LSE Events | Prof. David Harvey | The 17 Contradictions of Capitalism

I good evening welcome to this evenings lecture I'm Mary Lowe I'm associate professor in the Department of Geography and environment here at the LSE and on behalf of the school and the department's of anthropology and geography and environment in particular I just want to welcome you to tonight's talk by very distinguished visitor and former colleague here at the school David Harvey is distinguished professor of anthropology and geography at the Graduate Center of the City University of New York he's director of the Center for Place culture and politics in his long career he's had the rare distinction of being a transformative influence on his discipline and of being a job refer whose work strongly communicates across disciplines and wider publics outside the Academy he is thanks to Wikipedia for this information the world's most cited geographer and in 2007 The Times Higher Education supplement said he was the 18th that most cited intellectual of all time in the humanities and social sciences I don't know if Plato camped Marx and Freud were eligible for this ranking but even if not this is a somewhat remarkable status in the contemporary intellectual universe he's taught at many institutions from the University of Bristol to Johns Hopkins University in Baltimore Oxford University Johns Hopkins again and has been in New York since 2001 around the turn of this century he was a Miliband fellow here at the LSE in geography and environment David was awarded his PhD from Cambridge in 1961 at the start of a time of great ferment in geography with the arrival of an idea of constructing a scientific analysis of the spatial organization of the world human and natural bolstered by an array of models from economics psychology and other disciplines and a battery of statistical and other quantitative methodologies his first book explanation in geography in 1969 did much to synthesize and communicate many of the shiny new ideas of the 1960s famously issuing a call for geography to become a theoretical discipline of course he didn't rest there and with his 1973 social justice and the City he not only synthesized but transformed geography galvanizing dissatisfaction with the geographical status quo in a context of social conflict and global crisis with the development of a Marxist perspective on urban inequalities and in Justices in this book which starts by evaluating liberal positions associated with the philosopher John Rawls and welfare economics you can get a sense of his mind moving very fast in the direction of something entirely new there were other writers in geography and related disciplines in 1970s who made key contributions but social justice in the city was the key text marking the emergence of a more social theoretic discipline and crucially a more socially critical one to this largely at least in human geography remains the case David's written lots in social justice and the city and as we all want to know what he has to say this evening I can't elaborate on even a fraction of it perhaps his magnum opus a reconstruction and extension of Marxist arguments in capital the limits to capital appeared in 1982 it's a remarkably complex book that nonetheless manages to rigorously develop and examine difficult ideas in a clear and persuasive fashion the theorization of historical geographical materialism elaborated here was subsequently deployed in key articles on geopolitics and urban politics and his theorization of crisis and rent have remained central to his thinking and writing in recent years indeed as many of you will know his website features a plethora of material including lectures elaborating on various dimensions of Marx's work and he's recently published two volume companion to Marx's capital other books have contextualized postmodern ideas art an architecture in what was seen as an emerging era of flexible accumulation develop democracy and take on issues concerning nature and environmental justice elaborated on the transformation of 19th century Paris given an incisive account of geopolitics in the time of a resurgent American imperialism under the Bush administration and provided a highly influential and concisely presented account of the development of contemporary neoliberalism that's only to mention a few things that deserve to be mentioned when he was last here talking I recall it was in connection with his 2012 book rebel cities which brought together an extended material on the current crisis and activists and other responses to it his writings been strongly associated with the US and global right to the city movement and he's helped inspire much recent activism in many parts of the world now I have to remind you before we start that events are recorded and we hope I'm told to say we hope to make a podcast available online it is also being streamed live if that's working there to a large audience outside the hall so please if you haven't done so already put your mobile phones on silent and if you're into tweeting I'm supposed to point out to you that the twitter hashtag is hashtag LSE capitalism so I think all of you will agree is an excellent hashtag for our event so there's a book signing afterwards for about half an hour or a little more that I'm supposed to point out to you and I'll try and remind you at the end so you can pick up your own autographed copy of his new book 17 contradictions of capitalism and 17 contradictions in the end of capitalism is I believe the title of the book so without more ado I hand you over to David he'll speak for about 50 minutes he reckons and then we'll have some time for questions and answers look well thanks it's always good to be here and this is an opportunity of course to talk about the new book and the central idea behind it which was to try to explain where crises come from and in a funny kind of way to extend and deepen some of the argument that I've made in the Enigma of capital in which I argue the capital never solves its crisis problems it simply moves them around and the question is well how does it move them around and why does it move them around and what are the mechanisms and thinking about that I was course drawn to Marx's argument that crises are always reflections or manifestations of the underlying contradictions of capitalism so I thought I'd take a look harder at what those contradictions might be in the full recognition and I include myself in this criticism that we Marxists are very I think prone to take any situation we don't understand and just say ha its contradiction but by unraveling the contradictions it seemed to me that maybe I could train myself to be a bit sharper in my use of that term and try to understand so I did what I usually do which is to sort of troll my way back through the texts of Marx and at the time I was thinking about this I was also finishing up the written version of the companion to volume 2 of capital which had I think a singular impact upon my thinking about this this project and in fact some degree inspired it and doing this it readily became apparent that actually there are contradictions all over the place and therefore I thought to myself ever tried to systematize them a little bit which I finally did by boiling down a rather more complicated morass of kind of statements about contradictions into 17 the great thing I liked about the number 17 is it's a prime number to some reason or other or I think there's a magic in prime numbers so I like that so if you want to know why 17 because I like prime numbers it always has to be some mysticism in any finger constructor it's fun to do it that way but the 17 actually seemed to me to be kind of good idea to turn to try to structure them so I structure them into into seven foundational contradictions and seven moving or transformative constantly shifting contradictions and three dangerous ones and then it suddenly occurred to me there's another bunch of prime numbers there so suddenly you have a whole structure of prime numbers so this is the mystical side of the of the whole exercise but in in so doing what I learned a great deal about the way in which the contradictions interact and intersect with each other and the degree to which through the analysis of contradictions you could actually come up with what struck me is perhaps the most fecund part of the exercise which is to start to see the lineaments of a not so much a political project but a framing of what a political alternative to capital might look like and that to me was I think a rather profound understanding and one that I wanted to emphasize in the written version in this I think the the connection between the if you like the the analysis and the attempt to frame a political alternative that connectivity arose out of the way in which the contradictions were actually meshed with with each other and I hope to give you a brief example of of how that actually actually works for example the first contradiction I looked at is that between use and exchange value which on page one of Marx's capital so it's always a good place to start I'd always been particularly fond of this contradiction for a very very particular reason which is that when I started reading Marx with a small group of graduate students and Johns Hopkins way back in about 1970 at that time I was actually involved in a research project on what to do about housing in a city that had gone up in flames in night in the wake of the assassination of Martin Luther King and how to understand the dilemmas of housing provision in a highly ghettoized racially discriminatory structure of housing provision in the process of participating in this research I found myself actually allocated the task of writing the report and that came about for very simple reason everybody looked around says who the hell knows how to write around here well you're a Brit you should know how to do it so why don't you do it so I ended up being mandated to write the final report on housing for the city in the process we