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ROAR Magazine

Wed, 04 Apr 2018 23:30:14 +0200

Dissecting the madness of economic reason

A decade after the financial crisis of 2008, global capitalism remains in dire straits. Despite central banks providing a steady diet of low interest rates and pumping over $12 trillion of new money into the world economy through quantitative easing, growth remains anaemic, even as debt levels in many countries are back on the rise and inequality rapidly spirals out of control. Secular stagnation now goes hand in hand with the emergence of new speculative bubbles in stocks and housing, raising fears that fresh financial turmoil and further debt crises may only be a matter of time.

With mainstream economics clearly incapable of providing a satisfactory account of capitalism’s inherent tendency towards crisis formation, the past decade has seen a resurgence of interest in the work of Karl Marx, undoubtedly the most astute observer of the system’s internal contradictions. Perhaps no other living scholar has played a more important role in this renaissance of Marxist theorizing than David Harvey, the geographer whose many books and celebrated online course on Capital weaned a new generation of students and activists on an innovative reading of Marx’s critique of political economy.

In his new book, Marx, Capital, and the Madness of Economic Reason, Harvey provides a concise introduction to Marx’s theoretical framework and a compelling argument for its increasing relevance to the “insane and deeply troubling world in which we live.” Fleshing out a number of ideas first presented as part of a lecture series at the City University of New York, where he is Distinguished Professor of Anthropology and Geography, the book is characteristic of the “late Harvey”: incisive in its analysis, sweeping in its scope, accessible in its style and laced with profound insights on the madness of the economic system under which we live.

Harvey’s reading of Capital has long been marked by the emphasis it places on the system’s unrivalled spatial and temporal dynamism. Unlike the fixity and “arid formalism” of some of the more rigid structuralist accounts that were influential during the 1970s, Harvey accords central importance to Marx’s definition of capital as value in motion, focusing his analysis on its contradictory internal movements and its capacity to produce both transformative change and violent disruption across space and time. “Capital,” he repeatedly notes, “becomes a permanently revolutionary force in world history.”

The key contribution of The Madness of Economic Reason revolves around an attempt to visualize this dynamic logic of capital by means of an analogy from the natural sciences: the hydrological cycle. Like water, Harvey observes, capital constantly moves around. Moreover, as it circulates, it continuously changes form — without ever losing its essence. At the starting point of the circulation process, capital appears as money. It then reappears the next moment as means of production and labor power, which are in turn mobilized to produce a commodity for sale on the market, after which capital returns to its original form as money. This money is subsequently redistributed to different claimants (as wages, taxes, profit, rent and interest), only to be thrown back into circulation through consumption, state spending and productive investment.

This visualization allows Harvey to reconstruct the analytical framework presented in Capital as a coherent and integrated whole, developing a convincing case that the three volumes should be read as constitutive parts of a totality, each focusing on a different “moment” in the overall process of capital circulation, namely production (Volume I), realization (Volume II) and distribution (Volume III). This holistic reading sets Harvey’s approach apart from some of the more narrowly “productivist” readings of Capital, which have long tended to treat Volume I as a sacred text while largely neglecting the seminal importance of the second and third volumes. “This biased emphasis,” Harvey persuasively contends, “leads to serious error.”

For Harvey, as for Marx, the first and second volumes speak to a “contradictory unity” between the valorization of capital in the production process and its realization in market exchange. The contradictions between these two moments can only be bridged by the circulation of interest-bearing capital, which — through the lubrication of production and the debt-financing of state spending and consumption — serves to harmonize both. Harvey’s dialectical reading of this totality thus allows him to integrate Marx’s sophisticated account of turnover times (dealt with in Volume II) and the credit system (Volume III) into his general analysis of the capitalist mode of production.

This is particularly important because the systemic pressures to shorten turnover times and redeem mounting debts serve to shape the restless and crisis-prone nature of capitalism as a social order, contributing to a “penchant for speed-up [that] spills over from the realms of production and marketing to fundamentally transform the rhythms of daily life.” The same mode of analysis also allows Harvey to integrate the category of rent and account for capitalism’s inherent tendency towards expansion, which further contributes to the system’s unceasing transformation of its own spatial organization.

