44 of 46 people found the following review helpful
on 20 November 2010
David Harvey is probably both the best known and most prolific author on popular topics in Marxist economics today, and this is one of his best books so far. Working always from his perspective as an economic geographer, in "The Enigma of Capital" he uses the occasion of the current financial crisis to provide a lengthy and highly accessible popular overview of the theory of capital. He analyzes what capital is, where it came from, how it accumulates, how it relates to markets, what the role is of ground rent and localization in its movement (both metaphorical and real), and finally combines all this into a highly compelling political economic narrative. What is especially virtuous about this book, even compared with some of Harvey's excellent earlier works, is his ability to explain the general thrust of Marxist political economy in a manner that is easily understood by the wider newspaper-reading public and without using virtually any of the specific technical terminology of Marxism, as well as avoiding any of the explicit political content that is specific to Marxism (other than a very skeptical attitude towards capitalism as such). This is no mean feat given the complicated nature of capital and the different levels of analysis it seems to require to be fully understood. Harvey of course adds to the fairly traditional Marxist picture so narrated his own particular emphasis on place and space as essential mediating elements in capital's circulation, both economically and politically. I think this is a useful and important addition, in particular with an eye to the local impact of political economy becoming 'real' in this way - one need but look at Newcastle or Detroit and see what this means.
The book focuses on analyzing capitalism as it presents itself now - there is not much political commentary in terms of opposition to capitalism, except for some general comments at the end. This avoids, as too many Marxist economic books do, the question of realistic alternatives. It also does not pay particular attention to the 'prehistory' of capital. But both of these are very irrelevant objections, as the virtue of this book is not to be yet another rehash of things that have been done very well by others already. Its virtue is in integrating the analysis of space, crisis, and capital into a work for a general public that is hostile to Marxist terminology and skeptical about economists in general (both probably with good reason). For that reason alone, this book comes with warm recommendation - even more when combined with his other recent major works, "The Limits to Capital" (Limits to Capital) which works at a more in-depth theoretical level, and his companion to Marx's Capital (A Companion to Marx's Capital).
68 of 73 people found the following review helpful
David Harvey has produced an excellent study of capitalism, the current economic crisis and the way the Left could respond to it.
Harvey deals with the current economic crisis in chapter one and gives a clear, concise account of what went wrong and why.
As for the current crisis, that is pretty much it in this book. What Harvey is concerned with is the fact that the current crisis is just the latest of many and Harvey is most concerned with demonstrating that crises are innate and necessary to capitalism.
Harvey presents his re-working and re-theorising of Marx's analysis of 'Capital' to show how capitalism uses crises to reform, renew and revitalise itself. This Harvey accomplishes brilliantly. Harvey explains complex ideas in an easy to understand way.
Harvey theorises that capitalism may have reached a point where it cannot get over crisis and get back to a compound growth rate of 3% PA as the amount of capital that needs to be invested is simply too huge. Hence the growth of the financial sector and financial crises.
This leads to the final section on what the Left should do to tackle the crisis. For capitalism can solve it's problems as long as it makes people pay the price of it's crises: lost jobs, lost pensions, destroyed environment, wrecked public services and vast amounts of capital destroyed in wars.
Harvey argues for a uniting of the Left across a broad range of struggles and across the globe. A necessary yet difficult task. Harvey's focus seems to be to look beyond the traditional labour movements which seems to contradict many of his arguments about how capitalism works - Harvey doesn't seem to see the working class as central to a socialist challenge to capitalism. That may prove contentious. Harvey's book deserves to be widely read and a focus for debates on the Left as to how to respond to the current crisis.
4 of 4 people found the following review helpful
David Harvey analyzes thoroughly capitalism, neoliberalism and the latest financial tsunami. But, his solutions to solve the capitalist irrationalities are partly very utopian.
Capital is the lifeblood that flows through the body politic of all capitalist societies. Capital is a limitless process in which money is perpetually sent in search of more money via commerce, rent, property rights, royalties, financial trading etc.
