Harvey has long been a critic of capitalism’s inhumanity. In his 2014 book Seventeen Contradictions and the End of Capitalism, he yearningly imagined that the system is under threat as never before, just as the likes of Paul Mason and Slavoj Žižek regularly do. Global warming, habitat and species destruction, water scarcity and environmental despoliation suggested to him that it was in danger. So too did the fact that it was proving harder to find profitable investment opportunities.
Ever since 2008, sales of Das Kapital have risen, as some hope to find in its pages answers to our current woes. Just possibly, copies sit unread, forbidding rebukes to good intentions. Harvey’s book, like the now half-century-old Reading Capital by Louis Althusser and others, lays out the main arguments and insists on the relevance of Marx’s Victorian tome to a global capitalism very different from the one Marx analysed.
This book is also, however, when necessary, a creative betrayal of Marx. For instance, he imagined (apparently without irony) that the creation of new wants and desires was part of capitalism’s civilising mission. Harvey takes that endless manipulation to be our spiritual degradation as do the heretical neo-Marxists of the Frankfurt School.
Harvey still uses his grandparents’ knives and forks, while the rest of us assure market growth by consuming ephemeral products for instant gratification. He cites Netflix, though how Amazon, Apple and Facebook got off the hook is anybody’s guess: “Rapid transformations in lifestyles, technologies and social expectations multiply social insecurities and increase social tensions across generations as well as between diversifying social groups.”
We’re all familiar – aren’t we? – with the queasiness attendant on such rapid changes in how we live, changes that seem to have nothing to do with us, but to which we are forced to adjust, even on pain of losing what we belatedly realise is not an expendable commodity, namely our dignity. Or as Žižek puts it in Less Than Nothing: the “logic of exchange-value follows its own path, its own mad dance, irrespective of the real needs of real people”.
Let us turn to the last chapter in David Harvey's book, Marx, Capital and the Madness of Economic Reason, to see where this "madness" of "economic reason" is leading to;
"the insane and deeply troubling world in which we live."
Harvey begins the chapter on The Madness of Economic Reason pointing to the difference in the way commodities, when they are consumed drop out of circulation whilst money which goes on for ever. However, the disappearance of a commodity when consumed is contingent on;
the prior conversion of value from the commodity into the money form and money has the capacity to remain in circulation in perpetuity. "In the case of money,"writes Marx, "it becomes madness; madness, however, as a moment of economics and as a determinant of the practical life of peoples." (1) Daily life is held hostage to the madness of money. But wherein lies this madness?
Money in a world of exchanges simply facilitates the exchanges. But in the world of capital and surplus value production money takes on a quite different character. Value here "preserves itself through increase; and it preserves itself precisely only by constantly driving beyond its quantitative barrier . . . Thus, growing wealthy is an end in itself. The goal determining activity of capital can only be that of growing wealthier, i.e. of magnification, of increasing itself." Money, insofar as it works as a measure of wealth, must likewise engage in "the constant drive to go beyond its quantitative limit; an endless process. Its own animation consists exclusively in that; it preserves itself as a self-validated exchange value distinct from use value only by constantly multiplying itself." This is what distinguishes money under capitalism from all its multifarious pre-capitalist forms. "Money as a sum of money is measured by its quantity. This measuredness contradicts its character, which must be oriented towards the measureless."(2) It can never be contained or restrained.
This is what Hegel refers to as 'bad infinity'. This the form of infinity that has no ending and which, like God's wisdom, surpasses all human understanding. The number sequence is its paradigmatic form. For every number there is always a larger one which goes beyond. The world's money supply, absent the constraint of any material gold base, is a bad infinity. It is simply a set of numbers. Contemporary capitalism is locked into the bad infinity of endless accumulation and compound growth. In Marx's interpretation, Wayne Martin suggests, "capitalism is essentially oriented to an incompleteable infinitude, an orientation grounded in the ontology of capital itself."(3) Money can accommodate to the infinite need for the expansion of value simply by having the central banks add zeros to the money supply, which is what they do through quantitative easing. This is bad infinity, the spiral that gets out of control, run riot. We used to speak in terms of millions, then it became billions and trillions and soon, doubtless, we will speak in terms of quadrillions of dollars in circulation, a number which passes any real understanding.
The Möbius strip . . .
. . . or the Escher staircase
Harvey continues . . .