had been talking all the time to the bankers and fund development people we've been talking to landlords we've been talking to federal officials we've been told to city officials we've been talking to all kinds of people real estate agents and the like and we have a conference about what our findings were in which they were all sitting around the table and we'd all sent them copies of the report and I decided that the best way to frame this report was around the concepts of use and exchange value because I just read you know page 1a Volume one of capital and I thought to myself this conceptual apparatus makes a lot of sense you know there's a use-value of housing clearly a large segment of the population of Baltimore is not getting adequate access to you know use value of housing there's an exchange value structure and clearly something is wrong with the exchange value structure that it doesn't deliver the use values that really need to be delivered to that population so let's look at this relationship between use-value and exchange-value in housing and I got into that a little bit and formulated the argument that way I was a little nervous about presenting this reports because I thought somebody would say oh my god this is simply page one not in one of Capitol but of course nobody recognized it because nobody in the room had ever read there they all thought it was a terrific idea I thought it was fantastic this is a great idea you know I mean where did you get this from I said I didn't dare tell him and and and so it so it went on and you know by then I was not a convinced Marxist by any means but this gave me great confidence in Marx's analysis so I thought I better turn to page two and and this is how this is how my knowledge of marks actually unfolded was very much in dialogue with experiences of this of this kind I mean the story was a bit further down the line I by then I'd read Engels and and it was about four years later we had another conference on housing question and I kind of said look the problem is that we've faced this problem this issue of lack of provision of housing to low-income populations and particularly black marginalized populations and we're not really facing up to the fact that most of the solutions we suggest simply move the problem around this of course comes from angles 1872 essay on the housing question or where he says the bourgeoisie only has one solution to its housing problems it moves them around which of course then carries over to what I said in the Enigma of capital the bourgeoisie only has one solution to its crisis problems it moves them around so this idea came up and you know and everybody kind of again thought this is a good idea apart from some of the political people in the audience particularly those on the City Council who by then had figured out I was a bit of a lefty and I wasn't to be trusted so I was getting attacked violently by by them for kind of all well you now you're just a socialist and I was actually getting read baited but I was actually protected by the vice chairman of the Chase Manhattan Bank for real estate management and in New York City who kind of said this is a key insight this is fantastic I mean this is really exactly what happened to us in New York City we took on this plan and neighborhood and we provided finance for it and did all these wonderful things we had to do and the neighborhood improve but by the end of the day the same people we're not living there so this moving the route of the problem is exactly the nature of the issue so I was actually far myself defended by the banker and I was kind of the only time I've actually been defended by a banker but it was very good so afterwards he says to me now such a key idea have you written it up I said no I hadn't really written it up he said well where did I get it from I thought well by this time I most will be honest I said well it comes from angles and he says well does he work at the Brookings Institution so I said no no no no no by the time when I said well this is this is Marxist made his home my god but but the thing is the thing is that actually there's a there's a lot in Marx's political economy that has that quality to it if you can you know get past all the gobbledygook representations of it about you know this and that and a lot of common sense or what Graham she would call good sense comes out of understanding the political economy so this particular contradiction of use-value and exchange-value of course played a very critical role in the crisis of 2007 2008 because that crisis originated in housing where clearly the u.s. value system was actually captive to an exchange value structure that was being increasingly elaborated upon and finished in all sorts of ways the exchange value system had moved from simply commodity of housing being provided to housing as a form of saving to housing as a speculative instrument all of this had gone on over the years and so suddenly we find the exchange value system blows up and something like somewhere between four and six million people in the United States find themselves deprived of the of the use value in other words it was exactly the same story of the sort of that I had encountered in Baltimore in 1970 and so the useful exchange value structure is incredibly interesting way to look at this and when you ask the political question do you want to live in a society which just simply guarantees the the provision of use-values a decent housing and a decent living environment to every human being on planet Earth is that the kind of society you want to live in or do you want to live in a society that says your access to housing has to be mediated through this exchange value structure through which all kinds of people from you know bankers and real estate agents and mortgage finance ears and lawyers and so on are absolutely ripping you off left right and center to make absolutely sure that they get their pound of before you can get your house now which would you rather do and obviously the answer would be to most people the common sense thing is to say well let's live in a society that provides use values you know and and if the exchange value system is not really working at it quickly then let's get rid of it or change it or do something with it you know which is which which is which is going to make it work much much much better and this is the political point that comes out of the contradictions that by thinking of it this way you immediately find yourself saying let's live in a world which is providing use values to people let's live in a world that does it on an equitable kind of basis and then you look at what's happened over the last 40 years and we find more and more things that become actually commodified to the point where you have to go through the exchange value system to get the use value higher education health care you know you name it you know pollution rights you know I mean everything has to go through the exchange value system and we're told again and again and again that this is the most efficient effective and dynamic way in which society can work but it's a foundational contradiction and you see immediately that there are defects in it and that therefore it should be the center of critique but you try critiquing it it's very very difficult I mean around that table I when I recall everybody saying this is a sensible way to look at things but when you blow it out there is a sensible way to look at things and start to ask questions about it and kind of say well maybe we can do without the exchange value system here maybe we can treat housing as a human right maybe we can treat housing provision as something that should be orchestrated and organized on a collective associational basis and maybe there are techniques and ways of doing it and you find actually it's very difficult to make that argument except when people sit back and look at it they see the common sense of what you're what you're saying so politically it made a lot a lot of sense but then the exchange value a use value system it doesn't exist on its own there's an interesting kind of problem here exchange value in order for exchange value to work you need actually a measure of exchange value well the measure of exchange value will be all uses money but what does money represent money and Marx's view represents social labor the social labor which is done by certain people in society for other people in society which is mediated through the market system and it's a complicated relationship between money and that which it represents social labor is is is actually immaterial because it's a social relation social relations are immaterial but objective and Marx uses that to talk about value as something immaterial and objective this is a very very important thing you know it's on page 7 or 8 or something like that of the Volume one of capital where he talks about it in these terms but Marx is often read as a natural sort of materialist ie it you can't have something that's immaterial which is foundational but actually Marx's materialism is historical materialism it's not it's not scientific material is in the sense of natural materials it's it's it's historical materialism and the history of it is the social relation and the crucial thing is the social relation and that is not measurable directly it means a representation and it's representation is in the money form now social labor is represented by a thing and the commodity is represented by is initially with course was gold and silver which gave physical material formed something there was a social relation but in so doing it also lied about that social relation it also set up a situation where all kinds of other things could happen so I mentioned in a minute and you know one of the nice things are coming from geography is you end up with some nice metaphors I mean money is like map it does a very good job of representing some things but it lies like hell about all kinds of other things and you know we geographers know that and