I have a pet theory which is too simplistic and reductionist to be true
or even intelligible to many, but this is it: since economic growth is
not possible anymore (because of peak oil) the rich can get richer only
if the poor get poorer, hence authoritarianism, hence austerity, etc;
some of the old pre-20th century conditions are returning. The system is
not surviving, it is mutating. If the collapse of the soviet union meant
the collapse of socialism as ideology, the end of growth means the end
of liberal right wing ideologies. (Fortunately, I'm not completely alone
in believing this lunacy, Richard Heinberg seems to have spoken about it
in the recent ASPO conference: http://www.theoildrum.com/node/8573).
On 11/27/11 7:58 AM, Michel Bauwens wrote:
> see below via thomas greco, a commentary on harvey
>
> has anyone seen any good explanation of the current austerity/fleecing
> strategies ... it seems to me that a systematic and radical impoverishment
> is also a problem for the survival of the system as a whole ..
>
> Michel
>
>
> ---------- Forwarded message ----------
> From: *Thomas Greco* <
thg@mindspring.com <mailto:
thg@mindspring.com>>
> Date: Sat, Nov 26, 2011 at 4:47 PM
> Subject: Re: Fw: David Harvey on marx and capital
>
>
>
> Dear Rajni,
> Capital, and the crises of capitalism/. No, I've not seen the book, but
> if the review is a faithful description, the book seems well worth reading.
>
> I'm not inclined to frame my analyses and prescriptions in terms of
> competing ideologies because that leads to immediate resistance by the
> true believers on one side or another. Rather, we need to encourage
> people to think outside of their comfortable boxes by pointing out
> implicit assumptions and evident dysfunctions, and suggesting structural
> as well as policy changes that show promise of providing better outcomes.
>
> Of course, what constitutes a better outcome will always be a point of
> disagreement based on the fundamental values, attitudes, and beliefs
> that different segments of society hold (e.g., the 1% vs the 99% that
> the Occupy movement has highlighted). Besides that, our desires and
> expectations must ultimately adjust to the reality of our planetary
> limits to physical growth.
>
> Based on the review, the points that I may agree or disagree with Harvey
> about are inserted in red in the review below.
>
> *The Enigma of Capital, and the crises of capitalism, By David Harvey____*
>
> Review by Andrew Gamble
>
> Friday, 30 April 2010
>
> *Andrew Mellon, the US Treasury Secretary during the Great Crash of 1929
> and one of America's richest men, observed that in a crisis assets
> return to their rightful owners. Nothing much has changed. As the
> present crisis has mutated from a banking crisis to a fiscal crisis and
> a sovereign debt crisis, bonuses continue to be paid, while the people
> of Greece and Iceland suffer huge cuts in jobs and services.____*
>
> As the head of Citibank helpfully pointed out, "Countries cannot
> disappear. You always know where to find them." Once the bubbles are
> burst, expectations about asset values are dashed, optimism gives way to
> despair, and wealth is ruthlessly redistributed. *Capitalism survives by
> purging itself of debt and loading the costs of adjustment on the weak
> and the poor.____*
>
> [I agree, but something needs to be said about HOW it purges itself of
> debt. We’ve seen very clearly in this latest cycle how the capitalists
> have come away whole by pushing the debt off onto the public sector by
> means of government bailouts. That has cause severe fiscal (budgetary)
> problems for governments, which now are pressured to cut spending. That
> is where the weak and the poor (including the “middle class”) get
> fleeced and sacrificed because the cuts are typically made in social
> spending and programs that promote the common good.]____
>
> For David Harvey, this is the latest of the great structural crises
> which have punctuated the development of capitalism and which signify
> that major limits have been reached to further growth. Crises on this
> view are inherent in capitalism itself, and the means by which it renews
> itself. Only a periodic clear-out of debt and unproductive activities
> creates the basis for a further leap forward.
>
> Harvey is less interested in the detail of how the 2007-8 crisis
> unfolded than in understanding it as a manifestation of how capitalism
> works. Over the last two decades, he has become a leading exponent of
> classical Marxist political economy, his work known for its exceptional
> clarity and for integrating spatial categories into the theory of
> capital accumulation.
>
> Capitalism in the last 200 years has proved itself by far the most
> dynamic and productive economic system known to history, but the wealth
> comes at a price, both for human beings and increasingly for the natural
> environment.
>
> Periodically, capitalism over-expands and overshoots, encountering
> limits it cannot immediately transcend. This is a system which must keep
> expanding by at least 3 per cent a year. What drives it is the hope of
> profit, and this impulse comes to shape all social relations as well as
> nature. During booms, capital accumulates very fast, but the amount of
> surplus generated becomes harder and harder to absorb. The investments
> that have been made in the boom fix capital in all sorts of ways, in
> buildings, cities, regions and countries, as well as in labour forces
> and ways of organising production.
>
> After a time many of these past investments no longer yield a high
> return and sometimes no return at all. This is what precipitates the
> crisis. It may take the form of a profits squeeze, caused by militant
> labour wresting gains from capital, or by factors depressing the rate of
> profit, or by too little demand. Harvey argues that the present crisis
> is particularly hard to resolve because it comes after a long period in
> which real incomes in the US have stagnated, while the wealth of the
> property-owning elite has soared.
