In Capital, Vol.3, Marx outlines the tendency of the falling rate of profit as an inevitable outcome of the way capitalist production is organised around wage labour and the private ownership of the means of production. Involved in relentless competition with each other for market share, capitalists constantly employ new technologies in order to increase labour productivity and, thereby, gain an advantage over their competitors. Such advantages, however, are only ever temporary, as competitors are compelled to catch up with productivity increases on their side or go under. Hence, there is a general increase in the organic composition of capital, i.e. while constant capital in the form of technology and machinery is increased, variable capital, living labour is replaced.

Because it is only variable labour which can produce surplus value, the rate of profit inevitably declines. ‘With the progressive decline in the variable capital in relation to the constant capital, this tendency leads to a rising organic composition of the total capital, and the direct result of this is that the rate of surplus-value, with the level of exploitation of labour remaining the same or even rising, is expressed in a steadily falling general rate of profit’ (Marx 1894/1981: 318-19). Capitalism enters a crisis of overaccumulation, in which surplus profits and surplus labour, i.e. unemployed workers, can no longer be brought fruitfully together.

Robinson’s first key contribution is to highlight clearly that it is precisely such an aggravated crisis of overaccumulation, in which the global capitalist economy currently finds itself. There has been a persistent decline in the rate of profit from about 15 per cent in the post-WWII period to ten per cent by the end of the 1980s and six per cent in 2017 (P.13). Against this background, ‘the total cash held in reserves of the world’s 2,000 biggest non-financial corporations increased from $6.6 trillion in 2010 to $14.2 trillion in 2020 … as the global economy stagnated’ (PP.16-17). While corporations have reaped record profits, overall capital investment has declined due to a lack of profitable investment opportunities.

Of course, capitalism has always several options at its disposal to counter economic crisis. Increasing financialization is clearly one way of continuing profit-making, including speculatory investment in currency markets, cryptocurrencies, stock markets and futures markets to name a few. Increasing financialization is heavily based on record debt levels, be it private, corporate or state debt. And national responses to the Covid-19 crisis have further fuelled financial speculation. ‘Recycled into further speculative activity, the injection of state funding into the global financial system during the pandemic expanded even further the gap between the productive economy and fictitious capital as bubbles kept the capitalist economy afloat’ (P.22). In the end, however, only the exploitation of living labour in the productive economy can generate the surplus value, on which financial speculation is based. ‘The entire financial edifice rests on the exploitation of labor in the “real” economy’ (P.36) and any further expansion of fictitious capital will only aggravate the underlying structural crisis of global capitalism.

The second key contribution of Robinson’s book is his evaluation of ‘the second information age’. Yet again, capital presents new technology as the solution to its problems. Unsurprisingly, surplus capital flows into those corporations, which are involved in cutting edge technological development, resulting in a gap between these companies’ material assets and their market capitalization. ‘Apple and Microsoft registered an astounding market capitalization of $1.4 trillion each in early 2020, on the eve of the contagion. By the end of that year this figure had jumped to $2.08 trillion and $1.63 trillion, respectively. Amazon’s capitalization stood at $1.04 trillion going into the pandemic and had climbed to $1.58 trillion by the end of 2020. Alphabet (Google’s parent company) registered a $1.2 trillion capitalization, Samsung $983 billion, Facebook $799 billion, and Alibaba and Tencent some $700 billion each. To give an idea of just how rapidly these tech behemoths have grown, Google’s market capitalization went from under $200 billion in 2008 to over one $1 trillion in 2020, or a 500 percent increase over the decade’ (PP.43-4). Of course, new technology, digitalisation has significantly transformed the way goods and services are being produced. New technology, however, has also further increased the organic composition of capital, putting further downward pressure on the rate of profit.

In other words, new technology can stave off temporarily crisis by providing new profitable investment opportunities. Ultimately, however, ‘any such expansion will run up against the problems that an increase in the organic composition of capital presents for the system, namely the tendency for the rate of profit to fall, a contraction of aggregate demand, and the amassing of profits that cannot be profitably reinvested’ (P.49). Over time, the capitalist crisis of overaccumulation is going to deepen resulting in a general crisis of capitalist rule.

It is here, that Robinson makes his third key contribution by linking the crisis of capitalism to rising geo-political confrontations reflected in the Ukraine war and the increasing tensions between China and the US. As Nicos Poulantzas has pointed out, its relative autonomy allows the state to adjudicate between conflicting interests of various capitalist fractions by sacrificing the interests of a particular fraction at times in order to ensure the continuation of overall capitalist accumulation. At the global level, no such state organization exists. As Robinson argues, what he describes as the transnational state apparatus is too fragmented to impose any coherence on rival transnational capitalist class fractions.

Thus, war suddenly becomes an option for states, partly as an outlet of surplus capital – witness the increasing national spendings on arms and related rising fortunes of arms manufacturers – partly as a way ‘to externalize social and political tensions as they seek to hold together the social order inside the nation-state’ (P.67). In short, ‘the breakdown of the political organization of world capitalism is not the cause but the consequence of contradictions internal to a globally integrated system of capital accumulation’ (P.69).

Finally, Robinson discusses the global climate emergency and related large migratory flows. ‘The ecological crisis makes it very questionable that capitalism can continue to reproduce itself as a global system’ (P.77). And while he may underestimate capitalism’s ability to generate profits in the short term in responding to the climate crisis and thus endure longer – see the discussions around ‘green growth’ or ‘green capitalism’ – his fourth and final contribution is the clarity in which he rejects capitalism as a whole. In line with his Marxist approach, he comprehends that the capitalist mode of production must be changed, full stop. The crisis of capitalism ‘is existential for humanity and for capitalism. If humanity is to survive there is no alternative other than to overthrow global capitalism’ (P.82).

This is rarely spelled out so clearly and it is this final conclusion, which makes Robinson’s book so important. I strongly recommend it!

Andreas Bieler is Professor of Political Economy at the University of Nottingham/UK.

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