David Harvey on The Contradictions of Capitalism

anyone who believes in indefinite growth on a physical finite planet is either mad or an economist we don't want to focus politics on the notion that involves the rejection of principles around which a large majority of our fellow citizens or the organizers live we are not as endlessly manipulable and its predictable as you would think this mode of analysis really derives from a couple of ideas from Marx in the sense that contradictions are underpin crises so Marx made the comment that whenever you see a crisis then it's a manifestation of the underlying contradictions and I thought it'd be a good idea to sort of try to lay out what the underlying contradictions are and in particular given what's happened since 2007 2008 but also looking back historically but Marx also kind of argued and I go would agree with this that that crises are actually catalytic moments where when capitalism actually changes its spots and become comes out differently so they're their formative moments as well as difficult moments the first to a contradiction is for that between yeast value and exchange value and the example I would use here it would be a house a house is a use-value many different kind of uses and we all need a shelter some kind and accommodations a place a place to live so we can specify a host bunch of use-values about it about a house then let's look at the exchange value of the house and the exchange value has actually gone through a certain evolution historically from simply a cost of production of the house to the idea the house is not only an object that has to be bought and sold but it's also a form of saving and so for many working people the most common form of saving is to have a have a house for which they end owning but in recent years particularly since you know the Thatcher reforms and all the rest of it housing has also become a vehicle speculations and what we saw in 2007 2008 of course the exchange system went extremely wonky to the point where in the United States for example for somewhere between four or six million people lost their access to the US value of the home now what this suggests is we're in situation of this kind is that we should not necessarily believe straight out that the market system is always the best way to deliver youth values to people that if people need use values then why do we have to go through the market system there's a question here I think or which is a very very important to ask and I think it should be should be asked very clearly at this particular historical moment there are in fact ways of housing provision that don't go through the exchange value system in the way that we typically do which is through notions of homeownership individual kind of private property and the like but it's been then of course the use value exchange rate of dichotomy has been there all along oh it was only in 2007 2008 that it got to a point of being a massive crisis now have been historical periods when it was a massive crisis before back in the 1920s in the United States back in sort of the late 1980s we had had problems various countries have had problems with this as we go along so this first contradiction then is something that can be worked upon but it also delivers a political message which would you rather live in a society which actually delivers adequate youth values to everybody on a reasonably equitable basis or a society which is actually dedicated to the idea that in order to get use values you have to participate in an exchange value system which actually ends up benefiting some people in society extremely well in other words the vast amounts of wealth were extracted private wealth were extracted from the exchange value system that was providing housing up until 2007 2008 and I would argue well no we don't need the exchange value system to be that way we can reform it reduce its its role what we should be looking at is the provision of decent exchange use values to people now the same thing I think applies to many other aspects of social life which have been turned into commodities the obvious one which has been I think in the needs of quite a lot lace recently is higher education why do we have to go through the exchange value system in order to develop a higher educational system in the United States where this is most advanced what you see of course is an enormous debt of a student ordination and you're burdening those people with debt for life how student debt is the one kind of debt you can't get out of when you declare bankruptcy the only way you can get out of it is to die and and this is okay I think one of the features of which which is which is there but there's a role to indebtedness which actually you can track back into the housing question as it was approached in the 1930s but exchange value will only exist adequately if there is a measure of it and let's get you into the question of money now money is very difficult because it represents something well what does it represent well it's a claim on social labor and so there's a relationship between social labor which is which is in itself a social relation which is immaterial and the representation of it which is the monetary form and there's been a long history of you know the money actually having a certain autonomy from that which it represents and in any case you only have to know a little bit about theories of representation to know that representation sometimes lie but what's happened since 1970 is that the the pinning down of the money has become as it were a central feature of public policy because we got rid of the metal base we got rid of the gold and silver as the base in the 1970s so now there's if you like no kind of commodity that kind of keeps us in order and we therefore have to rely rely upon social institutions to stabilize the money supply during the 1970s there was a brief period in this country in the United States a very strong inflation where it was recognized that actually therefore whoever was in charge of the money supply should be anti-inflationary with them there forget this is an incredible kind of fear of inflation which is dominated public