Jack Rasmus

Periodically, my readers ask where my views ‘fit’ in the spectrum of left–and even Marxist–economists and economics. The following is my reply to a reader inquiring to that point. Specifically, the inquiry asked how my views differ from those of Michael Hudson, Michael Roberts, and Richard Wolff–as well as where my views fit in relation to Marx’s economics and what’s called Heterodox economics.

Dr. RASMUS REPLY:

Thanks for sharing your thoughts. I have a somewhat different take on Hudson, Roberts, and Wolff, while recognizing they all make important contributions on the left to the critique of contemporary US capitalism.

That said, to elaborate on my prior comments on the three:

Hudson is very good on critiquing finance capital but should reformulate his useful critique of global finance capital into a more coherent critique of contemporary US imperialism. For that, however, he’d have to move closer to a Marxist economic analysis, restating his contributions to the role of finance capital to imperialism in the 21st century. Hudson’s a version of ‘Left Minskyanism’ (like Steve Keen and others). Hudson also has little to say about the working class and how capitalism is intensifying worker exploitation at the level of labor markets. That’s probably because he has few experiences or roots in the working class itself. Should he restate and integrate his views on finance capital more in relation to working class experience and US imperialism it would improve his critique of Capital, which is still too one dimensional. However, should he do that I think he’d cut off some of his consulting contacts which he enjoys doing. As for his ‘debt jubilee’ idea, as he now formulates it, it is politically a non starter and makes him appear as hopelessly utopian (not unlike Utopian Socialists that Marx critiqued). That said, I agree the debt question needs to be better addressed by Marxists. Debt is one of late, contemporary capitalism’s devices to keep itself going, as well as a means to expand exploitation of labor more efficiently. Debt is also a contradiction for capital, a weakness of capitalism driving it toward more frequent financial crises. And one must distinguish debt in relation to worker households, business debt, and govt debt. They’re different but interrelated, especially when crises occur. Finally, debt magnitude alone is not the problem; it’s the ability to finance (pay for) it when crises depress cash flow (by households, business or govts) and thus prevent the servicing of that debt. That’s when debt crises erupt. Finally, that means Hudson’s debt jubilee is class neutral, which is a mistake. Do we really want to wipe out all capitalist investors’ speculative debt? Is it the same as working class household debt or even local government debt? In short, Hudson’s ‘debt jubilee’ needs a more class analysis and recommendation.

As for Roberts, he does good work too. His blog is worth reading if you can get by his almost fetish preoccupation with Marx’s unpublished proposition of the tendency of the rate of profit to fall as the primary, almost sole, cause of short term capitalist business cycle crises. Roberts is an example of the limits of much of anglo-american marxist economic analysis, which doesn’t understand finance capital in the current era and how it is destabilizing their own system.  The reason for his failure to understand this is that rigid interpretation of the tendency of the rate of profit to fall proposition found in Marx’s unpublished volumes of Capital. Roberts thinks that’s the prime driver of capitalist crises, including depressions. I don’t. Nor do I agree we’re in a ‘long depression’ era. We’re in a very volatile era of capitalist minimal growth periods and frequent economic downturns. That’s not a depression. But he distorts the idea of depression to fit his data that shows a clear slowing of real asset investment since 2000 (i.e. capital accumulation slowdown), which I agree is occurring. However we differ as to why. His explanation again is the falling rate of profit tendency which I don’t think is the answer. That answer is more complex. But he tends toward that falling rate single causal explanation. The falling rate tendency was never accepted by Marx as the primary driver of capitalist business cycles (which Roberts suggests). In fact, it had nothing to do with short term business cycle fluctuations, whether recessions, great recessions, or depressions. It was more a long run supply side explanation for capitalism’s inevitable trajectory toward breakdown.

Roberts, Kliman and other anglo-american ‘marxists’ are inferior in their analysis of current capitalism compared to some of the Europeans and Chinese who are more willing to acknowledge global 21st century capital has changed from Marx’s mid-19th century, especially in the area of finance capital and technological change.

In reply to where I stand in relation to these three (who all do make useful, though partial, contributions to analysis) you might want to read my forthcoming lengthy article in the Beijing, World Review of Political Economy later this year entitled: ‘The Changing Character of Late Capitalist Exploitation in Production and Exchange’, where I look at the implications of Artificial Intelligence and other next generation technologies on exploitation of the working class and capitalist evolution, as well as in the piece on what Marx called ‘secondary exploitation’ (exploitation via exchange relations)

I do not have the same optimistic view of producers coops, workers self-management, etc. that Richard Wolff has.  While it’s good to educate workers they are more important to capitalists than capitalists are to them, and that they could run their businesses in a socialist economy, to employ producers coops as a means of defeating capitalism and getting to socialism is misleading at best.  Coops are tolerated by capitalism (in Europe but not in US). They’ll let workers dabble in it, in insignificant sectors but never allow it to expand. Where coops work (e.g. Spain) it’s because the capitalists tolerate it. We should be proposing political strategies to contend for the institutions of capitalist state power. That’s the only road to change. To use Marx’s terminology: political relations must first change before economic relations in production can do so. There’s no short cuts. Capitalists can and will prevent coops from evolving into a threat–especially US capitalists. It will take an independent new party for real change, not producer coops. That ‘organizational question’ is the only real question before the left today. Nothing will really change without it being resolved first. But Wolff doesn’t sufficiently address that question (nor Roberts or Hudson at all). That’s because he’s a lifelong academic and has no experience or background in the working class to draw upon, I believe. That’s true also for Hudson. I’m not sure of Roberts, who appears to have come out of some corporate financial background.

