession: a Marxist View and The Long Depression. What follows is an edited version of their discussion on the legacy of Marx’s closest collaborator Friedrich Engels in light of the 200th anniversary of his birth.

Daniel Jacobs: What got you into Marxism? What is your background in terms of Marxism?

Michael Roberts: I come from a very middle, middle-class background. I know in the States that middle-class means something different. Now, apparently, in the classless United States there are no classes, only the top and everyone else is the middle-class. I don’t know what happened to the people below the middle-class. They seem to have disappeared.

But if we go back to the original socialist terms, we refer to the working-class who are those people who have to work for a living; but within that, there is a large-layer of people who have a reasonable, higher-level of education, who have maybe better jobs and so on, and in their view, they are not part of the working-class. I come from this middle, middle-class background from the suburbs of London. My family were doctors and lawyers, or scientists — that sort of people. But for some reason — who can say why on an individual basis, whereas all the other people at my school and college went on to become the usual nice sort of solid accountants and people like that — I didn’t do that. I started to develop more radical attitudes towards what was going on in the world and I slowly changed my politics as a teenager.

In the case of Engels, I think I was a bit behind him because by the time he got to 18 or 19, he had pretty-well become radicalized. By the time I got to about the same age and was on my way to college, I started to move from being a sort of liberal to being a social-democrat and eventually, on reading the works of Marx and Engels and being convinced by the materialist conception of history above all (i.e., to understand how history has developed and the nature of the class-struggle), I came to consider myself a Marxist. Although, when I graduated with a degree in economics, I went and got a straightforward job as an economist in the financial sector, so I didn’t become an academic.

If we think about most “Marxist intellectuals,” which is the category I fall into I suppose, as opposed to someone who develops a socialist understanding from the process of work, they become academics. I didn’t. There are very few of us Marxist economists out there who aren’t academics, but there are a few who went into finance but also had a Marxist analysis of the world economy and capitalism in general. I actually think this is a slight advantage. I think it means you are in the “belly of the beast.” You can understand what’s going on in finance capital a lot better. You can appreciate what is important for us to grasp in the trends that are going on in capitalism and you don’t get locked-down in too many of the abstruse, academic debates which a lot of Marxist academics do.

Those who read my blog, and I hope my books, would know that I have a pretty matter-of-fact style. I’m not very abstruse. There’s not lots of huge philosophical, technical terms that I use. I tend to try to keep that out of my material. And I do a lot of empirical work, which I have to say, most Marxist academics, including Marxist economists, don’t do. They’re locked into theory. I don’t see how you can convince anyone of any ideas unless you present some evidence to back it up with data and materials that you can look at and survey.

The short-answer to your question, Daniel, which I didn’t give you is that I came gradually towards the idea of Marxism through the process of intellectual discovery, rather than through any sort of class-base to my family and circumstances.

DJ: This actually leads into my next question. Obviously, we are in the bicentennial of Engel’s birthday but what else led you to write this book about Engels?

MR: Well, I have always thought that Engels has been sadly neglected as an important contributor to Marxist political economy, to the materialist conception of history and also to the understanding of the dialectics of society, as well. That is partly his own fault.  He started off before Marx in looking at and analyzing capitalism and trying to understand it through the view of the processes of competition and exploitation in his very early Outlines of a Critique of Political Economy, which in German is called the Umrisse which he wrote at the tender age of 22.[1] In this he analyzed the classical economists for the first time. He developed some of the pivotal categories of political economy that Marxism has. So, you could say that he was the first Marxist before Marx; the first Marxist economist. In fact, it was his work that encouraged Marx to recognize that he couldn’t just maintain a philosophical criticism of capitalism — he needed to look at the economic foundations of the capitalist process and critique the existing explanations provided by mainstream economists of the time like Smith, Ricardo, Malthus, James Mill and so on.

Marx was encouraged to read the classical economists and come up with a critique and that started his process towards producing Capital, which is of course, Marx’s greatest known book, explaining the nature of exploitation in capitalism and how that works out in the capitalist process. Engels was before Marx on this. I think he is sadly neglected by many for not realizing this. But like I said, that is partly his own fault because he gave up his work and went to work for his father as basically a senior manager taking a salary, and as a capitalist getting dividends in Manchester, in a cotton-mill, right in the heart of the Industrial Revolution in England taking place in the early 19th century.  Much of that salary ended up going back to Marx and his family in London, where Marx was toiling away in the British Museum writing Capital and other works, as Marx didn’t have much money.