Capitalism is founded on the individual freedom to engage in speculative money-making activities.
In order to explain the capital flows the author uses seven activity spheres and sees six potential barriers. They concern social relations (ex. labor), the environment (ex. natural limits), consumption (ex. lack of demand), money (ex. initial capital), technologies (ex. innovation), mentalities (ex. religion) and demography (ex. population explosion).
Crises are an essential part of the history of capitalism. The latest one was a financial tsunami propelled by neoliberal policies (a complete deregulation of all financial markets and institutions).
The author defines rightly neoliberalism as a successful class project legitimizing draconian policies designed to restore capitalist class power. The capitalists knew that they could bet the whole shop, because they had a guarantee that the government (controlled by them) would bail them out with tax-payer's money if the speculations went wrong (socialize the risks). A monstrous bail-out was needed, but it resulted in a further consolidation of capitalist class power (only 5 major US banks survived).
The irrationality of capitalism is blatantly visible in the coexistence of surplus capital and surplus labor, in the eyes of billions of people living in abject conditions and in the environmental degradation. The author's solutions, however, are partly very utopian. In addition to respect for nature and true democracy (no concentration of the political, judicial, military and media powers in a few hands), his hopes rest on the individual: radical egalitarianism in social and labor relations, self-realization in service to others (Kropotkin revisited) and the giving-up of daily comforts and rights.
Besides bibliographical errors, the author's appreciation of Mao's China is way of the mark. Mao's barefoot `doctors' had to learn medical practice on the spot (but not on him!) without any professional education (N. Cheng: Life and Death in Shanghai). Julia Lovell remarked very perspicaciously that Deng Xiaoping had clearly understood that the only chance for the Chinese CP to stay in power was to elevate drastically the living standard of the population and that by any means. The color of the cat was of no importance.
As nearly always with Marxist intellectuals, D. Harvey doesn't bother about the nature of the individual, the core of all societies, which are themselves only the sum of its members, nothing less, but also nothing more. Power (= survival) is an essential, dominating factor for any individual, because those who have it, live longer than those without it.
Before reading this book, I highly recommend a short introduction to capitalism and its dynamics by F. Braudel: 'Afterthoughts on Material Civilization and Capitalism'.
David Harvey is in no way a member of the group of intellectuals who sold their soul to the clique actually in power. His vision is genuine and to the point, but too optimistic concerning the nature of the individual.
This book is a must read for all those who are looking for serious solutions for the world's problems, even if today these solutions seem only dreams.
3 of 3 people found the following review helpful
on 18 February 2013
David Harvey shines the light on some fundamental flaws that capitalism is facing. Perpetual growth is what capitalists see as the best way to grow the economy, create jobs, create wealth and service debt, but debt is always growing faster than normal economic growth because of interest rates. And in order to service the extra weight of debt those interest rates put on top of current capital wealth countries need to tap into new profitable investments which primarily comes from taking advantage of natural resources.
3% perpetual global growth per annum is an exponent as this years 3% is bigger than last years 3%etc. To keep going the way we are, we are going to need larger and larger invest-able opportunities. Perpetual exponential growth is impossible on a planet with limited resources and the global economy is doomed to keep crashing if we keep putting such pressure on it to grow so rapidly. The reason we still run the world the way we do is because the few people who control the wealth benefit the most from this system. It is simply greed.
Is the answer no growth? I'm not sure. Sustainable growth may be possible if we tap into renewable resources like solar and wind power, and wean ourselves off of limited resources such as coal and oil. I may not agree with all the solutions that David Harvey may suggest, but he makes some great arguments and this is certainly a serious discussion that everybody needs to be having now. Not just those in government, as we have clearly seen how resistant they are to change, but the people. We need to be aware of the flaws and the pitfalls, we need to discuss solutions, we need to be a part of the conversation because the flawed system has to improve or change sooner or later. How many more economic crashes do we need to suffer until the people realise that nobody is going to help them but themselves.
Start by reading this book.
