Is it all over?
Michael Roberts looks at the implications of China’s stock market collapse
In recent weeks, the Chinese stock market has taken a massive plunge and in July shares suffered their worse month in six years, falling by 29% from the peak in June. This followed a humungous boom in stock prices since the beginning of 2015. Indeed, since August of last year, the market index in Shanghai has risen 160%. And even after the collapse in the last month the index is still nearly 80% higher than this time in 2014.
This stock market bubble is of the proportion of the US in the 1920s that led to the crash of 1929 and the subsequent great depression. Is this what is in store for the Chinese economy as well?
The recent collapse and the failure of government intervention to stop it has produced a chorus of doom-mongers about the future of the Chinese economy. But this is nothing new. As John Ross has pointed out, there are continual scare stories about the end of the ‘Chinese miracle’.1 In January 2014, the Financial Times ran an article headlined “China’s debt-fuelled boom is in danger of turning to bust”. In April, another FT headline declared: “China’s crisis is coming - the only question is how big it will be.” In October, the American Enterprise Institute announced: “An economic mess in China”.
American academic Michael Pettis is a favourite source in such articles - the US financial website Zero Hedge featured an article entitled ‘A Chinese soft landing will inevitably lead to a “very brutal hard landing”, Pettis warns’. The Financial Times carried several articles by George Magnus, former senior economic advisor to Swiss bank UBS, who predicts a coming slowdown of China’s economic growth to 3.9%.
Or take this comment more recently: the Wall Street Journal published an opinion piece by David Shambaugh in March arguing that “the endgame of Chinese communist rule has now begun ... and it has progressed further than many think”.2
Further back, in 2002 Gordon Chang wrote a book entitled The coming collapse of China. In the same year, The Economist magazine produced a special China supplement called ‘A dragon out of puff’. This report stated: “The economy still relies primarily on domestic engines of growth, which are spluttering. Growth over the last five years has relied heavily on massive government spending. As a result, the government’s debt is rising fast. Coupled with the banks’ bad loans and the state’s huge pension liabilities, this is a financial crisis in the making.” The Economist’s conclusion in 2002 was: “In the coming decade, therefore, China seems set to become more unstable.” In reality, far from entering a crisis, China had the fastest growth ever experienced by a major economy in recorded history.
Different this time?
But maybe this time it will be different. How do we answer that question? Well, the first thing to consider is that the movement of stock prices is not always or even often a guide to what is happening in the wider economy of production, employment and incomes. This applies even more to China, where an even smaller percentage of the population than average have shares or pension funds that trade in the stock market.
China’s stock market performance has rarely had much, if any, correlation with the country’s real economy. Barely 20 years old and poorly regulated, the stock market still has more in common with the gambling casinos of Macau than with global exchanges in western capitals such as New York, London or Tokyo.
As Arthur Kroeber, head of Gavekal Dragonomics, points out, only 7% of urban Chinese have money in the market.3 Moreover, the Chinese stock market is totally ‘rigged’ in free-market capitalist terms. Of the companies quoted on the Chinese stock market, the main holders are other Chinese companies, various national Chinese social funds and government institutions such as the ministry of finance. Investment companies of different types and calibres comprise just 7% from the declared share ownership structure, and individual investors represent only 2.2%. So the ordinary ‘day trading’ gamblers in Chinese cities are a very tiny proportion of stock holders.4
In other words, the Chinese government, through state-owned and directed banks and cross-shareholdings of state companies, can exercise considerable control over stock market trading. But that is why it has been a particular shock this time, that when the government intervened to prop up share prices through the ‘freezing’ of prices and the banning of ‘short selling’ (measures used in the past by many governments), it appeared not to work for long, with prices falling back after an initial rebound.
Why does government intervention appear to have failed this time? Well, it is partly because this stock market bubble was initially engineered by the government, which then found it had created a Frankenstein monster that it cannot control - such is the lesson of capitalist markets!
The government wanted to rein in a huge property bubble that it had created after the great recession led to a decline in exports to the US and Europe, and it needed to stimulate growth through domestic demand. This property bubble was driven by low interest rates, huge savings held by richer Chinese, and local governments borrowing or selling land to build homes and cities for the burgeoning urban population.
