I have been reading David Harvey’s “Organizing for the Anti-Capitalist Transition” (2010). Harvey’s theory of the current crisis differs somewhat from the other Marxists I have been following. I actually rather enjoyed reading Harvey because he is simple to read without being simplistic like Wolff’s and Resnick’s piece. Harvey gave this originally as a talk to the World Social Forum in 2010,
Harvey opens his talk by stating boldly:
The historical geography of capitalist development is at a key inflexion point in which the geographical configurations of power are rapidly shifting at the very moment when the temporal dynamic is facing very serious constraints. Three percent compound growth (generally considered the minimum satisfactory growth rate for a healthy capitalist economy) is becoming less and less feasible to sustain without resort to all manner of fictions (such as those that have characterized asset markets and financial affairs over the last two decades). There are good reasons to believe that there is no alternative to a new global order of governance that will eventually have to manage the transition to a zero growth economy.
I liked his argument here, but, I think, he could have clarified things by explaining what he meant by “three percent compound growth…” Growth is one of those terms from bourgeois economics that has been adopted into the lexicon of Marxism as a category without critical examination. When Harvey then proposes that “compound growth” must sooner or later give way to “zero growth”, he unwittingly injures his own argument.
Wikipedia defines economic growth this way:
Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, “economic growth” or “economic growth theory” typically refers to growth of potential output, i.e., production at “full employment,” which is caused by growth in aggregate demand or observed output.
“As an area of study, economic growth is generally distinguished from development economics. The former is primarily the study of how countries can advance their economies. The latter is the study of the economic aspects of he development process in low-income countries.
As economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure.
The definition is fraught with problems precisely because Marx’s theory examines capitalism in a fashion that it fundamentally at odds with bourgeois economics. For instance, in Marx’s theory what matters most in the analysis of the mode of production is not the raw production of use values like shoes or houses, but the production of values appearing in the form of shoes and houses.
What Harvey is calling into question, it at first appears, is “the increase in the amount of the goods and services produced by an economy over time”. Harvey, therefore, appears to be arguing that there should be no increase in the production of use values — that we should have “zero growth”. His argument, if not properly understood, seems to be that increased production of shoes and cars and houses and carrots is unfeasible. Perhaps he believes this; but if he does that pretty much leaves the vast majority of the planet in poverty. This is one of those instances where adopting the categories of bourgeois economics uncritically can have woeful consequences.
However, I think this was not his point at all — it would be hard to argue Harvey thinks the rather pronounced poverty of Africa should be ignored in favor of a no-growth economy. Harvey is criticizing growth that cannot be sustained “without resort to all manner of fictions”. I think he is arguing this is a characteristic of capitalist economic growth — that it requires fictions to be realized. Harvey appears to be saying: “Three percent growth isn’t possible in a capitalist economy long term because it relies on financial fictions to achieve.”
I can’t be sure of this, however, and I am prepared to be told that is not his point at all.
This still leave us with a problem. Harvey states:
There are good reasons to believe that there is no alternative to a new global order of governance that will eventually have to manage the transition to a zero growth economy.”
Actually this is not true. In fact, we have a choice: A zero growth economy with capitalism, or three percent growth without capitalism. In fact, a three percent growth itself is only a very low rate of growth in output imposed on us by the capitalist mode of production — there is no reason to think we have to observe this limit under a communist mode of production. Capitalism imposes this very low minimum growth rate because under capitalism growth is possible only by resorting to financial fictions. If the need for financial fictions disappeared, so would this very low level of growth. However, this choice is not at all clear because of the way Harvey sets up his argument in the opening paragraph of his talk.
David Harvey argues “The current crisis originated in the steps taken to resolve the crisis of the 1970s.” He lists off 6 of these steps:
- global wage repression and unemployment;
- opening previously protected national markets to world market competition;
- heightened concentration and centralization of property;
- employment of consumer debt to offset falling wages; and
- growth of speculative capital.
I would suggest all of these steps show the crisis of the 1970s was not resolved but were turned into permanent features of the world market. Perhaps a better way for me to say this is the steps taken to resolve the crisis of the 1970s resulted a regime of permanent crisis whose symptoms are listed above.
Harvey writes neoliberalism is a contradictory political ideology promoting the dismantling of fascist state economic policy and bringing these states into competition with each other to attract capitalist investment. This effectively converted nation states into local representatives of the largest and most mobile capitals in the world market. Harvey is making a strong argument that nation states, no matter their forms, no longer represent their respective proletarian majorities.
He then asks:
So how can the left negotiate the dynamics of this crisis?
I understand this question on two levels: first, how does the Left negotiate a crisis that is more or less the permanent crisis of the 1970s. Second, how does the Left negotiate a crisis where effectively politics no longer exists — and where practically there is no longer a Left? I am pretty certain Harvey would take exception to my characterization of his argument, but let’s look at it.