47 of 52 people found the following review helpful
on 3 June 2010
If you, like I, have found yourself pondering the banking crisis that befell the US and Europe at the close of 2008, agonised over the reasons and causes that led to the crisis, feel dispossession and indignation at the enormity and consequence of the bailouts, and wonder that the bailouts are indicative of counter-democratic tendencies, then David Harveys' 'Enigma of Capital' is a book for you; and if you have never contemplated any of the foregoing then David Harveys' 'Enigma of Capital' is also a book for you.
Prior to the events of 2008 and the succession of events that ensue within the Euro-zone I would never have considered reading such a title or such a topic, and I would have been scepitical that any one person could analyze the causes of a crisis, indeed a succession of crises, with such pragmatism and clarity. It is by chance and for unconnected reasons that in the new year of 2009 I began serious contemplation of other and more personal challenges and it was an entirely unexpected result that the direction I followed with regard to that would also yield unconventional insight in regard to economics, not from an aspect of a study of the flow of money, but from an aspect of evolutionary theory as applied to the long term functional evolution and expansion of economic activity. None of this makes me clever or knowledgeable but I do gain some satisfaction from having reasoned along one or two lines of thought and then subsequently finding similar assertions, and many, many more, put forward with aplomb and gravitas by Mr Harvey. 'The Enigma of Capital' is timely and revelatory in explaining not just the current, but a succession of market crises, and it resounds with me because a seemingly unlikely way of looking at things produced embryonic thoughts synergistic with (some of) the content.
David Harvey is a professor of anthropolgy with a detailed insight of Marx and Marxs' 'Capital'. Words like 'Marxism', 'Capitalism' and 'Communism' are loaded. Such loading precipitates pre-conceptions and such preconceptions would previously have been a barrier to my becoming interested, yet Harvey has fired curiosity in me, not for the political direction, but for potential to explain the how and why of the catastrophe.
Marx, I believe, was largely an essayist, reasoning out the evolutionary traits and likely consequences of growth and change within monetary economies and capitalist architectures much in the same vain that Darwin applied his insightful mind to the question of evolution. Marx, it is reported, had considerable interest in Darwins' work. It has taken decades for a clear endorsement and clarification of Evolutionary theory. Genetic science has now proven Darwin almost entirely correct in principle, albeit not entirely correct in the detail. For what I may know of Marx (very little) it may be that a succession of crises, especially the ripple effects of the banking crisis of 2008, and emerging analysis and comprehension could do for Marx what genetics did for Darwin, ie. prove him largely correct in principle. In appreciation of this Mr Harvey may have a head start over prevailing orthodoxy.
I agree with the two preceding reviewers, this is an immensely valuable analysis of the current financial and global monetary crisis that makes uncommon sense. I confess to be being a bit of a dullard, but I have found this volume to be both a compelling and readable explanation of a very challenging subject and it reads with the pace of a most skilfully crafted thriller. The suspense is in watching real-time events unfold as academics, advisers, governments and alliances try to face the ensuing challenges.
2 of 2 people found the following review helpful
David Harvey is one of the greatest living social scientists, and probably the most widely admired and quoted human geographer of all time. He virtually wrote the book on Post Modernism. His writings have been the among the most influential of the last forty years, with wide-ranging impacts in philosophy, sociology, ethics, politics, economics, human geography and even the arts and architecture. His Marxist credentials are beyond doubt and indeed, Marx or Marxism is mentioned on nearly every page of this incisive and erudite book from Harvey, published in 2011.
Harvey’s thesis is concise and clear – this book is a more popular style than some of his purely academic books which can have impenetrable English to some but nonetheless undiluted in its scope and vision – the world is not short of money, far from it. The problem typified in the 2008/2009 global financial crisis is that the world economies have to absorb $1.6 trillion excess capital per year and the only way that capitalists can absorb this money and produce yet more profit is to make more things – products or services – which requires more production and more markets to sell things.
