by
David Harvey
12
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'. [...]
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'. [...]
29
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.
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.
89
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. [...]
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. [...]
107
[...] What is called a crisis of 'under-consumption' results when there is not enough effective demand to absorb the commodities produced.
Workers spending their wages is one source of effective demand. But the total wage bill is always less than the total capital in circulation (otherwise there would be no profit), so the purchase of the wage goods that sustain daily life (even with a suburban lifestyle) is never sufficient for the profitable sale of the total output. A politics of wage repression only heightens the possibility of a crisis of under-consumption. Many analysts came to regard the crisis of the 1930s as primarily a crisis of under-comsumption. They therefore supported unionisation and other state strategies (like social security) to bolster effective demand among the working classes. [...]
think about this more ... this just implies that not all firms can realise a profit, right?
[...] What is called a crisis of 'under-consumption' results when there is not enough effective demand to absorb the commodities produced.
Workers spending their wages is one source of effective demand. But the total wage bill is always less than the total capital in circulation (otherwise there would be no profit), so the purchase of the wage goods that sustain daily life (even with a suburban lifestyle) is never sufficient for the profitable sale of the total output. A politics of wage repression only heightens the possibility of a crisis of under-consumption. Many analysts came to regard the crisis of the 1930s as primarily a crisis of under-comsumption. They therefore supported unionisation and other state strategies (like social security) to bolster effective demand among the working classes. [...]
think about this more ... this just implies that not all firms can realise a profit, right?
112
[...] capitalists, as we earlier saw, have a choice as to what they reinvest in: they can reinvest in the expansion of production or they can use their wealth to buy up assets, such as stocks and shares, property, art objects or shares in some speculative enterprise such as a private equity company, a hedge fund or some other financial instrument from which they can realise capital gains. In this case their reinvestments play no role in bolstering effective demand.
Something to think about: if the argument against raising marginal tax rates for high incomes is that these people will thus be less incentivised to "work more" and thus earn more, doesn't the same reasoning apply to falling profit rates? so they're less incentivised to reinvest productively if the rate of profit goes down, or even if it just doesn't go up enough? esp since they don't "need" to reinvest
[...] capitalists, as we earlier saw, have a choice as to what they reinvest in: they can reinvest in the expansion of production or they can use their wealth to buy up assets, such as stocks and shares, property, art objects or shares in some speculative enterprise such as a private equity company, a hedge fund or some other financial instrument from which they can realise capital gains. In this case their reinvestments play no role in bolstering effective demand.
Something to think about: if the argument against raising marginal tax rates for high incomes is that these people will thus be less incentivised to "work more" and thus earn more, doesn't the same reasoning apply to falling profit rates? so they're less incentivised to reinvest productively if the rate of profit goes down, or even if it just doesn't go up enough? esp since they don't "need" to reinvest
132
[...] Jared Diamond's Guns, Germs and Steel (1997) argues that the relation to nature is what counts, thus transforming human evolution into a tale of environmental determinism. Africa is poor for environmental reasons, not, he says, because of racial inferiorities or (what he does not say) because of centuries of imperialistic plundering, beginning with the slave trade. [...]
interesting take on it. I'll need to go back to the source because I vaguely remember Diamond saying that the environment is what resulted in the plundering (thus, he didn't ignore it completely) but maybe I'm wrong
[...] Jared Diamond's Guns, Germs and Steel (1997) argues that the relation to nature is what counts, thus transforming human evolution into a tale of environmental determinism. Africa is poor for environmental reasons, not, he says, because of racial inferiorities or (what he does not say) because of centuries of imperialistic plundering, beginning with the slave trade. [...]
interesting take on it. I'll need to go back to the source because I vaguely remember Diamond saying that the environment is what resulted in the plundering (thus, he didn't ignore it completely) but maybe I'm wrong
157
The conquest of space and time and the mastery of the world (of both 'mother earth' and the world market) appear in many capitalist fantasies as displaced but sublime masculine expressions of sexual desire and millennial charismatic belief. Is this the fetish belief that impels onward the ever rising 'animal spirits' of the financiers? Is this why so many financiers and hedge fund wizards are men? Is this how people feel when they bet the whole of the New Zealand currency in one go? What astonishing power to ride the world and bend it to one's will!
I mean I think the major reason hedge fund managers overwhelmingly male is cus only men have the power to become successful hedge fund managers, but his other point is quite valid (aligns with my idea for a post on why people go into finance, if not just for money)
The conquest of space and time and the mastery of the world (of both 'mother earth' and the world market) appear in many capitalist fantasies as displaced but sublime masculine expressions of sexual desire and millennial charismatic belief. Is this the fetish belief that impels onward the ever rising 'animal spirits' of the financiers? Is this why so many financiers and hedge fund wizards are men? Is this how people feel when they bet the whole of the New Zealand currency in one go? What astonishing power to ride the world and bend it to one's will!
I mean I think the major reason hedge fund managers overwhelmingly male is cus only men have the power to become successful hedge fund managers, but his other point is quite valid (aligns with my idea for a post on why people go into finance, if not just for money)
224
The difference between socialism and capitalism is worth noting. Socialism aims to democratically manage and regulate capitalism in ways that calm its excesses and redistribute its benefits for the common good. It is about spreading the wealth around through progressive taxation arrangements while basic needs--such as education, health care and even housing--are provided by the state out of reach of market forces. Many of the key achievements of distributive socialism in the period after 1945, in Europe and beyond, have become so socially embedded as to be immune from neoliberal assault. Even in the United States, social security and Medicare are extremely popular programmes that right-wing forces find almost impossible to dislodge. [...]
The difference between socialism and capitalism is worth noting. Socialism aims to democratically manage and regulate capitalism in ways that calm its excesses and redistribute its benefits for the common good. It is about spreading the wealth around through progressive taxation arrangements while basic needs--such as education, health care and even housing--are provided by the state out of reach of market forces. Many of the key achievements of distributive socialism in the period after 1945, in Europe and beyond, have become so socially embedded as to be immune from neoliberal assault. Even in the United States, social security and Medicare are extremely popular programmes that right-wing forces find almost impossible to dislodge. [...]
239
[...] an ethical, non-exploitative and socially just capitalism that redounds to the benefit of all is impossible. It contradicts the very nature of what capital is about.
[...] an ethical, non-exploitative and socially just capitalism that redounds to the benefit of all is impossible. It contradicts the very nature of what capital is about.
256
[...] there is no way that an anti-capitalist social order can be constructed without seizing state power, radically transforming it and reworking the constitutional and institutional framework that currently supports private property, the market system and endless capital accumulation. [...]
[...] there is no way that an anti-capitalist social order can be constructed without seizing state power, radically transforming it and reworking the constitutional and institutional framework that currently supports private property, the market system and endless capital accumulation. [...]