David Harvey: The History of Neo-Liberalism & The Pandemic

good day and welcome to letters and politics i'm mitch jazarich and today very happy to welcome to our radio program david harvey david harvey is a marxist economist geographer he is a podcaster and he's also a distinguished professor of anthropology and geography at the graduate center of the city university of new york he is the author of a number of books over the years there is a new book out which is a collection of his podcast actually put into print the book is called the anti-capitalist chronicles the podcast that you can find online is also of the same name again the anti-capitalist chronicles the book is put out by pluto press david harvey does join us via zoom professor harvey it is my very good pleasure to welcome you back to this radio program yeah great to be here it's good to have you how has the pandemic or or hasn't the pandemic affected your thinking about capitalism today well unfortunately one of the things it's done is it's taken me off the street and since i get a lot of my wisdom from the street i found the isolation really rather problematic and uh there's a lot of things going on out there food banks and supplies networks and new things happening and i felt that i you know being in the vulnerable group that i'm in that i couldn't go out there and see what was happening so i did what um marx once famously was said to have done which is in the absence of being able to participate in active revolutionary i think he went into the british museum and and and simply studied books and one of the things he wrote during that time was something called the grunderisa which is a kind of a crazy remarkable book and so i decided i was going to spend my time in isolation uh doing a companion to the grunderser uh so that would then go with my companion volumes to orleans one and two of capital tell me more yeah tell me more about gunrisa if if i'm saying it correctly well it's a cruiser it was a set of notes that marx wrote to himself and there's about 800 pages of it uh and it rambles on and on and on but then suddenly it it these incredible moments of clarity and incredible kind of insights generated about the nature of capital and uh one of the things it has did for me when it first came out in english translation was that it helped me understand uneven geographical development and urbanization and things like that that i was were the main topics of my of my inquiries so i've always valued the grunderson very very much as a text it's fairly remote from many people and so making it a little bit more comprehensible was uh my aim as it has has been my aim over really the last 20 years where i've been involved in what i call the marx project which is to try to make marks more accessible to contemporary audiences did karl marx ever take up issues around a pandemic or or even public health and how it could lead to a pandemic well he he had some kind of commentaries at various points about the big pandemic problem in his time was cholera and there were cholera epidemics in paris while he was there there were cholera epidemics in london while he was there and of course the big breakthrough into uh solving the the problem uh came in the london cholera epidemic i think in the 1850s sometime and it's about the broad street pump when it was finally recognized the cholera was a waterborne disease not an airborne disease and that made all the difference and it meant of course that the emphasis was clean water and potable water and that control of cholera was important now he didn't write very much about that but he was very well aware that this was going on and there had been significant cholera epidemics for instance a huge one in hamburg in the i think the 18th century where about a third of the population was destroyed and you know so it was around in his time but he didn't do much detailed analysis of it how about analysis of just a disruption to the economy so if not a pandemic maybe some other kind of an event well you know um here you come up against a problem that marx is really concerned with is the internal contradictions of capital and so he tends to view anything that's coming from the outside in the way of environmental disaster or even something which is based in nature and for instance one of his big enemies was thomas malthus and his theory of population and a theory of the falling rate of profit that ricardo attributed to increasing scarcity of land increasing price of foodstuffs therefore wages had to go up profits came down and therefore the end of capitalism was signaled by this external constraint and marx is saying no it's not an external constraint that's going to do capitalist and i'm interested in the internal contradictions so he tends to sort of push to one side all of the external uh disruptions and i think uh for for an interesting reason i mean one of the things i would say about the contemporary epidemic in 10 years time if you go back and you look at the trace of what's happening in the stock market you'll hardly see any trace of the epidemic at all a little blip back in you know sort of last february march and then after that it's marched on if you then said to what degree are the measures of inequality changing towards the lower income the answer is they've been going faster and faster to the ultra rich and the ultra rich have become famously much much richer through this epidemic so so that what marx is kind of saying is i'm interested in the long-term problems which of the sort that those those figures will will indicate and i want to know why capitalism does that kind of thing and how it absorbs epidemics and as naomi klein calls it you know we get disaster capitalism which is you know a disaster is something that capital will never let go to waste and it will profit on it like crazy as we as we see with uh you know certain branches the economy and certain individuals who become incredibly wealthy in the course of this uh last year and and probably continue to do so do you think they're i will and well yeah we'll continue to do so unless there's external intervention of