[P2P-F] Fwd: Fw: David Harvey on marx and capital

Sun Nov 27 06:58:22 CET 2011

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 at mindspring.com>
Date: Sat, Nov 26, 2011 at 4:47 PM
Subject: Re: Fw: David Harvey on marx and capital

 Dear Rajni,
Thanks for the link to the review of David Harvey's book, *The Enigma of
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 growth.****

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 itself
apart. ****

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 at mindspring.com
Mobile phone (USA): 520-820-0575
Beyond Money: http://beyondmoney.net
Tom's News and Views: http://tomazgreco.wordpress.com
Archive Website: http://www.Reinventingmoney.com
Photo gallery: http://picasaweb.google.com/tomazhg
Skype/Twitter name: tomazgreco
My latest book, "The End of Money and the Future of Civilization" can
be ordered from Chelsea Green Publishing, Amazon.com, or your local
bookshop.

On 11/22/2011 11:37 PM, rajni bakshi wrote:

 Dear Tom,
   I stumbled upon this because of the stuff at the beginning -- that
Jairus Banaji has been given
an important book prize in UK. Jairus is a friend and a very respected
marxist scholar.

  The speech by last year's winner seems important.....he talks about
 capital and money.
   http://www.youtube.com/watch?gl=IN&feature=player_embedded&v=QbOUCLYZVBU
 And a link to an article by David Harvey
http://www.independent.co.uk/arts-entertainment/books/reviews/the-enigma-of-capital-and-the-crises-of-capitalism-by-david-harvey-1958010.html

 Regards,
Rajni

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