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Some Good Insights but Much of the Language and Thought is Archaic
on November 30, 2014
I bought this book to get some insight into current Marxist thought. Unfortunately both the thought and the language come across has very dated, making for a heavy read, more like a text in the German philosophical tradition. For example, in this book the word "contradiction" does not mean a logical contradiction, but the tension between forces or concepts which may diverge, an archaic usage. An example is the tension between monopoly and competition.
Harvey does give some wordy insights into these "contradictions" of capitalism, but he does not derive a practical program of action to "end capitalism". Instead he presents a brief, utopian vision (much like Marx himself) in the epilogue while advising the reader to look for revolutionary opportunities lying hidden among the "contradictions". And sometimes Harvey is simply off base because, like most economists, he does not understand limits-to-growth, especially the fundamental role of energy. He would be well advised to read "Energy and the Wealth of Nations" by Charles Hall and Kent Klitgaard, or "The End of Growth" by Richard Heinberg, or some of the articles at www.resilience.org .
Even the logical analysis of this book is hard to pin down. For example, the title of the book suggests a focus on capitalism yet he states on p. 7 that the book will focus instead on capital and that the two must be clearly distinguished. So here - take a deep breath - is Harvey's definition of capitalism: "By capitalism I mean any social formation in which processes of capital circulation and accumulation are hegemonic and dominant in the providing and shaping the material, social, and intellectual bases for social life". After reading that I thought I might have better luck looking up capital in the ample index but could not find any reference to its definition. Since Harvey sometimes uses the word capital in a context where capitalism would make more sense to me, I'm still confused.
Contrast Harvey's abstract language with David Graeber's ("Debt - The First 5000 Years", p. 260): "Capitalism is first and foremost the art of using money to get more money". Or Thomas Piketty's ("Capital in the 21st Century", p. 46): "Capital includes all forms of wealth that individuals or groups can own and that can be transferred or traded through the market on a permanent basis".
....Harvey's first "contradiction" is Marx's distinction between exchange value and use value, the idea being that exchange value, or price, is determined by supply and demand or speculation or other conventions, so that it may diverge from the real value of a good or service to the user. Except it took Harvey 10 wordy pages to say this, and he missed what seems to me to be a critical result of this distinction: that wealth comes from the accumulation of use values that exceed exchange values, or that in some sense, wealth = use value - exchange value, or make yourself richer by buying bargains instead of lemons. The problem, of course, is how to reliably quantify "use value", an issue never addressed by Harvey.
Another example of archaic language that is needlessly obtuse is the "reproduction of capital", also the "circulation of capital". Take a classic form of capital - good agricultural land. In what sense does this "reproduce" itself or "circulate" (especially when it can hardly be said to produce itself in the first place)? In fact, why use the term "capital" at all, when it is composed of such diverse elements (natural resources, money, supplies, technology, services, knowledge, institutional structures, ...), basically all the inputs to every process of production except human labor. The whole capital / labor dichotomy seem to conceal far more than it reveals.
The Marxian analysis does correctly identify economic growth as coming from the "surplus value" from processes of production, if this surplus value (= newly created wealth) is properly reinvested. This surplus value is the "use value" of a product after subtracting the costs of all the inputs to the production process. But what is obscured here is the foundational role of energy. That is, in reality all surplus value derives from "cheap energy".
The energy of "cheap energy" is provided by the natural resources that are at the base of every process of production and the cheapness comes from good technology and all the other direct and indirect human inputs. For farm land, this natural resource energy comes directly from sunlight and indirectly from the chemical energy stored in all the minerals and organic matter in the soil and in water. Then people add their own energy, plus the energy of farm animals or machinery, and of fertilizers, etc. For the farm to be successful, these human managed inputs must be cheap in comparison to the use value of the food produced. And when it takes only 2 people on the farm to feed 100 people off the farm we get the spectacular success of modern industrial agriculture - the product of the age of cheap fossil fuels.
Instead Harvey believes Marx's widely discredited labor theory of value: "social labor is the ultimate source of value and profit" from which he comes to the astonishing conclusion that "replacing it with machines or robotic labor makes no sense either politically or economically" (p. 104). Of course, this makes perfect sense when you realize that the energy in a barrel of oil is approximately that of 500 human slaves working one 8 hour day of physical labor. Instead Harvey, citing Adam Smith, attributes productivity to "division of labor", which pales in comparison to cheap oil, despite its significance in reducing the requirements of human energy.
Even more astonishing, Harvey foresees robots causing a crisis of unemployment in the near future, despite the fact that capitalism has done very well over the last 40 years of automation in maintaining its desired level of unemployment (just enough to prevent wage increases), with a host of services replacing factory jobs in the US. The coming global economic contraction has, of course, real implications for jobs: it will mean a continued shrinkage of the middle class and a spread of low wage or informal work unless there is a radical reduction in economic inequality, especially a radical reduction in resources wasted on luxuries and frivolous projects.
....At one point Harvey propagates the myth that the high oil prices of recent years have only been caused by speculators, not "peak oil" (p. 252). Apparently he is not even aware that the production of conventional oil hit a plateau about 2005, with only modest increases in total production coming after several years of investment in far more expensive unconventional oil like tar sands and fracked shale oil. The resulting high prices drove the recent decrease in global economic growth, which has so befuddled economists of all stripes, to the point where demand has finally dropped temporarily below supply, cutting the price until the fracking boom levels off and demand picks up in a couple of years.
....So I've concluded that Marxist economists have no more clue than the capitalist economists of how to "de-grow" an out of control political economy. This vacuum has been filled by techno-utopians on the one hand, who imagine colonizing space if earth comes up short, and on the other by those like John Michael Greer who dig into the muck of a new dark age that could follow ecological overshoot and collapse (think of the rise and the fall of the Roman empire). Harvey even believes in the fallacy of substitution: "If there are specific impending scarcities of this or that resource, we are smart enough to find substitutes." (p. 260). He ought to read Ugo Bardi's new book: Extracted - How the Quest for Mineral Wealth is Plundering the Planet.
In reality there are no known substitutes for cheap oil that yield anywhere near the same wealth, and none at all for phosphorus, an absolute requirement of industrial agriculture. Thus we are indeed facing some form of collapse of the global economy caused by natural limits to growth. In theory this could take the form of a relatively benign contraction of population and industry over several decades. For example, if women, while in their mid-thirties, were to bear only one child on the average, the global population could be peacefully cut in half in 40 years. However I doubt it, considering the current wars in the Middle East and the outbreak of ebola in Africa. Nor do these "four horsemen of the apocalypse" seem to have much to do with capitalism, considering how both Russia and China have tried to ignore their limits to growth, not to mention similar responses throughout history.