how to lie with maps well how to lie about the social relation through money then becomes absolutely crucial and of course we've seen lots of lying about that social relation through money over the last few years for one other very specific reason and the reason is this that at some point or other gold and silver were not very effective as means a circulation so you had to actually set up representations of gold and silver which is the fiat money is on the bits of paper and the coins and all those kinds of things so you end up with a weird thing that the materiality of the social social relation is represented by by gold and silver and then you represent something of the representation but in the 1970s we suddenly gave up on gold and silver we lost the material could link so actually what happened was the representation became as it were free from any kind of material base and then the question arose well what is going to control this this representation called money in relationship to social labor and the answer was central bank policy now what we saw in the 1970s of course was strong inflation because we cut the thing and so suddenly people start printing money and so suddenly this inflation and everybody then gets nervous about inflation at that point Volcker and the central Federal Reserve joined with the German Bundesbank and kind of said basically we don't want we're scared of inflation inflation inflation inflation so they became absolutely of a kind of almost fetish lee involved in making absolutely sure we didn't have inflation so you get a european central bank that's ultimately set up when it's charter is avoid inflation says nothing about employment or anything else and this is fascinating things come out about the Federal Reserve in New York City that the Federal Reserve discussing the crisis just before Lehman Brothers went bankrupt had had a meet in the minutes of the meeting show that and I've forgotten the figures but it goes something like this during the conversation the question of inflation was mentioned something like 180 or twenty-two hundred and fifty times unemployment was mentioned 16 times and the crisis of engine five times and this is just before the whole thing is going to blow up this is if you like the fetish the Marxist fetish really taking over and the fetish form itself becomes as it were the center so the monetary system becomes absolutely crucial underpinning what exchange value is about and here there's a therefore a link it's like the use value exchange value thing connects to the the money versus social labor question so those two contradictions are not independent of each other they are dependent of each other and we're now faced I think with one of the big big issues which this poses which is what is money actually doing and what what kind of money should we be actually trying to design which is going to actually facilitate exchange as opposed to being a vehicle for speculative activity and all the rest of it what what kinds of things can we come we can we do and what can we do about the way in which money it can actually be used for certain purposes which are actually highly destructive now I mentioned one of those in a minute so this is if you like the second contradiction which is connected to the first the third contradiction is you can't have exchange value you can't have money without having private property and you can't have private property without having a legal system which guarantees that private property which means you can't have private property without the state and so you get this contradiction between the private property in the state which then becomes absolutely crucial around the monetary form and what we see is in a sense is the monetary form also being integrated into this other kind of question of state versus private property but we can go one other step further than that private property is about private wealth what money allows is social wealth to be actually appropriated by private persons and on that basis you get the class distinction because if price if social wealth could not be proprietary so what you see then get is the colossal relation between capital and labor so what I'm talking about here is the way in which these contradictions all sort of integrated with each other and actually sort of pile on top of each other to bring you an understanding of the dynamics of how capitalism works and recognition that if you want to get rid of the exchange value system as I want to do in the house question you can't do it without saying something about money and monetary speculation and all that's going on with the money form and you can't deal with those two without actually also dealing with the private property and the state and you can't deal with that without dealing with the class relation to capital and the appropriation of price of social wealth by private persons so this is what Marx calls a totality of intersections and it looks pretty intimidating when you start to push all these things together and in a sense it is intimidating but except that you start to see some ways in which these interactions can be understood what the interactions between the different contradictions can be understood and this for me was one of them if you like the big findings of what I was what I was looking at because it's pretty clear that one contradiction can in fact counter another and so you get a balance if you like within another than a capitalist system between these different contradictions and when one counteracts the other that is a speculative system gets out of my out of way in the housing sector but the state can step in and do something in relationship to it in other words the state private private property contradiction can get mobilized in such a way as to deal with some of the cruder issues that go wrong in the exchange value use value thing so that you can you can see a compensation they're going on in which some stability can be structured within the totality of what capital is about so some some relative stability can be set up even though it's very very dynamic in which crises don't really form crises begin to form the contradictions start to get out of hand but they can be managed and this is the crucial thing about contradictions we're not talking about a situation where they always create crises now a lot of the time crises and contradictions are managed and managed effectively so that they do not become what Marx calls absolute contradictions and become the center of crisis formation in other words there's no reason why the crisis between use-value and exchange-value and housing that broke out in 2007-2008 had to happen that way it was a consequence of many Mis moves in the state private property relation the monetary system and the like which actually contribute to the to its and this then leaves if you like into two possibilities one the contradictions counteract and control each other to the point to give relative stability or they become contagious and when they become contagious then something that's going wrong in the state and private property can actually affect affect some other you know the the the monetary system can affect the exchange value use value system so that what you find them find is the pattern of contradiction starts to multiply and therefore it becomes contagious and explosive and this seemed to me to be one of the crucial elements within within the analysis and and this this I think was was was to me one of the findings that followed on throughout the whole analysis that I was was unfolding a long way of the course of recognition that some of these contradictions are so so so macro that you really need to think about the if you like that again the who is managing the totality of the system and in what in what ways are they managing it and to me this one of the crucial elements here was the contradiction between production and realization and this gets you into a field that many Marxist like to talk about which is well the crises arrived arise out of production or do they arise because of realization and I sometimes see sort of Marxist crisis theorists and defined as either production based I either into falling rates of profit and things that or they're into the realization crises and I find myself described to somebody's into the realisation crises that they're not what I'm into is what Marx talked about in the grundrisse er and saying you cannot understand capital without understanding the relationship between production and realization in other words capital is about what he called the contradictory unity between production and realization so it's neither production or realization is the relationship between production and realization which is significant but this came to me in a big way in the following for the following reason when I was working on the volume 2 companion it became clear to me a number of things became clear to me first was the truth of the fact that this is probably one of those boring books ever written so it was very difficult to retry and write about it in an entertaining way and I did my best but it wasn't good enough but volume 2 deals with realization and is all about realization volume 1 is all about production volume 1 is about the production of surplus-value and how surplus value gets produced and reproduced and the class relations which are connected to it and all of the consequences that flow and Marx's argument runs that if the world is like this then we will get that and that and that than that and of course when we get to the general law capital accumulation Marx argues well if the world is constructed in this way that the classical political economists wanted to construct it then you would get an increasing polarization of wealth you would get in immense wealth at one pole and immense misery and degradation and and despair at the other pole which is that on the part of the working class so you get the thesis coming out of Volume one that the increasing immiseration of the working class