This is my review of The Enigma of Capital: And the Crises of Capitalism by David Harvey.
Reading this feels like galloping over rough terrain on a spirited thoroughbred out of control. The recent financial debacle of 2007-8 inspired Harvey`s analysis of the periodic crises in capitalism which seem to be inherent, together with the attempted solutions, and suggested future actions. Harvey, a "Distinguished Professor in Anthropology" and originally a geographer, quotes selectively and cogently from Marx, and clearly favours radical alternatives to "conventional" casually accepted capitalism.
His basic premise is the current consensus amongst economists and the financial press that a healthy capitalist economy in which most capitalists make a reasonable profit needs to expand at about 3 per cent per annum. "Credit-fuelled capital accumulation at a compound rate is a condition of capitalism's survival. Capitalism must generate and internalise its own effective demand" backed by money to pay for goods in the market.
Succeeding chapters explore the potential barriers to the accumulation of capital- lack of money, labour, resources, technology, resistance or inefficiency in the labour process and lack of "effective" demand. Although most of the ideas are likely to have been encountered already, it is useful to have them combined in one place.
I welcomed the lack of abstruse economic theory with equations and graphs, which may reflect the author's expertise as a geographer. He asserts that an obsession with mathematical models blinded economists to the danger of the early C21 debacle that few foresaw. However, I would have liked a more precise explanation of the new financial products, credit default swaps and derivatives which caused so much trouble. I also found many of the explanations e.g. of the relationship between the availability of labour and wage costs, too condensed and hard to follow for someone with no prior knowledge of economic theory.
Although the topics and relationships covered are wide-ranging and fascinating, the book has a breathless quality, fed by long complex lists of diverse examples which undermine the line of argument. Harvey seems unable to resist the temptation to qualify points with brief asides, often in brackets, thus adding to the disjointed effect. Many passages seem written in a semi-digested hurry. For instance, I wanted a deeper exploration of the implications of the "Walmart phenomenon" by which cheap retail goods produced by relatively cheap labour are imported from an ironically still communist China for American consumers, some of whom will lost their jobs in the process.
The radical ideas put forward in the final chapter seem too vague and undeveloped to be called solutions. Asserting that "an ethical, non-exploitative… socially just capitalism that redounds to the benefit of all is impossible" and "contradicts the very nature of what capital is all about" he concludes: "The accumulation of capital will never cease. It will have to be stopped. The capitalist class will never willingly surrender its power. It will have to be dispossessed."
Is he calling for bloody revolution, likely to lead to world wars and prolonged greater suffering and chaos than exist even now? He says lightly that it is good in itself to be utopian, but as a distinguished academic, does he not have an obligation to present rather more cogent and well-conceived proposals than this? Necessity being the mother of invention, many educated young people in developing countries are beginning to devise alternative life styles. Rising anger over social inequality and growing evidence of the dangers of under-regulated capitalism, exhaustion of natural resources, pollution and overpopulation, may give governments the impetus to modify capitalism with the support of the people. This is the only future I can see, rather than what sounds at time like an unrealistic rant from an ivory tower.