Zombie Capitalism [Paperback]

Chris Harman's 'Zombie Capitalism' is a closely argued, fully referenced and indexed indictment of Capitalism from it's inception in the late 18th century up to today's current crises.

It starts with a general but detailed round up of Marx's concepts: commodities, labour value, surplus value etc. There then follows a comparison of Marx's ideas with those of his critics - neoclassical, Keynsian and Marxist variations.

Once this grounding is complete, and he has demonstrated the appropriateness of using Marx's analytical tools, he moves on to a discussion of how Capitalism works. This is a fairly generalised approach but lays the foundations for later chapters.

Once these basics are out of the way, Harman moves on to consider how Capitalism has developed since Marx's time and whether Capitalism has moved beyond useful Marxist analysis. He shows, pretty convincingly to my mind, that it has not and that a Marxist approach can still shed considerable light on the workings of the system.

Following on from that, he considers the role of the state. It is clear that states are deeply involved in not just maintaining Capitalism but as active participants. Even in these days of international or transnational corporations, Harman shows how rooted 'capitals' are in the nation state. In this, he echoes Alex Callinicos. Suggestions that nation states have outlived their usefulness are clearly false. However, the state is not simply a provider of currencies, rules, regulations, copyright protection, worker maintenance etc. but is also an active participant in the Capitalist enterprise. Apart from the obvious State Capitalism (in a Keynsian sense), there are the examples of Stalinist Russia and modern China.

The history of Capitalism in the 20th century inevitable starts with the Great Depression of 1929. This is followed by the long boom of the post-World War 2 period (the 'Golden Age'). Harman shows how this was maintained not simply by the recovery from the 'creative destruction' of the war, but also by the 'disposing' of surplus capital in the purchase of arms - Eisenhower's 'military-industrial' complex - helping to maintain rates of profit. But he goes further and considers the effects of this on Russia and the Eastern Block countries.

Then comes the end of the 'Golden Age', the crisis of Keynsianism and the turn to Milton Friedman and Monetarism. Of course, a lot of this is simple history. But Harman provides a thoroughgoing and, to my mind, pretty convincing Marxist analysis of this history. He considers not just the crisis of the Western capitalist economies but also the end of Stalinist central planning.

Part Three starts with 'The New Age of Global Instability' (P227). He suggests that, in many ways, the current era is a return to the period prior to the Second World War - in a sense, back to 'business as usual' (i.e boom/slump). He argues against the prevailing 'globalist' theories, again pointing out the dependence of capitals on nation states - it is simply not that easy to move factories and their necessary supply chains across borders. However, he recognises the increasing mobility of financial capital, as it roams the world, looking for a return on investment but, at the same time, shows the many ways that 'productive capital' and financial capital are closely intertwined. For example, he considers the bubble in the telecoms industry which resulted in a huge increase in cable networks - far more than can currently conceivably be used.

The final section 'The Runaway System' (P307) looks at the likely consequences of the current form of Capitalism and, predictably enough, it is not a happy picture. Environmental degradation, 'Peak Oil', the dangers to the world's food supply are all resulting in a runaway system:

'The runaway world is, in fact, the economic system as Marx described it, the Frankenstein's monster that has escaped from human control; the vampire that saps the lifeblood of the living bodies it feeds off. Its self-expansion has indeed led it to encompass the whole globe, drawing all of humanity into its cycles of competing in order to accumulate and accumulating in order to compete.' (P325)

Capitalism is, quite simply, insatiable.

And finally, he asks, 'Who can overcome?' (P329):

'It is the very development of capitalism that shapes and reshapes the lives of those it exploits, creating the objective circumstances that can turn a disparate mass of people who sell their labour power into an increasingly self-conscious class "for itself". This class is the potential agent for challenging the chaotic and destructive dynamic of capitalism because capitalism cannot do without it.' (P349)

Overall, this is a fascinating book. I have to admit that I found the first few sections of Marxist economics hard going, not having any background in the subject, but once equipped with the basic concepts involved, the analyses presented in the later sections were powerful and persuasive.