What emerges, in short, is a visualization of capital that is much more attuned to its tumultuous spatio-temporal dynamics. These dynamics in turn have important implications for social struggles against the power of capital. Seen from the perspective of the totality, these struggles do not only take place within the realm of production, pitching workers against factory owners, but also extend into the spheres of realization, distribution, social reproduction and the relation to nature, where they take the form of debtors’ revolts against austerity, anti-gentrification struggles for affordable housing, student protests against the commodification of higher education, women’s struggles for the recognition of reproductive labor, indigenous mobilizations against the enclosure of common lands and resources, the global movement for climate justice, and so on.

Crucially, as economic activity in the advanced capitalist countries has increasingly shifted towards the FIRE sector (finance, insurance and real estate), struggles in the latter domain — against the dispossessions wrought by bankers, landlords and bondholders — become increasingly central to daily life. The simple analogy of the hydrological cycle therefore enables Harvey to construct a panoramic overview not only of the inner motions of capital but also of the particular locations at which opposition is likely to emerge.

At the same time, however, Harvey also notes an important difference between the water analogy and the reality of capital circulation:

The driving force in the hydrological cycle is incoming energy from the sun and that is fairly constant …. In the case of capital, the sources of energy … are more varied and the volume of capital in motion is constantly expanding at a compound rate because of a growth requirement. The hydrological cycle is closer to a genuine cycle (though there are signs of speed-up due to global warming), whereas the circulation of capital is, for reasons we will soon explain, a spiral in constant expansion.

Driven by the enforcement mechanism of market competition, which compels each and every capitalist to seek to maximize profits, capital becomes an engine not only of perpetual motion but of perpetual expansion. If productive capitalists fail to extract sufficient surplus value, or if they fail to realize this value in exchange, they risk being eliminated from the market. The laws of competition therefore compel the capitalist to constantly throw part of his retained profits back into circulation and to constantly attempt to improve the productivity of the labor process in order to extract further surplus value. The logic of capital, in short, presupposes uninterrupted accumulation.

What this means is that, at the aggregate level, the capitalist system comes to depend on endless growth for its survival. When this growth falters, a crisis emerges and capital needs to find new avenues for investment, value production and realization to kickstart the process anew. It is in this light that we should consider the financialization of the world economy and the dramatic expansion of global debt levels since the 1970s, which “suggests a global economy that is increasingly growing by the deployment of the smoke and mirrors of anti-value creation within the world’s multiple regional monetary systems.”

In recent decades, the credit system has clearly come to serve as the main driving force of continued expansion. As Harvey notes, it is “one of the key powers that impels the endless accumulation of capital.” Since debt is a “claim on future value production that can be redeemed only through value production,” the spectacular rise of indebtedness essentially compels all actors in the capitalist economy — states, firms and households — to maximize their earnings to service growing debt mountains. The inability to redeem these debts then becomes an additional source of periodic crises. “In the long run,” Harvey notes, “capital has to confront ever-escalating claims on future values to redeem the anti-value building up within the debt economy and credit system. Instead of an accumulation of values and of wealth, capital produces an accumulation of debts that have to be redeemed. The future of value production is foreclosed.”

Nowhere is this madness of economic reason more clearly on display than in China. Between 2011 and 2013, the country poured over 6,500 million tons of cement into its cities and countryside — an astonishing “45 percent more than the United States had consumed in the whole of the preceding century” (emphasis added). This historically unprecedented construction boom, which has utterly transformed China’s urban environment and left the country dotted with uninhabited ghost cities, was largely financed through a dramatic expansion of credit in the wake of the global financial crisis, with the country’s debt roughly quadrupling between 2007 and 2015, reaching 250 percent of GDP by 2016. Some analysts are now starting to express concerns that China’s growth miracle might prove to be the mother of all bubbles.