is the end product of what the general law capital accumulation defines but that but that conclusion in Volume one is entirely contingent it's contingent on the idea that there is no problem in realization in the world of realization that all commodities can be traded at their value that there is no problem in the market the market is always there you can always sell your commodity at its value no dust no difficulty furthermore it's also predicated on the assumption that the way in which the surplus is divided up between profit of enterprise and between interest and between rents and taxes and profit on merchants capital that those distribution arrangements have no impact whatsoever on the story that's being told so volume one is is a simple story which is told brilliantly and dialectically and the argument is impeccable but it's based upon these assumptions boiling to actually questions all those assumptions and starts to talk about you know what happens when we start to actually worry about realization and in volume 2 what you find is a completely different scenario and the scenario says one of the biggest contradictions there is in capitalism is the fact that capitalists are constantly trying to depress the wage rates of those they employ and in depressing the wage rates they actually undermine their market and if they undermine their market too far you'll get a crisis which arises out of realization and this was the you know this is what the vol 2 argon but again it's a contingent argument because it's all founded on keeping constant all those things which are variable in Volume one and and allowing then all those things which are held constant in volume one to very embodiment - now the relation so the relationship between volume 1 and volume 2 became absolutely critical to trying to understand what capital is about and and and and the trouble is that volume 2 is such a boring book that many many people I know never read it or if they read it they read it once and give up and can't say oh god is so boring I'm not gonna yeah let's get back to all that purple passages and prose in volume 1 it's great stuff to read and besides you know there's Shakespeare's in there and you know and Cervantes and all this kind of other people and none of that is in volume 1 - but this is this leads to a profound mystery ding of what it was that Marx is doing because it is a contradictory unity between volume 1 and volume 2 that defines what capital is about and let me give you a very simple and silly example really about about how that how that works that if you think you're in real difficulty in terms of a crisis of a certain sort which has connected to the situation volume 2 then then then what do you do with this this problem of lack of working-class demand well you've got to empower the working-class you've got to actually support unionization in fact you've got to theorize the economy in a certain way that Keynes makes a lot of sense so volume 2 produces something which is you know would say that if you want to manage capitalism from that perspective then volume you would be a Keynesian and you would start to sort of debt finance things and do all of the things that were essentially done with cat with with progressive capitalism after World War Two in other words World War two was was essentially dominated by demand management and dominated by Keynesian thinking and of course it was pretty successful in terms of generating growth the thing it was not successful with doing was disciplining the working class in fact it was empowering the working class so by the time you get into the 1960s throughout Europe and North America the working class is getting incredibly powerful and as it gets powerful the car starts to make demands and starts to sort of go on strike and all those kinds of things and you have all the stuff going on in Italy you get Social Democratic parties in communist parties beginning to sort of raise and of course what happens is there's a crisis of production of surplus-value in other words you're an equilibrium according to what you should do in terms of volume one but you're in disequilibrium in terms of volume what sorry you're in you're in equilibrium with what you should do in volume two but you're in disequilibrium with what's going on in volume one and the production of surplus-value is falling off and there's a crisis a macro crisis was the 1970s so what do you do in the 1970s you ditch Keynes and you go to a supply-side analysis and a monetarist analysis in other words you change your economic theory and you go to not demands but supply-side thinking and what is the main thing you want us is one a discipline on the supply-side wages so what do you do you attack working-class wages and all this kind of stuff form you know that's the neoliberalism world in other words what you do is you start to actually work extremely well in terms of the dynamics as suggested in volume 1 and guess what of course is Piketty and all these other people have been showing social inequality just spirals as it we would predict from volume 1 social inequality gets them rich become richer we get the billionaire's Club and we get you know we've got the kind of global plutocracy that we've essentially built since since the 1970s that is entirely predictable in terms of the volume one analysis because you're no longer concerned about the volume to accept the volume to stuff is going to get you in the end when the volume to stuff starts to get you because where's the market well the market isn't there so we've got to create the market so how do we create it well we start to use the financing and all this kind of stuff and we and oh there's not enough market there for the for the in the housing so what about setting up subprime financing for the mall you know all those kinds of things so you start to do these these things which is somehow rather gonna bring you back into some sort of equilibrium result big crisis 2007 2008 in other words in a way what we've what we've what we've got our when we look at the unity the the contradictory unity between production and realization is you've got a framework for thinking about capitalist history which works you know very crudely but but reasonably well in explaining why we shifted from a Keynesian so demand-side to a sort of monetary supply side analysis in the 1970s and what the consequences have been and now of course we find ourselves in a world where you know we're dealing austerity so it's still supply-side stuff etc etc etc and apart from China Turkey and various other places that are doing the so demand side the kind of explosion Keynesian kind of so the world is divided in this sort of way so this dialectical relation between production and realization which is founded on volumes 1 and volumes 2 of capital in intersection with each other and in relationship to each other is I think very insightful in terms of what it is we should actually be going for and if this explains something to me which was kind of really concerned about I mean the thing that struck me about the 1930s of my knowledge of the 1930s was new theory new thinking came out of a crisis situation in 1970s where I didn't like it new theory and new things came out of the 1970s which is sort of neoliberal argument why is there nothing new this time the answer is because there's nowhere to go you're blocked you either go back into you know supply-side stuff or deepen the supply-side stuff which of course is what austerity politics is all about or you go into the demand side and do what China and and Turkey is doing that's about the only those are the two options so there's no option of a third way unless unless you are prepared to go outside of capitalism entirely well you try thinking that one through and you try suggesting that to some bankers you try sitting around a table with the bourgeoisie and say maybe we should go outside of capitalism altogether see what you get I mean actually there are some people in there who kind of think it might not be a bad idea but the point is that we are blocked right now now what are we blocked around and this then comes back to other kind of questions which come up later in the analysis and the three contradictions at the end which to me are absolutely most dangerous to the future of capitalism right now which are very different from those which existed in Marx's time which is one of the reasons why I think we had to answer this question of what's new about capitalism today versus what is what is you know foundational is always there in a capitalist society what's new about what's what's what's particularly our time are certain contradictions the one which I'm most emphatic about is the one which is about perpetual growth exponential growth exponential growth is kind of interesting because it has this character that you don't notice it's growing very much until it starts to take off and there's an inflection point and then it kind whoosh goes up like this it's an exponential and capital has grown at an exponential rate of about 2.2 percent per year if you believe angus madison's calculations other people have different calculations but they all show its compounding and it's compounding growth now compound growth when capital was really about what was happening in Manchester or you know Birmingham in a few other places in 1820s one thing compound growth right now when you look at what's been happening around the world over the last 20 or 30 years look at what's happened in China look at what's happened in you know India look at what's happened in Latin America everywhere else and I think about this in terms of urbanization because one of the big things is one of my subtext in all of this is you can only explain urbanization as a way of actually facilitating a lot of this compound growth but look at the compounding of urbanization say in Latin America or go go to Istanbul go to Turkey or something like that and look at urbanization right now it's it's awesome what is happening I mean the amount