some kind you i was going to say you write in your book the anti-capitalist chronicles but i think maybe you said because again this is taken from uh your podcast but uh in in going through your book i found this quote i want to bring up it's this the neoliberal model is increasingly resting on fictitious capital and a vast expansion in the money supply and debt creation it's already already facing the problem of insufficient effective demand to realize the values that capital is capable of producing are we seeing that with in a time of economic fallout due to a pandemic and yet we do looking at the stock market is that an example of that exactly right i mean again the central banks have responded to the crisis by increasing liquidity now that means there's a lot more money sloshing around they better zeros for this for the money supply as they did in 2007 2008 and now they're doing it again and then the question is well who benefits from that money well it all goes into the stock market so they've been popping the stock market up very well at the same time as they've been not uh sort of dealing with the problems of poverty at the mass level now the bill that's just gone through is going to go some way towards rectifying that but but you know the the general tendency of capital itself uh lacking external political intervention is is to just just turn this into another speculative binge what is your take on the measure uh that came out of congress and was signed into law the american uh recovery act this was 1.9 trillion dollars put into the economy for a whole host of things do you see this as part of and we'll talk about what neoliberalism is but do you see this that as part of a neoliberal project or is that a part and different and mark any potential shift well this is trying to rescue uh the economy i think the people who want to say this is not a stimulus it's a rescue and i think it's a rescue which clearly is recognizing that there are millions of people in this country who are without employment without income without access to food there is child poverty around increasingly and that this is a social moral disaster and i think even sort of um conscious and people people with a conscience amongst the capitalist class can see that and that something has to be done about it but in doing something about it of course you are jacking up effective demand and effective demand is what is really lacking in the economy right now so big capital is quite happy with a lot of this i think because as people get more money in their pockets they're going to spend it immediately and that therefore the economy is going to be in some recovery mode and you can already see interestingly signs of uh of that i mean for instance in new york city a lot of restaurants have gone out of business and there are a lot of places which are for rent and suddenly you start to see new restaurants are opening up waiting for the recovery as it were so if you have capital right now and you fancy setting up a new restaurant it's a good time to go in because you can get cheap rent a cheap lease or something on on a prime location so we're already seeing some sort of anticipation coming out and that is going to be partly based upon this uh this recovery act is this what somebody like 20th century economist joseph schumpeter would call creative destruction well i um again i i'll come back to to to marx a bit and say well you know there is something that goes on through these external shocks to the system which can be of any sign and typically now coming from environmental quarters in peculiar ways and these shocks are absorbed it seems to me by capital uh rather rather well um i think marx's version of creative destruction is to say well it's not it's not destruction coming from outside it's not a volcano going up in iceland which cuts transatlantic flights for two or three weeks it's you know it's not that sort of thing it's the internal contradictions and the internal contradictions are those which are very much uh uh at the center of what is the end game it seems to me of of neo-liberalism talk to me more about that when we say internal contradictions what does that mean well one of the internal contradictions you have is that capital operates on profit and marx interprets profit as surplus value and basically says well you have to produce a surplus and because profit comes from the surplus and then the surplus is reinvested to make more profit the result is that you have a a growth machine in place it has to expand in order to survive so that capitalism historically has survived by about two or three percent compound growth on average now two or three percent compound growth when there's not much going on not a problem right now you're talking about two or three percent of compound growth on everything that's going on in china lots going on in india a lot less going on in latin america and to say nothing of japan and south korea and the united states and britain i mean you're talking about three percent compound growth on a mass which is so huge right now and that's partly where of course the environmental problem is coming from environmental problem is where we're we're you know we're we're pressing the environment in ways which was small scale back when marx was writing but now is mass scale and if you say three percent compound growth over the next 50 years you're talking about an economy which is huge and that means there has to be huge investment opportunities and where are those investment opportunities going to come from well we've had a lot of adaptations going on over the past 20 years which which i think are very interesting to look at in relationship to that problem of absorbing the the huge mass the monstrous mass as marx calls it of a product which capital is now capable of producing so that 1.9 trillion dollar american recovery act an act to save capitalism we've heard about the new deal in the 30s that that was an effort to save capitalism it seems on the face of it though this is a little different because as you would expect because no two times are a lie exactly alike but the