A fresh perspective on contemporary capitalism

By Martin Vogel

Karl Marx at Highgate Cemetery.

Book review: Seventeen Contradictions and the End of Capitalism, by David Harvey.

When I mentioned to people that I was reading a compelling Marxist take on the crisis in capitalism, I was not greeted with the warm curiosity that normally follows the mention of an interesting new book. In fact, most people looked at me as if I had ventured beyond the pale. Stalinism has much to answer for: not least, the blight it has put on open-minded critique of the conditions that prevail in liberal democratic capitalism.

I find this puzzling. Like many, I was sheep-dipped in Marxist analysis at university. Though I flirted with radical left wing politics as a student, having grown up with Czech heritage, I was all too aware of the failures and tyranny of life under what was termed “actually existing Communism”. Long before the European revolutions of 1989, I made my peace with the market economy. But I have retained a lifelong appreciation of the value of critique.

Seventeen Contradictions and the End of Capitalism by David Harvey exemplifies the insight that Marxist critique can still generate. A geographer by background, Harvey appropriates Marxist thinking and makes it his own, bringing a freshness that cuts through the common sense that our marketised, financialised society is the natural order of things.

As the title implies, the book makes play of the Marxist concept of contradiction. Put simply, this holds that every solution that a system finds to a destabilising problem creates the dynamic towards a new destabilising problem. For example, the dismantling in the 1980s of the trade union power which had been instrumental in creating a sclerotic and unmanageable economy enabled a period of lower labour costs, dynamic growth and wealth creation. But in concentrating the gains of wealth on an increasingly narrow section of society, this development entrenched inequalities so deep that business undermined its own markets because people became less able to afford its products. This creates what Harvey calls a problem of the realisation of capital.

Three important insights stand out for me in Harvey’s book. Firstly, as Marx identified, capitalism creates a separation between use value (the intrinsic value of thing to its user) and exchange value (the value at which it can be traded). Harvey explores how the driving of the market into so much of contemporary life has pushed exchange values too far adrift from use values. London’s housing market is a good example. The ability of people to enjoy a house for its use value as a home has become out of reach for many because people also invest in housing as speculative property. In order to function as a city, London creates diseconomies in terms of commuting distances, homelessness and so on. As Harvey comments:

“The trouble is that all of this seems to be so embedded in the ‘natural’ and unshakeable bourgeois order of things that it seems not only understandable but inevitable that business as usual should be able to dominate social life in spheres and cultural activity where it has absolutely no business to be. Exchange value is everywhere the master and use value the slave.”

The second insight is that because the economy is driven by the accumulation of capital, what this means in practice is ever more innovative ways to dispossess people of their wealth – whether held individually (wages, pensions) or communally (access to education, public parks). The neoliberal era of the past thirty years, seen in these terms, has been a protracted clawing back of the concessions won in the post-war social democratic era:

“The privatisation and commodity provision of medical care, education, water and sewage, and other basic services, diminish the discretionary income available to labour and recapture value for capital. But this is not the full story. All of these practices form a collective site where the politics of dispossession takes over as a primary means for the extraction of income and wealth from vulnerable populations, including the working classes (however defined). The stealing back of privileges once acquired (such as pension rights, health care, free education and adequate services that underpin a satisfactory social wage) has become a blatant form of dispossession rationalised under neoliberalism and now reinforced through a politics of austerity ministered in the name of fiscal rectitude.”

Finally, Harvey sheds light on the collapse of trust in business in that he sees no useful distinction between the illegal and legal activity that occurs in the capitalist economy. If the state and legislation sanction the dynamic of dispossession that he describes, then some of the more dodgy practices that arise in capitalism are of a piece with the more legal ones:

“It is stupid to seek to understand the world of capital without engaging with the drug cartels, traffickers in arms and the various mafias and other criminal forms of organisation that play such a significant role in world trade. It is impossible to shunt aside as accidental excrescences the vast array of predatory practices that were so easily identifiable in the recent crash of property markets in the United States (along with recent revelations systematic banking malfeasance – such as the falsification of asset valuations in bank portfolios – money laundering, Ponzi finance, interest-rate manipulations and the like).”

Capitalism’s defenders justify it on the basis that it is the best way to create maximum welfare for the largest number of people. The setbacks since the financial crash have dented that argument, particularly in the Western world. But it remains the case that capitalist development over recent decades has brought about reductions in inequality between nations, with countless millions lifted out of poverty in Asia, Latin America and parts of Africa. Harvey however worries about dangerous contradictions in capitalism that endanger human life. He doesn’t mean on the margins, he means systemically.

He creates a thought experiment in which it is possible to envisage a society in which there is no pretence of pursuing the welfare of the mass. The rapid pace of technological development means fewer and fewer people need be drawn into the labour market for the creation and accumulation of capital to continue. Alongside this, Harvey maintains that production has in any case been eclipsed by finance as the most significant sphere of dispossession. This raises the spectre of a society in which only a minority participate, with the masses surplus to requirements. If this sounds outlandish, we need only look to what is happening in Greece right now (£) as reported today in The Times:

“For Andreas Popodakis, nothing can excuse the treatment his mother, a paraplegic, received. The authorities cut her pension and social benefits, making it difficult to pay for the oxygen and ventilator system keeping her alive. Then, as electricity bills went unpaid, her supply was cut off, leading to her death. ‘Everyone knew her condition,’ Mr Popodakis said. ’It was like murder. They may as well have appeared before her and put a bullet through her head.’

“Waiting at the soup kitchen for a food parcel this week, Maria, 44, described herself as a typical middle-class girl. A graduate in business administration from a private Athens university, she worked for Oxford University Press and then for her husband’s computer company, only for it to go bankrupt when the crisis hit. ‘We once spent €500 a month renting a holiday home, while now I take home €10 a day working for a research firm,’ she said. ‘Is this crisis over? I still have no money for heating oil and I’m cold.’”

Faced with such accounts of actually existing capitalism, one does not need much persuading by Harvey that it is prone to dehumanising and alienating scenarios in which life can become empty, meaningless, devoid of emotional satisfaction and even material wellbeing. If it all seems too entrenched and systemic to change, Harvey argues persistently that a politics that challenges dispossession and oligarchy is not only necessary but realistic. He points out that capitalism thrives under a variety of attitudes to managing inequality (e.g. USA and Sweden) and that, “The gradual decommodification of basic needs provision is a feasible long-term project, which fits neatly with the idea that use values and not the perpetual search for augmenting exchange values should become the basic driver of economic activity.”

As I’ve observed before, change is in the air. Harvey’s is one of the most cogent and radical accounts of why things can’t continue as they are.

Seventeen Contradictions and the End of Capitalism by David Harvey. Available from Amazon.

Image courtesy Duncan Harris.