Engels gave up his own intellectual development and work for a whole period of time, and for something like 20 years-he only did a series of small articles or filled in for Marx and so on.  But he didn’t do any serious work until he retired in 1870. Then we get a new flourishing of work from Engels when he retired in 1870, which perhaps we can discuss as we go.

But the main reason for looking at Engels is that he has been neglected and we ought to be aware that he has much value to offer to us in the Marxist explanation of capitalism. But also, we need to correct what I think is, to some extent, a distortion of Engel’s views. He is often accused of distorting Marx, of misunderstanding Marx’s materialist conception of history and so on. In fact, some even argue that his editing of Marx’s later volumes of Capital distorted Marx’s views. In my book, I wanted to correct that view as well and take the opportunity on Engels’ bicentennial to show that this was not the case.

DJ: You mention in the early chapters of your book the methodology of Engels. “Engels’ 1842-44 methodology and his analysis in the Condition are still relevant in 2020s Britain.” Could you talk about what you see as his methodology and how you apply it?

MR: As I was saying, in this first serious work, called an Outline of the Critique of Political Economy, Engels analyzes capitalism from what we would now call a Marxist point-of-view for the first time.  He notes the exploitative nature of capitalism. He notes how capitalists are continually competing against each other in the drive for profit and as a result, that competition leads to instability and anarchy in the capitalist process of production. He critiques the position of the classical economists by saying, capitalism is not a harmonious process. Capitalism does not harmoniously move forward, gradually progressing, raising living standards, raising the productive level of labor in a nice gradual process with everything equalized out.  Fair Trade doesn’t lead to equality between nations and trading capitals. A competitive struggle takes place and it’s an anarchic one leading to the strong defeating the weak and, of course, in the case of capital and labor, leading to capital exploiting labor.

Now Engels didn’t fully develop some of these key categories of Marx’s political economy.  They were developed later on by Marx - like the law of value and surplus-value; the accumulation of capital and the law of the tendency of profitability to fall over time. They come through Marx’s works later on. But Engels sets the tone and more than that, the framework for understanding the nature of capitalism as early as the 1840s through his critique of the existing mainstream economics of the time.

DJ: Do you see history playing a role in his critique? One of my favorite lines in the Umrisse is when Engels says Ricardo and McCulloch are more responsible than Adam Smith: “The nearer to our time the economists whom we have to judge, the more severe must our judgment become. For while Smith and Malthus found only scattered fragments, the modern economists had the whole system complete before them: the consequences had all been drawn; the contradictions came clearly enough to light; yet they did not come to examining the premises, and still accepted the responsibility for the whole system. The nearer the economists come to the present time, the further they depart from honesty. With every advance of time, sophistry necessarily increases, so as to prevent economics from lagging behind the times. This is why Ricardo, for instance, is more guilty than Adam Smith, and McCulloch and Mill more guilty than Ricardo.”[2] There is also a section where he talks about Ricardo and Say on value, both epigones of Smith and they both appealed to Smith, but they appeared to be contradictory in their period. Does value come from utility or does it come from the cost of production? So again, how do you see history playing in his methodology and his critique of political economy?

MR: That’s a good point. First, David Ricardo, you might regard as the epitome of classical economics. He wrote his Principles of Economics in 1817. And as you say, he stands on the shoulders of Smith and others before him.  The key thing here is that how do we measure what anything is worth in society? Well, you might say: why do we need to measure what something is worth in society? Well, capitalism works on the basis of whether it is worth anything to sell or to produce.  So, a measure of what something is worth is quite important in the capitalist process of production. So how do you measure it? Ricardo and Smith came up with: there is only one way you can really measure a whole series of different commodities that look different, come from different sources and have different compositions. It is by measuring the amount of labor-time that goes into producing them. So, you have an average amount of labor-time that goes into producing a product like a motorcar as opposed to a chair; this gives you a basic understanding of what that chair is worth. If a chair is worth 100th or 1000th of a motorcar, basically, because it takes less labor-time, by that amount approximately, not exactly, than it takes to produce a motorcar.

So, the idea that labor is a measure of value and measuring it in labor-hours came from Smith and Ricardo. Of course, that immediately leads to the dangerous position in capitalism because if workers are working eight-hours a day, and they are receiving wages equivalent to goods they can purchase with them in only four hours, that means that four-hours are being given to the owner of the means of production that are employing the workers. The owners of capital have got four hours that are unpaid. Ricardo and Smith s just say “this product takes eight-hours to produce. That’s what it’s worth.” Marx goes further and says “yes, but a process of exploitation is going on, because only four hours go to pay for the worker’s necessities and four hours are in your hands, the capitalists, to do as you wish. You own the commodity at the end to either sell or to invest or whatever you want to do. You’re in control of the process of production.” That idea, Ricardo and Smith do not want to pursue. That’s the fundamental difference.