other reason being when i think of the new deal i think of a lot of sort of structures that were changed that we could argue brought more prosperity for the decades to come where this seems to be a one-time and maybe they make some of these things permanent in there but as far as as it is now this is a one-time shot uh into the system well but i think that there's a this is where you know i'm not sure quite how to interpret it one of the things i i learned in my long political life is that it's sometimes very hard to interpret what you're going through in the moment it's only you can it's only later you can see it for example neoliberalism was really sort of beginning to push very very hard with thatcher and reagan and even before that with pinochet back in the 1970s i couldn't call it neoliberalism until i wrote a book in 2005 it took me 25 years to be able to name what it was i'd lived through and i so i one of the questions i'm having to myself right now is what is it that i how would i name what it is we're living through one of the trends i noticed about neoliberalism in the 1990s and since then has been consolidated it became increasingly politically authoritarian and as it became more authoritarian so it lost a lot of popular support i mean literally original neoliberalism with marwick thatcher and ronald reagan commanded a great deal of consent and a great deal of support from the mass of the population i mean maybe wrongly in my view but nevertheless i it was it was there i think faith in the system was shaken towards the end of the 1990s with the first collapse of the stock market around then then it was shaken very very badly in 2007 2008 and now it's shaken again so that we've got a situation where the answer to the fact that was no longer widespread consent and there's a great deal of opposition means that the state has to become much more authoritarian in relationship to social movements in relationship to possible forms of opposition so we're in a situation where one of the choices is to become downright authoritarian and we would then look back on this era and say this was the origins of neo-fascism or fascism or something of that kind now that is an extremist language i grant you but nevertheless uh be careful about that because when you live through the origins of something and you're not quite seeing what it means many people who lived through the origins of fascism didn't know it was fascism until after it arrived and what we have right now when we look at all of these figures like bolsonaro trump and you look at modi and you look at erdogan and you look at orban and you look at all of these leaders in all parts of the world we are definitely in a moment where there's a strong authoritarian tendency and therefore what we're getting is a neo-liberal market which is administered autocratically and in authoritarian ways by by state power which is prepared to be arbitrary and self-reproducing so that that seems to me between roughly where where we're at unless there is something which pushes it in the opposite direction so that where's where's the opposite direction here we're saying well yes there is an opposite direction we can see it in various parts of the world various struggles going on but you know that struggle how it will come out i don't know authoritarianism that is needed when i guess people's confidence in a particular system fades yes and you write about this between what happened in our last economic crises of 2007 and eight between then and and now yeah it's it 2007 2008 capital had a choice they could bail out the people or it could bail out the banks what did it do it bailed out the banks and let the people go hang you know and and people saw that people saw it very clearly i think and kind of said what kind of system is this that bails out the banks and leaves us you know losing our houses losing our employment losing everything you know losing everything so there was a crisis of of non-consent and and an increasing criticism of the system but and of course this time around what we see is again the banks are doing okay you know they're doing well there's a big kind of push quantitative easing by the federal reserve and by the by the central banks is you know propping up the stock market and people are beginning to see that and saying how come all that money that's coming out of the federal reserve and that they're pushing it injecting into the system is ending up in jeff bezos pocket or into you know in into the stock market how come how come i don't know if it's getting to me now this is something that the current bill was trying to address a little bit and it's trying to regain confidence and saying there is a form of state power that can actually benefit you and we're going to try to show you that that the state is not necessarily an arbitrary you know right-wing institution it actually is capable of some you know delivering something which is a bit better to the mass of the population and we'll see how that how that plays out but but clearly this is very much on the agenda this is what the biden administration is about and this is what is pushing him a little bit to the left as opposed to his natural inclination which is to be center-right and and and so we're seeing a situation of of that time took a pandemic for that to happen yes oh yeah but but you know the interesting thing was again if you go back before the pandemic you would see protest movements going on all over the place all over the world everywhere you know there were protest movements and it was clear it was clear before the pandemic came along that the dominant economic model was not delivering the goods to the mass of the population it was very clear and and people were waking up to that fact they were also waking up to the fact that the question of democracy and governance was was was critical and that they weren't they were basically being governed by by an antagonistic and and policed by an antagonistic set of powers so that well before the pandemic struck those two issues were on the agenda and if you look at you know massive movements that have occurred in