Chinese banks searching for profit and corrupt local government officials engaged in this property boom. The result was a rise in debt, both in the public sector, hidden from the books by local governments, and among property developers. Total national debt is now 282% of gross domestic product, according to estimates by McKinsey, a higher rate than in the US.5 Outside the banks, debt is now over 200% of GDP, according to the Bank for International Settlements.
The government then reversed its policy and set out to curb the property boom with blocks on local government and real estate borrowing. With property out of reach, richer Chinese switched their speculations into the stock market. And in this speculation, the government gave them support. The large majority of the nearly $800 billion in what is called ‘margin borrowing’ for stock market trades comes from the banks. This also means that any losses that are realised if the stock market stays down from previous peaks will eventually fall on the banks from the non-payment of debts by stockbrokers and traders. Given that, apparently, much of these loans have been at very low or even no interest, the state-owned banks could face considerable losses, which in turn may fall onto the books of the government as a last resort.
But let us be clear. China can afford even serious losses to bank capital from a stock market bust. This time last year, China had $4 trillion in foreign exchange reserves, mostly dollars. This is the biggest ‘war chest’ for a rainy day (to mix the metaphors) in the world. In the last year, it has used about $300 billion of that up, or 7%.
And even this fall is not really due to covering potential losses in the stock market. It is a result of the relative decline in China’s trade surplus, so China is not racking up as much dollar revenues as before. It is also the result of the government not buying so many US dollar assets like US government bonds, which it used to do in order to keep the exchange rate of the Chinese renminbi weak for better trade. Moreover, Chinese exporting companies are now tending to hold onto their dollar revenues for purchases and repayment of debts rather than deposit them with China’s central bank for only low interest. Yes, there has been a capital outflow, as foreign investors take some of their money out of China and rich Chinese try to spirit cash out from the tentacles of the anti-corruption campaign of the government. But China still has huge firepower to absorb any stock market bust and subsequent bank losses.
There may be doubt that the stock market crash will have any appreciable impact on the Chinese economy. But there is no doubt that China’s economy, however you measure it, is slowing down.
China has been an economic miracle. This is something not even the most prejudiced and biased ‘free market’ economist can deny. When Deng Xiaoping took over control of the Chinese state and Communist Party back in the later 1970s, at the beginning of ‘neoliberal’ period in the major capitalist economies of the ‘west’, his first stated target was to increase the size of China’s economy by 400% between 1981 and 2000. The actual increase was 623%. The second goal was to increase China’s GDP by a further 400% between 2000 and 2050, or 1,600% between 1981 and 2050. In reality, China’s economy had already grown by over 2,200% compared to 1981 by 2014. Deng Xiaoping’s target was reached 38 years ahead of schedule! As regards China’s latest stated goal - to double GDP between 2010 and 2020 - China is also ahead of its growth target.6
China has raised 620 million people out of internationally defined poverty. Its rate of economic growth may have been matched by emerging capitalist economies for a while back in the 19th century when they were ‘taking off’. But no country has ever grown so fast and been so large (with 22% of the world’s population) - only India, with 16% of the world’s people, is close. As John Ross has pointed out,7 in 2010 87 countries had a higher per capita GDP than China, but 83 were lower. Back in the early 1980s, three-quarters of the world’s people were better off than the average Chinese. Now only 31% are. Behind China’s impressive economic rise has been the biggest human migration in history. By 2013, some 269 million rural residents had become migrant workers in cities, offering cheap labour and sustaining urban growth.
This is an achievement without precedent. But things are now changing. It used to be a benchmark that China had to grow at 8% a year to absorb the expansion of the labour force from rural areas into the factories and cities. But China’s economy is now growing at its slowest rate since the end of the global financial crisis and the great recession in 2009. On official figures, growth has slowed to 7% year on year from a previous double-digit pace and most unofficial estimates reckon growth is really even slower.
The slowdown is particularly visible in the industrial sectors. Value-added industrial output, a measure of manufacturing production, has hit financial-crisis levels. Industrial production grew by only 6% year-on-year in June, while electricity output, a revealing measure of activity has dropped to near zero.
And the consumption of goods has also slowed. Retail sales rose over 10% at the last count. That sounds a lot by the standards of the major capitalist economies, but it is a slower rate than during the financial crisis.
Above all, the crucial driver of growth - fixed-asset investment, which measures money put into big projects and factories - rose 13.5% year on year, down from a peak of 30% back in 2009, if still at a higher rate than in the early 2000s.