What Engels adds to that theory is quite interesting because he has the idea that there is not just a surplus created by the workers that is not paid for, which is the theory of surplus-value, but he also asks “How does that come about?” Historically, we can see previous societies that didn’t operate that way.  In simple commodity production, as you might call it, with people working from home and selling their product to other people, perhaps not really employing many other people, perhaps just their family, at this very low-level of commodity production you can’t really see the process of the law of value developing because there’s not really wide commodity production across the whole economy, across the world.  There is not a price which is being set by a series of capitalists. That only comes later as capital progresses. That’s a contribution that Engels makes: the historical connection of the law of value.  It adds to our understanding of how the law of value came about and how capitalism comes out of previous economies like feudal society or slave society. By the way, a lot of people, a lot of academic Marxists, want to reject Engels’ view of this difference between commodity production and wider capitalism. They don’t like that. But I think it adds to our understanding.

Marina Blumenschein: I know that you have argued that Michael Heinrich and others have wrongly viewed Engel’s editing of Marx as incomplete. I was wondering if you could talk about that and what differences, if any, do you recognize between the views of Marx and Engels and do you think there is any value to Michael Heinrich’s critiques of Engels’ editing and needs to be supplemented?

MR: That’s a big subject but there is a chapter in my book, Engels 200, about it. After Marx died, in 1883, most of his work had not been published in any form whatsoever; you only had Capital, vol. 1. Marx planned to write ten volumes of Capital, but in the end, it was watered down to something like four or five, but only volume 1 had been published and not published even in most languages, so it was hardly available. After Marx’s death in 1883, Engels took up the big task of putting all of Marx’s manuscripts together, editing them and producing a series of volumes, what became known as Volumes 2 and 3 of Capital.

One of the important theories or laws in Marx’s analysis of capitalism is the law of the tendency of the rate of profit to fall. In my short book Marx 200, which is a companion to Engels 200, I make a point that there are three main laws that come from Marx: the law of value, the law of accumulation and the law of the tendency of the rate of profit to fall. I think they are connected for us to clearly understand the Marxist critique of Capitalism.

So, in Vol. 3 of Capital, which was edited by Engels, there are three chapters that Engels edits Marx’s writing on the law of the tendency of the rate of profit to fall.  Just to explain briefly: the argument here is that, as capitalists compete against each other to get more and more profit, they can’t just lengthen workers hours or intensity their work without limit. In the end, the best way to get more productivity out of the workforce is to introduce a machine, nowadays a robot or some automated process, that gets rid of some of the labor you don’t need and can actually produce more with a smaller labor force. That way, costs fall and a capitalist can get ahead of other capitalists technologically and so usurp a larger share of the total profit in the economy from the weaker capitalists. Of course, the other capitalists can then introduce that technology as well. What tends to happen then is there is an increasing amount of investment taking place in machinery relative to takin go more workers. Now the law of value says that only that labor can create value.  So, if investment in labor and the labor-force is falling relative to the total investment, then there will be a lower amount of value being produced relative to the total cost of capital. So, there is a tendency then for the profit exploited from workers to fall relative to the total investment that the capitalists are making.  Profits can be still be increasing but the profitability can fall relative to total investment. This is the law of the tendency.

So, from this law, we have a theory or an explanation for why there are regular crises in capitalism; slumps and collapses in production and investment.  It is because profitability falls eventually causing capitalists to have an investment strike.  They stop investing, they lay off workers and so you get a production crash. This seems to happen every 8-10 years in modern capitalism and sometimes this slump can be severe, sometimes it can be mild; but it keeps happening.

Now, there are a number of Marxist academics who reject this explanation of the crisis.  And they go back to the editing of Marx’s Vol.3 of Capital and they say in so many words, “Look, we’ve been rummaging around in all of the original manuscripts that Marx wrote, called the Marx-Engels-Gesamtausgabe (Marx Engels Collected Works); we’ve gone into the dusty archives” says Michael Heinrich and others “and we’ve read very carefully the writings and we think Engels has totally distorted what Marx meant to say. When we analyze the original manuscripts, we can interpret them in a completely different way.”

