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).
on 10 May 2010
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.
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.
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.
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!
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.
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.
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.
on 31 October 2012
I was disappointed with this book. It a is very much a "Curates Egg of a book", ie, good in parts. The first half of the book is actually very good - explaining clearly the roots of the current post 2008 world economic crisis, and situating this within a more general explanation of the intrinsically crisis ridden operating structure of capitalism. It is particularly good in explaining how Finance Capital is now so disproportionately powerful compared to the other sectors, (and also corrupting/dominating the nominally democratic political processes of individual states), that it has become an out of control almost structurally cancerous growth - plunging the entire world into greater and greater crisis.
The book's second half gets bogged down in a rather unnecessarily extensive description/analysis of urbanisation as a key driver of capitalist development. It is also very repetitive in many places, with key phrases from earlier in the book restated again and again, a bit like those irritating TV programmes in which there is an "updating" repeat of the key points after every advert break ! One suspects this is because the book is based on a series of lecture notes. Better editing needed.
There is also some astonishingly crass dismissals of the death and suffering of millions of people during WWII and the disastrous experiments of the Mao Stalinist dictatorship in China:
p.138."Conversely seemingly negative developments (such as Mao's Great leap Forward or the Second World War that set the stage for rapid economic growth after 1945) may turn out surprisingly well."
Now if this was a cynical comment about some of the worst disasters in human history nevertheless turning out "surprisingly well" for capitalism as a system, one could accept this.. but this doesn't seem to be the tone of the comment, and others ! Harvey seems to have serious illusions (as yet another academic happy to be hostile to the undoubted cruelties of Bourgeois capitalism but prepared to ignore the cruelties of that perversion of the socialist ideal.. Stalinism) about the nature of the vicious State Capitalist tyranny running China in the name of "Communism" This even when it is well on the way to converting itself into a conventional self enriching Bourgeois class., from its bureaucratic collectivist class origins. Apart from anything else , Harvey, must be one of the few people nowadays who can see the utter disaster of the entire series of crazy policies undertaken by the Mao dictatorship, ie, Collectivisation, The Great Leap Forward, The Cultural Revolution, as anything but a disaster for China. The human cost is estimated as anything up to 30 million people dead. It is true though that these man made disasters can be argued to have so traumatised the Chinese population that from then on the entire Chinese people were completely malleable to every shift and turn of Comunist Party policy, Even the shift back to private enterprise capitalism and the emergeance of a new billionaire class - integrated with the upper echelons of the communist party elite !
The American terminology mindset of Harvey is again rather obvious by the completely incorrect way he defines "Socialism" (as opposed to "Communism") as analogous to the Social Democratic /Labour Party type management of a capitalist state, Sorry, Harvey, that simply aint "socialism" , its still just (slightly temporarily modified) capitalism - with a few of the nastier bits softened by some Welfare State additions. "Socialism" , as we Europeans are well aware, is what the Soviet Union should have been if the Stalinist Bureaucracy hadn't crushed the fledgling revolutionery Workers state after the international isolation of the post 1917 period.
Because the book was written in about 2009, with a superficial 2011 update, Harvey assumes the 2008 crisis is past its worst. Today (late 2012) it is quite obvious that state by state competitive "austerity" is driving the entire world economy deeper and deeper into the new Great Slump. Harvey has no coherent strategy for the 99% to take on the ever growing power and endless greed of the richest 1% - particularly as he essentially writes off the potential for the organised working class to get its act together to combat the desire of the world's ruling elite to make the rest of us pay for the crisis in ever greater impoverishment. Instead he just maunders endlessly on about the usual rainbow alliance of diverse anti capitalist forces. I suspect, as the growing forces of the Radical Left in places like Greece and Spain show , (matched by a similar explosion in the Fascist Right), the next period will be closer to the violent upheavals of the 1930's than Harvey can envisage.
I can't recommend really this book. There are better explanations of how capitalism works, and better explanations of the current crisis.
on 5 January 2011
In the modern world one would be forgiven for asking the question of where true human and social values are going. What is the aim of this rat race most of us are caught up in. The better job, the bigger house, faster car and more attractive bank balance... or in worst case simple survival to keep up. All at what cost?
Is the global or capitalist system sustainable? A simple question not asked often enough. Is survival of the fittest to apply only to the people who are better connected, more educated or to those who understand how the financial markets work. If so I personally believe we are in for a bleak future.
This book addressed many of the thoughts I had but could not verbalise or structure in my head. It answered questions which were beyond my humble comprehension and helped me see new angles to aspects of our developing world today.
While not providing all of the answers it certainly would raise many valid questions and help to formulate a debate on whether there is a better more coordinated way to collectively manage the world we live in.
Surely boom and bust to the detriment of many working class and the benefit of the rich can not be something we condole indefinitely into the future.
The answer will eventually lie in the collective power of the people. Ideally through a democratic vote. However, first people need to be educated re an alternative and unite to make a difference.