By Michael Roberts
This blog was originally published by Michael Roberts on Thursday, 8 August 2024.
The sentence near the end of the article about the death of Lenin led to comments which can be read at the end of the original article here.
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Last weekend the 17th Congress of the World Association of Political Economy (WAPE) took place in Athens, Greece. 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).
I covered the 15th Congress in Shanghai watching online panels. Unfortunately, I was unable to attend the 17th Congress and there were no virtual panels. But using the WAPE conference program, I was able to identify some of the presentations and papers.
I can only select a few papers that came into my orbit. But let’s start with the section on technology. Mike Nolan from the Rochester Institute of Technology presented a paper on Revolutionary Technology: The Political Economy of Left-Wing Digital Infrastructure. Nolan argues that the ‘decentralised nature’ of the internet and online social media tends to fracture and weaken class politics. What is needed is a “unified digital infrastructure” so that “left-wing organizations can share the costs of maintaining infrastructure and, at the same time, better exert control over the form that infrastructure takes”. Sounds sensible, but the feasibility of establishing such ‘left-wing digital infrastructure’ is not clear.
João Romeiro Hermeto of the Free University of Berlin presented on his book, The Paradox of Intellectual Property in Capitalism, in which he discusses the nature of intellectual property under the capitalist mode of production. In particular, he attempts to explain what knowledge is and how it is produced. He emphasizes how knowledge is turned into ‘intellectual property’ by big pharma and the tech giants. What is at stake is the control over the appropriation of social surplus labour, which in capitalism takes the specific form of surplus-value. This is no doubt true, but I was unsure where the book then took us. You may want to compare Hermeto’s analysis of knowledge in his book with Guglielmo Carchedi’s analysis of knowledge and mental labour in our joint book, Capitalism in the 21st Century (see chapter 5, pp 161-187.)
There was a very important section on the WAPE program called quantitative political economy. Thanos Poulakis and Persefoni Tsaliki from the Aristotle University in Thessaloniki revisited their perceptive analysis of purchasing power parity (PPP), the principal way in which the IMF and the World Bank measure GDP in economies. The purpose of the Purchasing Power Parity exchange rate is to convert each country’s local currency into a common baseline currency—usually the US dollar. Thus, economic performance can be compared using a single common currency rather than dozens of national currencies whose market exchange rates can change rapidly.
Poulakis and Tsaliki show that exchange rates are actually determined by real labour costs and if these unit costs were measured carefully, more accurate estimates of PPP would be achieved and more effective foreign exchange rate policies could be designed. Such empirical analysis is not new. See the paper by Francisco Martinez. But Poulakis and Tsaliki have extended previous work now to 163 countries.
An important conclusion from this is that trade surpluses and trade deficits are the direct consequences of the relative competitive positions of nations in terms of real labour costs. So exchange rate devaluations will only have a temporary effect on national competitiveness if the general conditions of production are not improved. As long as the least competitive economies at the international level cannot improve their general technical conditions of production, their national industries will be structurally uncompetitive and as a result, these countries would have permanent trade deficits.
Carlos Alberto Duque Garcia was also there to present on ‘Terms of trade and the rate of profit: a suggested framework and evidence from Latin America’. Carlos Duque from the Autonomous Metropolitan University in Mexico has already done excellent empirical work on waves of profitability in Colombia, entitled Economic Cycles, Investment and Profits in Colombia, 1967-2019. In that paper, Duque found evidence in favour of Marx’s hypothesis that both the rate of profit and the mass of profits determine investment; while on the contrary, there was no evidence that investment determines either the rate of profit or the mass of profits. This was yet another confirmation of Marx’s law of profitability.
Dimitris Paitaridis and Lefteris Tsoulfidis also presented on whether an accurate measure of gross capital stock matters in measuring the rate of profit on capital. This might seem self-evident. But it has become a subject of some debate. Some argue that capital stock cannot be measured using official data because it is based on bogus neoclassical concepts. And it is certainly true that capital stock measures used in official databases (e.g. the EU’s AMECO) are questionable. But the authors have produced a number of excellent papers on capital stock measurements and provide extensive support for the empirical relation between a rising organic composition of capital (capital stock increasing more than variable capital) and a falling rate of profit on capital stock.
Nikolaos Chatzarakis at the New School for Social Research also presented on the nature of long and short cycles in capitalist accumulation. Again, this was further work on cycles that the author and others at the Aristotle University have conducted before. Their cycle model showed periodicity conditioned by the long-run movement of profitability and behind that, the growth of the rate of surplus value as the regulating variable for cycles. Indeed, the extremely valuable contribution to Marxist economic theory and empirical studies by the Marxist scholars in Macedonia and Greece at large cannot be underestimated. See my review of Tsoulfidis and Tsaliki’s groundbreaking book.
And talking of theory, Marx’s law of value came under scrutinization in Fred Moseley’s new book ‘Marx’s Theory of Value in Chapter 1 of Capital: A Critique of Heinrich’s Value Form Interpretation’. I have reviewed the arguments in this book following a debate between Moseley and German Marxist Michael Heinrich at last year’s Historical Materialism conference. I know which side in that debate I was on (Moseley’s).
Importantly, at WAPE 2024, Christos Balomenos from the National and Kapodistrian University of Athens, presented his doctoral thesis: ‘A Theoretical and Archival Investigation of Marx’s Analysis of Interest-Bearing Capital and Credit in the Manuscript of 1864-65 and its editing by Engels.’ In this paper, Balomenos investigated Heinrich’s arguments for the existence of a crucial theoretical shift in Marx’s thought during the 1870s centred around his supposed doubts about the validity of the law of the falling rate of profit. In his investigation, he concludes that “the manuscripts and letters that Heinrich invokes to support his arguments do not substantiate any uncertainty on Marx’s part about the validity of the law of the falling rate of profit nor a shift of his opinion during the 1870s towards the primacy of capitalist circulation, and especially credit, for explaining economic crisis.”
Naturally enough at a conference of this nature, imperialism and China were prominently discussed. But unfortunately, I cannot offer any coverage of these subjects this time. The main plenary at WAPE was on Lenin’s economics, in the 100th year since his premature death from an assassin’s bullet in 1924. There was a battery of leading Marxist economists on the platform. I was invited to speak at this plenary, but, as I said, was unable to make it. However, all is not lost because I shall be online with a special meeting on Lenin’s contribution on 1 September hosted by the UK-based Arise group.
An uneven and inadequate account of this valuable conference – hopefully I can do better next time.
From the blog of Michael Roberts. The original, with all charts and hyperlinks, can be found here.