Michael Heinrich makes two points: first, that Marx probably didn’t like the idea of the tendency of the rate of profit to fall anyway and he basically dropped it.  He didn’t mention it after the 1870s.  So, Engels should have left the whole three chapters on the law (Chapters 12-15) out of Vol. 3 because Marx no longer agreed with it. But as far as I can see, there is no evidence for saying this but that’s what Heinrich and others conclude. Worse, Engels actually distorts Marx’s meaning by changing lines to make Marx appear to hold a position on the law that’s rather stronger than the position he actually held. Again, there is no convincing evidence for this.  Other scholars have reanalyzed Engels’ edits and don’t find this distortion.

Perhaps, more seriously, Heinrich says that anyway Marx’s law doesn’t work because the counteracting factors can overcome any tendency for profitability to fall – and it doesn’t fall.  Well, my reply to that is: oh yes it does. There’s a load of empirical evidence across the world and in different countries, showing that the profitability of capital does fall over time; not in a straight-line down, but it does go down as a general tendency.  And so often yet another Marxist economist publishes empirical evidence that confirms this This empirical evidence is ignored or dismissed by Heinrich and others.

By the way, I am only raising this as an intellectual critique of Heinrich’s view.  Michael Heinrich is a great scholar, a good socialist, a good Marxist, a good communist.  But he doesn’t agree with Marx’s law and he tries to argue against it and I don’t think he is right. But I urge the viewers to go on my blog and they can read the debate in there between myself and Heinrich and others to see who is right about this. All I would say now is that, as far as I can see, Engels did not distort Marx’s view. Marx still held to the law of the tendency of the rate of profit to fall. He actually tried to play around mathematically with it in his later years. So, I reject the view of Heinrich and others that we should dispense with this particular law.

DJ: You quote from a letter from Marx to Engels on April, 30, 1868 where he says that the law of the falling rate of profitability is one of the “triumphs” over preceding political economy: “The tendency of the rate of profit to fall as society progresses. This already follows from what was developed in Book I on the change in the composition of capital with the development of the social productive power. This is one of the greatest triumphs over the pons asini of all previous political economy.”[3] Smith and Ricardo have a falling rate of profit as well. I am thinking of Wealth of Nations where Smith talks about farmers who like to “reap what they didn’t sow,” they like to get surplus labor, to exploit workers. But Smith sees that competition in a free society would compel those people to reinvest and would raise wages overtime; it would raise the value of labor-power in that sense.  What do you think it means to Marx when he says this is a triumph over preceding political economy? The classical political economists would not say that a high profit rate was good either. They would say that means there is a monopoly.

MR: What Smith and Ricardo observe is that the profitability of capital tended to fall. Smith’s explanation was that you only get high profits, as you say, because there are monopolies controlling profits and other people. When you get proper competition and trade, then profitability tends to fall because everybody is competing for the existing amount of surplus available and so they are force down the rate of that surplus against the total capital-because of competition. So, Smith’s view is that the rate of profitability falls because of competition.

Ricardo has a different view. He says it’s not competition; the reason the rate of profit falls is because worker’s wages are forced up because workers are buying food and other necessities and the landlords who control the land and the price of food, hold the price of food up higher than it otherwise would be if it was completely a capitalist system. So, profit gets squeezed because wages go up. The Ricardian theory of the falling rate of profitability is that workers are asking for too much money. That has a modern analogy.  There are neo-Ricardians, who argue that the law we just discussed earlier, of the rising organic composition-the rising machinery and costs with respect to labor-is not the reason for the falling rate of profit. They say the real reason is the rise in wages or a battle between wages and profits in the distribution of income.

Marx said the classical economists made a great discovery here. They recognized that there is a falling profitability in capitalism and that threatens the future of capitalism because if profitability continues to fall, then capitalism won’t work.  Capitalism is a mode of production for profit, for private profit. If profitability is falling, then capitalism can break down.  This conclusion was very dangerous to propose.  So later on, there was what you might call a counter-revolution in economics, called “neo-classical economics,”.  The idea of a falling profitability disappears. We don’t talk about profit anymore and we certainly don’t want to suggest that profits are created through the exploitation of labor. because that means that capitalism is both an exploitative system and also will fail.

Marx said it was a really important point that the classical economists are making, but Marxism goes further.  Marx says we’ve explained the real nature of the process of profitability and what it means for capitalism. We’ve gone beyond the classical economists and we’ve come up with a critique of the economy that demonstrates the inequality and class struggle within capitalism and the way in which capitalism exploits workers, but also faces its own demise.

