David Harvey: Crises of Capitalism

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This is a wonderful short video by RSAnimate based on a talk by radical, as in Marxist, sociologist David Walker.

For those who recoil, Marx was the first to take note of the propensity of capitalism towards instability. By contrast, neoclassical economics, which has dominated policymaking in advanced economies, posits that economies have a propensity to equilibrium, and that equilibrium is…full employment! Marxists also look at long term trends in corporate profitability, and because Marxists use that as an important framework, it seems to be verboten as a line of inquiry in other schools of economics. Weird.

I found this talk to be engaging. Hope you like it. Hat tip reader Don B, via the New York Observer:

Or you can watch Harvey’s full lecture:

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  1. nowhereman

    In my youth I studied Marxism, obviously not nearly deep enough. I believed in “free markets”. But alas, the free Market is total fiction, so graphically exposed over the last few years.
    Yes a new direction is needed, and maybe it would be prudent to broaden our intellectual horizons to find it.

    1. alex

      “free Market is total fiction … Yes a new direction is needed”

      Frankly may people have appreciated, at least since the Great Depressions, that “free markets” are a myth, or more accurately, a slogan (no two people will ever agree on what’s free and what’s not). That understanding has been undermined, at least here in the US since the Reagan era, by the “free markets uber alles”, “regulation is bad”, “government is bad” ideology. It’s like something from Victorian Britain’s plutocracy.

      That’s why I prefer the term “competitive markets”. It’s a term that I suspect would have appealed to Adam Smith, who despised monopolies (much of what he railed against was government granted monopolies), talked about the need to foster competition, but was also in favor of things like progressive taxation and regulated interest rates.

      The answer we hit upon then, and that worked so well for so long, was competitive markets that were regulated to a reasonable degree. Again, no two people will ever agree on what’s an appropriate level of regulation, but it’s important to accept the principle that a reasonable degree of regulation rather than the mythical “free market” is what’s appropriate.

      There’s no need to re-invent the wheel. We had a good system, but threw well established principles out the window. That’s particularly true of the latest financial fiasco, which was little more than a re-play of many past financial panics (as they used to be called) with nothing more than a few new acronyms like CDO and CDS tossed in to confuse the historically ignorant.

      1. YankeeFrankee

        If you watch Harvey, his main point is that what we had from the 40s to the 70s is no longer workable — that 3% compound growth per year is fundamentally unsustainable — and we need a new way.

        1. alex

          “his main point is that what we had from the 40s to the 70s is no longer workable”

          Right, this time it’s different. This is the magical moment in time when we’ve finally hit the limits of capitalism due to it’s inherent contradictions, just as Karl predicted. 1848 and 1917 were just false alarms.

          What gets me is the way he dismisses those who see resource limitations as the fundamental problem with endless growth as people making excuses for capitalism’s inherent instabilities. He wants to see everything through his ideological lens. Resource limits are a very real issue. The inherent instabilities of capitalism are something that we’ve muddled along with and fixed willy nilly. Our big mistake was in forgetting the lessons of the past. He talks about the need for new thinking, but offers no real suggestions. Big deal.

          1. don

            Read Harvey’s very recently published book ‘The Enigma of Capital: And the Crises of Capitalism’, and you’ll find out that what you have to say about natural resource limitations is fully addressed by Harvey in the book.

            Bes know what it is you say before saying it.

          2. alex

            hm: “Are resource limitations responsible for the current turmoil?”

            No. What’s your point?

            don: “Best know what it is you say before saying it.”

            I was responding to his treatment of the natural resources limitation question in the lectures/videos. It was dismissive. He may well give a better treatment in his book, but given what he said about that and other issues in the lectures/videos, there are a lot of books I’d read before his.

          3. hm

            Forgive me if I’m misunderstanding you, but if resource limitations played no part in this or any previous modern financial crises, why should David Harvey address resource limitations as the most relevant factor in economic instability?

            “Right, this time it’s different. This is the magical moment in time when we’ve finally hit the limits of capitalism due to it’s inherent contradictions, just as Karl predicted. 1848 and 1917 were just false alarms.”

            I don’t see where he says this. He hypothesizes that this is an inflection point in terms of our ability to demand the same 3% compound growth that became the metric over the last 40 years, but he goes on to say repeatedly that the more difficult it becomes to achieve the appearance of this growth, the more frequently we’ll face asset bubbles, wealth transfer, and fraudulent financial activity. Harvey attacks the 3% compound growth metric specifically, but he certainly doesn’t predict any collapse of capitalism.

            “What gets me is the way he dismisses those who see resource limitations as the fundamental problem with endless growth as people making excuses for capitalism’s inherent instabilities. Resource limits are a very real issue.”

            I think Harvey would agree that the fundamental problem with endless growth (that is, over a longer timeframe) is in fact resource limitation, but his point is that “natural limits” are not the cause of the periodic crises seen throughout the history of capitalism–they are not responsible for the boom and bust cycles that are a very regular feature of the global economy particularly since the 1970s. They are blamed, however, in an attempt to divert attention away from the so-called internal contradictions of capital accumulation.

            ” The inherent instabilities of capitalism are something that we’ve muddled along with and fixed willy nilly. ”

            This reads as a dismissal of present and past crises and their attendant consequences for both individuals and our societies, as if the only legitimate concern is that point at which we run up against a crippling shortage of some critical resource. While historically true, it seems a bit flippant to casually accept that we will or should always muddle along given that this ignores substantial human suffering and the degradation of our social and political institutions. I guess, to (probably mis-) quote Harvey: If you want to live in a world like this, be my guest.

            Also, I have not read Harvey’s book. Hope all of the above is acceptably coherent. Thanks.

          4. alex

            hm: “if resource limitations played no part in this or any previous modern financial crises, why should David Harvey address resource limitations as the most relevant factor in economic instability?”

            Because resource limitations are a limit to economic growth, and he thinks that the inability to have endless economic growth is the source of capitalism’s instability.

            “He hypothesizes that this is an inflection point in terms of our ability to demand the same 3% compound growth …”

            What indication is there that the inflection point is now? Unless we’re natural resource constrained, why could we have 3%/yr growth in the past but not now? People were saying the same thing in the 1930’s, yet capitalism, after some necessary reforms, became stronger and more stable than ever.

            “he certainly doesn’t predict any collapse of capitalism”

            If we continue to have this level of instability I’ll predict the collapse of capitalism.

            “his point is that ‘natural limits’ are not the cause of the periodic crises seen throughout the history of capitalism–they are not responsible for the boom and bust cycles that are a very regular feature of the global economy particularly since the 1970s.”

            Particularly since the 1970’s? We had far worse booms and busts from the late 18th century through the Great Depression. While the current meltdown is the worst we’ve had since the GD, it’s not as bad as the GD. From the end of WW2 until the current crisis has been a model of stability compared to what came before. Were WW2 until 1970 better than since? Yes, but 1970-2007 were still better than the GD and before.

            “This reads as a dismissal of present and past crises …”

            No, it’s just my sarcasm getting the better of me. What I meant by muddling is that “stabilized capitalism” post-GD is the best system we’ve had so far. While I’m no stick in the mud, I think that calls for complete rethinking are grandiose.

            Above all I think that societies and economies are ad hoc and evolutionary. Grand re-designs don’t work because no human being can anticipate all the problems in any design. There’s also the problem that people generally accept what they’re used to as legitimate to some extent, and radical new ideas are suspect.

            Therefore the best we can do is make evolutionary changes. In some cases it’ll be something new, such as universal health care in the US. In other cases though we should go back to what we had before and was known to work well. The biggest cause of the Great Meltdown was irresponsible deregulation that ignored the lessons of the GD. Re-regulation is the simplest and surest way to restore stability.

