How Much is Too Much? (A review of a Marx-based analysis of the recent economic failures)

[muriel_volestrangler]

You don't have to be very familiar with Marx's economic theories to get a lot from it, I think. From The London Review of Books:

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Few writers could be better qualified than Harvey to test the continuing validity of a Marxian approach to crisis, a situation he helpfully defines – dictionaries of economics tend to lack any entry for the word – as ‘surplus capital and surplus labour existing side by side with seemingly no way to put them back together’. (This is at once reminiscent of Keynes’s ‘underemployment equilibrium’ and of the news in the daily papers: in the US, corporations are sitting on almost two trillion dollars in cash while unemployment hovers just below 10 per cent.) Harvey, who was born in Kent, is the author of the monumental Limits to Capital – a thoroughgoing critique, synthesis and extension of the several varieties of crisis theory underwritten by Marx’s thought – and has been teaching courses on Marx, mainly in the US, for nearly four decades. His lectures on Volume I of Capital, available online, have become part of the self-education of many young leftists, and now supply the framework for his useful Companion to Marx’s ‘Capital’. (I sat in on his lectures at the City University of New York in the fall of 2007; a good Marxist, Harvey made no effort to find out whether any of us – too many for the available chairs – had registered and paid for the class.)

Since the publication of The Limits to Capital in the second year of the Reagan administration and at the dawn of what has come to be known as the financialisation of the world economy, the dual movement of Harvey’s career has been to return time and again to Marx as a teacher, and to extend his own ideas into new and more empirical territory. The most substantial of his recent books, Paris, Capital of Modernity (2003), described the city’s forcible modernisation by Baron Haussmann as a solution to structural crisis – ‘The problem in 1851 was to absorb the surpluses of capital and labour power’ – and situated this urban transformation within the renovation of Parisian humanity it induced. Harvey’s other post-millennial volumes, The New Imperialism (also 2003), A Brief History of Neoliberalism (2005) and now The Enigma of Capital, amount to a trilogy of self-popularisation and historical illustration, taking current events as a proving ground for what Harvey has called, referring to The Limits to Capital, ‘a reasonably good approximation to a general theory of capital accumulation in space and time’.

The mention of space is considered. Harvey received his doctorate in geography rather than economics or history – his first, non-Marxist book was taken up with differing representations of space – and the whole thrust of his subsequent work, alert to the unevenness of capitalist development across neighbourhoods, regions and nation-states, has been to give a more variegated spatial texture to the historical materialism he would prefer to call ‘historical-geographical materialism’. In a sense, the emphasis confirms Harvey’s classicism. Marx himself somewhat curiously concluded the first volume of Capital – a book otherwise essentially concerned with local transactions between capital and labour, illustrated mostly from the English experience – with a chapter on the ‘primitive accumulation’ of land and mineral wealth attendant on the European sacking of the Americas. In the same way, Rosa Luxemburg, Marx’s first great legatee in the theory of crisis, insisted in the Accumulation of Capital (1913) that imperial expansion across space must accompany capital accumulation over time. Without the prising open of new markets in the colonies, she argued, metropolitan capitalism would be unable to dispose profitably of its glut of commodities, and crises of overproduction doom the system.

It’s not, however, until the last third of The Limits to Capital that the spatial implications of Harvey’s project loom into view. The book starts as a patient philological reconstruction, from Marx’s stray comments, of a Marxian theory of crisis. The method is fittingly cumulative as, from chapter to chapter, in lucid, mostly unadorned prose, Harvey adds new features to a simple model of the ‘overaccumulation of capital’. And overaccumulation remains in his later work – including The Enigma of Capital – the fount of all crisis. The term may seem paradoxical: what could it mean for capital to overaccumulate, when the entire spirit of the system is, as Marx wrote, ‘accumulation for accumulation’s sake’? How could capitalism acquire too much of what it regards as the sole good thing?
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The basic thesis is that capital will continue to go through phases of investment, overaccumulation of capital in few hands, which decreases the returns available on 'real investment' (eg manufacturing), because the market doesn't expand as fast as capacity because rich people don't spend as large a percentage of their income as working people, and then encourages the investment of 'fictitious capital' in property bubbles, or investment products that are basically Ponzi schemes, followed by a crash and a move to elsewhere in the world to start again. Leaving behind the ruins of the previous cycle, and putting societies at risk of things like a reactionary turn to fascism, or of environmental crisis.