Chris Harman's book Zombie Capitalism is like a breath of fresh air amongst all the establishment writings on capitalism and the latest crisis. While they look upon capitalism as a recalcitrant child that won't behave itself, that keeps throwing unexpected tantrums, Harman shows in great detail how the behaviour of modern capitalism is inevitably driven by the need to accumulate, and to deal with the inherent tendency of the rate of profit to fall. And it's not as if that is news even to right wing economists - they've seen the effects, they've seen the figures. But to countenance the labour theory of value, to acknowledge that capitalism doesn't tend to equilibrium but to crisis, is political anathema. Instead they acknowledge amongst themselves that they can't explain what's going on. Their economic theories do not explain either the post-war boom, nor the falling rate of profit, nor the role of the state as capitalist, nor many other things.

Harman presents Marx's concepts of capitalism, explains the labour theory of value and the tendency of the rate of profit to fall. He explains how capitalism has responded historically to the declining rate by increasing exploitation both within a country and abroad. He shows how the drive to accumulate led to imperialism and how the role of the state as mediator in the struggle between classes has developed into being a major capitalist power in its own right.

Harman looks at the evidence behind the claims of neoliberalism to address the crisis of profitability and shows how far from showing progress, the crisis of profitability has worsened over the last thirty years. Despite claims from pundits that capitalism was entering some new phase of global capital, transnational corporation, the free flow of capital, it was still driven by the same factors. Instead of a harmonious global economy, we ended up with massive instability as the US tried to defend its market hegemony in the face of the growing internationalisation of capital.

Harman's book is an excellent resource, both in terms of economic theory but also in following the major events of the twentieth century. In a single book there is a clear Marxist analysis of the development of capitalism throughout the twentieth theory which can explain the depressions, the post-war boom, the growing role of the state, the political consequences of the internationalisation of finance, the collapse of the soviet bloc, and the continuing tendency of capitalism to crisis. It clears away much of the obfuscation in conventional economic theory ironically using official statistics and economic reports.

For all those wanting a detailed and thorough explanation of modern capitalism, this book is highly recommended. For those who were brought up on the economics of Lipsey and Samuelson, of equilibrium theory, the firm, and ideal markets, this is a breath of fresh air and will ensure that you never think of economics in the same way again.

The vast majority of books attempting to explain the financial crisis of the last few years have done so by reference to the greed, stupidity and criminal behaviour of the individuals mostly responsible. Few would deny that these are important causes of the crisis, but even right-wing authors have become uncomfortably aware that the problems must go beyond just the behaviour of individuals, and have started to wonder whether there isn't something fundamentally wrong and unstable about the whole system.
This is not exactly a new idea: one Karl Marx is the best known proponent of the view that the system would eventually eat itself. To be fair though, many more recent economists (including Keynes who comes in for some unduly harsh criticism in this book) were well aware of the instability of capitalism, but believed that government regulation could keep its wilder excesses under control. But for those who want a pure Marxist interpretation of recent events, which provides a coherent and largely convincing argument, it would be hard to do better than Mr Harman's book. Its great strength is that it provides a clear and detailed theoretical framework, and applies it rigorously to the whole of modern economic history up to the present day.
This is also the problem, because Mr Harman wants to relate absolutely everything to the Marxist concepts of surplus value and capital accumulation. Often the argument is convincing, but sometimes it seems merely reductionist. For example, one of the author's concerns (he was a member of the Socialist Workers' Party) was to apply the same critical framework to the Soviet Union, which he regards as equally "capitalist" in the technical sense. This produces, for example, an interpretation of the massive size of the Soviet defence budget after 1945 that is rigorously based on considerations of capital accumulation, and so ignores the (understandable) paranoid terror of a repetition of the horrors of 1941-45, and the need to retain massive forces to prevent it. In the end, this is not really convincing. In addition, his attempted rebuttals of competing Marxist analyses, though often persuasive, do often become a little tiring.
Whether you are a Marxist or not, this book will confirm all your worst fears that something is not just wrong, but very wrong, with the system. But it would have been more convincing, finally,if the author had been a little less rigid and sweeping in his approach.