    2. NOTaREALmerican

      Until there’s an “ism” that addresses the problem of the sociopaths all the loot – regardless of the “ism” – will be owned by the smartest amoral scumbags.

      The problem is simple. Unfortunately, most humans can’t doubt the sociopaths. Perhaps it’s because of natural human optimism, and doubt is a form of negativity. And, as we all know, negativity is unpatriotic. There’s no “I” in team. Yer either with us or again’ us.

    1. YankeeFrankee

      No. Stalinism == 40,000,000 dead. Marx formulated some prescient and brilliant observations about the nature and flaws of capitalism. So stop acting like a discussion that raises some of his insights must inevitably lead to a totalitarian state. That is just primitive thinking. Oh, and don’t even tell me that many millions have not been killed by capitalist imperialism. Any system that places itself above the people it is designed to serve will cause much pain and death.

      1. rkka

        Stalinism=~700,000 executions, and a GulAG death rate comparable to the US prison system at the time, with the exception of 1942, for it’s ~2,000,000 inmates at any given time, including actual criminals.

  2. Andrew Bissell

    Is the problem really unique to capitalism? The Soviet economy also went through boom/bust phases, as did the Roman economy in its day. Perhaps we can say that capitalism does not eliminate the human tendency toward mass social fluctuation. The only economies I know of that have been “stable” over the very long term were the ones mired in abject poverty.

    1. alex

      That’s the kind of stability our current political “leadership” is working towards, at least for the masses.

    2. alex

      “The Soviet economy also went through boom/bust phases, as did the Roman economy in its day.”

      Such observations are proof that you’re not seeing instability issues through the appropriate ideological lens. Maybe you need re-education.

  3. F. Beard

    Marxism = 100,000,000 dead… Albert

    Well, the fascist banking and money system killed 50-86 million in WWII via the Great Depression. Also, fractional reserve lending leads to the business cycle which Marx mistakenly blamed on capitalism.

  4. Michael Fiorillo

    While his prescriptions have been discarded, no one has yet surpassed his descriptions of how capitalism works.

    It’s good to see Old Whiskers get the credit he deserves on this site.

  5. anonymous

    Marx was a journalist and a product of his time. He was a Platonic utopian who believed, quite literally, in the fairy-tale of the innocent savage formulated by Rousseau.

    I agree that his sharp observations on the inequities of nineteenth-century capitalism put the need for counter-balancing collective organizations (unions) into sharp relief. However, the defects in his thinking, particularly his faith in an inevitable movement towards a worker’s paradise are naive to the point of absurdity. Anyone who has ever visited a communist country understands that class and class conflict arise in all social situations, irrespective of political systems.

    There isn’t much to like about the old boy’s writing or thinking, IMHO. If you think he has anything substantial to offer, consider joining a union (private sector). He’s right about the need for collective bargaining, not much else.

    1. mpinca

      Marx was a dialectical materialist, rather the opposite, metaphysically speaking, of a Platonist.

    2. S

      “There isn’t much to like about the old boy’s writing or thinking”

      I take it, then, that you watched one or both of the above videos and found them utterly insubstantial and/or dishonest?

      One should also keep in mind that while Marx was a single man who produced a finite body of work in reaction to his times, “Marxist” thought describes about 150 years of inquiry and many thousands of individuals. You meant to say “There isn’t much to like about David Harvey’s writing or thinking,” which is laughable even from the most principled objection to Marxist critique.

    3. Yves Smith Post author

      Ahem, did you read Marx at ALL? What you wrote is a caricature. From an article by Monthly Review:

      With respect to financial expansion and crisis, Marx wrote in volume 3 of Capital that the whole “sphere of production may be saturated with capital,” with the result that profits increasingly enter into the sphere of speculation. “If…new accumulation,” he wrote,

      “meets with difficulties in its employment, through a lack of spheres for investment, i.e., due to a surplus in the branches of production and an over-supply of loan capital, this plethora of loanable money-capital merely shows the limitations of capitalist production. The subsequent credit swindle proves that no real obstacle stands in the way of the employment of this surplus-capital. However, an obstacle is indeed immanent in its laws of expansion, i.e., in the limits in which capital can realise itself as capital.”17

      The “credit swindle,” arising with the turn to money capital (represented by Marx as M to M’) as the basis of the amassing of wealth, inevitably precedes a bust. “Business always appears excessively sound right on the eve of a crash.” For Marx nothing was more natural than a liquidity crisis in an economic slowdown, where capital hungered insatiably for cash. Mimicking the 42nd Psalm, he wrote that the capitalist desires and hordes money in every form: “As the hart pants after fresh water, so pants his soul after money, the only wealth.”


      So tell me again that isn’t relevant. He was the first, bar none, to see the role of credit and speculation in economic instability.

      1. Transor Z

        I think Adam Smith had some inkling, and Hamilton wrote in 1791 (re: the script bubble that formed around the IPO of his baby, the national bank): “[A] bubble connected with my operations is of all the enemies I have to fear, in my judgment the most formidable.” So it wasn’t completely new ground.

        But reading Marx was one of those things that provoked a physical reaction in me in college (back in the Cold War — remember that?) because there was a sense that it was illicit/forbidden and because the guy was such a relentless dialectician; it always felt a little assaultive somehow.

    4. NOTaREALmerican

      Why does everybody confuse theory with applied economics? There’s lots of great theories. The problem is implementing the theories when you’ve got huge numbers of sociopaths in the society.

      As the saying goes: Nice theory, wrong species.

      This could be applied to ALL the economic theories. People tend to forget that their own favorite economic ideal is just a theory too.

      The only reality is the smartest amoral scumbags eventually win. NO economic theory has a reset button (concept).

      And that the end of the game….
      And the Smart Amoral Scumbags win the Capitalist Stupendous Bowl; with the final score sociopaths – infinity, dumbasses nothing. But, don’t go away, because well be right back with a look at the next season. You won’t want to miss who we think are the sociopaths that go all the way NEXT season AFTER THE LOOT IS DEVIDED UP AGAIN. (See what the problem is here).

  6. DieKiste

    “Marxism = 100,000,000 dead…”

    That is maybe evidence that Marxism as a political ideology might not be a viable solution to capitalism’s problem.

    It does not mean that Marx was wrong with his analysis of the failures and contradictions of capitalism. In fact, Marx’s analytical framework looks a whole hell of a lot better than classical economic theory these days….

  7. Canute

    Nowhereman and Alex are right about “free markets,” but they need to go a step further. “Free market” is an oxymoron. Markets are sets of rules – intrinsically un-free. Same with “free trade,” as in international trade, a border being a necessary restraint. Same for “free enterprise,” in that commerce requires rules. A competitive market is a tightly, intelligently, and dynamically regulated market.

    What many don’t like about this kind of critique is that it exposes our present economic system as contrived. Those who run the show would like you to think that it is inevitable, and that there is in it some ideal state of equilibrium. They don’t want people even considering that there might be equally valid alternatives.

    Our present dilemma is the end of a three-decade long cycle. The industrialists/merchants wanted demand without high wages and government subsidy (including military spending) without high taxes. The financial sector wanted to make money without paying anybody for producing actual physical value. It worked (for them) until the credit card bill couldn’t be pushed back anymore.

    1. alex

      “It worked (for them) until the credit card bill couldn’t be pushed back anymore.”

      Yay verily (whatever that means). Forget Marx and think Minsky.

  8. Jim

    Harvey has given a wonderful thumbnail overview of the major explanations for this economic/political crisis(i.e human frailty, institutional failure, false theory failure, cultural explanations and policy mistakes).

    His own narrative might be categorized as a firm belief in the necessary and utlimately emancipatory role of the state in gaining social control over the surplus generated by the economy.