DJ: Because they would have thought it facilitated production. In other words, for Smith, you were mentioning the competition that leads to profit rates falling, and that this was going to compel-I think Smith called them the stock-holders-to invest more and raise wages. That’s the Wealth of Nations, the accumulation of it.

I wanted to return back to Engels on the law of profitability and his relationship to the 2nd International. In a 2014 response to David Harvey, you mention that while obviously Marxists such as Lenin and Luxemburg were aware of the falling rate of profit they didn’t consider it the main driver of crises. You write: “The early Marxists after Marx: Kautsky, Lenin, Bukharin, Luxemburg, Hilferding and the Stalinist economist, Varga, rejected the [law of the tendency of the rate of profit to fall] as driver of a Marxist theory of crises.  Indeed, it was only in the 1920s and 1930s that Henryk Grossman and Paul Mattick put forward the [law of the tendency of the rate of profit to fall].”[4] I am thinking of Engels’ relationship, as Marx’s comrade, to the Second International, in this Belle Epoch of communism.  Do you think the Second International did receive or understand what he was trying to transmit to them in terms of the law of profitability? He is in direct correspondence with Kautsky while he is publishing these volumes.

MR: Well, there are two points here, I think. To be fair, the majority of revolutionary socialists at the time had not read volumes 2 and 3. They weren’t available; probably only available in German. Obviously, that’s important for the German Social-Democratic Party but for other countries, for England, they weren’t really available. So, they were relying upon the views of the senior members of the Second International to present to them Marx’s explanation of what was going on in capitalism. In particular, to explain to them why there were crises in capitalism. The leaders of the International were saying, “Yes, there are crises.”  Well, most of the leaders were. Bernstein came to a different view, namely that there weren’t going to be crises in modern capitalism; instead he thought it was going to be a gradual progress towards socialism which becomes a better way of running things because it’s nicer, it’s fairer, it’s more equal. There were no crises of production in capitalism, as such — it was just an unequal, unjust system.

That’s not the view of Marx and Engels. They see it is as crisis-ridden system as well and it relates in particular to what is happening to profitability. But the revolutionary socialist leadership of the 2nd International had not really read volumes 2 or 3, one of the big exceptions being, of course, Luxemburg.  She tried to argue against Kautsky and Bernstein, who were saying that crises weren’t going to happen in capitalism. She came up with a theory that crises were going to happen because there was too much being produced that can’t be sold to the workers.  So there had to be new markets, out in what we used to call the “Third World,” which we apparently now call the “Global South.” That’s why Imperialism took place; through colonialism. And that was her explanation of crises.

But nobody really got to the heart of why there are crises in the advanced capitalist world based on the law of the tendency of the rate of profit to fall.  This law was generally ignored or dismissed by the leading members of the 2nd International at the time. They looked for other theories. They looked for the fact that the workers didn’t earn enough to buy back all the goods, or that there was an anarchic process going on in capitalism where nothing was planned, so you couldn’t control it.  So, it got unstable and so on; the finance sector got too powerful, leading to financial crashes. So, the theory of the law of profitability got lost.

That’s one explanation. The other explanation is that the law of profitability implies that capitalist crises cannot be resolved within capitalism and the only solution is the overthrow of capitalism and its replacement by another mode of production. Now that is somewhat frightening to people who prefer a gradual process of change, which became the dominant theme in Social Democracy.  They found the law of profitability uncomfortable and would prefer to ignore it and look for something else. I think those are the two reasons: ignorance and a lack of comfort!

DJ: I am thinking about something you said earlier about the cycles—the 8 to 10-year cycles of profitability. The classic example is people thrown out onto the street and starving, detailed in The Condition of the Working-Class in England[5] in much better language than I will ever be able to write. Really vivid detail. Do you think that the misunderstanding or the downplaying of the law of profitability had an effect on the success of revolutions of the 2nd and 3rd Internationals?

MR: Well, I would like to think that when we are sitting here discussing all these issues is that the point of discussing, analyzing, reading, writing-is to raise our understanding of what is going on. So, ideas, theories, are necessary, are they not? I know Engels said an ounce of action is worth a ton of theory, but nevertheless, we still need that ton of theory in order to understand what type of action to take and what sort of action to take. It is necessary for us to try to get as clear as we can about the processes in capitalism, about its laws of motion, so that we can understand how things are.

