Limits to Capital [Paperback]

This is a very good, comprehensive book - that aims to 'bring together' the main theories originally advanced by Marx, in "Capital" (vol. 1-3), and at the same time develop this critique of capitalist political economy by situating it in a more contemporary context.

It is today considered unfashionable by orthodox social scientists to engage in 'political economy' - rather, the field has divided into the 'political' and 'economic' sciences. This, however, means that broader social questions are left altogether unaddressed - ignored or treated as taken for granted. David Harvey counters this orthodoxy with this detailed and timely book.

He advances a Marxist critique of the political economy of capitalism - engaging with the subject in a manner that is reminiscent of Marx's work itself: examining commodities, value, production, distribution, consumption, surplus value, accumulation, money, and the dynamics resulting from the contradictions inherent in the relations of capital. The title refers, therefore, to the parameters of capital as a social relation - to the limits of this relation, resulting from these inherent contradictions.

Harvey skillfully makes use of the developments in knowledge since Marx's time - and thus aims to bring the Marxist critique up to date. For anyone interested in understanding the political economy of capitalism, this book is an excellent source. For someone just starting one, the text can at times be a little difficult to follow - but this is, unfortunately, one of the features of Marxist analysis. Nonetheless, perseverance pays off - and much can be learnt from this enjoyable book.

I recommend it, especially for students of economics and sociology.

David Harvey is actually a geographer, but from reading this book, one would think him one of the great political economists. Based on this work alone, he should be in the popular range of Stiglitz, Schumpeter, Milton Friedman etc., but it is not likely that such 'honor' will ever befall a Marxist theorist. Nevertheless everyone interested in Marxist economics, for whatever reasons, simply must read this book.

Harvey's discussion of capitalism from a Marxist perspective is extraordinary clear, sharp and thorough. So much in fact that it is probably the most consistently in-depth exposition of capitalism from every aspect since "Capital" itself. This also makes it hard to review it, since one hardly knows where to begin.

Fortunately for political economy newbies (and this book is definitely the best kind of "introductory overview" you could give to an intellectual person), Harvey starts at the same point "Capital" starts, then works his way through. First he gives a clear exposition of the general framework of Marxist theory: the law of value, the differences between value, use value and exchange value, the mode of production etc. All this is done quite well, though there are of course many many such general descriptions available in print. Harvey does seem to skip over the "transformation problem" somewhat, which may annoy those who consider it a major hurdle. Harvey, in my view with good reason, does not.

The next two chapters discuss production, distribution, surplus value and its realization and the relation to supply and demand. Particularly useful here are his explanations of the importance of the concept of value composition of capital, and the reduction of skilled to simple labour, where he addresses one of Von Böhm-Bawerk's better critiques of Marxism.

The next part of the book is perhaps the core of the book. Here, Harvey delves into the organization of capital, the various forms which it can take and how these interrelate, and the tendency of the rate of profit to fall. He shows how the various manifestations of capital can interfere with each other's functioning and how this creates the tendency towards crises. He then posits the problem of overaccumulation (rather than underdevelopment) as the first 'layer' or 'cut' of crisis theory.

After the reader has grasped all this, the second crucial part of the book follows in a rapid manner, introducing first the problematic of fixed capital and its relation to the law of value, and then the role of credit in capitalism. The first is not very satisfactorily resolved and is in my view probably the weakest part of his theory. Alan Freeman has since given a quite different solution to the same issue, but that does not seem to really solve the problem either. Perhaps this is one of the things Marxist political economy has yet to fully solve.

Harvey's demonstration of the role of credit is however masterful and extremely enlightening for the many who are confused by the vast array of forms in which credit appears in modern society. His emphasis on the importance of understanding the so-called "fictitious capital", that is advanced capital not yet backed by actual value through production, allows him to show the second major appearance of crises in capitalism as well as explaining the theory of rent in Marxism, which forms the subject of the chapter thereafter. He corrects Marx' somewhat excessively anti-distributive theory of rent and explains the role of agricultural technology. Harvey is in many parts of this chapter rather confusing in his terminology, but a careful reader can certainly grasp the issue.