    I would immediately want to know, in detail, what, I presume, would be his new theory of the state taken the miserable governing record of most existing or formally existing Marxist regimes.

    My bias has been and still is that an entrprenurial capitalist can make decisions substantially more rational that any large bureaucratic apparatus (public or private).

    Part of my personal critique of modern capitalism is that because of the way it has been historically organized (primarily huge private bureaucracies) only a very limited number of people participate in its decion-making process which in its more entrepreneural form engages the entire personality of the indivdual involved–because of his or her skin in the game.

    Most Marxists would dismiss my viewpoint as petty-bourgeoise provincialism and cultural backwardness.

    Inronically, I believe that this type of backwardness is part of what we need to move forward.

    1. john

      Two points (and I’m not saying you’re wrong or attacking):

      1) He makes no mention of the state. Just says we need to think differently from how we have thought. Did you watch the entire thing?

      2) Capital moves to accumulate more capital. If you want to believe in the power of the entrepreneur, that’s great. But s/he will move toward becoming the bureaucratic monolith you hate because otherwise s/he will stop growing and be overrun.

      1. NOTaREALmerican

        Re: Just says we need to think differently from how we have thought.

        Which translates too:

        I think the intellectuals watching this video can actually change their thinking because – well – we’re really smart intellectuals.

        The reality. The sociopaths have no reason to change their thinking because – well – they’re sociopaths and have won, and own the political system the intellectuals are so desperate to change. The dumbass peasants – many of whom are semi-psychotic anyway – are incapable of not believing the sociopaths because – well – if they did 10000 years of human history would be entirely different.

        Fix the sociopath problem and you’ve got your solution. Otherwise it’s just more Marxist Libertarian Socialist Capitalist fantasy. Only Fascism addresses the sociopath problem right now, which is why all roads lead to that system.

    2. JTFaraday

      “His own narrative might be categorized as a firm belief in the necessary and utlimately emancipatory role of the state in gaining social control over the surplus generated by the economy.

      I would immediately want to know, in detail, what, I presume, would be his new theory of the state taken the miserable governing record of most existing or formally existing Marxist regimes.”

      Well, not only that, but, could you imagine what Hank Paulson and Turbo Timmy would do with it?

      So, yes, I would like to know what his new theory of the state is myself.

      1. CS

        What nonsense. Both the individual entrepreneur and the corporation (ie GM) were stymied by the freeze of credit caused by the failure of the banking system. The billionaire hedge fund officers were enabled by the bailout of the financial system on the backs of the very people who suffered due to the freeze of credit.

        Didn’t uber-capitalist Jamie Dimon explain to his daughter that a financial crisis was “something that occurs every five to seven years”? Direct quote from Marx. Sorry, Karl is the only one to provide a durable explanation for the behavior of the capitalist system. Republicans like to confuse American workers with the notion that they are “entrepreneurs”. Booshwah. Labor is a commodity which along with raw materials and tooling, capitalists use to produce products. The surplus value is capital, which they use as Harvey explained, to expand in one way or another.

        1. JTFaraday

          You’re still not addressing the point, which is, how do you take the state back from the corporatists now that they have it, assuming you’re not going to be running the gulag against the US fascists.

          You, Harvey, “the new ‘new deal,'” we can analyze it all day I’m sure, but being analytically correct up in your head is not sufficient.

          I would like to know his thoughts on this. You’re just more snark.

          1. CS

            In the Cold War, America framed the “fight against (Soviet) communism” as a fight between good and evil. In doing so America intentionally ceded the moral authority of the state to its corporations as the representatives of “free enterprise”. Of course, corporations have no moral authority, their only responsibility is to make profits. We’ve been paying the price ever since.

          2. JTFaraday

            And, once again, you are not addressing the critical question. You’re just taking up empty space on the page.

          3. CS

            Corporate power is the power of capitalism which is the power of money. Take corporate money out of the electoral campaigns to begin the process of diminishing corporate power. Overturn or nullify through legislation Citizens United. Discredit the false notion that spending money is the equivalent of free speech. Discredit the false teaching that democracy equals capitalism. Start by teaching that a political system is not the same as an economic structure. Political systems lay claims to some kind of moral foundation. Economic structures are amoral. The democracy equals capitalism falsehood got a big push with the Cold War good vs evil approach to political economy.

    3. AllanW

      Terrific first few minutes (the animated video) where Harvey skips over the main threads that seek to explain why the financial crisis happened. It hits all the marks of the main constituents (albeit in summary).

      He then picks as his point of departure a Marxist explication of inherent risk in capitalist economics. He starts with a chronology(very quickly done) and highlights the very important point that has been made many times before in many different contexts (such as war)that human problem-solving approaches tend to be poor at prediction
      and slow in reaction; they fight the last war rather than the current one. In this case, the Seventies and Eighties was an attempt to fight the ‘Organised Labour versus Capitalism’ battle (won by Capitalism) but by the Nineties the pendulum had swung too far in that direction and created a problem of demand shortfall that was ‘solved’ by
      cranking-up debt. He is quite right in this analysis. It’s simplistic(as he pointed out in the first few minutes, there are a number of factors that contributed) but nevertheless the current problems do have a component of wage and income inequality that worsens the circumstances.

      Where I depart from his seductive narrative is in the remaining few minutes where he take two tacks; one where he states that capitalism merely shifts problems geographically and one where he bemoans the reduction of manufacturing versus financial industries. Both of these
      issues are examples of what he just correctly identified as fighting the previous war; unfortunately he can’t escape his own Marxist conditioning and makes the fatal mistake of forcing empirical observations back into his own preset mould of prejudice. Damn shame because he is an interesting speaker.

      His first point, ‘Globalism bad’ does not recognise the facts at all and is unfortunately a standard Marxist slogan. It may seem like ‘Globalism’ is worse now than at any time in the past but that does not stand up to scrutiny; by any proportional global measure of liquidity of capital(cross-border flows), migration of labour, access to markets, barriers to entry (patents and innovations etc) and flow of products and services, the high-point of globalism was the last years of the nineteenth century not now (as posts on this site have shown).

      And his second point about bemoaning the imbalance between
      manufacturing and financial industries, while I have a nostalgic urge to agree I must unfortunately recognise that he is merely living in the past and pining for the ‘simpler’ times when basic manufacturing industries dominated the economic scene. I’m tempted to point him
      towards George Orwell’s ‘The Road to Wigan Pier’ as an antidote to his maudlin harking-back to those times; they were abominable and deeply, deeply subjugative. Quite apart from the fact that he is taking too much of a British or American perspective here (would his comments apply to the German or Taiwanese or Korean economy? No.), he is making
      the mistake of failing to recognise that the wheel has turned and we are in a knowledge economy not an industrial economy.

      At this point I’d like to make an observation of how these kinds of backward-looking mistakes are made and it relates to the human failing of embracing narrative fallacies rather than being driven by empirical observation (pace Taleb). We like and warm to narratives of cyclicality; it gives a measure of reassurance that ‘mini-skirts are back’ because we think we know all about mini-skirts. It is a mistake; virtually nothing to do with human affairs is cyclical in this way. I would characterise it as dynamically homeostatic. Let me explain; think of the chronological progress of time moving as a line in a space that describes human society. It moves forward as a line but cyclicality would mean it moved into a circular shape; this is a false model. In fact the line constantly moves forward BUT also UPWARDS in terms (broadly) of technological and scientific advances so in fact describes a helical shape. Viewed in two dimensions when the line passes certain sectors of the bound-space it might look from above like fashions and styles are indeed cyclical (‘Oh look! We are making the same mistakes in
      Afghanistan now that the Russians made twenty years ago.’) but in reality the circumstances, while having some surface familiarity, are fundamentally different and this can only be perceived from the side where we see that this particular turn of the helix does in fact occupy some of the same space as before but with the crucial difference that it is higher up the domain-space than before. It is a
      different set of circumstances.