policy since the 1970s long words and so that the relationship between money and what it represents and how the representational form of money is being managed and what's happening to it is also a con a contradiction so that you can get monetary crises and I think what you would say about 2007 2008 is that you actually have the use value exchange value of contradiction and you have the question of money and value kind of actually intermingled with each other to generate this massive kind of crisis and if so those those those two contradictions are very much involved in what happened there is a third contradiction which is the relationship between private property in the state in other words you can't have exchange and you can't have exchange value of housing without having private property and housing so the kind of whole kind of question of what the relationship business between private property and state policies also comes into the picture so if you wanted to analysis of 2007 2008 you could do so by following through these contradictions and how these contradictions work but I arrived at the end of a couple of contra 3 contradictions which I think I'm Li dangerous and I want to spend the rest of time just talking very briefly about what they are the first contradiction which is I think an acute element in our current situation is the difficulty of keeping compounding growth going I think in many ways what we've seen in the history of capitalism is economic growth at the rate of about 3% compound rate of growth per annum now 3% compound growth when capital is sort of located in few cities in Britain and maybe so a few in the continent and and in North America 3% compound grows into the future no problem really you've got plenty of place to expand there plenty of sectors that haven't been involved yet by the time you get to the end of the nineteenth century still plenty of places to go by the time you get to 1970 however you begin to look at the world and where are you going to go well of course there's China which suddenly gets brought into the whole thing India South Asia suddenly brought into the whole thing Soviet empire collapses so Russia is brought into the whole thing so now grocers can't become global and we're now looking going forward at the question of how you're going to maintain three percent compound growth on all of that everything that's going on in China everything that's going on in North America going on here how are we going to do it and this then turns into if it seems to me a real serious barrier that is the the capital faces of finding profitable outlets for all of that compound 3% compound growth where is it going to go what's it going to do and I think some of the signs of what it might do are already with us in terms of what's happened over the last 30 years increasingly capital over the last thirty years has been interested in investing in asset values not in production and to the degree it invests in asset values it creates bubbles asset bubbles and it's not only asset bubbles we also see sort of regional bubbles capital flows into Southeast Asia crazy kind of way and in 1997-98 it all blew up and you get a bubble and it pops and everybody says well that's over but right now for instance the property market there's there's a lot of money is flowing back into property markets doing so worldwide so if that is the case then we're going forward what are we going to do we're going to have more and more asset bubbles but what good does asset bubbles do the mass of the population the answer is it doesn't do anything very much at all in fact it's it creates all kinds of profound difficulties particularly since its associated with increasing inequality because one of the things that happens if you start to actually go for asset into asset bubbles you start to live off capital gains not of income and one of these assets which is crucial right now is of course intellectual property rights and what we see is actually a kind of a flow of capital into those activities where the earnings are not production not profit on production they're really rents on control over assets asset value an asset values and we're moving more and more into society that is founded on the principle of the Ron tier the Ron tier economy and for the degrees of Ron tier economy it's not actually helping us so the most of us live a better life at all all it's doing is amassing more and more wealth and power in a very very very small group in the population and to me then this raises a whole kind of questions about whether we should have a politics which is as the design to control if you like the Ron tier and I found it ironic well you know my canes back in the 1930s in position with the euthanasia of the wrong tier well actually the wrong tier is about to engage in the euthanasia of the producer and unless we're careful so so here if you like is a political question of how we are going to actually go start to come out and when you connect that political question with the kind of use values that we might want to apply to people we have this kind of crazy system where there's massive amounts of money which are flowing to these one-percent at the same time as we really would need massive amounts of money to flow in the other direction to sustain the life of a decent life style level for the mass of the population which is actually suffering from up with consequences of one of the other contradictions which is the pace of technological change which is actually removing labor from having very much significance in the dynamics of capitalism so this is if you like to me one of the big big questions in what ways can we deal with this problem of compounding growth in what ways can we actually a control growth even deep even engage in some sort of uneven geographical D growth of societies and so that we're no longer caught but that means we have to think of something that's not like capitalism because capitalism is founded on growth it's founded on growth because the capitalist typically starts the beginning of the day with a certain amount of money and ends up the day with that amount of money plus a profit so the system is continually