At the end of the book Harvey can finally follow up on his own area of expertise. By explaining the role of spatial and temporal relations in the flow of capital and the necessity of 'exporting' the internal contradictions of capitalist social relations, he is able to form a theory of imperialism that is largely in accordance with that of Lenin, but without the theory of underdevelopment. It also puts a good perspective on Marx & Engels' many journalistic articles about India and colonialism. Finally he combines this with the earlier two aspects to form the third 'cut' of capitalist crisis theory, which takes every aspect of capitalism in its modern appearance into account.

On the whole, Harvey has done an unparallelled and magisterial work in creating an exposition of capitalism that is at once as in-depth as "Capital" and much clearer (and shorter!) than that, although of course without Marx no such thing could ever have been made.
There are a few things nevertheless not covered (fully) in the book. Harvey pays surprisingly little attention to urban geography and (sub)urbanization as a factor in capitalism. Furthermore his theory of the state is a hodgepodge of different roles, which he never unites into one whole. Finally, people experienced in handling Marxist theory might have problems with Harvey's generally structuralist approach, which leaves relatively very little room for the autonomous significance of class struggle. Harvey mostly relegates that to the fields of production processes and labour mobility. Because of this, Lebowitz' "Beyond Capital" should probably be read alongside it as a complementary contribution, analyzing the same from the side of wage-labour.

Personally I am always grateful when anyone attempts to stand up for the teachings of Karl Marx and hence I do not count Harvey as a political opponent. However Harvey is conveying 'his' views on the limits to Capital and not the ideas of Marx. I first read this book in 1982 and thought it was off beam then. My concerns have been reinforced by revisiting the content once more. This review could be as long as the book itself so I will just try to give a flavour of what, in my opinion, amounts to Harvey's distortion of Marx's analysis in 'Capital'.Of course later editions may have addressed the deficits in my 1982 edition so this review may be unjust.

The main limit or 'barrier' to capital in the view of Marx is capital itself. Marx develops his analysis in the content of the three Volumes of 'Capital' and in the third volume identifies the tendential fall in the rate of profit as capitalism's Achilies Heel. The law of the tendency for the rate of profit to fall or LTRPF is the culminating point of Marx's critique of capitalism and perhaps one his greatest intellectual achievements. Marx has three chapters and a section of suplamentary remarks on the law with some sixty pages devoted to it. We would expect Harvey to at least address this concept in 'Limits'?

However try and find it in the book? Go to the Subject Index at the end and look for the 'rate of profit'? No seprate entry there under R for 'rate' so let's try unde P for 'profit'? Ok here it is in brackets (see falling rate of profit;surplus value). Follow the reference to the page numbers and I can't find anything substantive on the LTRPF. This is like trying to find a needle in a haystack. So where to now? Let's try under 'acummulation'? Here it is. Go to this section which looks at the 'first cut' theory of crisis and Harvey states:

'I say `first cut' because as we saw in the last chapter, his failure to integrate all of the insights from the first two volumes of Capital into the third prevents a full statement of the internal contradictions of capitalism (!)'

This is pure rubbish as work by numerous Marxist economists have proven that all three volumes of Capital logically 'cohere'. Bourgeois critics of Marx have been trying to prove inconsistency in his work for over a millenium and have failed. Harvey joins in by attemping to undermine Marx while claiming to base himself on his teachings!

In his summation at the end of the chapter I think we have a good example of the quality of the Marxist `scholarship' on offer here:

`This `first cut' theory of crisis (in which the LTRPF is never fully explained, not even The Law as Such, and where the fall in the rate of profit gets about a page and a half Bruciebaby) is a mixture of acute insight, muddled exposition and intuitive judgment all spiced up with a dash of the millennial vision to which Marx was prone (!)'

Now this guy calls himself a Marxist and receives widespread coverage in the media. Apparently he was awarded last year's Issac Deucher Award for his contribution to Marxist literature in 'Enigma of Capital'. If ever there was the equivalent of a Marxist luvie it would be him. The Marxist economist Michael Roberts was at the award ceremony and when he heard some of Harvey's ideas and that he was launching on-line video lectures on Volume II and III of Capital Roberts blogged that he was `really worried'!

No wonder. My advice is to read 'Capital' before considering approaching this book which is a muddled distortion of Marx's ideas.