The enigma of capital And the crises of capitalism

David Harvey, 1935-

Book - 2010

"Since the moment the deeply unsettling financial disaster erupted in September 2008, a crisis of confidence has gripped the economic mind. Experts of all stripes, from Alan Greenspan on down, were at a loss to explain what had happened. David Harvey saw this moment coming. A legendary scholar and critic of capitalism, he has been warning of problems for decades. Now, in The Enigma of Capital, Harvey provides a sweeping and brilliantly clear explanation of how the disaster happened, and how... we can avoid another like it. Unlike other commentators, Harvey does not focus on subprime loans or mortgage securitization as the root cause of the calamity. Instead, he looks at something that reaches far deeper into the heart of capitalism--the flow of money through society. He shows how falling profit margins in the 1970s generated a deep transformation. With government assistance, capital was freed to flow across borders, and production moved to cheaper labor markets, depressing workers' incomes in the West. But as more and more money moved out of the laboring classes and into the pockets of the wealthy, a problem arose--how could the workers afford to buy the products which fueled the now-global economy? To solve this problem, a new kind of finance capitalism arose, pouring rivers of credit to increasingly strapped consumers. Moreover, these financial institutions loaned money to both real-estate developers as well as home buyers--in effect, controlling both the supply and demand for housing. But when the real-estate market collapsed, so did this financial edifice, an edifice that dominated our economy. We cannot afford to simply shore up this financial system, Harvey writes; we need to undertake a radical overhaul. With this landmark account, he offers a richly informed discussion of how we can turn our economy in a new direction--fairer, healthier, more just, and truly sustainable"--Publisher's description.

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Subjects
Published
Oxford [England] ; New York : Oxford University Press 2010.
Language
English
Item Description
"Published in the United Kingdom in 2010 by Profile Books Ltd."--Title page verso.
Physical Description
viii, 296 pages : illustrations ; 25 cm
Bibliography
Includes bibliographical references (pages 263-267) and index.
ISBN
9780199758715
0199758719
9780199836840
0199836841
Main Author
David Harvey, 1935- (-)
  • The disruption
  • Capital assembled
  • Capital goes to work
  • Capital goes to market
  • Capital evolves
  • The geography of it all
  • Creative destruction on the land
  • What is to be done? And who is going to do it?
Review by Booklist Reviews

Harvey, longtime academic teaching Karl Marx's Das Capital, discusses capital flow, which is the lifeblood of all capitalist societies, spreading throughout the world like blood circulating through the human body, noting that the body dies when the blood flow stops. The author contends that many economists, executives, and politicians may not fully understand the nature of capital flows as the global institutions and lenders suck the life blood out of people everywhere, especially the poor, and central bankers' actions result in excess liquidity, falsely believing such transfusions will cure capital-flow problems. We learn about the disruptions and destruction of capital flow and the author's suggested guiding norms (which he readily admits are utopian), including respect for nature, radical equality in social relations, and technological and organizational innovations oriented toward the common good rather than supporting military power and corporate greed. Although this is clearly a view from the Left, and all readers will not agree with Harvey, he nevertheless offers thought-provoking analysis and ideas in this excellent but challenging book. Copyright 2010 Booklist Reviews.

Review by Choice Reviews

Harvey (anthropology, Graduate Center, CUNY), whose books include A Brief History of Neoliberalism (CH, Oct, 06, 44-1213), Cosmopolitanism and the Geographies of Freedom (CH, May'10, 47-5170), and Spaces of Global Capitalism (2006), is one of our deepest and most creative social theorists. Unfortunately, many of his books require some degree of prior training to make them accessible. This volume is different. It is not beyond upper-division undergraduate students, and although it is not packed as densely as Harvey's earlier works, it contains material that will be useful for advanced scholars. After an introductory chapter on the present financial disruption, the book follows capital in successive chapters, showing how it is assembled and how it produces, sends goods to market, and finally evolves. The penultimate chapters put the subject in the context of geography and the environment, respectively. Harvey concludes the book with provocative questions and recommendations about what needs to be done and who will do it. Stocking this book is highly recommended. It will be well used and well appreciated. Summing Up: Highly recommended. Upper-division undergraduate through research and faculty collections. Copyright 2011 American Library Association.