      Harvey makes the mistake here of interpreting this particular turn of the helix in two dimensions rather than three. So while he rightly makes the point at the end that everyone should be on the streets demanding revolution against the nasty rentiers and capitalist pigs, he also recognises that they are not and cannot understand why they
      are not. It is because while he has correctly assessed that some features of imbalance and inequality exist (like they did in France and Russia between the workers and the aristocracy or the peasantry and the rulers), fundamental differences are also in evidence. Overall poverty levels are not anywhere near as high as they were in
      revolutionary Russia or starving France; most people in fact do have above subsistence level conditions of life because science and technology have provided advances. We are in fact on the same kind of turn of the helix as revolutionary times BUT we are higher up the space of physical conditions. Revolution is not on the cards at the

      But he is an entertaining speaker in many ways and I absolutely agree with his final point about the standards of public debate about these issues but they won’t change markedly while the majority of the population are anaesthetised (or should that be mesmerised?) with cheap consumerism.

      1. Toby


        He may well be a nutter (not sure if that’s a bad thing), but renegade and highly controversial physicist Nassim Haramein makes the point about progressive or spiralling cyclicality too. He talks about planetary orbits never taking the planet back to the same spot in the universe, because the orbited star too is in motion, as is the galaxy it is part of, and so on. Change is the only constant, they say. I think they’re right.

      2. Richard Kline

        So AllanW, you have a cogent basis for all of the criticisms you raise. Despite that, it is my regret that I’m going to disagree in detail with practically all of your resultant contentions.

        As a point of context, I concur with you in the various points of agreement you have with Harvey’s remarks. I’m more partial to anarchist critiques myself, but I’ve read in Harvey’s works with a good deal of sympathy. He is, to me, an intellectual who is a Marxist rather than the other way around, and the clarity of his perspective follows from this in my view.

        You characterize Harvey’s later critiques here as backward-looking in two cases, and in that respect faulty. With regard to the issue of the broad costs of the global penetration of capital-accumulative enterprises, this is not something ‘in the past’ but rather an ongoing process, of result yet indeterminate. By definition, critiques of this cannot be backward looking then, unless one considers the outcome inevitable and that all should simply lie down and let the bulldozers roll over us. If such a state of affairs is formulated as ‘globalism is bad,’ whether by those opposed to the it’s process or those who would mislabel the opposers, of course such simplistic capsules distort more than they reveal. Your additional remarks concerning the reach of First World capital in the 19th century are both true and false. As an absolute measure, more capital may have been deployed then, true. The extent to which that capital penetrated and reshaped many local societies, to their loss and capital’s gain, was significantly less in that era, even if one only considers the economic dimension. A Marxist analysis is more likely to look at the composite result here than to try, and fail as in this example, to reduce it to a single meaningful number or set of tables: it’s the picture of forces which matters.

        What it is of globalism, 21st century version, that is bad, that is to the point to consider. Financialization is not even working well for highly ‘developed’ countries, and promises less to those on the periphery. Global financializaion has little constructive to offer any society however much it profits a very few. Over-extraction of resources and environmental degradation in pursuance of the advantage of mass-capital penetration of distant regional economies is problematic at best: the income is soon gone, the externalized costs remain locally dumped (and cumulate), and the gains land in distant pockets of distant peoples. This is as true for Montana and Australia as it is for Papua and Niger. An advantage of a Marxist critiques is that it sees the situation in all four places similarly rather than, inaccurately, as unique sets of unrepeatable circumstances. There is more in this vein, but I’ll let that stand for objection here.

        In respect of your second criticism, I would agree with you that an economic analysis pivoting on the status and trajectories of manufacturing industries is significantly backward looking yes; very 20th century so to speak. You contend, however, “that the wheel has turned and we are in a knowledge economy not an industrial economy.” Who is that ‘we’ in your counter conjecture to Harvey (and many others)? Said knowledge economy is never going to employ close to a third of the present population in even ‘developed’ societies, as manufacturing did in recent times; not anything like 70-90% of the population in subsistance economies. Yes, yes, ‘knowledge workers’ think they are the new cocks-of-the-walk, and that the world turns on their joystick, but by any historical comparison this is self-centered rubbish. Their share of revenue, production of any kind and all the rest isn’t going to approach historical norms. (Unless one lumps in the financial ‘industry’ as knowledge workers rather than largely parasitic rentiers and arbitragers, a characterization I take to be far more cogent, and one which separates them from knowledge trafficers strictly spoken.)

        But that isn’t even the main point of a critique leveraged upon the status and trajectory of knowledge workers which is: what of the rest? What of those who have no subsistence agriculture or manufacturing ‘to go back to’? This, to me, is the point to considerations of the productive balance in contemporary society. All those others are not going to become knowledge workers. They are not even going to become servitors to self-appointed knowledge workers. Marxism is about the _political_ economy of societies _as wholes_ rather than about the political fortunes or economic sweet spots of specific groups whose trades are in expansion or contraction. The balance in contemporary society trends away from ‘those who also produce’ even with respect to the recent past of heavy manufacturing generations. This to me is the entry into the discussions Harvey makes, but a subject which cannot be effectively condensed into the time Harvey has in this particular presentation, no. And regarding those ‘knowledge workers,’ if someone doesn’t produce their breakfast, chip out their gadget guts, or truck the coal to their gigawatt power plant, they’re all little nowhere men because their skills don’t cut bait in any other societal context. (Which points lead us back to the globalization of capital critique because increasingly all such remaining ‘productive production’ process are dominated by large capitalist enterprises who proceed _entirely to their own benefit_ with precious little control by said knowledgistas or anyone else.)

        My broadest differences with you, AllanW are exactly in the area of your perspective on the cyclicality of societal trajectories, or I should say your view on the lack of same. I say my largest regrets are here as well because you have clearly engaged in this particular issue at a non-trivial level, and your analogies to dimensions of action are very much to the point. But faulty as deployed I may say, and in part because not followed through logically. There are indeed cyclical process very potently at work in societies, and rather more diffusely in the economic behaviors of societies; I advance that view that as one having closely studied the issue. The Marxist position on this is frankly defective, I’ll say that up front if with lament. It is not my view that there is a single trajectory of change; there are multiple if society-specific vectors, a point the lack of understanding of which has short-circuited most meaningful analysis of this phenomenon. Nor are cyclical processes rooted in economic behaviors I think I can conclusively state (though not substantively prove at this point since I’m distant from publishing work on this), despite the fact that economic activities manifestly fluctuate over time. The why and the how of this would take a book-length discussion, a book I am not presently writing.