expanding if the system is not continually expanding then you're no longer in a capitalist system so we have to ask you start to talk about what the alternatives to a capitalist system might be but I don't see they're not to talk about you know exactly how it could be structured and that there's one final point however which is connected with this which is the the last contradiction I look at is something called Universal alienation what we see is a disconnect between the way most people are thinking and the political process we see a disconnect between people's sense of identity and the kind of jobs they do the survey in the United States recently will show that 70 percent of the pop in the United States either hates their job or is totally indifferent to its qualities and that is not uncommon at all and so widespread alienation in the world of production in part because the path of technological change has been to remove labour from having a creative and direct involvement in the labour process and and to locate intelligence inside of the Machine and so we have not only automation but we also got artificial intelligence which is changing changing things very very very fast so in that in that light we have to start to recognize alienation now one of the deals which cut it in a way was to say to workers all right you may have a meaningless job but you're going to have a good time because I'm going to provide you all this consumer goods but one of the consequences of this also is the loss of institutional rules institutions that can actually pose the alternatives in creative ways particularly the institutions of Labor out of this there comes what I think is for me critical kind of question it's pretty clear from I think what's happened that there's widespread disillusionment with the political system there's widespread disillusionment with what politicians can do or say there's widespread disillusionment with the role of money power in society so you know just widespread alienation and widespread alienation is producing every now and again these eruptions and outbursts of street anger we've seen Brazilian cities erupt this last year we saw gezi Park and Taksim Square and Istanbul we've seen of course much of what was still going on in Cairo there was eruptions in Sweden and before that of course you had the events in London and so you see again and again and again eruptions of various kinds are of people on the street kind of just expressing intense anger with the nature of the system which means that in effect we can only face up to this particular dilemma of what to do about compound growth and how to deal with the contradictions of capitalism by some new thinking and to devise new ways of doing politics so not only do you get this analysis I think a good way of understanding where crises come from of understanding how capital uses them sometimes creatively and sometimes well to redefine itself how it provides opportunities for alternatives to be debated and discussed but it also gives you like a frame for what an anti-capitalist struggle might look like there's a certain resonance between your analysis and another book along with yours which is getting a lot of attention at the moment is thomas piketty's book on capital and this notion this this focus on the Ron TA class on the power of asset holding what does that what does that mean for where as it were the class class forces lie I mean in a sense if the problem lies with the 1% then is it the 99% versus the 1% is that what's going on or are all of us who own houses and have made lots of money out of our houses are we now on the wrong side of that divide well how does this work work it work through in terms of class interests well I think in there are two two things there first off the immense money power that is concentrated within what can be only described as a plutocracy or an oligarchy has immense influence over the media has immense influence over politics democracy is now the democracy of money we see this in most advanced forms in the United States so that essentially you have the 1% or 0.1% which is able to buy elections and buy influence and power and is pretty direct at doing so that's the first point the second point is yeah you're quite right to kind of say well you know individual home ownership just to give you take that example it's been a policy of social stability and support for capitalism from the very GetGo it's become widespread in society and therefore when people start talking about a stakeholder society or evil estimate you try to find ways to pin people into support of the system because it is not in their interest as it were to to give up private property so yeah we all of us I think have that ambivalence but the thing that's bit beyond that is the educational structure I mean education our universities and all the rest of it it becomes so conventionally neoliberal in the way they set up and that also connects very much to this business of having to pay for your education you pay for your education you what do you want you want a good job at the end of the day for when a good job at the end of the day you're not a troublemaker you know you do the conventional things and and so actually there's been a tremendous way in which capital has built into society a whole set of supports for itself at the ideological level and the practical level but at the same time you know how many people are around sort of talking the way I talk for example well there aren't that many actually this is one of the big problems and and you know and I may be crazy sometimes told I'm crazy but but actually the thing that strikes me is when I went through this is a lot of the things that come out of this analysis are just straight common sense and obvious you

Channel: RSA

Views: 143,421

Keywords: Capitalism (Idea), David Harvey, The RSA, Royal Society Of Arts (Organization), City University Of New York (College/University), RSA Animate, consumer

Id: f9dLcGJ5NI0

Length: 18min 55sec (1135 seconds)

Published: Wed Apr 30 2014

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The geographer David Harvey says fixing inequality will take more than tinkering