If the 1970s was a crisis of fascist states — i.e., of “state led monopoly capitalism” — and it resulted in states being drawn into ruthless competition with each other to attract globally organized highly mobile capitals, the proletarian majorities of these nations are being told to reduce their living standards or watch capital move to more compliant locales.
What is the “Left” position in the face of such a threat? What is the “Right” position in the face of such a threat?
This, I think, is why there is great upheaval in the protest movements with both “Left” and “Right” critics of the fascist state economic policy in bed together. Remember, the argument against NAFTA was heard on both the “Left” and the “Right” — Perot and Nader. Even now both Occupy and Tea Party claim they are not exclusively for Right or Left opponents of Washington. When the state itself is called into question by events politics loses its organizing principle. So, on one level Harvey is asking “How should the Left respond to the crisis of the fascist state?” On another level he is asking “Is there a Left anymore when the fascist state itself is dying?” Can we speak meaningfully about “Left” and “Right” when Washington is outraging everyone, regardless of politics, by bailing out banks?
What purpose do silly labels like “Left” and “Right” serve in this context in the United States? In Greece? In China? Let’s remember the “Right” won in the 1930s – which is why fascism triumphed; and they won again in the 1970s – which why we have globalization. If the “Left” (understood as the proletarian majority) had won in either case, we would have seen a reduction in hours of work — not fascism or globalization.
Harvey’s question “So how can the left negotiate the dynamics of this crisis?” comes down to: “How do we address this crisis when the state itself is the effective representative of the largest and most mobile global capitals.” A situation that is true not only in the United States but also in Greece and China.
The second question Harvey asks is “Can capitalism survive the present trauma?” Harvey seems to think the answer to this question is “Yes.” I am not so sure I agree with him on this. If this crisis is a continuation of the 1970s crisis (which is to say if it is just part of the ongoing crisis of fascist state economic policy and the progressive collapse of the fascist state itself) I don’t see how the capitalist class is doing anything other than accelerating toward its own demise.
What made fascist state economic policy work was not simply the continuous devaluation of wages but also the continuous expansion of unnecessary labor in the form of fascist state expenditures. If this is now replaced by both devaluation of wages and fascist state austerity an economic catastrophe is likely imminent. In the United States we have a name for this two-sided process: Detroit.
Harvey seems to think this can all be held at bay by further impoverishment of the mass of society and the jackboot, on the one hand, and new opportunities opening up “in some new space to seize opportunities to challenge older class and territorial hegemonies…” He uses Silicon Valley as an example of this process. But, in fact, he is just spouting bullshit at this point. There is no way he can argue Silicon Valley replaced Detroit by any measure of economic activity. Actually it was the reverse: Silicon Valley accelerated the loss of industrial employment with new process of production and a changing geography of labor employment. That is exactly why we are now in this depression.
Harvey hangs his prediction on the likely outcome of this crisis on an alleged “new space to seize opportunities to challenge older class and territorial hegemonies…” versus “…radical movements to challenge the reproduction of an already destabilized class power.” But, both the depression of the 1930s and the depression of the 1970s suggests he is wrong on this. In neither depression did new spaces for capitalist accumulation open up nor was the capitalist mode of production seriously challenged. Instead, further concentration and centralization of capital occurred and the proletarian mass of society sought to reproduce themselves as before the crisis. Using the two 20th Century depressions as case studies it does not seem likely either of Harvey’s predictions have merit. This conclusion seems all the more probable since the collection of fascist mini-states have less power than in either of those depressions. Greece, even under the control of the “Left”, is rather unlikely “to challenge the reproduction of an already destabilized class power.” Insofar as we are talking about political action the Greece fascist state has almost no residual power to upset world market relations.
Harvey asks: “So what will happen this time around?” If I understand Harvey’s argument on this point correctly each percentage increase in output has to result entirely in an equal quantity of wasted labor:
If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030. This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted). Real problems of finding adequate outlets for surplus capital began to emerge after 1980, even with the opening up of China and the collapse of the Soviet Bloc. The difficulties were in part resolved by creation of fictitious markets where speculation in asset values could take off unhindered. Where will all this investment go now?
I think Harvey is right on this. With the competitive pressures being exerted on the economic policies of the various fascist states their ability to offset chronic capitalist overaccumulation with wasteful spending is severely compromised as in Greece. As Harvey argues
Leaving aside the undisputable constraints in the relation to nature (with global warming of paramount importance), the other potential barriers of effective demand in the market place, of technologies and of geographical/ geopolitical distributions are likely to be profound, even supposing, which is unlikely, that no serious active oppositions to continuous capital accumulation and further consolidation of class power materialize. What spaces are left in the global economy for new spatial fixes for capital surplus absorption? China and the ex-Soviet bloc have already been integrated. South and SouthEast Asia is filling up fast. Africa is not yet fully integrated but there is nowhere else with the capacity to absorb all this surplus capital. What new lines of production can be opened up to absorb growth? There may be no effective long-run capitalist solutions (apart from reversion to fictitious capital manipulations) to this crisis of capitalism. At some point quantitative changes lead to qualitative shifts and we need to take seriously the idea that we may be at exactly such an inflexion point in the history of capitalism. Questioning the future of capitalism itself as an adequate social system ought, therefore, to be in the forefront of current debate.