        I’ll turn to the framing of the issue then, for your consideration and that of others. The discussion of cycical processes at the level of ‘x is back in fashion’ trivializes the process. Specifics do not meaningfully recur, this is a pervasive but fragmentary view on cyclicality. Societies maintain a repertoire of ideas and behaviors which changes only gradually over time. In this regard, yes indeed there is a cumulative aspect to societies over time, and secondarily to humanity over time. Some things once learned are not forgotten; seed hybridization as a possibility, for example. In this sense, societies can ‘progress.’ But specific societal stands can discard things they do as well. The Maya make a good example of a complex society which discarded much of that complexity. [This last is a time-intensive discussion rather over-simplified as stated which I won’t detail here.] Your characterization of the trajectory of change as upward is not proven, either in the short term—centuries—nor the long term. It is in fact, an intellectual artifact from late Greek thought ported via early Christianity, that is a philosophical position with a really quite fascinating intellectual history. That ‘philosophy’ of upward progress has underwriten a great deal of modern intellectual thought; it was embedded in Hegel and quite remarkably borrowed into Marxism, but certainly wasn’t limited to those perspectives. But it is not an analytical construct, that is my point here. And something to closely consider in this regard is that, yes, many in the world live less closely at subsistence level conditions due to contemporary production processes. Wildly unsustainable production processes, that is. We kill the sea, exhaust the land, and expend what’s below the soil for good and all. The sustainability of what we do isn’t merely debatable, it is not evident. That is a critque of the 21st century left, both of anarchist, and contemporary Marxist thought, dismissed under the ‘globalization is bad’ rubric in your remarks. You and I and we sit at the top of an arc, and all I hear you talk about is ‘more up.’ If those knowledge workers think up a new Rapunzel’s Wheel for us, well then there’s that. If not, I think Harvey’s critique of the pitiless folly of global capital is much closer to the view our descendants ten generations since will hold, because it is the facts of such conditions which will shape their lives one the pixel-wash of today has powered down.

        Your remarks on the dimensionality of change over time, however are well-considered initially. We do not have a useful way of integrating in a single perspective these different vectors of social process simultaneously in action. Having studied how to do this, I would start as you with a figure of a helix; consider one extending in time-space horizontally. Time-x is back-forward, past-future. This is the vector of cumulation of thought, material, and experience. A time-x.1, voila, the Constitution of the US; at time-x.230 or so, the present conservators of it peeling off shreds to light their cigars. (Or choose your own invective.) Look across the helix from the side; that is time-y, the moment of the unique instance. A specific action; and time-dependent historical context; a non-repeatable singular running together of things; an unexpectable *oops*. Or whatever, but this is the dimension of the contingent. Consider the vertical dimension, then; this is time-z, the scale of wax-wane. Modeling smartphone adoption on a temporal scale? This is your plot. Modeling ahua-dominated political connectivity in the Yucatan a millennia ago? This is your plot. Ther is yet one more dimension (at least) fundamental to analysis, though. Consider the substance of the helix itself. At one point is swells, only to shrink again; at one point it is dense and concentrated; at another a fleck-cloud and chaotic. This is the dimension of actual cycliality in societies. I have my own terminology for this dimension, which I will not inflict upon anyone without the analysis behind it to make it meaningful, but consider the perspective is what I suggest. In understanding cyclicality, one must hold _at least all four dimensions in the mind at one time_ with regard to any single event. Barack fires Stan? Place it four-ways. The Napoleonic Wars in part or whole? Locate similarly? Genghis goes ballistic? Well that was amongst the most singular events I have ever studied, but yes one can still locate it in a 4-space.

        What does that have to do with Harvey’s discussion? Little directly; more with your counter-analysis to the (rather limited) framing of cyclcality in Marxist thought you feel defective. To my conclusion it’s more accurate to call it incomplete (withough parsing the very extensive details here). It is your characterization of our present trajectory as “on with up” that I disagree, taking Harvey for the stronger there. We are at the top of the turn in many things: on _isn’t_ up.

        Having put that concept in motion, I think that I’ve expended my share of pixels for this good night.

        1. AllanW

          Many thanks for your considered response. You are correct that this format is not conducive to taking this discussion forward so please feel free to contact me on wortallan@hotmail.co.uk in order to find a better way. Best regards.

          1. Dan Duncan

            Or…better yet, the two of you can spend some time reading Edwin Abbott’s “Flatland”.

            How novel: Using dimensions as a method of social commentary…only Abbott did the same all the way back in 1884 no less.

            Kind of ironic, when coupled with the discussion of cycles, isn’t it?

          2. Richard Kline

            So Allan, I’ll drop you a line in the next few days, and perhaps we’ll chat this one up.

      3. john c. halasz

        There’s no doubt plenty of room for criticizing Hegelian dialectics and Marx’ criticism/deployment of them. But it’s no simple matter. And much talk about “non-linearities”, multiple determination, complex interactions of parts in generating evolving social wholes and “sublation” into developmental stages, with geographically dispersed outcomes, (“formal vs. real subsumption”), etc. can already be found in Marx, thought couched in that 19th century conceptual idiom/technique. On the other hand, it’s not given that advances in formalizations, in mathematics and general systems theory, necessarily resolve the problems that Marx grappled with, perhaps in partially self-obstructive ways. That would depend upon just what the problems are identified as and how well such formalizations would capture them in being applied to them. Marx still is of considerable heuristic interest there, as much for his failures or blind spots as for his genuine insights.

      4. hm

        “His first point, ‘Globalism bad’ does not recognise the facts at all and is unfortunately a standard Marxist slogan. It may seem like ‘Globalism’ is worse now than at any time in the past but that does not stand up to scrutiny”

        ‘Globalism is worse now than ever’ doesn’t necessarily follow from ‘Globalism bad,’ and Harvey doesn’t really make either of these claims, except in mentioning the globalized labor market and its benefits for capital. The assertion that capitalism moves its crises geographically stands on its own as a coherent description of reality. Harvey’s point is ‘Capitalism bad,’ whereas globalization as we know it is a necessary product of capitalism’s eternal search for growth. The idea of globalism itself is inextricable from capitalism, but Harvey’s point is that capitalism is the problem, not the aspect of capitalism called globalization.

        “I have a nostalgic urge to agree I must unfortunately recognise that he is merely living in the past and pining for the ‘simpler’ times when basic manufacturing industries dominated the economic scene. I’m tempted to point him towards George Orwell’s ‘The Road to Wigan Pier’ as an antidote to his maudlin harking-back to those times”

        It’s quite a leap to say that Harvey is motivated by nostalgia in his discussion of manufacturing… is it maudlin to compare the present to the recent past and highlight the lack of progress?

        “Quite apart from the fact that he is taking too much of a British or American perspective here (would his comments apply to the German or Taiwanese or Korean economy? No.), he is making
        the mistake of failing to recognise that the wheel has turned and we are in a knowledge economy not an industrial economy. ”

        But as you said, “we” are not ALL in a knowledge economy… Harvey’s (or Marx’s?) point that this ‘turn of the wheel’ is not an act of God, but rather a deliberate result of policy designed to appease Capital, to the detriment of workers subject to such decisions.

        Really appreciate the effort put into your comment (and to so many of the other comments on this post!)

        1. AllanW

          Ø hm; whereas globalization as we know it is a necessary product of capitalism’s eternal search for growth.

          Agree with that.

          Ø hm; The idea of globalism itself is inextricable from capitalism, but Harvey’s point is that capitalism is the problem, not the aspect of capitalism called globalization.

          Not sure he is making the distinction you make on his behalf. I’ll revisit the talk but am left at the moment with the firm impression that he does indeed see ‘globalism’ as bad in and of itself.

          Ø hm; It’s quite a leap to say that Harvey is motivated by nostalgia in his discussion of manufacturing… is it maudlin to compare the present to the recent past and highlight the lack of progress?

          It seemed that way to me but I fully accept that the short format of his talk did not allow Harvey to delve into more detail so I may be projecting here. It’s both maudlin and wrong I think. Remember, he was talking in this section about the current imbalance between the manufacturing sector and the financial sector of the economy. In the context of his brief chronology, he was bemoaning the swing of the pendulum away from organised labour in manufacturing industries towards financial sectors and this is precisely where in the talk his presuppositions betray him. ‘Organised labour’ need not be limited to manufacturing industries but has been in the past (hence my understanding of him ‘harking back’) yet he doesn’t seem to address the current reality whereby ‘labour’ can organise itself in any sector but doesn’t. Why are there no or puny ‘organised labour’ curbs to rampant corporate greed in the financial sector? He seems to miss this point but we are only talking about a presentation score for Harvey here of the difference between seven and a half out of ten and eight rather than between three and four.