In the 1960/70s labour was expensive, as it was unionised and based largely in the Old World economies – in the last twenty years 2 billion extra workers have come on stream in the former communist countries and the developing world. The markets in the West are depressed due to low wage rates and are hence supported by credit – both domestic and corporate – to sustain spending to buy more stuff. There is a limit to the number of houses or yachts that the superrich can own but no limit to the amount of money you can have in the bank. Excess cash needs to be turned to production so as to not lose out to the next competitor to come along. Finance has become an industry in itself. Neoliberalism is a dirty word in this book.
Harvey questions whether ‘3% growth per year’ is a good thing – at what cost? Also, he argues that the ‘boom and bust’ cycle is not a problem for Capital at all – in fact it is part of capitalism. Intellectually, it is difficult to argue against Harvey – in fact, I am sure most highly educated bankers at the likes of Goldman Sachs (etc) would agree with him - but are making hay while the sun shines – another point Harvey makes. Classically, where Harvey and his contemporaries fall down is in the presentation of a sustained and credible alternative thesis and this book’s later chapters are no exception. Marxism has always been strong as a critique of the paradigm but hasn’t worked very well as a paradigm shifter.
However, taking nothing away this is a superb book and stands well in the Harvey canon. Its historical and political insight, depth and breadth of knowledge, cross-referencing, and analysis are a delight and I continue to be an admirer of this man’s contribution to Post Modernism and an analysis of the political economy. This is an essential read for anyone interested in why the world doesn’t work. But don’t look for a solution in this book – we haven’t found one yet.
8 of 9 people found the following review helpful
on 3 August 2011
I purchased The Enigma having read "Social Justice and the City" during research for my Architecture dissertation. From this I knew that Harvey has a very clear style, and his work is thorough and engaging. While this book is targeted at the lay reader (myself when it comes to economics) one feels that he is not sparing any details, it has rigor and at times can be scientific and dense. Harvey's focused writing style guides you through however, making good use of familiar contemporary and historical examples to flesh out his arguments. While throughout it is good to remember that he is coming at the issue from a firmly Marxist POV, it is interesting to get this angle, which we rarely find in the mass media. All is not perhaps as well as some would want us to believe, he is after all sighting that the problems the world economy faces is systemic, and that "Getting back to Growth" is good for neither society or capitalism itself.
Harvey takes the economic discussion away from mathematical theory and fictions, and brings it back down to the human level, commodity, land and urbanism. He reminds us of the intertwined nature of the financial and political worlds, and gives us an insight to a worrying prospect of "the party of Wall Street" continuing to take capital accumulation into dangerous, unregulated and mysterious realms.
In short, I have started reading for a 2nd time, and have just ordered a few more of his earlier books!
1 of 1 people found the following review helpful
Reading this feels like galloping over rough terrain on a spirited thoroughbred out of control. The recent financial debacle of 2007-8 inspired Harvey`s analysis of the periodic crises in capitalism which seem to be inherent, together with the attempted solutions, and suggested future actions. Harvey, a "Distinguished Professor in Anthropology" and originally a geographer, quotes selectively and cogently from Marx, and clearly favours radical alternatives to "conventional" casually accepted capitalism.
His basic premise is the current consensus amongst economists and the financial press that a healthy capitalist economy in which most capitalists make a reasonable profit needs to expand at about 3 per cent per annum. "Credit-fuelled capital accumulation at a compound rate is a condition of capitalism's survival. Capitalism must generate and internalise its own effective demand" backed by money to pay for goods in the market.
Succeeding chapters explore the potential barriers to the accumulation of capital- lack of money, labour, resources, technology, resistance or inefficiency in the labour process and lack of "effective" demand. Although most of the ideas are likely to have been encountered already, it is useful to have them combined in one place.
I welcomed the lack of abstruse economic theory with equations and graphs, which may reflect the author's expertise as a geographer. He asserts that an obsession with mathematical models blinded economists to the danger of the early C21 debacle that few foresaw. However, I would have liked a more precise explanation of the new financial products, credit default swaps and derivatives which caused so much trouble. I also found many of the explanations e.g. of the relationship between the availability of labour and wage costs, too condensed and hard to follow for someone with no prior knowledge of economic theory.