Hegel's virtuous infinity is the circle, the Möbius strip or the Escher staircase in which motion can continue for ever but where everything is calculable and knowable in advance. In the first two volumes of Capital, Marx devotes lengthy chapters to simple reproduction that might be possible in a non-capitalist world of zero accumulation. The trouble starts with the production of surplus value and the necessity of its perpetual expansion, which entails the shift from a cyclical virtuous infinity to a spiral of endless accumulation. It is this shift that forces the perpetual pursuit of an 'incompleteable infinitude' on the part of capital. Use values, though clearly limited by material constraints, are not, as we shall see, immune to this madness. There are 'attempts to raise consumption to an imaginary boundlessness' while much else 'appears as limitless waste' in which the accelerating degradation of the environmental commons feature so prominently. (4) Pages 172-73
Harvey continues the argument thus . . .
Our understanding of the world is held hostage to the insanity of a bourgeois economic reason that not only justifies but promotes accumulation without limit while pretending to a virtuous infinity of harmonious growth and continuous and attainable improvements in social well-being. The economists have never confronted the 'bad infinity' of endless compound growth that can only culminate in devaluation and destruction. Instead they laud the virtues of a bourgeoisie who have triumphantly "subjugated historical progress to the service of wealth".(9) They steadfastly evade the question of whether crises are inherent in the system. Crises, they say, are due to acts of God or nature or to human errors and miscalculations (particularly those attributable to misguided state interventions). Any or all of these can derail the supposedly immaculate machine of endless free market capitalism. But the machine in itself, the economists hold, is the epitome of perfection. When confronted with a crisis, the economists can only claim "that if production were carried on according to the textbooks, crises would never occur'. 'Every reason which they (the economists) put forward against crisis is an exorcised contradiction, and therefore a real contradiction. The desire to convince oneself of the non-existence of contradictions, is at the same time the expression of a pious wish that the contradictions, which are really present, should not exist."(10) Contemporary economic science is contradiction-free.
It is in this context that Marx decided to dedicate so much of his intellectual effort and working life to the critique of political economy and the madness of economic reason. In the process, he uncovers deeper and deeper irrationalities and 'insane forms' in the systemic thought and political programme that is supposed to guide us to a utopianism of everyday life. The contradictory laws of motion that he identifies solely advantage a capitalist class and its acolytes, while reducing whole populations to exploitation of their living labour in production, to paltry possibilities in their daily life and debt servitude in their social relations.
The madness of economic resaon, Marx discovers, is further magnified by the growing antagonisms between value and its monetary representations. As money is necessarily cut free from any material base (such as that of the money commodities of gold and silver) so its idealist constructions (as numbers of dollars, euros, yen etc.), and even more importantly its increasing appearance as forms of credit money, become vulnerable to the vagaries of human judgements, open to excesses and manipulations by whoever holds the reins of power. "From its servile role . . . as mere medium of circulation, (money) suddenly changes into the lord and god of the world of commodities' that can be 'tangibly brought into the possession of a particular individual." Money is an individualised claim upon the social labour of others in exactly the same way that debt is a claim over the future labour of those others. Money gives its possessor "a power over society, over the whole world of gratifications, labours, etc."(11) The gap between the proliferation of such claims and the value base upon which such claims might be based has widened enormously since Marx's day. If everyone in the world went to the banks to demand cash equal to their deposits then it would take several months if not years to print the notes required. Two trillion dollars a day change hands on foreign exchange markets.
But this is only the tip of the iceberg of phenomena within the financial world. The flows of credit moneys, of that form of anti-value which capital itself creates, have increased enormously since the 1970's. (12) In the first instance these flows lubricate activities within the field of distribution itself. The latter more and more appears as a black hole into which a mass of value disappears in the name of debt redemption, without any security that it will ever re-emerge. Inter-bank lending is at an all-time high as are the interchanges between financial institutions and the central banks. Banks have long lent to governments against the state's power to tax. The power of the state to tax is reciprocally used to bail out banks in trouble. The escalating national debts of the leading states have not the faintest hope of ever being legally retired. But significant flows of tax revenues into debt redemption become normalised within the field of distribution as a whole. Much of the effective demand derived from state expenditures, on the other hand, is fictitious capital (anti-value) generated within the credit system and lent to the state. The claims to future value production endlessly expand. Consumer credit (some of it of a predatory sort) is made available to everyone (including workers and students) and typically escalates as it circulates. the fantasy of 'an imaginary boundlessness' in consumption is avidly pursued. Credit flows to land and property owners. It fuels speculation in rents and other asset values that then have the power to magically increase without limit. Merchants and industrialists borrow even in the face of the potent power of anti-value that may destroy them at some future date. Merchants, land and property owners, states and anyone else who saves (including more privileged sectors of the working classes) deposit surplus funds in financial institutions in the expectation (sometimes deceived) of a rate of return.