          Ø hm; But as you said, “we” are not ALL in a knowledge economy

          I claim the same sanctuary of ‘brief format does not allow detailed explication’ that I gave to Harvey earlier in this comment. Let’s not get fixated upon the word ‘knowledge’ or my brief use of it in the original comment; there is a whole discussion to be had about this aspect of our world at the moment. In brief, my meaning is that now more than ever before, the exploitation of informational asymmetries determines outcomes to a far greater extent than such historical characteristics as the availability of labour, capital or means of production. In this sense we are all living in the ‘knowledge’ economy.

          Ø hm; Really appreciate the effort put into your comment (and to so many of the other comments on this post!)

          Thank you for the compliment; Yves creates the space in which we share these thoughts so kudos goes mainly to her.

      5. Progressive Ed

        AllanW: An excellent post. Thank you. On a more general level (i.e. from a more general perspective), you might enjoy the work of Ken Wilber.

        1. AllanW

          Progressive Ed; Many thanks for the pointer to Ken Wilber’s work; at first glance he seems to be exploring some interesting ‘mind/brain’ concepts with a more practical bent which I find appealing. I need to spend more time with his writing. Thanks again.

  9. dv

    Absolutely brilliantly put together. I ha come to the conclusion through a lot of thinking but never have been able to tie together the logic and history like was done here. I once worked as an analyst at a hedge fund after a decade and a half career in engineering asnd manufacturing. I found my hedge fund collegues to be extremely narcissisitc and entitled. They only had negative things to say about the common working man all the while complaining about half-million dollar salary+bonus right out of college. There is/was absolutely something wrong with that. As I compare the social benefit of my former collegues in engineering and my most recent former collegues in the hedge fund I would say my engineering collegues to be better, more grounded, nicer and more socially beneficial than the most recent hedge fund collegues. I have since been let go from the hedge fund (blew up) and couldn’t be happier not to be associated with them (I do miss the $ but fortunatley nver based my lifestyle on it). I am off to do public service work in finance now at an annual salary that is less than one months pay as a hedge fund analyst. It will be an interesting contrast.

  10. Progressive Ed

    Public service work? Why not transition to something useful, e.g. start some sort of company and create some jobs.

    1. aet

      If you want to help people, become a doctor, or anurse.
      There is always need.

      If you want to create jobs, better make an appointment with a banker.

  11. MichaelC

    Every time I’m ready to recoil at the mention of Marx, that lyric from the vapid “American Pie” pops into my head.
    While Lennon (john) read a book on Marx..

    to remind me it was Lenin, not Marx who was the evil genius.

    There’s nothing in this piece that doesn’t ring true. If it’s author isn’t outed as a ‘radical’ this piece would probably come off as pretty mainstrean and on point, given most people’s experience over the last 3 (and 20) years.

    Here’s to hoping that this time around the observations will lead to better policy than they did the last time these ideas got a hearing. It’d be nice if the good guys got to hijack it this round.

  12. Andy

    Harvey is a geographer, actually. Just pointing it out b/c radical theories and critiques (Marxist, feminist, post-this and -that) of capitalism are actually mainstream in Anglo-American geography and that is often overlooked in popular culture, yet alone many American universities. Harvey is one of the “fathers” and “mothers” of a robust critical bent to geography. It’s a wonderfully creative field.

  13. emca

    I a little shocked that a “Marxist” should have such insight into the goings on of Capitalism in its current attire, but Harvey’s discussion of the economics since the seventies (and the accompanying cartoon) is the best 11:11 summation of the underlining problem we face today; if your going to have a sustainable economy, you need for labor to enjoy the fruits of material wealth production in ways outside greater and greater debt accumulation.

    Its a dead-end road running an economy or nation on large financial gains for a limited few. Everyone knows this but the understanding does not translate into any meaningful action, unless of course, when predatory Capitalism finds it natural cyclical conclusion in abject failure and hardship for society as a whole. Then we get patches and excuses, always and forever excuses, rolled with return to the same.

    Concentrated wealth is a disaster. It feeds corruption in government making that citizen constitute, whose mandate is the common good, an appendage and servant of select private interests. I don’t see suffering for Goldman (and its pocketed government) as a desirable alternative over suffering under the tyranny of a politburo. The current (eventually terminated?) freedom to gripe about it does not alter the reality of the situation or the substance of the problem.

    Harvey understands what has happen in England (the selling-off of its productive base) and what is happening in the U.S. (the selling-off of its populace). You don’t need a Marxist label to get it.

    1. NOTaREALmerican

      And, like most very nice intellectuals that hang around bucolic college towns (areas) with other intellectuals – and drink fine wine – he tends to forget that the teaming-masses of dumbass peasants willing went along with the idea of being sold-out.

      In the US it was the majority racial group voting against their own interests for 30+ years desperately trying to “get even with those people”. When the Democrats controlled the dumbasses at least we had labor vs. capitalists. When the Republicans took control of the dumbasses the result was mean fascism (which is EXACTLY what the majority wanted, but they wanted the meanness directed only at “those people”, not themselves. Stupid dumbasses got exactly what they deserved).

      Gee, what a surprise. Do the intellectuals have any ideas how to keep dumbasses from voting like – well – dumbasses?

  14. Paul Tioxon

    Marx was a systematic thinker, like all good philosophers. His economics has a starting point, sociological analysis. The stages of history. But he did not believe we have begun history, that we were in pre-history. We had not yet consciously begun to make the choices that decide our future but rather were subjugated by kings and high priests. Out side of the royal halls, we were used as instruments of another. We did not plan, we were planned for. We did not deliberate, but accepted orders and force of violence to build the dreams of others. Only a social order consciously organized to carry out the will of the people, who collectively make decisions, make history. Today, we helplessly observe our own predicament, our own powerlessness. In that regard we have made progress. We no longer are blinded by false consciousness. Our critical capacity can see the oligarchic structure, the finance sector, along with the military industrial complex hold sway, beyond the law, beyond the ballot box, but invisible to the analysis such as we read on NC. That at least is a start. As for the opinions here as to what is or is not Marxism, who has studied it at the university level in any capacity taught by anyone who studied Marxist economics or philosophy? No one. If there is a Marxist economist tenured in the United States that teaches the subject, let me know.

    1. Dude

      Dude, just google for marxist economists in the US. There are a bunch at UMass Amherst.

    2. psychohistorian

      I don’t think we have to study Marx to figure out what to do next. If We the people are going to take the government back over from the existing sociopaths then Congress is the first target.

      The happens to be a well intentioned person that is leading an effort to do just that. His name is Lawrence Lessig and his organization is Fix Congress First located here:

      Who knows what is going to work but it is good to see folks trying. Just like it is great to experience an Yves rant to power which we just wished everyone would read and appreciate.

      To the ramparts of our class struggle everyone!

      1. NOTaREALmerican

        Re: To the ramparts of our class struggle everyone!

        I’ll wait for you. I’m thinkin the bucolic limousine liberal college town I live in doesn’t really want class struggle. They love living off the state. I know I do. 2Big2Fail Zombie bank socialism for the masses!!

    3. Ben Allen

      Robin Hahnel teaches at American University

      Rick Wolff (a regular contributor for Monthly Review) teaches at UMass Amherst

  15. dave

    The cartoon is really fun, but at the conclusion its a dud. It is nice to see him be honest in saying, “I don’t have the answers,” but that is were the stops being useful. I already knew about most of the problems he spends 90% of the video talking about. Identifying problems, especially with hindsight, is easy. Coming up with policy solutions going forward is hard. Other then name dropping Keynes and Marx he didn’t do anything in this regard.