of it is going on and I'm kind of saying okay this is compounding growth right now what would compounding growth look like in 30 years time what kind of urbanization would we have in 30 years time if all of those buildings you see in sort of a Turkish cities and what you see in in Latin America what would happen what kind of world would we be looking at we're talking about compounding growth on everything that's going on in you know North America and Europe but also now what's going on in China what's going on even in part much of the Middle East and what's going on and and and the compounding of it is is is absolutely terrifying in its implications for what the world will look like in 30 years time and we've actually got it seems to me a crisis moment where compounding growth cannot continue now capital is always about growth it has to grow because it's always about producing surplus value and surplus value is always about extra it's always about more capital is always about more it cannot be sustained unless there is more and there's more of what well more this more that well one of the things that's been happening is more money now money can be accumulated without limit which is why it was very good to get rid of the the gold and the silver because you got rid of the the limiting factor on it but now you kind of adding trillions to the money supply you then kind of what he said without limit but what is what does that mean and where does it go in terms of what what people's lifestyles are about what does it mean in terms of all sorts of things which then become absolutely critical one of the things I like to dwell upon and I talked to this about my my cultural colleagues is really about the rapid turnover time in the world of consumption if if capital only made things that lasted a hundred years it would have been dead long ago so it's really come up with a strategy and started to do this in the 1930s of planned obsolescence but the planned obsolescence has got shorter and shorter and shorter so we're now actually in a situation where the turnover time of consumption is becoming faster and faster and faster look at what happens with the electronics how many gadgets have you possessed over the last 10 years you know how many times you've been told get rid of that old phone you've gotta have this new one you know with the new apps and all that kind of stuff I mean this is the this is the world we're in and actually capital has moved more and more to the production of commodities which have rapid turnover times which are ephemeral and in fact the the production of of new new ways of thinking even then become significant so we have actually people wanting to talk about we're in a new stage of capitalism called cognitive capitalism I don't believe it at all but on the other hand I mean when is capital not being cognitive I mean I this one of the issues but but but nevertheless there is something there which is which is very significant which is the way in which capital is seeking out modes of consumption which happens almost instantaneous turnover times which includes a course spectacle now spectacle has a great thing which is it's an instantaneous turnover the only reason I don't like to call it immaterial because it man material activity that goes into the creation of the spectacle is huge and the mobilisation that goes on and you can see actually this competition over over it I mean my favorite example here would just just go back and look at the opening ceremonies of Olympic Games it's a very good example and by the way how many places have gone bankrupt after then staged Olympic Games including of course Greece but this is a this is this is if you like the part of the dynamic that that that that we are in and this is leading it to me to toot all sorts of dangerous situations and I want to make the proposition and I tried to make the proposition in the book that that compound growth cannot last and we therefore have to find alternatives and we have to find alternatives to move towards a steady-state economy now when you say that people kind of say well your anti growth no I mean I'm anti growth in the sense that the aggregate economy has two global economy has to grow I'm very much in favor of growth in certain parts of the world with search for certain reasons and I'm in favor of D growth in other parts of the world and this is something we need to actually look look look towards because that also connects with the other contradiction which is a serious one which is the environmental one which where there are it seems to me again a whole bunch of issues which are very difficult and dangerous and I'm not simply talking about being apocalyptic about global warming because I'm not apocalyptic about that at all but I think that the degradation of many physical environments ecological systems is a very serious very serious issue and again you think about compound growth in relationship to all of that and then you've got some very serious issues that need need to be addressed well this leads to however event for me is the big question what how are we going to get to some alternative and what should it be about I've already argued that if you go through all the contradictions you'll end up with well we don't want one that's banned of stole all on on exchange value we want one that's really based primarily on unuseful we don't want one where production is forcing realization we want one where realization is actually forcing products and and and so on so we can come up with the politics of this kind by going through the different contradictions but then the question arises why would anybody go for this politics because I think capital can survive its own contradictions but it can do so at a cost at a cost to human beings at a cost the environment at cost and that cost is increasing and is becoming more and more value so I argue in the final part that actually one of the things we're looking at is a situation of universal alienation and I want to bring back the question of alienation to the center of the analysis that there is a sense in which capital is taking us in a direction where it seems inhumane it's not going where we might want it to go and therefore collectively and consciously we can actually decide to take it in a different direction we are evolutionary agents human beings have always been an evolutionary agents and they've done some incredibly wonderful and marvelous things even under capitalism but we have to do some incredible wonderful and marvelous things in a way that goes beyond or outside of capitalism and we have to start to think about it we have to start to work at it and one of the things that rages me about the way universities are headed in the way think tacks are headed is they're simply about deepening where we're at deepening where we are they're not about actually having a free discussion about alternatives and that free discussion about alternatives is something that has to be consciously developed and we have to actually get together and start to talk about what these issues might mean and how we might do it I don't have solutions to a lot of these problems I have some general ideas about how to frame the debate and discussion and we can talk about that and many people will have other ideas but this is something what has is going to take a collective a real collective mobilization of you know what Marx called the general intellect if we're going to actually get anywhere with it and this is to me one of the big missions that it seems to me has to come out of the situation as we currently are right now there are no answers being offered to the dilemmas which faces there no answers to the contradictions which capital poses and therefore we have to start to find those answers and one of the ways of course is to do that is to come to terms with what the nature of those contradictions are and that is what I was trying to work on in the book I don't know whether I got them all and then probably plenty more to come but anyway I'll help you take a look at it thanks very much we have time for some questions that you do indeed now we have people with microphones who will be traveling to you to get your questions so if if I pick you out once we get going please wait till the microphone gets to you tell us who you are people often forget to do this unless you really really don't want to it's just useful and thirdly try to ask a question please we'll get more questions in if we don't stay positions or talk for a long time so nice short as you can questions okay so let's have a go thank you very much professor Harvey and a very quick question thinking of the problems of compound growth what do you think of the New Economics foundation 21 hours a week the new economic foundation have put forward the idea of everyone working 21 hours sharing out the work we have in the context of a kind of slow or no growth economy okay take the curves take them all right so who else had been handsome at this lady at that anybody else thank you and my name is Shaka and I just wanted to ask what you thought about money as a representation of trust between between people and and within social relations all right so that's interesting one about money and trust there's a question at the front here anyone at the top or I'll come over to you at present yes I am an alumni and also from occupy London and because I'm from occupy London and it's now two and a half years later and we seem totally invisible I guess and what I think about more than anything now is the fact that we are so you know it relates a bit slightly to what other people have said but there's certainly the issue of trust and who we can trust and all the rest of it when we're organizing and so it's led me to believe that we absolutely and I think you alluded to this professor Harvey that we absolutely must actually engage with the very people that we think have created the process in quite a substantial way and I wondered what you thought about that yeah okay good 21 hour