Even more illuminating is that Chinese industrial company profits are contracting, making it more difficult to invest more or pay off debts.
The most up-to-date measure of economic activity can be found from the purchasing managers’ index (PMI). This is a survey of business managers in companies on the level of their purchases. Are they buying more for their companies this month than last month? According to the July figure for the Caixin manufacturing PMI, Chinese manufacturing activity is in its weakest shape in three years. The PMI fell to 47.8 in July, down from 49.4 in June. A reading below 50 indicates the manufacturing sector is contracting and this is the fifth consecutive month the index has been below that mark.
The slowdown is partly a result of the sluggish recovery in the world economy in Europe, Japan and the US, the main destinations for Chinese exports. But it is also part of a deliberate and carefully signalled policy by China’s president, Xi Jinping, to shift growth away from the export-dominated model that brought more than a decade of double-digit growth rates, as China exploited cheap labour to become the undisputed workshop of the world. Instead, Beijing hopes to achieve the next stage of economic development through more sustainable, domestic-led growth, encouraging urbanisation, and increasing the role of markets. Opening up its stock markets to overseas investors - albeit via intermediaries in Hong Kong - was one step in that process.
The driving force behind the country’s growth has been investment.8 Now the argument of the mainstream economists of the west is that China has engaged in wild ‘overinvestment’, while neglecting the need to boost consumption and the services-based modern economy. This is what the current government must seek to achieve or China will either crash or explode.
All these mainstream pundits reckon that China will slow permanently. The International Monetary Fund now reckons China’s trend growth rate will fall to about 6.3% by about 2019. Others are more pessimistic. The US Conference Board forecast that after 2020 growth would be only 4% a year. Why? First, the need to control the credit bubble will mean tighter monetary policy and thus slower investment growth. Second, the great urbanisation explosion will cease, as there is already enough housing and transport for the population.
Keynesian pundits in America, Lawrence Summers and Lant Pritchett, reckon that all developing economies must eventually slow down, as history shows. For China, they argue that “par” for the statistical course would involve a decline in the trend growth rate to only 5% over the next ten years and to 3.9% on average over the next two decades.9
But are the mainstream models of past economic development accurate or relevant to understanding China’s economic miracle over the last 30 years? The mainstream argument goes that China is now a ‘middle-income’ (capitalist) economy and unless it allows the market to rule, it will not close the gap in productivity and income per head with the advanced, older capitalist economies. Only this will enable China to escape from the so-called ‘middle income trap’. They mean that, to begin with, ‘emerging economies’ can grow fast with big capital investment and exports, using cheap labour and new technology - the Chinese model. But less than a fifth of the 180 countries in the world have made it to being advanced economies. Of the 101 countries that were ‘middle-income’ in 1960, only 13 had managed to break from the pack to become advanced economies by 2008.10
One reason why countries get stuck in this ‘middle-income trap’ is that they reach what is known as the ‘Lewis point’, named after the left economist of the 1950s, Arthur Lewis. Put simply, this is the point at which a developing country stops being able to achieve rapid growth relatively easily, by simply taking rural workers doing unproductive farm labour and putting them to work in factories and cities instead. Once this ‘reserve army of labour’ is exhausted, urban wages rise, incomes reach a certain level and a ‘middle class’ emerges. Distorting Lewis’s theory, mainstream economics asserts that then there must be a switch to boosting domestic consumption that a state-led economy cannot undertake. So the cry is: ‘Liberalise with free trade and capital - that’s the only way to move on!’
This model was advocated for China’s future in a World Bank report11published a few years ago in conjunction with China’s advisory body, the Development Research Centre of China’s State Council. The report argued that there would be an economic crisis in China unless state-run firms were scaled back. China needed to implement ‘deep reforms’, selling off state-owned enterprises and/or making them operate more like commercial firms. According to the World Bank, China’s growth would decelerate rapidly once people reached a certain income level - a phenomenon that these economists call the ‘middle-income trap’. The report said the answer was to set up ‘asset-management firms’ to sell off state industries, overhaul local government finances and promote ‘competition and entrepreneurship’. The first of its six strategic measures is the privatisation of the state. This is put right up front. In contrast, there is no mention of the democratisation of the state, the ending of one-party rule; the ending of the suppression of individual rights and freedoms, allowing trade union rights, etc.