I can take an example right now in 2020. We will have, in a few weeks, a new president of the United States who will presumably be sitting in the White House if “The Donald” has finally exited.  He is going to advocate a spending program at some level in order to put right U.S. capitalism and so are other governments doing similar. My view is that the capitalist sector is larger than any other sector in the economy; it is way larger than the public sector-and all the investment decisions in the world are made by capitalists in the capitalist sector. If their profitability isn’t high enough, then it doesn’t matter how much the government spends on a few bridges and roads and other projects; it’s not going to take the capitalist economy forward sufficiently to restore levels of employment, investment and production even to the very poor levels of the last 15 or 20 years.

That conclusion comes from understanding the law of profitability. I am using the law to explain that a Keynesian-style fiscal-stimulus policy, namely that if governments spend money, governments can get capitalism out of the crisis, won’t work—at least not over the medium-term, though it might work for a year or two. Basically, it won’t work unless profitability rises. So that’s why theory becomes relevant to actual practical things that we must advocate in the labor movement. Yes, we want workers to have better wages; yes, we want governments to spend money on services and conditions; but don’t expect that to solve capitalism’s crises. It’s won’t. We need to change the mode of production. That’s how we pose the question in the movement.

MB: Why, in your view, should people read Marx’s writings when crises like the Great Recession or the coronavirus occur?

MR: Just to take an example of Engels, when Engels was writing in the 1880s after Marx’s death, he noticed that the boom and slump situation was somewhat altered. Economies seemed to be stagnating. It was what I call in my book ‘The Long Depression’ the first long depression of capitalism, from about 1873 up until the early 1890s, depending on the country. This was a period of long stagnation where economies had slumps, but recoveries were weak, so it was a very depressed period. This forced capitalists, because profitability had fallen so much, to expand into world markets, and we had the development of imperialism.

Engels pointed out that this development was going to lead to a major imperialist war; a confrontation unlike anything ever seen before.  Millions were going to die. This would be the end of old monarchies; old regimes will collapse and may be an opportunity for workers’ revolutions that will come out of it. That was a very accurate forecast about what did actually happen in 1914 and after.  So, we can analyze economies and use them to understand what’s going to happen, and we can also use the laws of motion of capitalism to predict what is likely to happen and so educate ourselves in the labor movement for the right course of action to change things.

DJ: Do you see it as an indicator, or in other words, like a way of, I think I read in an interview that you did recently — with NegationMag, I think you had suggested using it as the health of the economy.[6]

MR: Yes, I consider it the law of profitability as providing a key health indicator of the capitalist economy.  Of course, profitability is not an indicator of what we need, as social needs are decent public services, decent life expectancy and other things. But from the point of view of capitalism, what is happening to the average profitability of capital, in national economies and internationally, is a pretty good indicator of the health of the capitalist economy. That is why if it’s declining, we can expect a deterioration of capitalist production, investment, and a reversal of the productive forces.

DJ: So, going back to an ounce of action and a ton of theory in the quote from Engels in that case — so, in terms of an indicator, do you see that as an indicator of timing actions then, would that be a way in which a labor movement would go — ‘oh, maybe profitability is actually too high right now’ and you would kind of wait for it to slump more? I mean this kind of goes back to my question also about the —

MR: That’s a bit too one-to-one, because there are obviously other factors at different levels of abstraction. It is quite a high level of abstraction to look at profitability — at lower levels, we must note what’s happening to credit, what’s happening to debt, what’s happening to wages, and what are the policies of particular governments in reaction to what’s going on in their economies. These factors all play a role in our understanding of what action to adopt in the labor movement, and not just to react but also to pro-act.  So it would be very crude to say that because profitability is high we have got to wait for it to fall before we can take action. I think that would be the sort of determinist view that would be totally useless for us to apply. Profitability is more like a thermometer or a barometer if you’d like, of what’s happening in the capitalist economy.  We can use it as a guide to what trends we are going through.

I argue in my ‘Long Depression’ book, for example, that we can divide changes in profitability into four repeating periods.  You have spring, summer, autumn and winter periods of profitability. In a spring period, profitability recovers from depression. As profitability rises, workers can get more jobs, and as investment rises, they can put pressure on capitalists to make concessions. And so, you can get gains in public services and wages and so on.  The post-war period, from about ’46-’64 was such a ‘spring’ period of recovery for the labor movement.