week yeah I mean we are in a situation right now where part of the dynamics of technological change and I deal with this in the book are actually rendering many of the labor processes which going on around us redundant I mean I guess even The Economist has kind of argued that about 50% of the service jobs is likely to disappear and I think the left has to be very careful not to try to defend jobs which are going to disappear and then we tried to do that with the manufacturing sector and didn't succeed the same thing is likely to happen to the service sector it would be very it's it's perfectly feasible right now that you could do away with the certain categories of employment like airline pilot you could actually you could actually send jumbo jets across the Atlantic or electronically nitrite now if you really wanted to people would be very scared about it but given given what happened to the Malaysian flight recently they might actually feel more safer with a electronic but uh but I yeah so there's a lot going on there and then the question of work sharing and how to preserve income structures in a population where where most of the jobs are disappearing even in even in the service sector that's you know can it be done with work sharing or should it be done some other way some people are arguing that we should have a guaranteed income and various other solutions of that kind you know I'm not going to get into any any of those the question of money and trust I think right now this comes back to what I see as what I call Universal alienation that is a feeling that you can't trust anybody and and of course one of the one of the issues arises that the money you're supposed to you know it's supposed things are supposed to be as safe as the Bank of England or something of that kind but the Bank of England isn't particularly safe and it used to be people would say things as safe as houses and they're not safe either financially so I think that the whole kind of question of a breakdown of trust is is at this moment a part part of what I would consider widespread widespread alienation in relationship to the political system in relationship to work processes and in relationship to consumption as well so this is a you know again something that I try to deal with a little bit but again it's without getting into a sort of whole lecture about it I would I would argue the loss of trust is something that has to be compensated for by again the development of sub political bonds and political movements and and part of the those political bonds and political movements have to be put together in such a way that I agree with you entirely that we you just cannot afford we cannot afford to imagine that there is a group over there called them who are the enemy and somehow or other we are the good people that in some some way there has to be to some negotiation the bringing in to a political process of many of those people who are actually significant in relationship to to particularly economic power as it currently exists the problem I think however is that the billionaire's Club is showing itself to be particularly short on empathy with anybody other than itself that it does to the degree it does anything it's what this guy Peter Buffett who is the son of Warren Buffett and there's a foundation called philanthropic colonialism and and is actually into conscience laundering rather than actually solving any problems so I think that again there has to be a critical engagement but it must be a fiercely critical engagement of those people who are attempting to do good and I think this extends to the to the way in which the welfare state globally is essentially replaced these days by NGOs and there will be no revolution by NGO that I can assure you even though there are some very good people within the NGO would like to see a revolutionary transformation because the NGOs are structured in such a way as to their financing and all the rest of it is set up in such a way that there are in the end counterproductive in terms of their institutional form so if we want to define a new way of doing politics it cannot be through the NGO industrial complex it has to be through some other other other form now what form that can take it seems to me to be something that has is emergent not not not and I you know I'm not a good organizer myself I have a hard enough time organizing myself as opposed to organizing anybody else so that I think that that again the question of trust and how to build trust on how to build a political process is something that is very much an open open question but it is an open question and I think there are a lot of people who are really concerned about it and I meet people concerned about it all of the time and who are trying to put their thinking caps on to say you know well we should we should really try to get this together in a radically different way from the way in which we tried to do it in the past all right there are three questions over here in the superstructures hi I'm Eva Kowalski from the School of Oriental and African Studies and I was wondering whether you could elaborate a bit more on how volume free of capital M fits into your analysis in terms of you know the financial sector and that's also where mark steers with credit because that seems to be a major major course of crisis nowadays thank you all right question about volume three fool yes sorry I've got twenty minutes hi I'm bromine a member of public is China heading towards a crisis the future of China and maybe one more for now taking their thinking cap on and looking at the model of global Academy's learning intellectual and devious development politics education and going back then to the root of your analysis this little group of three fugitives two fugitives and born half fugitive where the factory angles in Manchester supporting each other but one was an aristocrat with extraordinary long-range knowledge of political directions and peacemaking in Europe so injustice create hard to do the V&A lavinius Congress the peace now isn't there then time that we when we want to create a new model to help to ensure the trust question and contradiction questions that we perhaps start forming little revolutionary outfits which have gone through Holocaust similar situations like say for instance liberation of of a Warsaw Ghetto which is extraordinary that history if you compare it with our economics in the moment with the high frequency trading more or less same story the only thing it's not visible it's not represented now it wouldn't clear be with other words the need to create academic models in which small groups of utterly repressed academics but who show some talent would be mixed exactly with high experienced aristocratic or government knowledge and trying to help now really praised model suggestions in which way we should go about because if we endlessly say ok we wait for the academics to do the drop for us we can wait you know with the same suggest wait until next big crisis excellent thank you right well they are the answer to the ask the last question is yes China China you know it's a gamble it's a gamble I'm I'm struck by many of the signs of overproduction there are many rumors of plenty of problems in the in the credit structures and the the like that in fact China is doing pretty much in the housing market there what was done in the United States and 2000 but China is actually doing in many ways what the United States did after World War two which is suburban eyes and urban eyes and a fantastic kind of rate which is propping up most of the world's economy I mean China consumes half of the world's cement supplies half of the world's steel supplies so it's a very it's a very dynamic situation but a very perilous one and most people I read on it kind of some people say well it's headed for a crash and some people say no because they have a lot of surplus available to themselves so they can recapitalize they've got their foreign exchange surplus they can recapitalize their banks and they can recapitalize their system in ways that most other most other countries could not so I don't know about the China case I'm very nervous about its continuity I can tell you this that if the China experiment blows up or comes to a crash then the world capital will be in very very very serious trouble and you see this in the stock markets because as soon as there's some sort of suggestion that something wrong the Chinese manufacturing sector the stock markets go down and so there's a great sensitivity to to the data coming out of China and of course this comes back to the formal question can you trust the data coming out of China and the answer like most other economic data is you can't trust much of it at all so it's a it's a toss up now volume three of capital actually what I did in the companion to volume two was to take all of the chapters on finance merchants capital from volume three and insert them into the context of volume two because volume two is incredibly annoying in the following sense that you keep on coming across issues like differentials in to turn over time like Fisk fix capital formation and circulation like the whole problem of coordination of different sectors of the economy between production and means of production versus means of consumption all of which Marx keeps on saying well this all looks very very different if you introduce the credit system but we are not prepared to do that here he says in volume 2 and it becomes clear that however if you did not have the credit system and this is one of the conclusions you reach coming out of volume 2 if you did not have the credit system then capital would have to hoard so much money and so much of the of the wealth that it would actually grind to a halt in other words more and more would have to be held in reserve to deal with the replacement to fix capital to deal with replacement of that so hoarding is something which Marx talks about in volume 2 but you see the volume of it escalating higher and higher