But is this scenario of the ‘middle-income trap’ due to the loss of ‘comparative advantage’ in cheap labour, Lewis-point style? Or is it due to the failure of developing capitalist economies to raise productivity and sustain investment in technology and human capital in the face of cycles of falling profitability and global crises - often engendered in the mature capitalist economies and thus outside the control of individual national economies? In other words, is the slowdown of all previous emerging capitalist economies ultimately a sign of the failure of the capitalist mode of production itself?12
It is no accident that only two large developing capitalist economies have succeeded in becoming part of the rich capitalist club in the last 50 years. Measured in GDP per capita and starting at $3,000 per head (PPP real) 40 years ago, Taiwan and Korea now have per capita GDPs over $25,000. In the same period, no other Asian tiger or Latin American economy has risen above $13,000, still within the World Bank’s middle-income range.
Taiwan was a special client state of the US and also benefited hugely from China’s own expansion and from Japan trade. Korea also had a special trade agreement with US. Both economies had large state holding companies, military regimes that restricted ‘free markets’ and were oriented to investment in heavy industry and technology - not the neoclassical model. Interestingly, at its current stage in this process, China’s per capita GDP is higher and growing much faster than even Taiwan and Korea.
Even if China slows down over the medium term, as everybody now predicts, it will still add over $21 trillion to its GDP before the end of the decade and reach the size of the US economy by then. And it is not really true that the Chinese economy has restricted consumption. Consumption may have fallen as a share of GDP during the fast pace of investment expansion and urbanisation, but real consumption per head in China has been growing at 8.5% annually for a decade - the highest of any major economy.
Even though China’s consumption as a share of GDP is very low by capitalist standards (anywhere between 35% and 45% of GDP, depending on how you measure it, compared to 65%-75% in mature capitalist economies), it will add another $10 trillion in annual consumption by 2020, equivalent to the size of America’s annual consumption. These figures come from the World Bank report itself. This has been achieved without the capitalist mode of production being hegemonic.
The World Bank report admits that the ‘free market’ still does not dominate in China - indeed that is the problem, according to the World Bank and its domestic supporters. The report recognises that China’s incredible economic success over the last 30 years was based on an economy where growth was achieved through bureaucratic state planning and government control of investment.
Nevertheless, the mainstream economics and western ‘China watchers’ continue to promote a development model for China that is ‘consumption-led’ and dominated by markets. It is the height of hypocrisy for the World Bank and expert China watchers to demand the end of state planning, the privatisation of the financial system and to promote ‘free markets’ in the stock markets and key industrial sectors after the experience of deregulation and free markets in the major capitalist economies led to the biggest collapse in global finance and GDP in the great recession since the 1930s. How can that be a model for future Chinese development?
Already, the expansion of markets over planning in China has led to increasingly volatile and dangerous bubbles in credit, property and stock markets that mirror the experience of the west. And it has led to a huge rise in inequality of wealth and income, something that many more ‘liberal’ pro-capitalist economists are worried about in the west.
China’s property and stock market bubbles show that the great expansion in industry and investment in the last 10 years has not been equally shared. China’s Gini coefficient, an index of income inequality, according to Sun Liping, a professor at Beijing’s Tsinghua University, has risen from 0.30 in 1978, when the Communist Party began to open the economy to market forces, to 0.46. Indeed, China’s Gini coefficient has risen more than any other Asian economy in the last two decades.
The IMF has found that the Gini coefficients (gross and net of tax) rose from an average of 0.30 and 0.29 in the 1980s, respectively, to 0.52 and 0.53 by 2013.13 Similarly, the income share of the top 1% of households in China increased from 2.8% in 1980 to 4.9% in 2009. This ratio is still relatively low compared to that in many other countries (such as 7.2% in South Korea and 19% in the US, but it is significantly higher than the total income share of the lowest quintile of households in China.
This rise in inequality is partly the result of the urbanisation of the economy, as rural peasants move to the cities. Urban wages in the sweatshops and factories are increasing, leaving peasant incomes behind (not that those urban wages are anything to write home about, when workers assembling Apple i-pads are paid under $2 an hour). But it is also partly the result of the elite controlling the levers of power and making themselves fat, while allowing some Chinese billionaires to flourish.