Then comes the “summer” period when profitability falls, as it did from ’64-’82.  Now you get workers trying to preserve their gains from the spring period and capitalists trying to take them back because profitability is falling.  Now you get major class struggles. When I was young adult like you guys, it was in that period of ’64-’82, which, looking back, was a revolutionary period. Lots of military and fascist regimes were overthrown in Europe and we had major class struggles across the world: the Vietnam war (or the American war in Vietnam to be more exact).  Major events took place in that period because profitability was falling and workers were strong enough to fight.  But they got defeated by slumps and by events which are at a lower level of abstraction, like the crushing of the trade unions and so on.  So, from the early 1980s to the end of the century, it was the ‘autumn period’, what we now call the neoliberal period, was profitability recovered a bit, as capitalists kept workers under their thumbs. But that recovery in profitability came to an end at the end of the twentieth century and for the last two decades, it has been a winter period, a period of depression like the 1930s where profitability has been low and falling. So, capitalism has not done very well but workers are still too weak from the previous period to do anything fundamentally to change things

Maybe you could argue, that if we have a recovery in profitability from here in 2021 for say the next 10 or 15, years, if we do — I’m not sure we will actually — but if we do, then that might lay the basis for a new strength in the labor movement and a situation for evolutionary struggle later on.  In that sense, profitability can be some sort of guide to what’s going on.

DJ: That actually leads into my next question, because you have a quote in your book, when talking about the condition of the working class you mention former Bank of England governor Mark Carney. You’ve recently suggested that the period since 2009 has repeated the Engels pause. But I guess you just suggested actually we are repeating the 1840s because the 1850s, after the 1848 revolution, was followed by a boom period. What does that imply?

MR: I think you’re right, I think in the 1840s was a depressed period, which saw the end of the old manufacturing or the old artisan workers being replaced by machines which Engels was actually managing in Manchester.  With the development of machinery, there was a shedding of labor, old labor work disappeared and workers entered new industries where they were operating machines for the first time. We could say that this period now could be something similar. Lots of old industries have died in the neoliberal period, and now we have the rise of tech industries where people work on software and computers. In these industries workers are not organized on the whole, but they could be and they will have increased strength over the next ten years.

Carney made the point that we can see a gap between the productivity of workers and their wages, just as we did in the 1840s, which Engels points out in his Condition of the Working Class in England.  Engels argued there was a pause in wage rises.  He doesn’t use the word “pause” but we can. There was a rise in the productivity of labor through machines, so a gap develops between productivity growth and wage rises. And that’s similar to now, particularly in the United States.

MB: Do you think that the 1840”s is more similar to what’s going on now than maybe the 1870s which required actions like World War I?

MR: Well, I just gave you my four periods of spring, summer, autumn, winter. In my view the 1840s was a summer period, the profitability of capitalism was falling and workers’ wages came under pressure, after recovering a bit in the spring after the Napoleonic Wars when there were new industries. The summer period of the 1840s led to the development of the Chartists in England and eventually to the 1848 revolutions across Europe.  Only with the defeat of the 1848 revolutions did you have a long boom, an autumn period, like the neoliberal period that we had after the 1980s. There was a long boom from 1850 to 1870.  Indeed, Marx and Engels complained that nothing was going on. Then the long depression of the mid-1870s to the 1890s was the winter period with low growth, low investment, low employment.  As in the case of the long depression of the late 19th century, we have something similar now.

Will that lead to imperialist wars as in 1914? Well, in the late 19th century, there was no immediate wars, because economies recovered in a new spring period. The development of imperialism then eventually led to war, but not the depression itself. I suspect that is what is likely to happen this time.  The current depression won’t lead to world war but there is a rising trade and technology war between the U.S. and China.  Over the next 10 to 15 years this is the big thing. It could possibly lead to war, but only if governments have people at the head of them who are militaristic in their approach rather than trying to keep business going. At the moment, with Trump removed, we don’t appear to have that likely at least for the next four years.

DJ: Two moments in the 20th century come to mind: 1917 and 1968. Were these summer periods for profitability? Because they weren’t winter periods, right?”

MR: In the case of the 1960s, that was the start of a summer period. The rate of profit in the major economies started to fall in the mid-1960s, and we had the Vietnam war underway. We had a number of factors coming together which caused the struggles of 1968. Particularly in Europe, with the weakness of the French capitalists at the time. The French social-democratic republican constitution was collapsing and De Gaulle applied a presidential semi-Bonapartist constitution. That produced a reaction from the workers, we had the May ’68 uprising.  This was different in many ways from the World War of 1914-1918, although the First World War came in a “summer period” as in 1968. But 1917 came in the middle of the World War which makes this a little bit more confusing.  More research is needed, I think!

DJ: I have one more question, I was going to return to Engels for this great quote you have at the end of your book, from a letter that he writes to a young socialist who was praising him by saying “you’re the father of descriptive economics.” And Engels writes back, “Well, you know, Adam Smith and Boisguilbert, all sorts of people describe economics.” I was curious about your opinion on this because you go on to say over the next couple of pages that Engels was more than a descriptive economist.