and higher becoming bigger and bigger and bigger depending upon the greater the dependency upon fixed capital formation and if fixed capital formation is increasing which it always does with growth then fixed capital becomes a big big category that cannot be dealt with outside of the existence of a credit system which allows surpluses from here to be used of to invest in fixed capital there so so what I decided to do was to use all of the stuff about credit system into two so to say well only through this system can you answer some of the questions which Marx is leaving open in volume two so there is a relationship between volume volume two and volume three but the relationship is I think very strong what what comes out of the analysis of the credit system is in fact some pretty fantastic stuff and I love Marx's analysis of the crisis of eighteen forty seven forty eight in which what he calls the mistaken Bank Act of 1844 played a crucial role in prolonging and deepening the crisis and when you look at it this is a dead ringer for the European Central Bank whose formation and his configuration has played a very central role in prolonging and deepening the crisis and and Marx's analysis of the Bank of England's Charter which was reformed in 1844 it's a very interesting way of looking at what what real some of the institutional responses I also found it very very interesting that the two crises that Marx analyzed in in capital are the crises of eighteen forty seven forty eight and eighteen fifty seven fifty eight and both in both of these instances Marx called them primarily commercial and financial crises and it didn't mention the falling rate of profit once which is very interesting to those people who right now kind of trying to understand recent crises in relationship to a particular theory of the falling rate of profit I'm not going to get into too big deep arguments about that but as you know there's a lot of you know this is where where Marx is like to form circular firing squads and and get after each other you know what their position is on crisis theory and all the rest of it but it is interesting I think that Marx in those in those passages in volume three where he's analyzing the actual crises of eighteen forty seven forty eight 1957-58 analyzes them in a way in which financial issues and credit issues and commercial issues are actually come to the fore and it would seem to me that if you know we should we should be prepared at least to contemplate the possibility that we should be doing the same sort of thing in relationship to what happened in 2007 2008 and what its relationship might be to some of the deeper underlying issues which arise out of the contradictions of capital is another another question but the volume three analysis is as you know broken into two parts one is the continuation of the general argument which culminates if you like in the Fallen rate of profit theory and then the rest is about the theory of distribution and the theory of distribution has a completely different has a completely different tone to it and a completely different dimension to it and it cause challenges some of the findings of volume 1 and of volume 2 because the theory distribution is not a passive element in the dynamics of capitalism in the terms of rent extractions and so on and this is one of the arguments are making in the contradictions book we are much closer now to forming a Ron tier economy in which rents on the appropriation of rents is becoming absolutely central to what capital is about and this is kind of interesting because Keynes look forward to the euthanasia of the Ron tier and of course if you follow Keynesian policies that's where you would very much end up but since we've had this other kind of capital which has been emerging since the 1970s actually we've got the reconstruction of the Ron tier and the Ron tier is now constituted not only by the Ron tier as a finance capital because interest can be seen as a form of Ron tourism it's also based on land and property markets and tremendous everywhere you go in the world land and property markets are becoming crucial most of all in China where everybody if there is going to be blow-up in China it's probably likely to be in property markets so so the Ron tier is becoming significant but the Ron tier is also becoming very significant in intellectual property rights so suddenly you find yourself in a situation where some heads of American corporations say we don't need to produce anything anymore all we do is produce the knowledge and then actually sit there as a Ron tear and if you're not around here on the knowledge you just around here by forcing monopoly so you have this route these Ron tears emerging or like an agribusiness Monsanto Cargill and the monopoly power over of a seed plasma and all the rest of it which which is extraction of monopoly rents so the category of Monopoly rent has become very much more significant and again you can't get to that without going to the volume three I mean it's odd it really is odd in Marx's capital that you go through the whole of Volume one and the role of the landlord is not there at all the land of rent not there you go through volume two it's not there the first part of more than three it's not there volume three suddenly the rent comes back in and then right at the end the little fragment on rent marks is the three big classes in society that is industrial the industrial bourgeoisie the landlord's and the way and the workers and then you say well we're the landlords in this whole analysis in three volumes of capital what were they doing and and why they handled in the way they are in the in the segments on rent so this is to me again very important to touch to get a global view of what it was that Marx was trying to do in capital and why he was doing the things he was doing in the way was and I think it's only through that perspective we can have a judgment as to whether Marx is making any sense in relationship to contemporary situations clearly if we want to understand the central current situation we can't do that without looking at land and property prices and everything that's happening in that and we can't do it without looking at intellectual property rights and this is all about what the what's the role of rent in a capitalist economy and it may well be and this is another interesting kind of thing which will get people outraged when I say it which is that actually Ricardo had a theory of the end of capitalism and it was because of the excessive power of the Ron tear marks didn't like that theory so Marx constructed the rollin rate of profit theory to get rid of the Malthusian base of Ricardo's falling rate of profit theory but maybe we're back in a Ricardian situation where the overwhelming power of the ran tear is going to squeeze out productive capital even even merchants capital but if you look at the powerful sources that right now where the income streams are coming from a lot of is coming from merchants capital you know who are the richest people in the world right now no longer the heads of General Motors and all that kind of thing it's people in Walmart and its people and you know those kinds of organizations and its course people also and the communicative activities as well so we have a we have a different kind of scenario in which the power of the round here is absolutely absolutely vital to come to terms with and that's one of the issues they do take up at the book its own considerable length all right well there was a question up here perhaps we'll take that first then there were a couple of people here you and somebody else was that know and you and will hopefully you've had your hand up but hopefully we'll get to you after that because we don't ask too many questions at once but we do have limited time so okay might be it okay hi i'm i'm reading um this book at the moment actually and I wondered if you could expand a little bit on the contradiction between the state and private property and why exactly it's a fundamental contradiction because I didn't quite understand what I was reading is it because private property is predicated on the basis of the freedom of the individual which the state has the power to and often does take away um yeah if you can elaborate a little bit on that that'd be really good and I wanted to say that I very much agreed with you that we need to begin posing political alternatives and on that note I'd like to draw everyone's attention to a festival that's taking place this summer called Marxism 2014 its alternatives for a world in crisis it's the biggest left-wing festival in Europe will have revolutionaries from Syria Lebanon and Egypt there's loads of meetings the aims to draw people into discussion also into action on issues and it sounds very exciting but what I'd like try to be able to answer and I'd like to save it if he plans to come and speak it like he did two years ago so and if you'd like to book grabba leaf lock me in the lobby thanks all right okay thank you right so you hello I'm a graduate student at King's College across the road all right my question is to do with the perception of how humans interact so that traditionally there's been always a tendency to defend capitalism by saying that human beings rationally act in a way but in the recent 20 years or so the field of experimental economics and behavioral economics have sort of shown there's so many studies that show that humans don't necessarily act that way so given the fact that these studies have been published in very well-known journals across North America recently in very liberal schools how would you say that academia doesn't have the power to change things as it were all right hi I'm from the group Curtis tickets um we are busy with critiquing capital M as it works in this society I do very much agree that there are a lot of contradictions that come with capital but I beg to differ on that they don't work out just to give a quick example is that the contradiction between the use value