There is massive offshore evasion of tax and the hoarding of secret bank accounts by China’s super-rich, yet again revealed in the leaked reports about the ‘Chinese princelings’, among others. More than a dozen family members of China’s top political and military leaders are making use of offshore companies based in the British Virgin Islands, leaked financial documents have revealed. The brother-in-law of China’s current president, Xi Jinping, as well as the son and son-in-law of former premier Wen Jiabao, are among the political relations making use of these offshore havens.14
Socialism with Chinese characteristics
What lies at the heart of the debate about China’s future is the class nature of its economy and social relations. In my view, China cannot be seen as just another capitalist economy. It is a hybrid. The planning mechanism that was adopted when the communists came to power in 1949 still dominates the economy. But the communist elite have steadily expanded the role of the private sector in the economy, while maintaining control at all levels of the ‘commanding heights’ of the economy in banking, industry and even service sectors. This is what the party elite like to call ‘socialism with Chinese characteristics’.
China’s ‘socialism with Chinese characteristics’ is a weird beast. It is not ‘socialism’ by any Marxist definition or by any benchmark of democratic workers’ control. And there has been a significant expansion of privately owned companies, both foreign and domestic, over the last 30 years, with the establishment of a stock market and other financial institutions. But the vast majority of employment and investment is still undertaken by publicly owned companies or by institutions that are under the direction and control of the Communist Party. The biggest part of China’s world-beating industry is not made up of foreign-owned multinationals, but Chinese state-owned enterprises.15 The major banks are state-owned and their lending and deposit policies are directed by the government (much to the chagrin of China’s central bank and other pro-capitalist elements). There is no free flow of foreign capital into and out of China. Capital controls are imposed and enforced and the currency’s value is manipulated to set economic targets (much to the annoyance of the US Congress).
At the same time, the single party state machine infiltrates all levels of industry and activity in China. According to a report by Joseph Fang and others,16 there are party organisations within every corporation that employs more than three Communist Party members. Each party organisation elects a party secretary. It is the party secretary who is the lynchpin of the alternative management system of each enterprise. This extends party control beyond the SOEs, partly privatised corporations and village or local government-owned enterprises into the private sector - or ‘new economic organisations’, as these are called. In 1999, only 3% of these had party cells. Now the figure is nearly 13%.17
The law of value does operate in China, mainly through foreign trade and capital inflows, as well as through domestic markets for consumption goods, services and funds. But the impact is ‘distorted’, ‘curbed’ and blocked by bureaucratic ‘interference’ from the state and the party structure, to the point that it cannot yet fully dominate and direct the trajectory of the Chinese economy.
But its pernicious influence on growth and inequality is growing. The best guide to that are the changes in the profitability of Chinese capital, as the private sector has expanded and the state sector has been faced with trying to compete domestically and in world markets.
There have been three cycles of profitability for Chinese industry in the last 40 years since Deng ‘liberalised’ the ‘command economy’ of Mao. Between 1978 and 1990, there was an upswing, as capitalist production expanded through the Deng reforms and the opening up of foreign trade. But from 1990 to the end of that decade, there was a decline, as overinvestment gathered pace and other economies, particularly in the emerging world, went through a series of crises (Mexico 1994, Asia 1997-98, Latin America 1998-2001). The falling rate of profit then was accompanied by a slowing in the rate of GDP growth. Then, from about 1999 onwards, there was a rise in profitability, which also saw a significant rise in the rate of China’s economic growth (as the world too expanded at a credit-fuelled pace). But it looks as though profitability peaked in 2004-06.18
After 2007, the slump in world capitalism drove down Chinese profitability. This is particularly visible in the fall in the ‘productivity of capital’ invested since 2007.
Inevitably, this has had a deleterious effect on GDP growth - profits lead investment and investment leads growth, particularly in China.
Despite the efforts of the ‘reformers’ (pro-free market) in the Chinese leadership, there has been no change in the general philosophy of ‘socialism with Chinese characteristics’ and thus the maintenance of the dominance of the state sector. The majority in the leadership seem to want to continue with an economic model that is dominated by state corporations directed at all levels by the communist cadres. Markets will not rule and the law of value will not dominate prices, labour incomes or domestic trade.
