A recent Marxist economics conference explored a wide range of topics, including the UN, declining American hegemony, global inequality, Greece, and the rate of profit
Michael Roberts is an Economist in the City of London and a prolific blogger.
Cross-posted from Michael Roberts’ blog
Last weekend the 18th Congress of the World Association of Political Economy (WAPE) took place in Istanbul, Turkey.. WAPE is a Chinese-run academic economics organisation, linking up with Marxist economists globally. “Even though that might seem like bias, the WAPE forums and journals still provide an important outlet to discuss all the developments in the world capitalist economy from a Marxist perspective. Marxist economists from all over the world are welcome to join WAPE and attend WAPE forums.” (WAPE mission statement).
As you would expect, many of the plenary speeches included economists from China as well as those from ‘the West’ and the ‘Global South’. I was invited to attend but was unable to do so, so I cannot report on the subjects of the various plenary speeches. However, I did make a presentation by recorded video (see my You Tube channel).
There were also a series of paper sessions covering themes such as geopolitical economy; macroeconomic modelling; ecology; AI; imperialism and multi-polarity; and of course, China. I have managed to obtain some of the presentations from their authors and so can make some (rather limited) comments.
Let’s start with geopolitics. The first paper session on this theme was about the 80thanniversary of the United Nations. I’m afraid I cannot comment on the papers in this session as I do not have them. But I can make a general point about the history and efficacy of the UN. It was an institution set up in 1945 along with other agencies designed to set the world order after WW2. The IMF was supposed to support advanced capitalist economies that got into financial trouble, using funds mainly financed by the US; the World Bank was supposed to support and help the poor countries of the world to grow and end their poverty; and the UN was supposed to be the international body to ensure peace and offer ‘neutral’ peace-keeping diplomacy and armed forces if necessary to resolve or control conflicts.
The claim was that these organisations were fair and balanced and constructive. In reality, they were agencies to ensure US-led imperialist control over the world. The IMF provides emergency funds under strict conditionalities; but many countries that have governments working in the interests of US imperialism get extra help with fewer conditions (Argentina, Ukraine) while others are starved of funds (Venezuela) or face distress from IMF debt. Based in New York, the UN was not a body of equals; it has a security council where only the top post-war nations have a vote and a veto on anything that the UN does. This has paralysed its role as peacekeeper. Significantly, as the US has lost some of its dominance politically, the UN it has increasingly been ignored by the great powers – whereas the US would go to the UN to get backing for its war in Korea in the 1950s or even the invasion of Iraq in the 2000s (unsuccessfully), increasingly the US now looks for ‘coalitions of the willing’ to bypass the UN and instead uses and expands NATO for its purposes. The UN has not played a role in resolving conflicts in Ukraine, Gaza, Iran or Afghanistan. It is an irrelevance.
That the UN is an irrelevance is further confirmed by the discussions taking place at WAPE and other conferences of the left. The discussion now is about alternatives to US hegemony and imperialism and the hope that ‘multipolarity’, as expressed in the BRICS formation, could be a new development in defeating US dominance over the last 80 years.
There were a number of papers on this theme. I have only one that I can comment on. Prof. Chandrasekhar Saratchand, University of Delhi presented: Neoliberalism and the Transition From the Washington Consensus to MAGA. In his paper, Prof Saratchand argues that the global order post WW2 as described above gave way to neoliberalism, the aim of which was to extract extra surplus value out of the Global South by ‘metropolitan capital’. The so-called Washington Consensus (WC) was the ideological support for this exploitation of the poor countries. The WC argued that only the US and the ‘free democracies ‘ of the West could bring prosperity through “free markets” and unrestricted capital flows. Any resistance to this Consensus by government adopting protectionism or nationalisation was detrimental to the world.
However, China’s rise increasingly undermined the world order (ie US hegemony). So the US switched from ‘engagement’ with China to ‘containment’. The Washington Consensus was also amended post the Great Recession to no longer advocate globalisation and free trade, but instead to support the ‘democratic bloc’ against the ‘autocratic bloc’. Saratchand argues that the US cannot turn the clock back and stay as global leader, despite the aims of the MAGA supporters under Trump in the US. Indeed, the dollar is threatened by multi-polar blocs in the future.
My own paper (as presented by video above) concentrated on the failure of the poor countries of the world to ‘catch up’ with the rich countries after 80 years of the post-war world order. I tried to gauge the gap between the rich and poor countries ie the imperialist core and the dominated periphery. To do this, I measured 1) the average per capita income in each country (taking into account, where we can, the inequality of incomes within countries); 2) the level of labour productivity; and 3) ‘human development’ as defined by the UN. Then I extrapolated the current average growth in these measures to see when the periphery might catch up.
I found that the countries of the Global South (6bn people) are not ‘catching up’ with the Global North (2bn people) and never will in the foreseeable future. The main reasons are that wealth (value) is being persistently transferred from the South to the North AND profitability in the Global South is falling faster than labour productivity growth is rising. However, I did find that China may be the exception because its investment growth is less determined by profitability than in any other major Global South economy. In effect, the Marxist model of uneven and combined development explains best why the periphery is not catching up and will not do so unless the structure of global accumulation and trade is changed – to put it bluntly, unless capitalism/imperialism is replaced by a commonly owned and democratically planned global economy.