Although the topics and relationships covered are wide-ranging and fascinating, the book has a breathless quality, fed by long complex lists of diverse examples which undermine the line of argument. Harvey seems unable to resist the temptation to qualify points with brief asides, often in brackets, thus adding to the disjointed effect. Many passages seem written in a semi-digested hurry. For instance, I wanted a deeper exploration of the implications of the "Walmart phenomenon" by which cheap retail goods produced by relatively cheap labour are imported from an ironically still communist China for American consumers, some of whom will lost their jobs in the process.
The radical ideas put forward in the final chapter seem too vague and undeveloped to be called solutions. Asserting that "an ethical, non-exploitative... socially just capitalism that redounds to the benefit of all is impossible" and "contradicts the very nature of what capital is all about" he concludes: "The accumulation of capital will never cease. It will have to be stopped. The capitalist class will never willingly surrender its power. It will have to be dispossessed."
Is he calling for bloody revolution, likely to lead to world wars and prolonged greater suffering and chaos than exist even now? He says lightly that it is good in itself to be utopian, but as a distinguished academic, does he not have an obligation to present rather more cogent and well-conceived proposals than this? Necessity being the mother of invention, many educated young people in developing countries are beginning to devise alternative life styles. Rising anger over social inequality and growing evidence of the dangers of under-regulated capitalism, exhaustion of natural resources, pollution and overpopulation, may give governments the impetus to modify capitalism with the support of the people. This is the only future I can see, rather than what sounds at time like an unrealistic rant from an ivory tower.
7 of 8 people found the following review helpful
on 17 November 2010
This book does an excellent job of explaining how we got into our current mess. It essentially explains how capitalism works, why it is by nature prone to periodic crisis, and how it has adapted at several crucial points over the last 200 years to overcome obstacles to continuous expansion. And perhaps most crucially how it may have finally run out of road.
Perhaps the most interesting insight is how adaptations have been made to overcome potential crisis. After WWII, there was a real risk of a massive global slump like there had been after WWI. Due to overcapacity. However a solution to this was found by the Americans lending money to Europe in the form of the Marshall Plan to create overseas markets, and at home, promoting consumerism and ensuring that most workers had well paid unionised jobs in order to create demand. The same process took place across the western capitalist world, thus rescuing capitalism.
By the 1970s however, high wages had become detrimental to profitabillity and capital accumulation. And so started the era of neoliberalism spearheaded by Thatcher and Reagan, who ensured that unions were smashed and jobs outsourced.
As real wages in the west stagnated however. This created a problem of maintaining demand. The solution to this was to make credit easilly available, and to make people substitute debt for wages to maintain consumption. Which for a short while worked. But as we have seen was never a sustainable solution. So where does it go now?
Essentially, to function, capitalism must constantly find productive outlets to soak up surplus capital, otherwise it is plunged into crisis. Perhaps inevitably in a finite world, it is becoming increasingly difficult for it to do this in a legitimate way, hence the deliberate creation of bubbles (.com, property etc) and the invention of fictitious financial "assets", which caused so much havoc to the world financial system in 2008, when they turned out to be worthless paper.
If this analysis is right, then we should expect to see regular serious crisis erupt in the near future, as capital either has nowhere to go, or is sucked up into yet more bubbles, followed by collapse and crisis. Capitalism as we have known it, may well become increasingly dysfunctional, and may be nearing the end of the road as a legitimate economic system.
The author gives only a vague account of what might replace it, calling for a revival of the concept of communism, although not offering much more detail than that.
Altogether a very interesting read.
1 of 1 people found the following review helpful
on 10 May 2012
Brilliant book.....only one flaw and that is how capital has a gross effect on the relationship with Nature. Harvey mentions 'global warming' a few times, but does not directly relate the issue with capital. I think it has something to do with a continued thought process (Marxist)that solely sees the problem as one of 'production' per se. I found reading 'Environmental Ethics' by Patrick Curry an ideal companion to this book as Curry explains the role of capital and capitalism involvement in 'global warming. Both books are essential reading.