Can the elite continue with this ‘halfway house’ without provoking either a crisis or slump that will force them to follow the ‘capitalist road’, as the World Bank and the pro-capitalist elements want? Will the elite face an eruption from below, as the fast-growing working class urban population starts to flex its muscles for a say in running society?
Well, I think not - at least not yet. Even on the most pessimistic estimates, China is still growing faster than any other major capitalist country and nearly all the so-called emerging economies. The working population is still growing, although it will soon peak around 2020; there are still hundreds of millions of rural workers and peasants to be incorporated into the industrial machine; and China is still sucking up as much the world’s raw materials as it needs to sustain its expansion.
If the capitalist road is adopted by the new leaders and the law of value becomes dominant, it will expose the Chinese people to chronic economic instability (booms and slumps), insecurity of employment and income, and greater inequalities even worse than the current stock market crisis.
On the other hand, if the surplus created by the Chinese people remains under the control of an elite backed by an army and police and ruling without dissent, then the needs and aspirations of a more affluent and educated population will not be met. The key to continued growth and more equality will be democracy. China needs to move from so-called ‘socialism with Chinese characteristics’ (ie, a state-led economy under a corrupt autocracy) to a China with socialist foundations (democratic planning and equality). China cannot just stay as it is indefinitely, whatever its leaders might hope l
3. Dragonomics: http://research.gavekal.com/content.php/6022-China-Service; and see www.brookings.edu/research/opinions/2015/07/13-china-stock-market-kroeber.
6. J Ross op cit (see note 1).
7. J Ross op cit.
8. See Chun Chang, Kaiji Chen, D Waggoner, Tao Zha, ‘Trends and cycles in China’s macroeconomy’, August 1 2015: www.voxeu.org/article/trends-and-cycles-china-s-macroeconomy.
9. L Pritchett, LH Summers, ‘Asiaphoria meets regression to the mean’, NBER Working Paper No20573, October 2014; and see http://larrysummers.com/2014/10/27/why-china-wont-keep-growing-fast-forever.
10. World Bank: www.openknowledge.worldbank.org/bitstream/handle/10986/16045/WPS6594.pdf?sequence=1; and www.imf.org/external/pubs/ft/wp/2013/wp1371.pdf but see also, http://blogs.worldbank.org/futuredevelopment/there-no-middle-income-trap.
11. China 2030, www.worldbank.org/en/news/2012/02/27/china-2030-executive-summary; and www.worldbank.org/content/dam/Worldbank/document/China-2030-complete.pdf.
12. For more on this issue, see my upcoming paper on China, Three models of development, to be presented to the 2015 IIPPE conference in Leeds in September 2015 (http://iippe.org/wp).
13. IMF working paper, S Cevik and C Correa-Caro, fiscal affairs department Growing (un)equal: fiscal policy and income inequality in China and BRIC+, March 2015: www.imf.org/external/pubs/ft/wp/2015/wp1568.pdf.
14. This is the latest revelation from Offshore secrets, a two-year reporting effort led by the International Consortium of Investigative Journalists (ICIJ), which obtained more than 200 gigabytes of leaked financial data from two companies in the British Virgin Islands, and shared the information with The Guardian and other international news outlets. The documents also disclose the central role of major western banks and accountancy firms, including PricewaterhouseCoopers, Credit Suisse and UBS in this offshore world, acting as middlemen in the establishing of companies. Between $1trillion and $4 trillion in untraced assets have left China since 2000, according to estimates (www.icij.org/offshore/leaked-records-reveal-offshore-holdings-chinas-elite).
15. A recent report by the US-China Economic and Security Review Commission provides a balanced and objective review: “The state-owned and -controlled portion of the Chinese economy is large. Based on reasonable assumptions, it appears that the visible state sector - SOEs and entities directly controlled by SOEs - accounted for more than 40% of China’s non-agricultural GDP. If the contributions of indirectly controlled entities, urban collectives and public TVEs are considered, the share of GDP owned and controlled by the state is approximately 50%.”
17. As the paper puts it, “The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises and senior party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin’s Commanding Heights.”
18. From E Maito, ‘The historical transience of capital’: http://gesd.free.fr/maito14.pdf; and M Roberts, ‘The world rate of profit revisited’, paper presented to the AHE conference, July 2015: http://hetecon.net/documents/ConferencePapers/2015/AHERoberts.pdf.