in turkey and in brazil and in this country to some degree it was though those questions were on the political agenda something was going to have to be done about those questions along came the pandemic and now everybody can say it's a pandemic's fault well i tend to think in a long term and say the pandemic is an epic phenomena yes it's very disastrous yes it's kind of some very serious implications none of them by the no a lot of them not so bad from the standpoint of the of the capitalist economy by the way and and but but certainly for the people so yes that's there but in the long term i think we're going back to the question which was on the agenda before the pandemic struck of what kind of economic system is going to deliver the goods for the mass of the people and around the world what kind of governance structure is going to be adequate to meeting the needs and the wants and recognition also of popular movements also so both the state and capital were in question this is letters and politics and we are in conversation with david harvey he's a marxist economic geographer geographer also podcaster and distinguished professor of anthropology and geography at the graduate center of the city university of new york he is the author of a number of books there is a new book out that is based on his podcast both by the same name it's called the anti-capitalist chronicles the book is put out by pluto press but you can also find the podcast online just look for anti-capitalist chronicles david harvey is there when you talk about other potential alternatives that people are talking about is are there any models any ideas out there that that you think are interesting or or viable uh oh that's a terrible question to ask if i had if i had a clear answer to that i wouldn't be talking to you i would be out in the street doing it you know um but but there are a number one of the one of the things that that has happened i think on the left and this is this is this is an interesting kind of problem much of the left has been very much enamored of the idea of local localism and autonomy as one of the answers to the situation now my response to that is to say that i i like the idea of localism and autonomy as far as possible and that we should start to think about food sovereignty and food supply local and all that kind of thing and we can cut back on some of this unnecessary globalization that you know takes water from uh you know fiji and puts it in my backyard you know it's crazy kind of kind of stuff so so yes there's the local autonomy is a very good idea but simply local autonomy without it being embedded in some much larger structure that is going to say to those all those autonomous communities collectively we have to operate in such a way as to take care of say global warming of habitat destruction uh all of those kinds of questions and in other words we need we local autonomy has to be embedded in in some some other structure and that structure is something which is entirely built now in favor of capital it's it's the international monetary fund it's the bank of international settlements it's the world bank it's the the cohorts of treasury secretaries and and and central banks around the world it's all of those groups they are the ones who in a sense are provide the the the infrastructure above all of this above the local autonomy and if the local autonomy doesn't challenge that superstructure and command that superstructure so that it can support the local autonomy in ways which are going to be okay from the standpoint of global environment and all the rest of it if that is lacking then then it the local autonomy is not going to go anywhere in fact capitalists are not going to love it in other words they they'll love the local autonomy see they say yeah well it's all segregated it's all separate out there they're not talking to each other they don't you know i don't militate against us we we can simply deal with with that world of local autonomy and and this is this is so this is the big question to me is as to how we are going to reconstruct those institutions at a global level or a regional level or a national continental level or something like that how we're going to reconstruct the institutions which will allow local autonomy maximum freedom without necessarily destroying those macro economic and those macro environmental aggregates which are foundational for human life in 2005 you publish the book a brief history of neo-liberalism i'd like to talk to you a little bit about that history of neo-liberalism it's still a term that's used often much more now than than it used to be but but i think not you know i don't think everyone including myself have a great grasp of of exactly what it means and i was really interested in preparing for a conversation to read about the uh connecting the beginning of neoliberalism to the military coup that occurred in chile in 1973 what's important about that well what's what was important about it was that again this is an authoritarian kind of uh thing i said pinochet came to power in 1973 uh he had to do something about the economy all dictators at certain point have to you know suppress dissent you know and at the same time make the economy bubble along sufficiently so that everybody can say okay things are better than they were so pinochet was looking for a means to try to to create an economic uh you know growth and uh he'd been two years in power and he turned to a bunch of economists who were in the catholic university in santiago and these economists have all been trained in chicago under milton friedman and they were called the sort of chicago boys and pinochet went to the chicago boys and and said to them hey let's try to reorganize the economy along the lines that you're proposing and essentially the shift was this that during the years of the 1960s the main focus of economic policy was sustaining demand because during the 1930s it was lack of demand lack of effective demand there was a problem so a long time keynes and said okay we can create demand and it will be a demand-led economy and it that was the case during