Review by Publishers Weekly Reviews

"At times of crisis," notes eminent Marxist geographer Harvey (Spaces of Global Capitalism), "the irrationality of capitalism becomes plain for all to see." Harvey excels at a revealing and constructive analysis of global capitalism at a moment when its integration--and the attendant widespread susceptibility to its disruptions and downturns--has never been tighter or the post–cold war Western economic model for the world economy more discredited. The narrative delineates with admirable clarity the arcane details of the current financial crisis, while rehearsing the rise of capitalism as a historically specific "process" plagued by fundamental dilemmas. A Marxist perspective comes augmented and nuanced by wide reference to scholarship, close readings of Marx and Engels, and instructive examples of capitalism's basic tendencies in episodes like Henry Ford's notorious Fordlandia venture in the Amazon. While certain to be controversial even on the broad left, Harvey's analysis joins other recent attempts (such as Raj Patel's The Value of Nothing) to re-think the current economic and political regime from its roots, while identifying and variously championing ready alternatives already manifesting themselves within it. (Sept.) [Page ]. Copyright 2010 Reed Business Information.

Review by Publisher Summary 1

Covers the basic workings of capitalism, how it came to dominate the world, and why it resulted in a financial crisis in 2008, arguing that a radical overhaul of the economic system is the only way to create a sustainable future.

Review by Publisher Summary 2

"Elegant...Harvey's analysis is interesting not only for the breadth of his scholarship but his recognition of the system's strengths... It is also entertainingly swashbuckling in its dismissal of all Wall Street's claims to be adding to general prosperity."---Financial Times"Harvey excels at a revealing and constructive analysis of global capitalism... The narrative delineates with admirable clarity the arcane details of the current financial crisis, while rehearsing the rise of capitalism as a historically specific `process' plagued by fundamental dilemmas."---Publishers Weekly"A welcome addition to the literature on the crisis. It provides a lucid and penetrating account of how the power of capital shapes our world."---Andrew Gamble, The Independent"Brisk and persuasive...Looking at the United States, it is hard to see anything as benign as the New Deal coming out of the present situation. If it does, it will probably owe a good deal to David Harvey's students."---Alan Ryan, The Literary ReviewEver Since the Financial crisis erupted in September 2008, a crisis of confidence has gripped the economic mind. Experts of all stripes, from Alan Greenspan on down, were at a loss to explain what had happened.A legendary scholar and critic of capitalism, David Harvey has been warning of such problems for decades. Now, in The Enigma of Capital, he provides a sweeping and brilliantly clear explanation of how the disaster happened and how we might avoid another like it. Unlike other commentators, Harvey does not focus on subprime loans or mortgage securitization as the root cause of the calamity. Instead, he concentrates on the basic workings of capitalism itself, a system that has shaped Western society for three centuries. And it is the heart of capitalism---the flow of money through society---that is primarily responsible for the current crisis.Harvey shows how falling profit margins in the 1970s generated a deep transformation. With government assistance, capital was freed to flow across borders. Production moved to cheaper labor markets, depressing workers' incomes in the West. But this created a new problem---how could workers afford to buy the goods which fueled the now-global economy? To solve this problem, a new kind of finance capitalism arose, pouring rivers of credit to increasingly strapped consumers. The credit fueled a historic real estate boom, but when the bubble burst, so did this financial edifice---an edifice that had come to dominate our economy.We cannot afford to simply shore up this financial system, Harvey writes; we need to undertake a radical overhaul that takes our economy in a new direction---one that is fairer, more just, and truly sustainable.

Review by Publisher Summary 3

For over forty years, David Harvey has been one of the world's most trenchant and critical analysts of capitalist development. In The Enigma of Capital, he delivers an impassioned account of how unchecked neoliberalism produced the system-wide crisis that now engulfs the world. Beginning in the 1970s, profitability pressures led the capitalist class in advanced countries to shift away from investment in industrial production at home toward the higher returns that financial products promised. Accompanying this was a shift towards privatization, an absolute decline in thebargaining power of labor, and the dispersion of production throughout the developing world. The decades-long and ongoing decline in wages that accompanied this turn produced a dilemma: how can goods--especially real estate--sell at the same rate as before if workers are making less in relativeterms? The answer was a huge expansion of credit that fueled the explosive growth of both the financial industry and the real estate market. When one key market collapsed--real estate--the other one did as well, and social devastation resulted. Harvey places today's crisis in the broadest possible context: the historical development of global capitalism itself from the industrial era onward. Moving deftly between this history and the unfolding of the current crisis, he concentrates on how such crises both devastate workers and createopenings for challenging the system's legitimacy. The battle now will be between the still-powerful forces that want to reconstitute the system of yesterday and those that want to replace it with one that prizes social justice and economic equality. The new afterword focuses on the continuingimpact of the crisis and the response to it in 2010.One of Huffington Post's Best Social and Political Awareness Books of 2010Winner of the Isaac and Tamara Deutscher Memorial Prize for 2010Praise for the Hardcover:"A lucid and penetrating account of how the power of capital shapes our world."--Andrew Gamble, Independent"Elegant... entertainingly swashbuckling... Harvey's analysis is interesting not only for the breadth of his scholarship but his recognition of the system's strengths."--John Gapper, Financial Times