Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.
The standard narrative surrounding the current economic crisis goes something like this. It is not quite certain who or what is to blame for the near-collapse of the financial sector, but deregulation, loose monetary policy, reckless lending and bankers’ greed all have played a part. Right now, we need to start sorting out the mess. Regulation should be introduced that prevents market actors from taking excessive risks, and we all should re-embrace values such as prudence and thrift.
If this narrative is to be believed, the crisis was caused by individual misconduct in the marketplace and poor political decision-making. This in turn suggests that it’s got nothing to do with the dominant economic-political order. David Harvey, an A-list geographer known to a wider audience for his online lectures on Karl Marx and his Brief History of Neoliberalism, disagrees with this perspective. He contends that capitalism can’t exist without crises, and that the current crisis results from the measures taken to contain earlier ones.
The main chunk of Harvey’s book is dedicated to describing the ‘flow of capital’ – the lifeblood of the global capitalist system – and to explaining why this flow is disrupted time and again. Harvey follows Marx, who stresses that capital is not a thing, but an ever-expanding movement. Industrial capitalists expend money in order to hire workers and buy machinery as well as raw materials. The workers produce products, which the capitalists can sell at a profit. The capitalists then reinvest this profit (or part of it). This means that the whole process starts again, but on a bigger scale. As Harvey emphasises, capitalists are spurred on by the need to remain ahead of competitors.
The constant accumulation of capital means that capitalism is expanding and evolving all the time, but this is by no means a smooth process. Harvey detects a number of potential barriers to accumulation – for example, limited natural resources and raw materials; a limited pool of people to hire; acts of resistance by workers; and insufficient demand for products. Harvey’s key point is that barriers such as these cannot be removed but only repositioned. In other words, dealing with them in one place and at one time tends to recreate them in another place or at another time, and possibly in a magnified form. Once the barriers become too big to be shifted, capital accumulation
is disrupted and a crisis starts.
Harvey’s brief account of the current crisis illustrates this point. He argues that in the 1960s it became harder for capitalists to employ extra workers on conditions right for capital accumulation. This was because there was full employment, and because workers formed strong trade unions. Capitalists reacted by (a) increasing the share of women and immigrants in the workforce; (b) using labour-saving technologies such as robots; (c) transferring production abroad; and (d) allying themselves with union-busting politicians such as Ronald Reagan and Margaret Thatcher. As a result of these strategies, wages started to stagnate or even decrease. Capitalists had dealt with the problems of hiring and resistance, but in so doing, they had created the problem of demand.
In the US, this was addressed by extending people’s access to mortgages and consumer credits. At the same time, capital was redirected from production into the financial sector, and regulations obstructing its global flow in and out of assets were removed. The profit opportunities thus created led banks to extend ever more credit, but without increasing the deposits they held accordingly. Eventually, some banks got into trouble. As a result, inter-bank lending stopped, and the credit markets froze. There were massive losses, and banking capital got devalued.
In sum, circumventing the demand barrier by inflating debt prepared the ground for one of the deepest capitalist crises in recent history. The bottom line of Harvey’s counter-narrative is that we got where we are not due to the greed or the hubris of the self-styled ‘masters of the universe’, but due to the political-economic dilemmas created by the barriers to accumulation. Ultimately, the operational logic of capitalism is to blame for our predicament.
This suggests that getting out of the mess means going beyond capitalism: ‘There may be no effective long-term capitalist solutions… to this crisis of capitalism,’ Harvey remarks. He concludes his book by discussing Lenin’s question: what is to be done?
If Harvey’s global perspective allows him to provide a persuasive account of a truly global crisis, it prevents him for providing a convincing answer to this. He provides us with the truism that everything is connected, and concludes that there is no privileged point of political intervention: ‘The trick is to keep the political movement moving from one sphere of activity to another.’
This statement has little practical relevance. In fact, it diverts attention from the pressing question of where and how to start building an anti-capitalist political project. I suspect this can only be answered by paying much closer attention to the specific conditions for political action in different parts of the world. The global flow of capital may be a good entry point for discussing the crisis, but it doesn’t seem to be the right exit point.
Dipesh Pandya speaks to documentary film-maker Sanjay Kak, who for 30 years has been working outside the mainstream to tell a story rooted in the struggles of those excluded by India’s militarism and its narrative of neoliberal growth
Jeremy Gilbert on how radical Labour politics can be inspired by the utopianism of the counterculture
Disasters have unequal impacts – it's the poor and marginalised who suffer most. David Harvey writes on Hurricane Harvey
Survivors of the fire are still relying on thousands of community volunteers, writes Dan Renwick - but the failed council is plotting a comeback
What if it's not us who are sick, asks Rod Tweedy, but a system at odds with who we are as social beings?