the 1960s that ran into serious problems at the end of the 1960s of inflation and all the rest of it so the demand economy wasn't working and so the friedman people kind of said well okay supply economy is what works and so we're going to focus on supply now one of the big forms of supply which needed to be focused upon was labor supply and labor wages in particular so in effect an administration came in and ronald reagan came in one of the first things he did was to say we've got to discipline labor and was this part this this strike by the air traffic controllers and reagan essentially put them out of business uh with with hardline tactics and this then meant from then on that labor was not big labor in particular was not going to be a powerful player politically it lost a lot of power economically through technological change technology i mean when i went to baltimore in 1969 it was a steel works that had 30 000 people employed if you wanted to do anything in baltimore you went to the head of the steel workers union and said hey help us out and you know they had a tremendous amount of power by the time you get to 1919 there's about 5 000 people employed there and they're producing the same amount of steel technological change was foundational then supplementing that was offshoring that is you open the economy up and you allow capital to flow anywhere in the world so if you couldn't get cheap labor at home you could take capital and go to you know put this factory in china or mexico or philippines or guatemala or wherever so this was this was this was the the the switch that occurred in in the 1970s but i wanted to emphasize something which is that it wasn't simply a switch of public policy it wasn't simply a switch in ideas and dominant of ruling ideas it was a switch engineered by a ruling class this is what makes my own explanation of neoliberalism special which is i said you've got to look at the constitution of class forces back in the 1970s in chile it was big land owner elites who are at the root of pinochet's revolution yes pinochet was supported by the cia but it was not a cia revolution it was a revolution engineered by the ruling elites in chile with cia support and what we then find was the western ruling class in the united states the united states at that time had a fairly compact ruling class good example of that was the rockefeller brothers the rockefeller brothers for instance didn't like the university i work in cuny because it was a free university basically the rockefeller brothers said we can't support a tuition-free university like cuny we you have to pay you're gonna have to pay uh tuition so there's a big battle of a tuition and what the rockefeller brothers did was to go around and say we've gotta find somebody to help us out with this so they hired all kinds of consultants to write papers talking about how free tuition meant bad education and the good education came with paying tuition because then he took responsibility and you know hundreds of articles were written along these lines rockefeller brothers saw to it that it all got published in british digest even got published in the student newspapers uh around cuny so with a battle where that battle was lost and we started to pay you know education it went from an education a tuition-free university to one which paid tuition we've been raising tuition ever since as a form so this is the this is the point of the this was something that was worked out through uh the business round table and all the rest of it and they looked around and said okay this is what we want to do where are the ruling ideas that help us do it and that's where friedman and all of the neoliberal theorists came in and the supply ciders theorists came in and they started to say get the state out of supporting the social wage wages were crucial there's a social wage which is the what people get in the way of you know free schooling free medical care free you know all those kinds of things uh so there's a social wage and then there's an individual wage individual wages were going to be curbed uh by by attacks upon the labor unions the social wage was cherry was was curbed by austerity and and changing taxation arrangements it's something very important for americans to realize that the highest tax rate after world war ii was 92 the lowest that the tax rate went in the golden years of really fierce growth in the united states was 70 percent the highest tax rate when reagan came to power was 70 percent he harbored it and brought it down to 35 and it's been around there ever since so if you want a clear sign of the breaking point of the break between the keynesian order and the neoliberal order it's just just look at the history of that tax rate and what you see of course is very low public provision and that's part of the problem of the virus now with the public health was never the top priority uh public health was more significantly worked out in in you know in in the 1960s 1970s in the 1960s and 1970s there was a minimum wage which was closer to what was it could be the equivalent now about 23 24 an hour now we're kind of on you know we're squabbling about 15 an hour to try to get it up to that and so if you go back to the 1960s you had a high minimum wage high rate of taxation and a very high rate of growth you know and everybody the republicans kind of all say oh taxation is terrible you know high minimum wage and so you know austerity of government is absolutely vital to economic development it's not absolutely is not there's no evidence of that historically so the neoliberal switch was a was a class power move which was about reducing the social wage reducing the individual wage creating supply conditions for for for capital which were optimal for profitability at the same time as they were minimal for the standpoint of the well-being of the workers so that the share of wages in national income has gone down from the late 1970s or 1980 to now you know systematically almost along that has not been affected by the by the virus it's it's still going down in terms of its share in in the national product could the