As for my own work, I started out as a labor economist–after spending 15 years in the union movement at the grass roots level (not some staff job as an organizer, rep, local elected officer, negotiator, strike coordinator, etc.  I then spent 19 years in tech companies analyzing markets & technology evolution. Only then, at age 60 did I enter academia and, like yourself, as an adjunct (by choice to enable time to write), for the past 15 yrs.(during which I helped organize St. Marys college and negotiate its first contract + did a 3 yr. stint as national VP for national Writers Union, UAW 1989)  I keep contacts with union former acquaintances in various unions. I evolved into a macro economist along the way, and then a macro analyst increasingly focused on finance capital and its role in American imperialism.

I respect the work of the late Keynesian, Hyman Minsky (as does Hudson, who I’d call a ‘left Minskyan’). There’s much in Keynes’ original works still of value and relevance. As for Marx, he’s still very much fundamental. The system still runs on labor exploitation at its core. But Marx’s economics needs to be brought into the 21st century. Mid-19th century European (and esp. English) capitalism was undeveloped in terms of money, banking, and finance compared to today. Anglo-American Marxists like Roberts, Kliman and other are content to just repeat mid-19th century Marx as stated, as if capitalism stopped evolving ever since. They prefer to select quotes and passages from Marx and then fit them into today’s capitalist world. Like fitting square pegs in round holes. They’re more marxist philologists than economists.

If you want to follow the evolution of my own economic views, I suggest first my 2010 book, ‘Epic Recession: Prelude to Depression’ (Pluto press or available my blog). The first half of that book is a theoretical critique of Keynes, Minsky, and others; the second half is an economic history analysis of the 2008-10 crash, including the mutual role of financial and real asset cycles behind the crash.

A further view of my take on European contemporary imperialism is my 2015 book, ‘Looting Greece: A New Financial Imperialism Emerges’, Clarity Press (emphasis on the imperialism and specifically how financial imperialism works in Europe as an extension of Hobson-Hilferding-Lenin’s views on ‘Imperialism’ at early 20th century.

My 2016 book, ‘Systemic Fragility in the Global Economy‘ (Clarity 2017) entire second half is a review and critique of Economic theory from Smith and the classicalists to Marx, to the post-Marx neoclassical attack on Marx, to Keynes (in the original not the bastardized versions of Keynes), contemporary ‘mechanical’ marxists (as I call them) to Minsky. That book’s last chapter concludes with my own theoretical views at the time (5 yrs ago) integrating financial cycles and real cycles analyses.  It’s an extension and innovation on views of Keynes, Minsky, and Marx, concluding with a first pass at an equation representing ‘fragility’ in the global capitalist system in the 21st century-where fragility is a term that represents likelihood of a financial instability event.

My 2018 book, ‘Central Bankers at the End of Their Ropes‘ is a critique of both theory and practices of capitalist central banks–i.e. of monetary theory and ‘monetarism’ in theory. It traces the history of central banks and monetary theory from the formation of the Federal Reserve in 1913 to present and includes other major central banks in Europe, China, etc. A prequel describing the evolution of central banks from 1780 to 1913, and US depressions along the way, is my 2020 book, ‘Alexander Hamilton and the Origins of the Fed‘, Lexington books.

My forthcoming World review of Political Economy article noted above is a foray into explaining (and expanding) Marxist exploitation theory in light of the last 4 decades of capitalist evolution in general, and specifically where that’s going in the wake of widespread implementation of Artificial Intelligence, 5G, cybersecurity, cloud computing, etc. technologies. Finally, I’ll address some of the themes further in my forthcoming book, ‘The Viral Economy and Its Consequences‘. It’s both a further economic theory analysis as well as an analysis of US economic policy evolution in the most recent stage of Neoliberalism, and thus a continuation of that historical policy evolution of Neoliberalism since 1980 and Reaganomics, as described in my 2020 book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump‘, Clarity, 2020.

Well, there you have my own perspectives and how they differ theoretically from the works of Hudson, Roberts, and Wolff. I’m probably more a ‘political’ economist than they, who is deeply critical of bourgeois economics (which is mostly ideology) but which deserves attention where it’s not ideology. I’m more focused on capitalist economic policy and its evolution, not just theory. In theory I believe Keynes, Minsky and others–not just Marx–have made worthwhile contributions to understanding capitalism. I’m also more focused on the American Empire and imperialism than the three (Hudson, Roberts, even Wolff) and why it’s the greatest danger as the US empire weakens and its current neocon-capitalist-political elites strike out more aggressively to try to restore their hegemony.  I’m also more concerned with the changes of capitalist technologies today and their impact on the working class and unions (what Marx would call ‘forces of production’).

Most marxist economists today would probably not call me a marxist economist since I’m not reluctant to critique Marx where his views need further development after 150 years; nor critiquing Lenin since his views on Imperialism require upgrading as well. Today’s Marxist economists would probably call me a revisionist (when in fact all I intend is to not become a marxist philologist–or ‘mechanical’ marxist–like them). Marx’s Capital can’t be treated as a bible, where every passage or proposition is considered fixed and eternally true exactly as stated. That’s to turn Marx’s economics into a form of ideology.

Economically, I’m somewhere well left of Minsky and his epigones like Keen and Hudson on the one hand, and closer to European marxists like Heinrich and some Chinese, than to Anglo-American traditional immutable Marxism. I’m not really a heterodox economist either, whose analyses is ‘all over the block’ as they say, tend toward single issue analyses, and much of which is at the service of Identity politics, the latter of which I personally reject as a scourge on the American left.

Hope that helps clarify your query as to where I stand in terms of economic theory and differ re. the three others (Hudson, Roberts, Wolff), who all do good work in their own limited way and are worth reading but who are but precursors to a more accurate and complete analysis of 21st century capitalism and imperialism.

Jack Rasmus7-2-22