    So far the only serious policy suggestions I’ve seen is the MMT believe you can print your way to prosperity and the Austrian liquidationist theory. Both will never be implemented for political reasons. The MMT method will fail because politicians won’t know where to stop or how to spend stimulus money effectively. The liquidationist theory will never work because no politician who promotes it will survive and election.

    If he’s adding some third policy prescription I’d like to here it.

    We all know where this is heading. Muddling through with large but ineffective deficits that the chattering classes debate the size of endlessly while politicians ignore the subtlety of that debate completely because all they care about is elections and power. Bouts of deflation and inflation as the value of money fluctuates with political winds and the Fed is constantly behind a curve they have shown they don’t understand. Stagnant or negative growth in the real economy for at least a decade.

    Here’s hoping someone out there invents some amazing new energy source to bail us out of our own stupidity for awhile.

    1. Toby


      don’t be so harsh on those who admit they don’t have the answers. Welcome them, thank them for their honesty. Do you believe any politician, or anyone for that matter, who says they have the answers? It’s a cliche, but getting out of this mess is up to us, not some some charismatic leader selling snake oil. Finding the ‘best’ way forward will take open and honest discussion and participation from all of us, which includes a readiness to be wrong and not caring who is ‘right.’ We have to grow up and stop expecting mummy and daddy to fix everything, then blaming them when things go wrong.

      The engery sources are all there: wind, solar, geothermal, wave, tidal, hydro, biomass, only the will is lacking. Even the necessary technologies exist. Energy is not the problem, our culture is.

      MMT offers some very useful insights, but does not go deep enough in my view, and you mention one of its problems. Try Bernard Lietaer and Charles Eisenstein. Also, a little booklet called The Ecology of Money should be read by everyone. It’s reform and revolution we need, and the above mentioned are showing us where we need to start looking. Also, educational reform as described by John Holt, John Taylor Gatto and Sir Ken Robinson is going to be vital.

      1. dave

        I’m not expecting someone to come along with a magic solution. I’m saying that three years into the crisis we don’t need any “calls for debate”. The debate has already started and we need to start coming up with solutions. Like I said, all he presents in a review of facts we already know. He hasn’t added to the debate at all.

  16. Toby


    I’ve only read a few comments so far (and have not read Marx at all) but I don’t think this warm reception to a great cartoon-essay from a Marxist would have been possible even a year ago. The times really are changing.

    Let me take this opportunity on such a radical thread to recommend Bernard Lietaer and Charles Eisenstein (The Ascent of Humanity) yet again. We have a systemic crisis and need radical systemic analysis, which both people offer, to have any chance of establishing a sustainable socioeconomics going forward.

    And, for the very radical, check out post-scarcity and resource-based economics. In my view, some mix of deep monetary reform (with an eye to post-scarcity), deep educational revolution, plus an embrace of the benefits of technology in terms of automation and reducing the work week, is the best way forward. Certainly better than fascism and maintaining this tottering, poison-spewing monolith any longer.

    (Amazing, I watched the cartoon just last night, and find it linked to on NC! Well done Yves. Peolpe like you are pushing the debate forward. People like me are very grateful indeed!)

  17. J

    Yes, we agree to disagree.To point a finger at Capitalism as premises to all evils is coming into vogue.The mechanized Aristotelian, static machine age Capitalism that is.It is roped,framed and blamed.Never mind that natural and fluid capital formations existed forever with human endeavor.Upon stealing the productive added value of the post war boomer generation,Marxist babblers as Harvey are crawling out of the woodwork.
    Just another cynical excursion into the vast fields of social engineering and chicanery.An appealing bait for the sheared sheeple.How timely,how useful!
    Thesis-Antithesis-Synthesis.We rule!

    1. NOTaREALmerican

      Re: An appealing bait for the sheared sheeple.How timely,how useful!

      And how necessary. History is just the dumbasses peasants getting screwed by the nobility. Usually with enthusiastic cheering by other peasants. Humans are scum, which is why capitalism resulting in fascism resulting in glorious wars is the only history possible. (And, without war how would the males create stories of their greatness to be passed to their dumbass children to prepare them for continued greatness).

  18. purple

    Still capitalism has shown the ability to rejuvenate itself, although far too often this has included war. There are a number of technologies brewing that could open up a whole phase of growth, they just aren’t profitable now.

    The long-term question for capitalism is how to achieve growth in a world of stagnant population, or population decline. This will be a major question starting mid century, as India’s working age population peaks. China’s will already be falling, of course.

    1. Skippy

      Having to wait till the answer is_*profitable*_, has to be the most idiotic corner mankind has subjected him self too!

      1. NOTaREALmerican

        “Profit” is best because it’s an unambiguous measurement usable by sociopaths. And, as sociopaths always win – regardless of the “ism” or the time in history – what OTHER measure could there be? It doesn’t need emotions or judgment. It’s perfect.

  19. Expat

    Confusing Marxism with Stalinism is like calling America a free-market democracy. Marxism is a social philosophy shrouded in economic garb to create an aura of scientific respectability. The pure form is a beautiful thing, like Christianity as presented by the lighter aspects of the New Testament (Love each other, Do unto others, Be kind, etc.).

    The principal advantage of capitalism over Marxism is its essential appeal to the basic individualist, survivalist instinct in most of us. A Marxist state can be created on a small scale; think of families, tribes, or communes. But, ironically, it fails at large scale and in industrial societies because too many people are not Marxist and will pervert the utopia. If Marxism (or communism writ large) is associated with authoritarian regimes, it is because most people refuse its basic tenets.

    What, then, of neo-capitalism? Is America a quasi-fascist state because of the inherent failings of capitilism in the sense that many people don’t like what it is, does, or achieves?

    I don’t argue in favor of Marxism since it goes against the nature of man. I also don’t argue in favor of pure capitalism since it goes too far in promoting the worst of man’s nature.

    Like Harvey, I have no answers.

    1. Toby


      If, when you say Marxism, you mean egalitarianism, it does not go against “the nature of man.” We humans lived in egalitarian societies for the vast majority of our time on Earth. That says something. I don’t know enough about Marx to offer an opinion on Marxism specifically, but ‘human nature’ appears to be flexible enough to live in rigid hierarchies and in flexible, semi-anarchic arrangements, and other systems too I’m sure. Our current inflexibility is cultural/institutional, not strictly biological or genetic, much as I hate to couch things in such Cartesian terms.

      The question is, do we want to achieve a sustainable socioeconomic relationship with our environment, or don’t we? Do we want to make it or not? If we do, then perhaps radical rethinking is called for. Let’s not be too attached to Capitalism or Marxism or Humans-Are-Bad, let’s be unprejudiced about this and consider what sorts of things need to be looked at. There’s no perfection to be achieved, no Utopia to reach, but there are things we can address:

      The Nation State

      These (and others I’m sure) need to be looked at afresh, as openly as we can manage. I doubt very much that carrying on as we are is going to cut it, if long term survival is what we’re after. Something that deeply troubles me, for example, is how long term thinking and capitalism seem to be mutually exclusive. Capitalism seems to want The Invisible Hand to take care of sustainability. That approach doesn’t appear to be working; look at oil, the Gulf of Mexico, education, top soil, water and air quality etc.

      Finally, there are never ‘answers’, just ever-transitional ‘solutions’ towards subsequent emergent transitional ‘solutions’. That’s how I see it anyway.

      1. Expat

        Marxism is not egalitarian. Marx wrote “From each according to his ability, to each according to his needs”, thereby acknowledging that people are different, with different skills and requirements. A diabetic brain surgeon would get food and insulin as well as adequate rest to insure his hands are steady and his mind relaxed. A parapalegic mailman would get food and a wheelchair with saddlebags to carry his letters.