MR: Well, I think that’s right. Obviously, he has great powers of observation and description —The Condition of the Working Class in England is a masterpiece of sociological description and analysis about the poverty, the conditions, and how they came about. But it’s also a theoretical analysis, because in that book, he develops one of the key categories of Marxist economics, the so-called “reserve army of labor.” Capitalism tends to produce unemployment — it produces employment, but also unemployment, and so there’s always a “reserve army” — a layer of people who are out of work, looking for work, in a position where they can’t get work; “precarious employment” we call it now. And this reserve army is larger or smaller depending on the health of the economic cycle. As Engels points out, this is an important weapon to keep workers’ wages down and keep up exploitation.

In his later works, after Marx’s death, Engels raises a number of other important Marxist economic categories. Two in particular spring to mind.  First of all, there is the idea of turnover of capital; that the rate of profit depends partly on how quickly capitalists can turn over production with the machinery and the labor force they have.  This is another counteracting factor to the falling rate of profit. Engels inserted this turnover category into Capital Volume 3, so that’s a theoretical contribution he makes.

Also, very modern these days, was the concept of “fictitious capital,” namely investment in bonds, stocks, and other financial assets and derivatives around them. This sort of investment isn’t actually producing anything productive; it’s not producing any value.  It’s investing in financial assets in the hope that stocks and bonds are based upon some real value that’s being created in production by companies. But this investment could turn out to be fictitious because its price could be way above the actual real value that the companies are producing out of the workers.  Remember value only comes from labor in Marxist theory. If financial assets are priced way above any real value in a company, it can become fictitious. It’s exposed as fictitious when there’s a collapse in the economy, and the stock and the bond markets collapse or all those gains that I’d been making in bitcoin suddenly disappear just as I was expecting to cash in. That concept of fictitious capital comes from Engels.  He raised it very early on and Marx takes it up in Volume 3.

MB: Marx invented a new mode of "critique" called "ideology critique"— a term derived from Engels' writings — and called for a "ruthless critique of all that exists" in his early writings.[7] Marx developed ideology critique in his many critiques of political economy, philosophy, literature, politics, anthropology, mathematics, law, culture, gender, race, the environment, etc., and argued, in the postface to Capital, that "critique represents... the class whose vocation in history is the overthrow of the capitalist mode of production and the final abolition of all classes — the proletariat."[8] Your writings, however, specialize in and popularize Marxian economics. Does this mean you think radical intellectuals should abandon Marx's critique of ideology as Latour, Negri, and Zizek argue?

MR: Marxism is the materialist conception of history, and history includes ideology. If we were to take the position that everything depends on economics and nothing depends on the action of human beings that would be wrong. As Marx said, men make their own history, but they make it under the conditions in which they are placed. So, ideology and the economic foundations of society are connected in a dialectical way. That means that we do need to understand and criticize ideology, and how ideology relates to the views of different class interests in a particular social and economic formation.

So, arguments about ideology, can’t just be ignored. We have to analyze them and see how they relate to the process of the capitalist mode of production. My role, insofar as I have one, is to concentrate on the economic processes going on.  That doesn’t mean I ignore ideological criticism, but other people are better at that than me. But I would say to these other people, who are better at that than me, that they have to remember that everything is related to the economic processes going on and what’s happening to the health of the capitalist economy and the two things cannot be separated. |P

[1] Friedrich Engels, “Outlines of a Critique of Political Economy,” Deutsch-Französische Jahrbücher,February 1843, available online at <>

[2] Ibid.

[3] Karl Marx, “Marx to Engels, 30 April 1868” in Karl Marx Friedrich Engels Collected Works (London: Lawrence & Wishart, 2010), Vol. 43, 24.

[4] Michael Roberts, “Monomania and crisis theory: a reply to David Harvey,” The Next Recession, 2014,  <>

[5] Friedrich Engels, The Condition of the Working-class in England, 1845 available online at <> 

[6] Andrew McWhinney, Tommy McGlone, and Josh Messite, “Interview with Michael Roberts,” NegationMag (January 2021), <>

[7] Karl Marx, “For the ruthless criticism of everything existing,” letter to Arnold Ruge (September, 1843), in Robert Tucker, ed., Marx-Engels Reader (New York: Norton, 1978), 12–15. Also available online at <>.

[8]  Karl Marx, Capital: a critique of political economy (Chicago: Charles H. Kerr & Company, 1915), Vol. 1, 20.