and the exchange value is so cruelly demonstrated by the 30,000 people that die each day because they don't have access to the use value of food which is available because they don't have any exchange value to hand out but what does it mean it means can you see me and that this is something that happens daily and it works out perfectly for capital so I think that illustrates that not kept us going some wrong way but capital if you want to put it that way is inherently inhumane and if you want to change something about that about those starving people you would need to end the capital as the aim of the whole economy and not change whether production or realization is more important and who try and what drives what but and the realization of any value and yes can you bring a question exactly the question M one more hint is whoever wants to have like more details about that information we handed out a brochure and the question is what do you think about that all right there was this gentleman in the front here this is a question on inflation over the last since 2008 the world banks have been throwing money into the stock markets in bonds creating masses amounts of wealth and they still manage to control inflation which is one of the surprising things that over the last few years and how in effect that they have managed to bring inflation down why is that when they're throwing so much money into the markets all right one last question from the person with the green stripy thing there hello my name is Jana and I'm a support working homeless foster and squatting in East London it's fun to ask you what do you think about squatting as a means to reclaim surplus in housing all right excellent admirably concise question all right yeah on private property and the the state the thing is that you can't have exchange going on unless there are juridical individuals who do the exchanging and juridical individuals implies that there's a structure of law and contract of some kind and that structure of law and contract defines both their right to have complete control over that commodity which they are disposing of including a course there are labor power in situations where work has become part of the commodification and and that juridical relation has to be stabilized and that's where the state some form of state power enters enters in so the dynamic between the importance of having juridical individuals who can engage in in trade and have complete control over the commodity which they trade and complete disposal capacity to dispose of it and of course juridical individuals doesn't mean necessarily individuals like you and I it also means corporations right now because they're defined as juridical individuals so you need that that that set up in order for the exchange value system to work in order for money to be to have the capital the qualities that it does I think that the the question of the introduction of of all kinds of other ways of thinking about economic activity and economic rationality fortunately the system of economic rationality has been under fire I think for some time and I have to say the place where you see this most clearly is in the work of Keynes I mean it's it's if you care to read the general theory which is a fantastic book in many ways about you know two thirds of it is about psychology and only about one third is about the actual economic theory and of course the economic textbooks give you the economic theory and leave the psychology behind in fact once around a seminar in which we talk keynes and graham she and i think it was a very very interesting kind of connection because keynes is very much talking about the necessity to construct hegemony of a certain sort and can gain consent and therefore a lot of this experimentation has been going on in that boundary between economics and psychology is very much about how to maintain and sustain consent in a society where we're beginning to see the the worrying signs of what i call universal alienation emerging an attempt to it seems to me to sort of mobilize and it's there's no accident that in recent times some of the Nobel Prizes in economics which are not really Nobel Prizes but they've been given to people with a psychological bent rather than who are sort of just doing the technical sort of number number crunching so I think that there is a has been an evolution in thinking in which many of these elements have put put together in a different way and you know I'm not arguing I'm not arguing that the care that academia is not inventive it's the question of what it's inventive about I think a lot of work that's gone on in academia particularly around you know questions of race and gender and gay lesbian rights and those kinds of questions are very being very very transformative and so it's not as if the society our society has been correct if you like stuck in the Raton on everything it's become much more open to multiculturalism has become much more open on many things and and therefore this is if you like a progressive side but the thing that's interesting to me is that when I'm talking about basic political economic formation and the nature of the contrary the contradictions of capital it's there that there's absolutely almost silence about what an alternative might look like because I don't think there is one to be defined I agree entirely about the fact that the the exchange use value system is constantly depriving large segments of the population of use-values when I said that things compensate each other I was talking about a general crisis of the system and it's a crisis always from the standpoint of capital as Marx pointed out capital is really about a permanent crisis for the working class and much of the working class and therefore you know from that perspective of a class perspective you would say that the use value exchange value distinction is something that should be abolished and exchange value should be abolished as in fact mark argued should be the case in fact that was you know one of his nostrils at that we should look forward to a society which was just simply about use values with exchange value playing absolutely no role whatsoever so I agree with you entirely that the the system does not compensate in the sense that it works well for everybody but it does it actually contribute to the reproduction of capital and the answer is yes a crisis is bar largely defined in our society by the inability of capital to reproduce itself and it's such a reproduction of capital and its failure which is the defining moment of crisis inflation it's not actually true that inflation is not with us I mean it depends which part of the world you're in China has been actually bogged down in inflationary pressures Argentina Brazil Latin America have a strong inflationary pressures so it depends where you are and and there's been a lot of inflation in in various prices so even though you can kind of say the measures of inflation are down there's a tremendous inflation of housing prices and the tremendous inflation in in in in rents for example so so this this you know we have to be careful about using the statistical data which say inflation is very low what what is really meant by that is working-class and labor has been so disciplined that it's unable to actually jack up its its wage rate effectively and it's the repressive it's a repression of the wage rate and the declining share of wages in national income which is I think the significant element that means there's no inflation coming from that quarter and that therefore in the United States the inflation rate is low and therefore in Europe the inflation rate is low and in Japan the inflation rate is low so this is to me if you like the the crucial question about inflation squatting yeah I think squatting is a great idea let's uh you know you know we could squat all kinds of things I mean in fact I was taken around the street in London which is apparently in notorious now for the fact that nobody lives on it even though it's full of you know the affluent mansions most of the very very large new mansions in in the condominiums in New York City are empty and and you live in a world which is kind of crazy when you think of it that you have all of these empties empty and I was in Istanbul last week and I was told there's something like 600,000 empty rooms there empty empty apartments or empty dwellings in in Istanbul I mean this this and this is a boom town in terms of building they're keeping on building and they're building empty buildings so that people can speculate on the value of the building and all this kind of stuff so again it's incredible inflationary pressure increasingly most most people find it very difficult to live near the centre of London or live near the centre you know live on Manhattan or any of these places wherever you go and this is not just simply just a few places wherever you go there's tremendous kind of inflation going on in the value of empty buildings and you kind of go what kind of use values that and you then you kind of say well we should squat them and in fact you know we had this little plan there's a great new condominium down in the wall street this has gold tiled bathrooms and we saw thought to ourselves we'd like to go take a there and jerry' now I know so but obviously you know these are highly protected spaces as you can imagine but I mean this is this is the you know this is the total irrationality of the system and you look at it you kind of go why are we tolerating such incredibly irrational practices as building like crazy and to keep place is empty so people can't get into them I mean that is the exchange value noose value system which is gone completely berserk and we should do something about it all right that well that we'll have to do because we're five minutes / but we've learned a lot you

Channel: LSE

Views: 244,905

Keywords: LSE, London School Of Economics (Organization), Geography

Id: AULJlwoI3TI

Length: 92min 35sec (5555 seconds)

Published: Thu Apr 03 2014