Harvey’s visualization of the process of capital circulation therefore provides a unique insight into the absurd irrationalities sustaining the capitalist order, especially in its highly financialized present form. If there is one unresolved tension in the book, however, it probably lies with Harvey’s recurring temptation — indeed, the systematic attempt — to explain capital’s inner laws of motion with reference to the natural laws of physics, chemistry and biology.

The central analogy of the hydrological cycle is but one among many, in this respect. On page 73, for instance, Harvey writes that “the evolutionary laws of capital hinge upon the unfolding relation between value and anti-value in much the same way as the laws of physics rest on relations between matter and anti-matter.” Elsewhere, he elucidates the “immaterial but objective nature” of value by invoking a comparison with the immaterial but objective force of gravity. Later, he refers to the totality of capital as resembling “not that of a single organism such as the human body” but “an ecosystemic totality with multiple competing or collaborative species of activity, with an evolutionary history open to invasions, new divisions of labor and new technologies.”

The question that arises is to what extent Harvey’s repeated invocation of geo- and biophysical phenomena risks reifying capitalism’s historically situated social relations as immutable natural laws — especially to the minds of less initiated readers, who are likely to be attracted to the engaging and accessible nature of this introductory text. The principal contradiction here consists in the fact that Harvey, like Marx, defines capital as value in motion; yet value itself, he rightly insists, is fundamentally a social relation. It logically follows, then, that capital is a social relation in motion — a social relation, in other words, that continuously changes form as capital makes its way through the circulation process.

At no point, however, do the shape-shifting social relations that constitute capital as value in motion cease to be social relations. Throughout the circulation process, capital merely appears as various “objects” (labor power, money, commodity, etc.) to be owned or bought and sold on the market. But this appearance, so brilliantly demystified by Marx in his analysis of commodity fetishism, merely obscures its true nature as a social relation. In sum, while geo- and biophysical analogies may help elucidate the important aspect of capital’s movements and metamorphoses as value in motion, they clearly fail to capture the equally important aspect of value as a historically specific social relation.

Harvey, of course, is by no means oblivious to this; indeed, the critique of capitalist social relations is central to his entire intellectual project. Probably more than any other living theorist, he is acutely aware of the mystifications inherent in the movements and metamorphoses of capital. To be fair, Harvey also repeatedly stresses the inevitable simplifications involved in his analogy of the water cycle. Yet he never explicitly acknowledges what is lost in this analogy. Indeed, the only difference Harvey identifies between the motion of water and the motion of capital has to do with the cyclical nature of the former and the “bad infinity” (or spiral-form) of the latter. The fact that the former operates on the basis of immutable natural laws, while the latter is the product of a long history of class struggle, unfortunately goes unmentioned.

The risk inherent in this approach is therefore that it ends up importing the positivist method of physics into the study of capitalist society, making the latter appear “natural” and therefore standing outside of history. This temptation to “naturalize” the inner laws of motion of capital in turn has important political implications. The laws of nature, after all, are fixed: they can be studied and temporarily defied through human ingenuity and technological innovation, but they can never be lastingly altered. The “laws” of political economy, by contrast, may impose themselves with the force of a natural law in the present, but they are ultimately a product of the history of class struggle and as such remain susceptible to human action and subject to change over time. This was perhaps the single most important insight Marx developed in his devastating critique of the classical political economists, first outlined in The Poverty of Philosophy:

When the economists say that present-day relations — the relations of bourgeois production — are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus, there has been history, but there is no longer any.

Marx’s outright rejection of the ahistorical nature of bourgeois theorizing was to become the foundation of his critique of political economy, including his detailed analysis of its principal categories in Capital and Theories of Surplus Value. If there is any good news that emerges from his analysis, then, it is that the social relations underpinning the circulation of capital can in principle be reshaped in a more rational and more just direction through an organized process of social and political struggle. The challenge, in this light, would be to develop a compelling vision of the type of organizational forms and political strategies that could be developed in pursuit of such a revolutionary objective.