>
> The gap between what labour was earning and what it would spend was
> covered by credit. The average debt of per household, including mortgage
> repayments, was $40,000 in 1980. By 2007 it was $130,000. Getting this
> debt down and restarting the economy is a huge task.
>
> [I too have been preaching that the limits to growth have been reached,
> and yes, however one might choose to characterize an economic system
> (capitalist, socialist, or otherwise), there must be a periodic
> “clear[ing]-out of debt and unproductive activities,” for the system to
> maintain its vitality, but not necessarily to make way for further
>
> I’m wondering if Harvey’s book adequately explains the phenomenon of
> “expansion and overshoot,” and whether or not that would also occur
> under his conception of a alternative non-Capitalist system. I’m also
> wondering about the basis for his statement that, “This is a system
> which must keep expanding by at least 3 per cent a year.”I’ve seen
> estimates that run closer to 6%. My own belief is that the proximate
> driver of continual economic growth is the compounding of interest that
> is a fundamental feature of our global monetary system, and that the
> surplus that is created by the economy goes largely into capital
> concentration and profit-seeking reinvestment, rather than to increased
> and more equitable consumption. Thus, we see starvation and want amidst
> plenty.] ____
>
> Harvey is pessimistic that growth can be restarted without the
> infliction of quite unimaginable hardships on the many of the world's
> poorest people. *Capitalism survives by socialising losses and
> distributing gains to private hands. Harvey devotes a large part of his
> argument to show how this is done through the close ties of the state
> and finance. He calls it the state-finance nexus.____*
>
> [Yes, this is an increasingly obvious point. I’m glad to see that Harvey
> is highlighting the “*state-finance nexus.”*I trace that back to the
> founding of the Bank of England in 1694, which established the pattern
> of central banking and government-banking collusion that has since
> spread around the world and culminated in a rather monolithic regime.
> But there are cracks beginning to form.]____
>
> This is not a conspiracy: both sides of the relationship need one
> another and support one another. There are frictions and conflicts, but
> in the end they work together because this is the only system anyone
> knows or thinks can be made to work. Michael Bloomberg, as Mayor of New
> York, commissioned a report which declared that excessive regulation in
> the US was threatening the future of the financial sector in New York.
>
> The financial crash of 2008 destroyed the credibility of the financial
> growth model put in place after the last great capitalist crisis in the
> 1970s. It has also, as Harvey notes, put a question-mark over the
> continuance of US hegemony, because of the shift in the balance of the
> global economy towards the rising powers of India and China.
>
> He thinks that the accumulated rigidities over the last cycle have
> become so great that only a very fundamental restructuring can restore
> the basis for renewed economic growth. But the pressure for an early
> return to business as usual are very great, threatening an early return
> of credit and debt as the only way to fuel the economy, and the eruption
> of another crisis in a few years.
>
> Harvey argues that each major capitalist crisis has been worse than the
> last one, and more difficult to surmount. He accepts that capitalism,
> with all its resilience and inventiveness, is quite capable of
> overcoming this crisis too; but he is sceptical, and believes that this
> is the moment that a revived anti-capitalist movement can seize the
> opportunity to put forward a realistic alternative to capitalism as a
> way of organising the economy.
>
> [Yes, it is evident that each successive cycle is more extreme than the
> last. The financial system based on interest-bearing debt is shaking
>
> It seems odd that he attributes “resilience and inventiveness”
> to**capitalism. These are human qualities that might thrive in a variety
> of circumstances. The question is how, specifically, to support them. ]____
>
> This is perhaps where the argument is least convincing. The
> anti-capitalist left is fragmented and not particularly numerous.
> Radical political responses during previous capitalist crises have often
> favoured the right. The rise of China and India, both of which have
> continued to grow through the recession, suggests that the fundamental
> shift in the balance of the global economy is only just beginning, and
> if it continues is likely to provide huge potential for growth and
> absorption of surplus, provided certain political conditions are met.
>
> This will not be easy but is certainly possible. Marx thought that no
> social order ever perishes before all the productive forces for which
> there is room in it have developed. On the evidence Harvey himself
> provides, capitalism still has a long way to go before that is the case,
> and no gravediggers are in sight.
>
> [What are the physical limits to the application of those “productive
> forces?” It is evident that the masses of India and China cannot
> possibly achieve the levels of consumption and way of living that have
> prevailed in the West. The emphasis must shift from capital accumulation
> and increasing consumption to more equitable distribution and better
> quality of life for all.]____
>
> But this book is a welcome addition to the literature on the crisis. It
> provides a lucid and penetrating account of how the power of capital
> shapes our world, and sets out the case for a new radicalism and a
> vision of alternatives. What we need, he argues, is not just a new world
> but a new communism, following the failure of the old - although he does
> accept ruefully that using "communist" as a political label may not
> bring instant success in the United States.
>
> [I guess we will need to read the book to see what Harvey has to propose
> in making the “case for a new radicalism and a vision of alternatives.”]____
>
> /Andrew Gamble is Professor of Politics at the University of Cambridge
> and author of 'The Spectre at the Feast' (Palgrave Macmillan)/
>
> [Annotated comments by Thomas H. Greco, Jr.]
>
> Thomas H. Greco, Jr.
> thg@mindspring.com <mailto:thg@mindspring.com>
> Mobile phone (USA):520-820-0575 <tel:520-820-0575>
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