Of all the Marxist academics I have read these past few weeks, Harvey is almost alone in his insights on this issue. Harvey is raising the question whether all growth this cycle will not be entirely composed of financial speculation. He is correct that this is not even on the radar of most writers. The problem, however: Harvey seems to imply the present trajectory of the capitalist mode can be reversed back toward state economic policy.
Yet there appears to be little appetite for such discussion, even among the left. Instead we continue to hear the usual conventional mantras regarding the perfectibility of humanity with the help of free markets and free trade, private property and personal responsibility, low taxes and minimalist state involvement in social provision, even though this all sounds increasingly hollow.
Perhaps I am projecting here, but Harvey appears hold out hope globalization and the neoliberal policies associated with it must be reversed through a revived “Left” politics. Frankly, if Harvey is expecting any such reversal within the context of a “Left” political movement — i.e., within purely national political forms — I think he is delusional. Worse, he is being as reactionary as the “Left” was in the last two depressions. Global accumulation is a permanent feature of the capitalist mode of production and cannot be reversed. Even an attempt in that direction is foolhardy and ultimately regressive. Our future is bound up with a global production and exchange process, and any solution must take this global circuit of capital as its starting point.
The legitimacy crises that are unfolding at this very moment, and for most of the last 40 years, are precisely legitimacy crises of nation-state politics and a legitimacy crisis of political ideologies bound up with nation-state politics — “Left” and “Right”. This was already clear when Barack Obama’s and Scott Brown’s election in Massachusetts produced nothing tangible but disappointment for the radical voices on both “Left” and “Right”, respectively. And, it was brought home in August of 2011 when the GOP folded on the debt limit debate despite the election of dozens of Tea Party candidates. The indifference of fascist states globally to the anger and dissatisfaction of their working small producer class majorities is now palpably evident.
The “Left” really has to get it through their thick skulls that globalization is not going to go away; it cannot be reversed in any fashion. Reversing globalization is as much a pipe dream on the “Left” as restoring the gold standard is on the “Right”.
Harvey sees two problems:
The central problem is that in aggregate there is no resolute and sufficiently unified anti-capitalist movement that can adequately challenge the reproduction of the capitalist class and the perpetuation of its power on the world stage. Neither is there any obvious way to attack the bastions of privilege for capitalist elites or to curb their inordinate money power and military might. While openings exist towards some alternative social order, no one really knows where or what it is. But just because there is no political force capable of articulating let alone mounting such a program, this is no reason to hold back on outlining alternatives.
Frankly, this statement just points to Harvey’s difficulty applying his deep knowledge of, and experience teaching, Capital to the present crisis in a way that pulls us back from the abstractions of the labor theory of value. As a practical matter all the power of “capitalist elites” come down to is control of the labor process and the activity of billions of individuals. The inordinate money power and military might of the capitalist class are nothing more than the activity of billions of folks confronting us as the property of a handful. Taking away this power from them means only taking away our labor from them — denying them employment of it to produce surplus value. How this can be accomplished is clearly a problem that is more complex than simply stating this is what needs to be done. However, if we are discussing What Is To Be Done a la Lenin, the task confronting us is not difficult to formulate: we must withdraw our labor power from the capitalist production process. Nor is it difficult to identify who exactly must withdraw their labor power from the capitalist class — it is a collective act that must be accomplished by each of us and all of us together and at once.
Is it realistic to expect the working classes of at least the most important nations in the world market to withhold their labor power? Moreover, is it realistic to expect this as a spontaneous movement of these working classes? I think these questions answer themselves. All of the big movements that have come on the scene in the past three years have attempted actions along the lines of the 1930s and 1970s — the revolution in Egypt, the protests in Greece, and southern Europe, the Tea Party and the Occupy movement have all attempted a restoration of outmoded political relations in the face of globalization. The oft-quoted rebuke by Lacan to the students of 1968 Paris applies here as well: “As hysterics, you demand a new master. You will get it!” The attempts to recover the nation-state are nothing more than an attempt to find a new master amidst the rubble of the old state.
Tags: David Harvey, Depression, economic growth, economic policy, Fascist State, fascist state political economy, great depression, Great Stagflation, Keynesian economics, neoliberal, neoliberalism, otma, political-economy, The Commune, The State, zero growth