Harvey made an initial stab at this challenge in previous works, including Rebel Cities and Seventeen Contradictions and the End of Capitalism, but one can only hope that he will keep returning to it in the future, if only to bring his exciting and highly illuminating reading of Marx to its logical conclusion: the question of what is to be done. In these tumultuous times, after all, the left urgently needs its brightest and most creative minds to focus on the intractable puzzle that now confronts it: the question of how to break up the vicious cycle of endless compound growth and bring an end to the institutionalized madness of economic reason before it lays waste to all human civilization.


Marx, Capital, and the Madness of Economic Reason is published by Oxford University Press in the US and by Profile Books in the UK.

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Fri, 09 Mar 2018 18:18:06 +0100

Radical Labor: Aligning Unions with the Streets

Since the 1970s organized labor in the United States has seen a steep decline in its membership and political influence due to capital flight, “right to work” laws in southern states, automation and technological innovation. But recently, millions of US workers have rallied behind organized labor campaigns demanding fairer working conditions and higher wages — often based in union membership — for employees.  Radical Labor profiles a local chapter of Service Employees International Union (SEIU), Local 105 to understand how the labor movement can collaborate with allied community activists, build a multi-racial coalition of working people for social justice, and realize more equitable workplaces and communities.

SEIU Local 105’s organizing is grounded in what President Ron Ruggiero called “whole person unionism,” which is a fundamental understanding that workers “don’t just exist at work.” This recognition is crucial if the labor movement wishes to be part of a broader progressive social and political movement.

This film confronts labor’s problematic history with immigration and racial justice by highlighting how labor struggles, although rooted in class, are interconnected with race, gender, sexual orientation, and immigrant rights. To challenge media discourses and political rhetoric that divides working people along identity issues, Radical Labor highlights the intersectional oppressions of working people and reveals the long-term relationship building efforts needed to organize and center workers in the fight against economic, racial, gendered, and social inequalities.

Mon, 12 Feb 2018 15:01:38 +0100

Tunisia: protesting austerity, demanding sovereignty

Around 800 people were arrested, dozens were injured and at least one person was killed in a violent police crackdown on the protests that rocked Tunisia for over two weeks in January. The protesters, who stemmed from a wide variety of social and economic backgrounds, took to the streets in response to the government’s announcement of its 2018 budget. A new round of harsh austerity measures are predicted to inflate prices of basic foods, fuel and energy and to further undermine crucial public services such as health care and education.

Compared to other mobilizations in Tunisia in the post-2010 era, these recent events had a much wider geographical spread, with people taking to the streets in sixteen out of 24 governorates. The January protests drew in a wide array of different social groups, from the precarious middle classes to the most marginalized groups at the bottom ranks of society. The protests were initiated by the youth movement Fech Nestennaw? (“What are we waiting for?”), which is associated with the left-wing Popular Front coalition, but they were joined by many other young people living in the neglected regions of the interior and in the poor neighborhoods at the margins of Tunisia’s urban centers, where the protests were most violently repressed.

So, what are the immediate triggers that led people to revolt? What are the underlying causes of this short-lived uprising? What framework shall we adopt to analyze the multiplication of protests, social movements, occupations and the intensification of discontent and resistance in the last few years in Tunisia? Should we be content with merely lamenting the fate of the 2010 revolution and how elites have treacherously managed that so-touted “transition” to the better days of “democracy” and “good governance”? What really happened to the promises of the Arab uprisings?

Beyond the immediate triggers of the 2018 financial law, the looming austerity measures and soaring food prices, there are deeper, underlying causes of this multi-dimensional crisis. Exposing these will reveal that the most recent protests are part of a protracted revolutionary process, with ups and downs, periods of radicalization, setbacks and counter-revolutions. This process has played an important role in the emergence of the masses unto the political scene, which partly explains the new vibrancy and dynamism of Tunisian civil society.