history of neoliberalism be characterized this way in in the 70s kind of the birth of a movement you had the powell memo uh uh urging corporate america to fight back against sort of the social gains that were made in the previous decades uh you have the creation of the u.s chamber of commerce the heritage foundation then you get into the 1980s and you have as you pointed out cutting in half the upper end tax rate you have the suppression of labor and unions and in the 90s with the democratic president bill clinton you get uh welfare reform and you get uh uh the repeal of glass-steagall uh act uh sort of unleashing the forces that would bring us the 2008 uh crisis is that and sort of i think what you would say with clinton sort of completing and solidifying the neoliberal project absolutely i mean he came in to power promising universal health care and things like that and he ended up with the reform of the welfare act you talking about criminalization stuff nafta and all of that and it's very interesting the two figures who consolidated the neo-liberal order was clinton in in the united states and and blair in in britain and blair in the labor party so he'd have a democratic party and a labour party who are consolidating the neoliberal program which was had such momentum behind it in the 1980s that it was just very very hard to stop and to look at the alternatives but part of the reason for that was the widespread consent that existed for the neoliberal program because the neoliberal program was very much about freedom and liberty and and saying well and and personal responsibility and certain groups in the population benefited from that uh for instance uh you know there were movements within feminism which were very much around us you know using the neoliberal opening to consolidate their position and the same would be true of african americans and so neoliberalism was was was had had a very strong base but the way i look at this base was that this was an answer to some degree to that all that protest movement that occurred in the 1960s the 68 generation the sort of chicago 7 kind of thing that sort of all of that was a it was an answer to that and it basically went this way that movement wanted social justice and freedom of speech and freedom of liberty and all the rest of it and basically corporate capital came along and said we'll give you the ultimate in individual liberty and freedom you just forget the social justice and that was the bargain that was struck and a lot of people fell for it and said okay we can forget all about that social justice stuff forget the state providing you know a great deal of welfare for the population forget all of that individual liberty and freedom is what counts and today we've got a sort of almost crazy version of that individual liberty and freedom by people saying you can't tell me to wear a mask you can't tell me you know i'm i'm keep on thinking to myself that does that mean that none of them wear seat belts and none of them actually acknowledge the red light means a stop at a traffic light i mean you know it's kind of this crazy form of individualism and in in a sense the neoliberal ethic has taken off into a sort of crazy territory right now it is interesting uh in talking about the suppression during this period of social justice movements and and ideas where today it's back but what i'm seeing from corporate america today is is trying an attempt to adopt it and to integrate it within its model i mean you you can go to some big store chain store and they'll have a black lives matter section you watch a baseball game and on the back of the pitching mound there's a hashtag mlb i'm answering a movie that's based blm um and no i mean i think that's right you look look big capital is in favor of multiculturalism it's in play you know it's in favor of of a lot of things of that kind the one thing you can't do is to challenge their class power if you try to challenge the class power so you know along comes trump and use the tax reform which is pure neo-liberal it's a redistributive tax system going from the poor to the rich and that's what you do at the same time as you kind of say morally we are all about you know we're anti-racist or we're you know blah blah blah um and and the other thing that i think is worrying the corporations is the deficit of effective demand and here you do come back to certain echoes of the roosevelt era which is why in a sense uh you know biden has taken on the mantle of a little bit of the of the roosevelt era and and saying well you know effective demand is a problem corporations uh have uh you know need need to revitalize effective demand now there's a good deal of pent-up demand people know from the lock down and i guess they're counting on that but then at the same time the rescue package is also very much about you know jacking up effective demand for product and so you know the capital is pretty neutral about a lot of those things doesn't really care too much uh how you do it as long as the effective demand is there by whatever means then that's that's uh okay you piqued my interest when you said earlier that in the 1960s we see keynesian economics which is kind of the dominant form of economic thought at the time and really ever since the the new deal the 1930s that keynesian economics ran into trouble in the 1960s what was that a natural outcome a natural result of keynesian in my view it was an inevitable result of the keynesian system and the kansan system rested upon the empowerment of labor uh labor um did become stronger and better organized both politically in terms inside the democratic party or of here in europe in social democratic parties so labor became you know more prominent and as it became more prominent it upped its demands in certain ways so if you look at the distribution of wealth in the 1970s you'll find that the upper classes were losing we're losing wealth and you were beginning to redistribute real redistribution of wealth partly to an affluent working class which was predominantly white and didn't incorporate the ghetto impacted african-american so you had all of the