Theory

By Michael Roberts

At this year’s Historical Materialism conference, I attended a session on what is called ‘fossil fuel capitalism’. Lukas Slothius from the LSE argued that fossil fuel companies often claim to be leading the fight against climate change because they are investing in new technologies to reduce carbon emissions, like carbon capture systems or hydrogen. But these systems do not deliver emission reductions in any appreciable ways and are extremely expensive. Really this ‘technology’ claim by the fossil fuel industry is just allowing them to carry on with fossil fuel exploration and production unhindered.

Matt Huber from Syracuse University outlined how the key categories in Marx’s Capital – value, the hidden abode of production, surplus value, the accumulation of capital, primitive accumulation and the expropriation of the expropriators– provide a framework that is very relevant to the role of fossil fuel capitalism in the climate crisis.

Knowledge companies and their profits

In an insightful session on digital commodities, value and AI, young Luis Arboledas-Lérida did an excellent demolition job of the claim by some authors that the income of the knowledge companies (the Famous Five or Magnificent Seven) was in the form of monopoly rents, not profits. Lucas refuted the arguments that these rents came from monopoly ‘mark-ups’ or from the claim that as knowledge had no value created by labour, any income must come from proprietary ownership, like the ownership of land.

Lucas argued that such theories were a misunderstanding of Marx’s theory of ground rent. Indeed, the bulk of income gained by the knowledge companies is straight forward profits from the sale of advertising (Meta, Twitter etc) or software (Microsoft). Moreover, the claim that knowledge workers generate no value for their employers because it is mental labour is clearly nonsense and is the opposite of Marx’s materialist conception of labour, whether physical or mental. In my view, such theories seem to have kinship with the ludicrous concept of ‘techno-feudalism’ and the death of capitalism.

Sessions on Marx’s theory of value

There were many sessions on Marx’s value theory; including discussing yet again the so-called transformation problem of modifying values in labour time into prices of production and whether Marx achieved that transformation with logical consistency. This discussion has gone on for decades or even longer. I think it has been successfully resolved by various Marxist authors since the publication of Capital Volume 3. Yet I can go back to my review of HM 2016 and find the same discussions. It seems some people are either not satisfied with Marx’s solution or maybe just like gnawing on a bone forever.

A more interesting session on value theory involved Nikolaos Chatzarakis from the New School where he used the physics theory of energy conservation as an analogy for Marx’s value theory. In the energy conservation theory what energy goes in, comes out (with maybe some loss), but it never comes out with more energy than at the start. Energy cannot be created out of nothing. Similarly, in the capitalist production process what goes as the effort of labour power in value (measured in labour time) can never be more than the labour that went into production. So machines cannot create new value on top of labour. And that implies that full automation is impossible under capitalism – it would not be capitalism.

In the same session, John Smith, the winner of the Baran-Sweezy prize for his groundbreaking work on imperialism back in 2016, argued that there was an important conceptual difference between the rate of exploitation and the rate of surplus value. The former can be measured in previous class societies like feudalism and slavery, but the latter only arises in capitalism. John argued that we need to recognise that exploitation can go beyond just the Marxist category of surplus value, especially in the so-called Global South, the arena of ‘super-exploitation’. John seemed to argue that Marx’s category of of surplus value should be amended or even abandoned. My view on this category of super-exploitation can be found here.

Unequal exchange between the Global North and South

Talking of imperialist exploitation by the rich countries over the periphery, Conrad Herold from Hofstra University offered an important critique of the latest measurements of unequal exchange in international trade. These show massive transfers of value (and resources) from the so-called Global South to the imperialist core. Conrad was sceptical of the validity of using PPP exchange rates to discern the value transfer as nearly all the current studies do. Measuring transfers by differences in exchange rates and purchasing power in countries delinks it from value and so cannot be an accurate measure of the value transfers.

For example, a recent study by Jason Hickel et al comes up with a staggering transfer of $62 trillion since 1960 or $152 trillion when accounting for lost growth. This appropriation through unequal exchange represents up to 7% of Northern GDP and 9% of Southern GDP. This is way more than the measure that Guglielmo Carchedi and I found in our work on the Economics of Modern Imperialism. We did not use the PPP exchange rate formula but relied instead on value incorporated into the export trade of different countries.

This year’s HM themes were imperialism and climate change and so there were many sessions on these (literally) burning issues. In one session, Tavo Espinosa and AK Norris argued that racial segregation in the US allowed capital to extract surplus profits from black labour within the country and not just through imperialist transfers from abroad.

The nature of capitalist crisis

There was also a session on Marxist theories of profit in relation to ‘late capitalism’ and imperialism. I was unable to attend but looking at the abstracts, I found a paper by Ian da Silva from Fluminense Federal University (PPGE-UFF), Brasil interesting. Here is how the abstract goes:

“In order to illustrate our argument, we briefly present the debate that took place in 2013 on the Monthly Review blog, which began with a publication by Michael Heinrich denying the validity of the law, in which some of his main interlocutors on this subject were Michael Roberts and Andrew Kliman, defending the validity of the law. They argued that this law is the basis for the construction of a theory of crisis in Marx, taking it as the cause of crisis itself. But I conclude that the participants in the debate are mistaken in that they do not understand the meaning of “law” in Marx, comprehending it in an empirical way. Instead, agreeing with the validity of the law, I argue that the fall in the rate of profit cannot be the cause of the crisis, but only one of its forms of manifestation. The cause of the crisis is the contradiction between the social conditions of production and the private conditions of appropriation.”

It seems we are back with the discussion on the causes of crises under capitalism that I outlined in my previous post (Part One on the HM conference) concerning the session on Ernest Mandel’s book, Late Capitalism. Apparently, according to da Silva, crises have nothing to do with Marx’s law of profitability. Instead crises are caused by “the contradiction between the social conditions of production and the private conditions of appropriation.” That sounds like a tautology to me, not a causal connection.

‘The Eye of the Master’ takes the best book award

Finally, the winner of this year’s Isaac Deutscher prize for the best book of 2024 was Matteo Pasquinelli’s The Eye of the Master; an insightful social history of artificial intelligence. AI is the topical issue and I reviewed this book last year.

From the blog of Michael Roberts. The original, with all charts and hyperlinks, can be found here.

The featured image at the top of the article shows the large attendance at HM 2024