The Enigma of Capital
David Harvey | 2010-04-15 00:00:00 | Profile Books Ltd | 256 | Economics
Taking a long view of the current economic crisis, eminent academic David Harvey explains how capitalism came to dominate the world and why it resulted in the current financial crisis. For three centuries, the capitalist system has shaped western society, informed its rulers, and conditioned the lives of its people. Using his unrivalled knowledge of the subject, Harvey lays bare the follies of the international financial system, looking closely at the nature of capitalism, how it works and why sometimes it doesn't. He examines the vast flows of money that surge round the world in daily volumes well in excess of the sum of all its economies. He looks at the cycles of boom and bust in the world's housing and stock markets and shows that periodic episodes of meltdown are not only inevitable in the capitalist system but essential to its survival. The essence of capitalism is its amorality and lawlessness and to talk of a regulated, ethical capitalism is to make an error of reasoning of the most fundamental kind. "The Enigma of Capital" considers how crises of the current sort can best be contained within the constraints of capitalism, and makes the case for a social order that would allow us to live within a system that really could be responsible, just, and humane.
Reviews
"At times of crisis, the irrationality of capitalism becomes plain for all to see," Harvey writes at the beginning of the last chapter in The Enigma of Capital. He describes this irrationality with characteristic wisdom and analytic clarity. This book is an entertaining explanation of the current economic crisis and its significance in history. Harvey's forty-year career has been spent teaching and writing about Marx, but he is not so much a "Marxist" as a scholar of Marx; he analyzes capitalism using the tools and the perspectives that Marx provided, while also recognizing their limits and building on them in order to move forward the kind of rigorous critique of capitalism that is absolutely essential right now.
Reviews
"The Enigma of Capital" was interesting at the beginning, but then evolved into some sort of seemingly formulaic recitation of questionable relevance; further, the material was puzzling because of its incompleteness. Eventually I realized that the reason is the author is an anthropologist by training, and a Marxist by choice. Harvey sees the U.S. as having used its military during the Cold War to 'sell' protection, and now is trying to sell War on Terror protection with much less success. The point of his book is to understand why U.S. capitalism is crisis-prone; I added the qualifier 'U.S.' because the author doesn't recognize that the Chinese have done a much better job of preventing economic crises than others, so far.
Harvey describes capitalism as a process in which money is perpetually sent in pursuit of more money, the faster the better. Inaction can lead to destruction - eg. obsolescence. A surplus of money can create pressure for privatization and global trade. The fundamental problem today is that capitalists need to invest $1.6 trillion in profits, and this amount will grow to $3 trillion by 2030. In 1950 the required investment was only $0.15 trillion, and $0.42 trillion in 1973 (all in inflation-adjusted dollars). Harvey, however, doesn't recognize the enormity of a problem that China has become - making investment/employment in the U.S. particularly difficult, but not at all so in China.
Reviews
This is an interesting book [considering the 2008 financial/economic crisis, its legacy still with us in 2010 & for how much longer?] in the criticism of capitalism titled "The Enigma Of Capital : And The Crises Of Capitalism" by the widely acclaimed social theorist (Marxist) David Harvey. For three centuries capitalism has flourished & shaped the western society (its rulers & people in a profound way). David Harvey very clearly lays bare the follies of the past & current international financial system ; and also closely scrutinizes capitalism : how it works & why sometimes it does not work. David Harvey has examined the flows of money that surge around the world daily in excess of the total sum of its economies : the up/boom & downs/bust cycles of the stock markets & housing sector is as inevitable in capitalism as to its ultimate survival, so his findings suggest! He discusses previous & current financial crises : we saw neoliberalism give way to massive financial bail-outs of banks & companies in the interest of preserving the status quo and wealth of developed society (at the expense of the third world society). The essence of capitalism is in its amorality & lawlessness and the talk of a regulated, ethical system is to make a fundamental error, this influencial & social theorist (Marxist) David Harvey argues. This is likely an opportunistic attack against capitalism without offering practical solutions of a better system & indicating where such a system has successfully worked better than capitalism he criticises! The book may be timely to spark debate & reflection following the 2008 financial meltdown/crisis ; David Harvey in this book "The Enigma Of Capital : And The Crises Of Capitalism" proposes a case for a better system other than Capitalism [Socialism/Marxism/Communism?] that is responsible, just & humane. This book will bring joy & praise from Socialists/Marxists/Communists, but Capitalists may raise eyebrows & ask questions : but, really, what/where is that alternative system? Where has it worked successfully? The debate is perhaps warranted in view of the current financial crisis (since September 2008), but weaknesses in capitalism alone does not make it obsolete! A thought provoking reading though the motive by the Marxist David Harvey may be misplaced, but you decide! I give this book 2 stars for its fair assessment of capitalism & its weaknesses but it fails to provide a solid alternative to capitalism with a proven track record!