Marx recognised the importance of fictitious capital formation and asset speculation while highlighting the madness of their economic reason. He understood full well that these inter-distributional relations constitute acute "moments of economics" affecting "the practical life of peoples". But, as everyone knows, this is a notoriously opaque and mystified arena of capitalist activities that eludes any easy summary or even superficial description.
To study capitalist economic history is to study this madness in action.
Pages 174-78
Harvey then proceeds to identify patterns of this craziness in the recent post-financial crisis of 2008 context, especially the global impact of the Chinese economy in a "globalised" world. He then looks at how the relative spaces of the global economy are being revolutionised, and, as he says; "yet again";
. . . not because it is a good idea or desperately wanted and needed in itself, but because this is the best way to stave off depression and evaluation. The absorption of surplus capital is the aim. Marx understood this all too well. "Next in urgency, perhaps, to the desire to acquire money, is the wish to part with it again for some species of investment that shall yield either interest or profit; for money itself, as money, yield neither . . . Enterprises which entail a large capital and create an opening from time to time for the excess of unemployed capital . . . are absolutely necessary . . . so as to take care of the periodic accumulations of the superfluous wealth of society, which is unable to find room in the usual fields of application."(31) The result of this particular case is a wholly new material base of space relations for the reconstruction of the world's divergent value regimes.
Capital is not the only agent involved in this spatial restructuring. Mas migratory movements are bringing labour forces together into competitive configurations. This has also happened before but it is now, like the case of Chinese cement (see Note below), at an unprecedented scale. It is not only the volume of migratory movements that counts. The labour forces of the world have been brought into a competitive relation with each other by declining transport and communication costs, organisational technologies and changing speed (rather than costs) of movement as well as through the development of complex commodity chains. Time-space compression in both capital and labour force relations produces a range of political stresses and responses varying from anti-immigration movements, the rekindling of nationalist fervours or, on the positive side, the willing embrace of multiculturalism as a harbinger of a different human future.
Harvey ends this remarkable chapter in this remarkable book thus:
Capital "as a special kind of commodity'has always "had a special kind of alienation peculiar to it'. (51)'The entire immense extension of the credit system, and credit as a whole, is exploited by the bankers as their private capital. These fellows have their capital and revenue permanently in the money form or in the form of direct claims to money. The accumulation of wealth by this class may proceed in a very different way from that of actual accumulation, but it proves in any case that they put away a good proportion of the latter."(52) The problem is that finance typically "gives rise to monopoly in certain spheres and hence provokes state intervention. It reproduces a new financial aristocracy, a new kind of parasite in the guise of company promoters, speculators and merely nominal directors; an entire system of swindling and cheating with respect to the promotion of companies, issues of shares and share dealings."(53) Furthermore, "if surplus value is conceived in the irrational form of interest, the limit is only quantitative" and the consequences of this , Marx adds, "beggars all fantasy". (54) Bad infinity raises its ugly head. The bonuses the Wall Streeters gave themselves during the years of collapse "beggared all fantasy". This was what outraged the Occupy movement that suddenly appeared in 2011 in Wall Street's Zuccotti Park.
The disciplining effect of debt encumbrances is vital to the reproduction of the contemporary form of capital. Debt means we are no longer 'free to choose', as Milton Friedman in his paean to capitalism supposes. Capital does not forgive us our debts, as the Bible asks, but insists we redeem them through furure value production. The future is already foretold and foreclosed (ask any student who has $100,000 in student loans to pay). Debt imprisons within certain structures of future valuie production. Debt peonage is capital's favoured means to impose its particular form of slavery. This becomes doubly dangerous when the power of the bondholders subverts and seeks to imprison the sovereignty of the state. it is for this reason that the only mode of capital's survival is through the coherence and fusion achieved through the state-finance nexus. With this, the alienation of whole populations from any real influence and power is complete. Neither state nor capital can offer any relief to deprivations and disempowerments. Athens is traditionally celebrated as the cradle of democracy. Today it is merely the cradle of debt peonage, the full and complete demolition of any democracy whatsoever.