The people could reach a democratic and non-violent solution if they were freed from US meddling, argues Boaventura de Sousa Santos
A decade after the start of the crash, economic power is in our hands – we must take it, writes Ann Pettifor
Nick Dowson looks at the new wave of co-ops and community groups where people are building their own truly affordable homes
Working class theatre: Save Our Steel takes the stage
A new play inspired by Port Talbot’s ‘Save Our Steel’ campaign asks questions about the working class leaders of today. Adam Johannes talks to co-director Rhiannon White about the project, the people and the politics behind it
The dawn of commons politics
As supporters of the new 'commons politics' win office in a variety of European cities, Stacco Troncoso and Ann Marie Utratel chart where this movement came from – and where it may be going
A very social economist
Hilary Wainwright says the ideas of Robin Murray, who died in June, offer a practical alternative to neoliberalism
Art the Arms Fair: making art not war
Amy Corcoran on organising artistic resistance to the weapons dealers’ London showcase
Beware the automated landlord
Tenants of the automated landlord are effectively paying two rents: one in money, the other in information for data harvesting, writes Desiree Fields
Black Journalism Fund – Open Editorial Meeting
3-5pm Saturday 23rd September at The World Transformed in Brighton
Immigration detention: How the government is breaking its own rules
Detention is being used to punish ex-prisoners all over again, writes Annahita Moradi
A better way to regenerate a community
Gilbert Jassey describes a pioneering project that is bringing migrants and local people together to repopulate a village in rural Spain
Fast food workers stand up for themselves and #McStrike – we’re loving it!
McDonald's workers are striking for the first time ever in Britain, reports Michael Calderbank
Two years of broken promises: how the UK has failed refugees
Stefan Schmid investigates the ways Syrian refugees have been treated since the media spotlight faded
West Papua’s silent genocide
The brutal occupation of West Papua is under-reported - but UK and US corporations are profiting from the violence, write Eliza Egret and Tom Anderson
Activate, the new ‘Tory Momentum’, is 100% astroturf
The Conservatives’ effort at a grassroots youth movement is embarrassingly inept, writes Samantha Stevens
Peer-to-peer production and the partner state
Michel Bauwens and Vasilis Kostakis argue that we need to move to a commons-centric society – with a state fit for the digital age
Imagining a future free of oppression
Writer, artist and organiser Ama Josephine Budge says holding on to our imagination of tomorrow helps create a different understanding today
The ‘alt-right’ is an unstable coalition – with one thing holding it together
Mike Isaacson argues that efforts to define the alt-right are in danger of missing its central component: eugenics
Fighting for Peace: the battles that inspired generations of anti-war campaigners
Now the threat of nuclear war looms nearer again, we share the experience of eighty-year-old activist Ernest Rodker, whose work is displayed at The Imperial War Museum. With Jane Shallice and Jenny Nelson he discussed a recent history of the anti-war movement.
Put public purpose at the heart of government
Victoria Chick stresses the need to restore the public good to economic decision-making
Don’t let the world’s biggest arms fair turn 20
Eliza Egret talks to activists involved in almost two decades of protest against London’s DSEI arms show
The new municipalism is part of a proud radical history
Molly Conisbee reflects on the history of citizens taking collective control of local services
With the rise of Corbyn, is there still a place for the Green Party?
Former Green principal speaker Derek Wall says the party may struggle in the battle for votes, but can still be important in the battle of ideas
Fearless Cities: the new urban movements
A wave of new municipalist movements has been experimenting with how to take – and transform – power in cities large and small. Bertie Russell and Oscar Reyes report on the growing success of radical urban politics around the world
A musical fightback against school arts cuts
Elliot Clay on why his new musical turns the spotlight on the damage austerity has done to arts education, through the story of one school band's battle
Neoliberalism: the break-up tour
Sarah Woods and Andrew Simms ask why, given the trail of destruction it has left, we are still dancing to the neoliberal tune
Cat Smith MP: ‘Jeremy Corbyn has authenticity. You can’t fake that’
Cat Smith, shadow minister for voter engagement and youth affairs and one of the original parliamentary backers of Corbyn’s leadership, speaks to Ashish Ghadiali
To stop the BBC interviewing climate deniers, we need to make climate change less boring
To stop cranks like Lord Lawson getting airtime, we need to provoke more interesting debates around climate change than whether it's real or not, writes Leo Barasi
Tory Glastonbury? Money can’t buy you cultural relevance
Adam Peggs on why the left has more fun
Essay: After neoliberalism, what next?
There are economically-viable, socially-desirable alternatives to the failed neoliberal economic model, writes Jayati Ghosh
With the new nuclear ban treaty, it’s time to scrap Trident – and spend the money on our NHS
As a doctor, I want to see money spent on healthcare not warfare, writes David McCoy - Britain should join the growing international movement for disarmament
Inglorious Empire: What the British Did to India
Inglorious Empire: What the British Did to India, by Shashi Tharoor, reviewed by Ian Sinclair
A Death Retold in Truth and Rumour
A Death Retold in Truth and Rumour: Kenya, Britain and the Julie Ward Murder, by Grace A Musila, reviewed by Allen Oarbrook