Ultimately, this is about Tunisians mobilizing against plans to derail their revolution; resisting imperialist domination and (neo-)colonial power structures; and showing their determination to continue their struggle and recover their sovereignty.

The country is being crushed by the weight of accumulated debt and its services, imposed on the country by the IMF and the World Bank — two of the Western powers’ main aides in putting their imperialist designs into practice. In 2016, the IMF agreed to offer Tunisia a $3 billion loan, and by 2018 the debt service will reach an expected record of 22 percent of public expenditure; a political and economic imperative imposed by sycophantic domestic elites against the interests of most Tunisians whose key demands are dignity and sovereignty.

It is no coincidence that this most recent wave of mobilizations coincided with the seventh anniversary of the toppling of Ben Ali and the start of the Arab uprisings that heralded momentous changes in North Africa and beyond. To some extent, the Tunisian experience seems to be the exception in the region because it didn’t descent into the chaos and the violence that has been haunting neighboring countries since. However, what is being pictured as a peaceful “democratic transition” is in reality nothing but a dynamic process to crush the revolutionary spirit of the people.

Indeed, the Tunisian “democratic transition” is but a euphemism for a “Western-sponsored transformation” to implement more of the disastrous economic policies that led the people to rise up and revolt in the first place.

The demands of the 2010-’11 revolution for dignity, bread, national sovereignty and social justice are being side-lined and ignored by the neoliberal elites that are wedded, more than ever, to the religion of the free market. These “comprador elites” are simple lackeys who are serving foreign interests by selling off the economy to foreign capital and multinationals and enthusiastically cooperate with the imperialist’s “war on terror” to expand their domination and aid their scramble for resources.

The ruling elites are dispensing with popular legitimacy and consciously turning their back more and more on the deprived interior of the country. They continue to offer one concession after another to the IMF and World Bank and are among other things planning to open up the interior to fracking, which will endanger the population and the environment by consuming huge quantities of water and polluting the ground-water tables. This is scandalous in a country that suffers from serious water poverty and has been witnessing recurrent droughts.

Despite a new article in the Tunisian constitution stipulating state sovereignty over natural resources, oil and gas companies continue to garner obscene profits and enjoy impunity for systematic corruption, while local communities shoulder the burden of the externalized social and environmental costs of this industry. It seems that every single government since 2010 is only interested in exporting the enormous profits they derive from exploiting the people and their natural resources. They are content with the preponderant role of multinationals in the economy. Take the edifying example of Shell-British Gas, which currently owns a full one hundred percent of the most productive gas concession in the country! This simple fact makes a mockery of their talk of sovereignty and democracy.

If that’s not enough, Tunisia is currently negotiating a deep and comprehensive “free trade” deal with the European Union: the Deep and Comprehensive Free Trade Area (DCFTA). “Free trade” deals which are many things, but “free” is not one of them maintain a profoundly unjust international division of labor and perpetuate the domination by the centers of empire over the peripheries of this world.

The neoliberal doctrine of “free trade” combined with a blind belief in perpetual growth paves the way for corporate take-over and legitimizes the ongoing plunder of resources. This is neo-colonialism posturing as “market democracy”.

The brilliant analysis of the Algerian revolutionary thinker Frantz Fanon is as relevant as ever when we try to make sense of all this. He noted that the mission of this anti-national bourgeoisie has nothing to do with transforming the nation but rather consists of “being the transmission line between the nation and capitalism, rampant though camouflaged, which today puts on the masque of neo-colonialism.” Fanon predicted that these bourgeoisies would betray the masses, halt liberation and set-up a national system of tyranny and exploitation reminiscent of their colonial predecessor. This dismal state of affairs has not changed since the revolution.

Fanon, who lived in Tunisia at the time of the Algerian revolution in the late 1950s, would have been repulsed by this mindless greed. How can we go on submitting to imperialism and bowing to every folly in order to satisfy foreign capital?