The corrupting and alienating power of money - which, when it takes the form of interest acts like "love possessed" - is part of the problem. It was not only Marx who recognised the alienations involved. Even Keynes, a deep defender of the bourgeois order but on occasion a trenchant critic, weighed in on the matter:
When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money motive at its true value. The love of money as a possession - as distinguished from the love of money as a means to the enjoyments and realities of life - will be recognised for what it is, a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease. All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting accumulation of capital, we shall then be fre, at last, to discard. (55)
That human wealth, which should have all manner of social meanings, is increasingly imprisoned in the unique metric of money power is in itself problematic. "When the limited bourgeois form is stripped away," writes Marx;
what is wealth other than the universality of individual needs, capacities, pleasure, productive forces etc., the absolute working out of . . . creative potentialities? . . . Where he does not reproduce himself in one specificity, but is in the absolute movement of becoming. In bourgeois economics - and in the epoch of production to which it corresponds - this complete working out of the human content appears as a complete emptying-out, this universal objectification as total alienation, and the tearing down of all limited one-sided aims as sacrifice of the human end in itself to an entirely external end. (56)
This is what 'beggars all fantasy'. This is the insane and deeply troubling world in which we live.
Pages 204-206
Note: To study capitalist economic history is to study this madness in action. Consider the following astonishing but all too concrete fact. Between 1900 and 1999, the United States consumed 4,500 million tons of cement. Between 2011 and 2013, China consumed 6,500 million tons of cement. In two years, the Chinese consumed nearly 45 per cent more cement than the United States had consumed in the whole of the preceding century. (14) Those of us who live in the United States have seen plenty of cement used over our lifetimes. But what has happened in China is extraordinary. The increase in the scale of spreading cement around is unprecedented. It provokes worrying questions. What might the environmental, political and social consequences be? there seems to be more than a touch of madness about it. Is this the 'imaginary boundlessness' of which Marx speaks?
Cement is used in construction. This means a massive investment in the creation of built environments, in urbanisation and the construction of other physical infrastructures (transport systems, dams, container terminals and airports). It is not only cement that is used. there has been an enormous expansion of steel production and use. In recent years, more than half of the world's steel output and use has taken place in China. A lot of iron ore is required to make that steel. It comes from faraway places like Brazil and Australia. Many other materials, like copper, sand and minerals of all sorts, have been consumed at unprecedented rates. In the the last few years, China has been consuming at least half (and in some instances 60 or 70 per cent) of the world's key mineral resources.
1. Marx, K., Grundrisse, London: Penguin Books, 1973.p. 269. 2. Grundrisse, pp. 270-71 3. Martin, W., 'In defense of Bad Infinity: A Fichtean Response to Hegel's Differenzachrift,' mimeo, Department of Philosophy, University of Essex; Arthur, C. The New Dialectics and Marx's Capital, Leiden: Brill, 2004, pp. 137-52. 4. Grundrisse, p.270. 9. Grundrisse, p.590. 10. Theories of Surplus Value, Part 2, London: Lawrence and Wishart 1969. pp. 468, 549. Most economists recognise market imperfections that arise from externality effects and imperfect information (and even study them as 'market failures'). Those with Keynesian inclinations recognise a state role for proper aggregate demand and supply management mainly directed at dampening business cycles in the hope of eliminating crises and depressions. But their aim is to correct imperfections and to define optimal policies for state involvement which will restore the concept of harmonious equilibrium to its rightful historical place. None of them, even those like Paul Krugman, Joseph Stieglitz and Jeffrey Sachs, who lay claim to progressive political positions, have any conception of the internal contradictions of capital or the dangers of the 'bad infinity' of endless compound growth. 11.Grundrisse, p.221. 12. Federal Reserve Bank of St Louis, Economic Reports. 14. 'Towering Above', National geographic, 229(1) 2016' 31. Capital, Volume 3, London: New Left Review, 1981. p. 595. 51. Capital, Volume 3. p. 470. 52. Capital, Volume 3. p. 609. 53. Capital, Volume 3. p. 569. 54. Capital, Volume 3. p. 595. 55. Keynes, J.M., Essays in Persuasion, New York: Classic House Books edn, 2009, p. 199. 56. Grundrisse, p.488.
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