Reviews
You may want to read this, so you have a perspective, a context on what is happening now.
The assemblages of capital are complex for the uninitiated and do not come to shape itself entirely as you may find in a textbook. What capital once was, is not what it is now, it is a different beast, with needs and fortunes. How capital has moved round the globe is what interests us and Harvey,Where are debt-ridden economies where do they go, what do they chase, and who are its enemies? Debt usually is seen chasing "above-water"economies, as China or South East Asia; ones reserved now of full-bodied capital for collateral. Harvey is brilliant at making these narratives.
Curious how radical thinking, the work of Marx transcends the present you may argue; Harvey gives you why things are as they are,and shows how sectors relate; This refers to the components, the dynamics of the system of technology, the political,capital, the social,labour. Include also today the million-dollar advisory think tank cadres and how it all works to create surplus profit and crisis.
We've had numerous crisis. It is curious to what extent those in power learn from them; unpretentiously now a qualitative metamorphosis is in current reality.
The reality now is what needs clarification,for the powers are simply grossing over their failures for the greater populations of the globe.
Harvey's work has always been clear and well documented on the class base of how the accumulation of wealth occurs, How the powerful classes make bids for power continuously.
And we sink or swim based on their decision for the democratic state is moribund.
The economic systems meltdowns is what is in front of us, with "shadow banking"Credit default swaps in place for the past 10 years.
One strong trajectory here is how Wall Street,the finance sectors/powers of the globe have come to control in dominance the other large players, as state powers, merchants, Third World isolated nations,land developers rentiers,and intellectual cadres;
This control curiously was all built on "air" on mostly uncollateralized capital, loans of loans of loans, or banks allowed a 30 to 1 ratio for their reserves to at risk assets; Where are the indice, "mark-to-market"?
But finance alone,money chasing money(M-M) causes things to stagnate over time, Things,/reality Harvey tells us augment and become impacted in ways the system cannot predict in all its complexities.
This quest of the ruling elites of the globe to augment their forever diminishing ratio of surplus profit has been the movement of capital. It makes for a good history in and of itself. The history of capital, where it goes, how it has moved, what it does to transubstantiate people's lives.
This is where the neo-liberal order began in the early Seventies, to roll back labour,but that alone will not insure the dynamics of the system for surplus profit, for the consumer capacity now needs to augmentation strength to a degree. So the Credit system at all levels needed to be put in place.
The needs to reform always has the taint of capital,like Keynes component of the "animal hunger" as integral to how things work. Yes we want capital to change in drastic ways, so people can get back to work, can educate their children, but Harvey thinks labour is not in a position to influence this not now, and I agree. Labour now is debt-ridden in its reality,marginalized without a primary focus for itself. Harvey again gives the trajectory for this since the early Seventies.
The system of capital has been on a "head-trip" of fast billions-$$$$ accreting practically overnight, assets/derivatives get bundled, and no one even knows what is being sold nor bought; it is all in formula for fast accretion.
The "unfortunate" slow down of this now, is now within the desiring machinse of its return.It is what the G20 discuss, the "dream of return".
What is on bankers,politicians minds now are getting back to where they were, with alterations of course, but nothing too drastic;The system on surface needs to eradicate the more excessive ends, the Ponzi-Players. But Time is a factor on capital as well, so the "excessive" again may come to be the "normal" centers of finance, as we have seen.
There is an undisclosed trajectory for how capital doesn't know how it proceeds, once "profit in speed" is established; it merely happens endlessly;.Harvey addresses this admirably: Where do we go from here, and who will do it.
Things(the dynamics of capital) Harvey points out could be slower, and if capital turns itself slowly, the "trickle-down" could not be as treacherous, or erosive for the working poor of the the globe.
Now mass unemployment is the reality, and is what you see.Emigre workers are told to go home, empty office skyscrapers, developed housing now empty gathering dust.Capital is there however to buy at bargain basement prices. Those who had full-bodied capital can now buy.
If reinvestment, capitalizations do not occur quickly you have what we have now 30% of the productive capacity sitting idle. Speed is what determines who gets to realize surplus profit, or who goes bankrupt, like the second tier European nations, Greece, Portugal, Ireland, Spain and Italy. But how is speed the factor when the globe grows more or less at 3% compounded. Harvey likes to refer to the longue duree,(Braudel, Arrighi) since 1750 of the Dutch Bankers. If the productive capacity slows down or stops this development something needs to be changed.
But Harvey has no illusions, labour right now is not in a position to help itself for its own betterment, What can the striking workers in Athens or Madrid do now for power? Sit and wait and hope some moral principle will take root someplace, some time.
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