The current situation of acute disenchantment cannot be dissociated from the ongoing efforts to maintain an oppressive status quo, depoliticizing society and putting the brakes on the potential radicalization of demands from below. The phenomenon of NGOization contributes to this agenda of disempowerment. While it is supposed to “empower civil society,” it ends up contributing to the creation of an artificial civil society which lacks any real political independence and is useful only for deepening the “marketization and privatization of the social”. I cannot think of a more eloquent quote to illustrate this, than what Arundhati Roy reflections on the same phenomenon in India:

Their real contribution is that they defuse political anger and dole out as aid or benevolence what people ought to have by right. They alter the public psyche. They turn people into dependent victims and blunt the edges of political resistance. NGOs form a sort of buffer between the [authority] and the public. Between Empire and its subjects. They have become the arbitrators, the interpreters, the facilitators.

The January protests in Tunisia express the accumulated anger of the masses at the anti-national and sterile elites that persist in ignoring the deplorable stagnation of the country. For the last seven years, young people all over the country were organizing protracted sit-ins, protests and occupations, halting the production of key industries — such as phosphate mining, oil and gas, etc. — demanding jobs, nationalizations, equal distribution of wealth, accountability and the end of the endemic corruption. The state’s failure to listen to these demands, meanwhile continuing to erode public services, is the result of a reckless insistence on applying the same neoliberal recipe for disaster, in all its relentless violence, that the Tunisian people have been fighting for so long.

In the midst of this catastrophic situation, the masses and the pauperized classes in Tunisia who refuse to despair and give up, have shown once again their resilience and their willingness to keep fighting for their rights. As in other parts of the world, they rebel, in inspiring ways, against a system that offers them only pauperization, marginalization and the enrichment of the few at the expense and damnation of the many. After all, it’s the masses that make and determine history; it is their decisive awakening that leads to revolutionary moments.

The resistance movement may lack political clarity and it may be in need of concrete, revolutionary alternatives, but its resurgence shows that Tunisia is still a cauldron of resistance to neoliberal and neo-colonial attacks on its sovereignty. Its revolutionary fervor, though weakened, is still alive. It lives in the ongoing struggles and resistance of social movements, the emergent revolutionary organizations, youth collectives, women’s rights associations, trade unions, the unemployed graduates, small peasants and marginalized communities in the regions of the interior and working class neighborhoods, away from bustling tourist sites. Together, they yearn for transformative change and justice.

The way forward, and let’s be clear about it, is to walk firmly on the path of decolonization towards a new liberating order, not for Tunisia alone but also for other subjugated countries in the region and across the global South. The end of settler colonialism in Palestine and the illegal occupation of Western Sahara — among many other struggles — cannot be disentangled from these efforts.

We need to rediscover the revolutionary heritage of the Maghreb, Africa, West Asia and beyond, developed by great minds like Frantz Fanon, Amilcar Cabral, Thomas Sankara and George Habash to revive the ambitious projects of the 1960s that sought emancipation from the imperialist-capitalist system. We can learn from experiences like those in Algeria and Egypt that wanted to break with the hierarchies, divisions and regionalisms imposed by imperialism and worked to build regional and international solidarities to challenge it.

Building on this revolutionary heritage and applying its anti-colonial credentials to the current context is of utmost importance in Tunisia and the region in general. The events taking place in Tunisia right now are a demonstration of people rising against the Manichean geographies of oppressor and oppressed, geographies imposed on them by the globalized capitalist-imperialist system. The struggle for justice and sovereignty continues.

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Sat, 03 Feb 2018 20:45:17 +0100

The New Debt Colonies: finance, imperialism and the politics of dispossession

Delighted to report that the editorial board of @PrincetonUPress just approved the complete manuscript of my book, which is now officially forthcoming. Just need to make some minor revisions and then we’ll go into production on Feb 15!

Tue, 30 Jan 2018 21:44:42 +0100

Course outline: “The Sociology of Finance, Debt and Austerity”

Delighted to report that the editorial board of @PrincetonUPress just approved the complete manuscript of my book, which is now officially forthcoming. Just need to make some minor revisions and then we’ll go into production on Feb 15!