Another theme of the conference sessions was macro modelling, in other words working out the cycles of accumulation and growth under capitalism. Costas Passas, a the Greek School of Social Sciences looked at Greek capitalism in his presentation, The Political Economy of Crisis and Recovery in Modern Greece. This was a joint paper with Thanasis Maniatis, both of whom published in our book World in Crisis back in 2018. Passas and Maniatis show that, contrary to recent optimistic mainstream talk, Greece is not really recovering from the terrible years of debt and austerity of the 2010. The central role in any model of capitalism must be profitability; and the current modest recovery in Greece is due to a huge increase in exploitation and an unprecedented devaluation and destruction of capital, the two forces that can raise profitability. But Greek capital still has a very low level of profitability, and so insufficient investment holds back technical change. All the old problems of a weak capitalist economy are exhibited in a renewal of balance of payments problems in Greece. For more on this, see my recent online booklet on Greece.
In another paper, Hiroshi Onishi and Chen Li, of Keio University–Kyoto University and St. Andrew’s University, considered what they called an External Dependency Model of the Capitalist Sector in Labour Supply. They construct an accumulation model based on two assumptions that (1) the level of wages determines the supply of labor; and (2) labor shortages are historically offset by the non-capitalist sector.
This seems to follow the idea of Rosa Luxemburg that capitalist progress depends on the extent of labour supply or demand, not on the relation between the productivity of labour and profitability. Onishi and Chen Li argue that the greater the labor supplied from outside—whether from foreign countries or from non-capitalist sectors such as rural areas—the more intensely capitalists have been able to exploit labor within the capitalist sector. As Western societies become increasingly unable to accept more immigrants due to rising cultural tensions, and as rural labor reserves in Asia become depleted, the exploitation rate will fall, causing a crisis for capitalism. This echoes the theory of the great economic historian J Arthur Lewis.
It is true that immigration and an increased supply of labour is a powerful counteracting factor to falling profitability in capitalist economies, ie it produces a rise in the absolute rate of surplus value. But the presenters seemed to have ignored the most important way capitalism accumulates and expands, ie through mechanisation and thus a rise in relative surplus value. The end of immigration does not necessarily mean a fall in exploitation and therefore a fall in profitability. Unfortunately, Rosa Luxemburg was wrong to think capitalism would collapse if external demand from the periphery fell, and neither is it correct to think capitalism would collapse if the supply of labour globally dried up, even though that would intensify the problem of boosting profitability for capital.
Konstantinos Loizos at the Centre of Planning and Economic Research (KEPE), and Stavros Mavroudeas at Panteon University, Athens, presented a paper Alternative Marxist Theories of Competition: Looking for a New Comprehensive Hypothesis. This argued that any Marxist theory of competition between capitals must involve class struggle as the key element. They refer to Marxist ‘fundamentalists’ (of which I think I am one) who “are right to point out the importance of competition to support innovation in capitalist development.” However, the defining characteristic of capitalism is not competition, but class struggle. The authors argue that class struggle takes two forms: among capitals and between capital and labor and both determine the rate of surplus value and the rate of profit.
Surely, it is the exploitation by capital of labour that determines the size of surplus value and profitability, while competition among capitals determines the distribution of that surplus. For me, the class struggle is between capital and labour. Competition among capitals is not a ‘class struggle’? Many capitals are not many classes. So for me, the charge that “fundamentalists seem to degrade a social relation with political consequences to a technical issue that justifies the tendency for equalization of the rates of profit” is an odd conclusion. If the authors mean that academic Marxists are only ‘interpreting’ the world when ‘the point is to change it’, then there may be truth in that, but to talk of Marx’s law of profitability as a ‘fatalistic law’ that degrades the role of class struggle cannot be right.
Perhaps the most interesting paper presented at WAPE that I have received is that by Greek Marxist economists Ozan Mutlu & Lefteris Tsoulfidis, on Capital Accumulation, Technological Change, and the Rate of Profit in European and the US Economies. This paper makes a significant contribution to Marx’s law of profitability and the ensuing consequences for the major economies in 2025.
In the paper, the authors break up the economies of Europe and the US into productive and unproductive labour sectors and generate rates of profit accordingly. The general rate of profit is for total economy and the net rate of profit is for productive sectors only. They confirm a long run downward trend in the profitability of capital, driven by two factors: a rising organic composition of capital and a rising share of surplus value going into unproductive activities. This leads to a fall in investment over time to “what can be termed “Marx’s moment” or the tipping point of “absolute overaccumulation of capital” as in 2008.
However, a recent development has been a reversal of a rising share of surplus value in the unproductive sectors, which “appears to have contributed to stabilizing the profit rate”since 2008. The authors speculate this reversal could be due to “new technologies (AI? – MR) increasingly being applied to non-production activities, where employment has sharply declined. This is evident in sectors such as finance, real estate and wholesale and retail trade. These trends seem likely to solidify soon and will probably shape the emerging new sixth-long cycle.” The authors refer here to their view that capitalism is in its downward phase of a fifth long cycle and a new sixth cycle may soon start, driven by rising profitability. I am not so sure. https://thenextrecession.wordpress.com/2025/07/27/ai-bubbling-up/
A final point. WAPE contributors are keen to discuss and analyse the possible decline of US hegemony and the rise of a ‘multipolar’ world, personified mainly in the BRICS group. It seems many on the left look to the BRICS to provide an alternative anti-imperialist force that can resist US imperialism in support of working people globally.
I think this is a dangerous illusion. Can we really expect that Putin’s Russia, Xi’s China, Modi’s India, Ayotolla’s Iran, El-Sisi’s Egypt, Subianto’s Indonesia or MbS in Saudi Arabia will lead an internationalist movement of workers to overthrow imperialism? These governments do not work for the international interests of working people, but for the national interests of their respective elites. The ‘class struggle’ globally is between the workers of all these countries and their ruling elites, not between elites of imperialism and the elites of the ‘resistant’ countries. For me, imperialism will only be defeated by movements of the working class in the rich countries, but also in the BRICS.
Apologies to anybody with papers not reported on, or for any misunderstanding of the arguments of those I did consider.
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