by
David Harvey
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Marx agreed that workers employed in circulation (e.g., in marketing) do not produce value (otherwise he would have to concede that value could be produced by market exchange). They can, however, be a source of surplus value. They are like machines which cannot produce value but whose use can increase relative surplus value by lowering the costs of wage goods and so diminishing the value of labour power thereby producing more surplus value for the capitalist. Costs entailed in circulation and state administration, Marx argued, should be viewed as deductions out of value and surplus value production. Costs of circulation in the market (other than those of transportation), no matter whether borne by the industrial or merchant capitalist, are considered as necessary deductions from potential value already produced. [...]
[...] If investors seek speculative gains in price-fixing markets for assets which have no value (such as art objects or currency and carbon futures) instead of investing in value and surplus value creation, then this indicates a pathway by which value can be leached out of the general circulation of capital to circulate as money in fictitious markets where no direct value production (as opposed to appropriation) occurs. When price signals betray the values they are supposed to represent then investors are bound to make erroneous decisions. If the money rate of profit is highest in property markets or other forms of asset speculation then a rational capitalist will place their money there rather than in the sphere of productive activity. The rational capitalist behaves irrationally from the standpoint of the reproduction process of capital as an evolving totality. The result could be a deepening tendency towards secular stagnation in the economy as a whole.
a corollary of this which he explains later on: in the presence of an asset bubble, cutting taxes on rich is a bad idea cus they will overwhelmingly invest in that over true production
[...] when technology becomes an independent business, it no longer responds primarily to needs, but it creates innovations that have to find and define new markets. It has to create new wants, needs and desires not only on the part of producers (through productive consumption) but also, as we see all around us on a daily basis, on the part of final consumers. This business thrives upon and actively promotes the fetish belief in technological fixes for all problems.
But for fixed capital circulation to be fully effective, a number of preconditions must exist:
[...]
This requires 'a certain level of productivity and of relative overabundance, and more specifically, a level directly related to the transformation of the circulating capital into fixed capital ... Surplus population (from this standpoint) as well as _surplus production, is a condition for this.'
Capital tends, as we have seen, to produce surplus populations (an industrial reserve army) and surplus products (commodities facing problems of realisation). It thus systematically produces conditions conducive to fixed capital formation. [...]
to ponder: is this analogous to investing in education, healthcare etc (i.e., temporarily taking some capital out of circulation to invest in the long-term) and if so, are pro-capital forces who oppose those investments not just engineering their own downfall
[...] Different productivities of labour according to natural differences (e.g., cheap food from fertile land in a favourable climate), the different definitions of wants, needs and desires according to natural and cultural situation and the dynamics of class struggles, mean that the equalisation of the rate of profit will not be accompanied by an equalisation of the rate of exploitation between countries. In the event of trade between countries, 'the privileged country receives more labour in exchange for less, even though this difference, the excess is pocketed by a particular class, just as in the exchange between labour and capital in general'. [...]
One of the reasons that a troubled global capitalism survived as well as it did after 2007-8 was because of China's sustained growth of productive consumption. The Communist Party leadership in Beijing almost certainly did not set out to save global capitalism, but this is in effect what they did.
basically the govt pushed for a massive construction boom during the downturn, not necessarily because the country actually needed these new buildings/cities, but because it was the best way of holding economic depression at bay
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 many 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 practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they my be in themselves, because they are tremendously useful in promoting accumulation of capital, we shall then be free, at last, to discard.
from Essays in Persuasion
Whether we can get out of this crisis in a different way depends very much upon the balance of forces. It depends upon the degree to which the mass of the population rises up and says, 'Enough is enough, let's change this system'. [...]
As more surplus capital went into production during the 1980s, particularly in China, heightened competition between producers started to put downward pressure on prices [...] Profits began to fall after 1990 or so in spite of an abundance of low-wage labour. Low wages and low profits are a peculiar combination. As a result, more and more money went into speculation on asset values because that was where the profits were to be had. [...] the debt explosion and the new derivatives markets took off, which, along with the infamous dot.com internet bubble, sucked up vast amounts of surplus capital. Who needed to bother with investing in production when all this was going on? This was the moment when the financialisation of capitalism's crisis tendencies truly began.
But why this revolutionary impulse in the heart of capitalism and why is capitalism so different from other modes of production? Human beings are clearly fascinated by the perpetual pursuit of novelty, but the social and cultural conditions under which such a fascination can become a central driving force in human evolution are very special. Most hitherto-existing social orders were inherently conservative. They sought to preserve the status quo, to protect a ruling class and repress human impulses towards innovation and new ideas. [...]