urban uprisings going on but this is a this is the situation uh where um if if you raise wages corporations can can respond by by raising prices and at that time in the 1960s corporations and labor were protected by national boundaries there was capital controls so you could realistically talk about the monopolistic sector in the united states which was you know classically the three big auto companies and the three big auto companies had a fairly affluent working class attached to them the auto companies just simply raised raise wages and then raised prices and because prices went up the union started to set up colder agreements which is cost of living adjustments so so the inflation started to be a a major tool a political tool whereby wages were kind of stabilized so you gave wages and then reduced the meaning of the wages by inflation so you get strong inflationary pressures coming towards the end of the 1960s and the inflationary pressures were were very disturbing and and of course in the 1970s it took off like crazy so you had inflation rates uh at the end of the 1970s up around 17 or 18 percent you had interest rates imagine this right now you say to people you know the interest rate back in say 1981 was something like 16 or 15 percent and people say what they're so used to living in this kind of charmed world of uh close to zero interest rates that you can borrow for but if you borrowed and you had to pay 15 interest and you were paying 15 interest on a national debt i mean my god this is this is this is this is a catastrophe so there was a real serious problem of that sort uh which was engendered at the end of the 1970s or end of the 1960s in particular do you see this as a potential problem moving forward after spending the amount of money they did during the pandemic there is a there is a debate going on i mean i watch bloomberg news and there is a debate going on in the business circles about is this is this going to trigger inflation and we've seen the 10-year yield jump from around 0.7 to 1.7 in you know three months so there is there are signs that the market is anticipating a return of uh some kind of inflationary pressure but then there's a lot of people who also poo poo it i mean 1.7 is still very low and and the question is when would the federal reserve step in to try to stabilize it because the central bank's mission is to control inflation and inflation has been essentially controlled since the 1980s onwards in the main capitalist countries of course it's not in is not controlled in argentina it's not controlled in uh some other parts of the world it's not controlled in turkey and so on but but you know it's been very much controlled in the advanced capitalist countries i mean inflation can be scary uh i mean you just think about your savings and all of a sudden not having what you thought it was worth and and i mean is it is it just that easy to to control i mean how how likely are we do you think we are to be able to keep controlling it well it depends upon what the sources of inflation are i mean there are some people who kind of tend to think that inflation is due to the fact that there's too much money around i i don't think that's i think there's a component of that the big question is the wage rate if the wage rate starts to move uh upwards in real terms and the share of wages and national income instead of continuously declining starts to rise then i start thinking we'll start to see inflationary pressures but i have there's no evidence of that occurring right now it may occur and it was interesting you see that uh one of the things biden did was to celebrate union power the other day which is first time in many years that the president of the united states has celebrated union power but he but but there may be there may be a bit a resurgence but the problem right now is the workforce is now so precarious and so the divisions of labor you know i mean i mean the auto workers are no longer a powerful union because there aren't that many of them and the steel work is not a powerful union because there's not that much of them i wonder if we could get new forms of labor organization i'd like to see a union of airport workers for example uh i mean if all the airport workers went on strike you you you collapse the economy in three weeks i mean it's an immense amount of power and when you look at the constitution of the work forces out on airports you'll see that they're you know predominantly african-american hispanics or latinx as we now have to say latinx african-american and and waged women and that's the core it seems to me of the contemporary working class and that's where the core of power resides and if the unionization of the of the airport workers became sort of collective but the union movement is itself not adapted to trying to try to do something like that so there's got to be a lot of pushing and shoving around in terms of unions in order to get them to have the right kind of organization for for the contemporary situation they're still thinking of themselves like the auto workers union or the steel workers union and that's not where we're dealing with precarious labor we're dealing with with you know new divisions of labor uh so we need we need to to think about that but inflation is going to be very dependent upon that might be in my view which is kind of a bit of a perverse view but david harvey is an economic geographer and distinguished professor of anthropology at the graduate center of the city university of new york he is also the host of a podcast called the anti-capitalist chronicles and there's also a book out now that's based on that podcast by the same name anti-capitalist chronicles it is published by pluto press david hari harvey i've enjoyed our conversation very much and i'm very grateful to you sir for taking this time to talk to us today yeah thank you for your questions i really enjoyed it

Channel: Letters and Politics

Views: 23,861

Keywords: David Harvey, neo-liberalism, neoliberalism, Marxism, economics, pandemic economics

Id: XfTUXReorBc

Length: 49min 29sec (2969 seconds)

Published: Mon Mar 29 2021