        I don’t know of many (any examples) of egalitarian societies or social structures in our short history. Tribalism is hierarchical with often strict division of labor and privilege.

        As far as “wanting to make it or not”, I don’t think most people (yes, yes, I am a confirmed Hobbesian and a terrible snob) can appreciate the consquences of their daily decisions. Jared Diamond asked the question in “Collapse”: What went through the mind of the Easter Islander who chopped down the last tree? A more useful question is: What was going through the minds of all those who chopped down any tree prior to the last one?

        As far as human’s adaptability to various political and social structures, this is undeniable, but it does not address the question of what conditions humans prefer. I would prefer to not be locked up in a US maximum security prison, but I would accept that over death (I might regret those words after the first week of being someone’s “bitch”)

        History is primarily the story of success. The losers are forgotten or discounted. So, yes, we will find solutions and transitions. We will muddle through, but the “we” is collective, not individual.

        1. Toby

          Need egalitarianism mean that no differences are permitted? The famous quote you cite does not preclude egalitarianism, which is not about uniformity at all. Indeed, the more power the upper echelons of rigid hierarchies accrue, the more uniform become the great unwashed at the bottom of the pyramid. Diversity is the spice of life, no? The more flexible the social system, the more diversity it allows.

          Egalitarian societies have indeed existed and do exist, according to the bits and pieces I have picked up about them from Christopher Boehm, Marshall Sahlins and Charles Eisenstein (and others, but I forget their names — ah yes, Kropotkin). A couple of tribe names stick in my head: !Kung and Piraha. Boehm calls hunter-gatherer societies inverse hierarhies, because the hoi polloi prevent alphas from gaining dominance. As for division of labour, your point is only partially correct. It really took of post-farming, and post-farming represents a short period of our time on Earth.

          We prefer what we are used to, generally speaking. What is healthy for humanity and environment simultaneously is probably more important in the long run, though. And I hope you never have to be someone’s bitch. And, what’s so bad about death? I think we have to embrace it to properly embrace life. There’s too much fear in our lives, and that’s one of our deeper problems.

          Evolution is the story of success. 99% of all species that ever lived are now exinct. Homo sapiens sapiens may well soon be one of history’s losers, unless we work out how to live sustainably. This only matters to humans of course, but that’s good enough for me! I love life, and still find us a fascinating beast. We can experience great joy and are very creative. Those two things alone are worth fighting for.

          Oh, and Hobbes was wrong. Most definitely wrong.

  20. liberal

    Yves Smith wrote, By contrast, neoclassical economics, which has dominated policymaking in advanced economies, posits that economies have a propensity to equilibrium…

    Yes, but why? My impression is that perhaps it went that way because they needed “equilibrium” for technical reasons—to be able to use mathematics in the way they wanted to.

    For example, there’s all this talk about “the Marginal Revolution,” but how it it that it’s not just an attempt to shoehorn the study of economics into elementary differential calculus? (Certain marginal arguments, like the notion that workers are paid by a firm according to their marginal contributions, are preposterous.)

    1. NOTaREALmerican

      Re: equilibrium

      If you simply substitute “equilibrium” with “equilibrium in the absence of sociopaths” it makes perfect sense. Intellectuals can never admit there are sociopaths or that most of the semi-psychic human dumbass believe almost any goofy-ass thing the sociopaths tell them. This is why most intellectuals can’t comprehend the world we live in now. It has nothing to do with economics; it’s the difficulty of admitting that the guy in the mirror isn’t really all that nice – and neither are his relatives, friends, and neighbors.

      Economics is all fantasy unless it can account for human sleaze.

  21. Steve Roberts

    Pretty much everyone can understand that the greater risk you take, the greater the upside and greater the downside. We can see it in every part of society. Small business owners take FAR more risk than an engineer working for GE but they do so to attain a better reward at the risk of losing it all. Happens in the stock market, banking and in our choice of education degrees. It’s all around us. The problem is that when we have success for most of the last 150 years it’s all well and good and assumed this is the way it should be. When we actually REALIZE the risk (a depression or recession) we blame the entire system and want to throw it out. All of a sudden capitalism is horrible and we must eliminate all risk.

  22. Zephyrum

    A thoroughly-enjoyable animation, though perhaps not a clear articulation of Marx’s beautiful insights regarding capital.

    In general, the problem with Marxist societies has always been there is no incentive to exert oneself, so people tend not to operate at their highest levels without the carrot of preferential treatment (or the stick of punishment.) The problem with capitalist systems is that people spy easy wealth lying just on the other side of some rule–what harm could arise from bending it, or having your congressman remove it? In either case corruption grows until the system fails and a reset of some sort becomes necessary.

  23. Bernard

    At least in what i gather, there seems to be a general perception that the Don’t Bees folks out number the Do Bees in our society. Marxism is bad Socialism is bad, Capitalism is Always GOOD!!!! the generalizations of ISMS. that PR game has been pumping out the Bad/Good labels for years.

    i know what i was told growing up. “good productive members” of Society were called Do BEEs when i was growing up. Bad member of Society were called Don’t BEEs. and Don’t be a Don’t Bee!, Do Be a Do Bee! Such simplifications make such simple isms. easy to brainwash kids that way.

    what amazes me most is the number of people who appear so righteously indignant at the prospect of “supporting the Don’t Bees.” the Welfare Queens as St. Ronnie of the Rich called them during his Reign. lol.

    there is this hallowed and unquestioned belief among the “elite” in our social contract that allows for the trashing of the “whole of society” when there are “bad Don’t Bees/Welfare Queens” who take advantage of the “benefits” of society, lol, that society has generated. It has turned into a “throw the baby out with the bathwater” idea as the only fix proposed.

    this “willing and appropriate” response to do away with “society as a whole” just so those “welfare Queens” are thwarted in their ability to “leech” off of society is all that matters. Along with “Government is bad, regulations hinder ability of Markets” bsing. all those PR memes for limiting actual responses and designed for the suppression of /or controlling of thinking. The “We know better” ideology, us vs. them divisiveness that works so well.

    We are led to sanction and endorse this “what a wonderful “choice” made by those” who decide such matters unto themselves and for us. the phrase, Render unto Caesar, comes to mind here. the rest of us who are not Caesar(s) watch what these decision makers do. The Decider, lol. The belief in the concept of the “pick yourself up by your own bootstraps” heralded by the St. Ronnie view of society, with no questions asked or allowed mentality.

    otherwise, we are subjected to these “decision makers” shrieking as loudly and as vehemently as possible whenever the “idea” of someone not “pulling their own weight” arises. the shrillness of these voices are meant not only to avoid any questioning/broaching the concept of their own infallibility, but to also manipulate so deftly the conversation so we can’t/don’t actually ask such questions in the first place. We must accept as “given” ideas as uncontrovertibly “true”as in, the “free market” and whatever else these “deciders” tell us to accept at face value. no questions allowed, once we enter such moral high grounds of those “high priests and rulers/owners of society.

    as someone who will never be rich nor has ever had that desire, the shrillness of the” St. Ronnie” view of capitalism is effectively outright “demagoguery.” What’s more apparent is the Decider’s unwillingness to admit in any reality they choose not to accept. i guess this unwillingness to accept a reality that goes counter to what they want “reality” to be versus the way we are is what really astounds me about the “St. Ronnie’s legions.” Heralding the “Faith Based” voters, who were part of the “St. Ronnie” Government. they were such good Believers in “unreality” as to be unquestionable. simple unable to answer questions as a matter of faith. This Faith precludes answering or questioning.

    of course, the old golden rule of “he who has the gold makes the rules” factors into all equations. something are just givens, no matter how much effort is spent on changing fundamentals. what i see here is the use of “shrillness” and “outright temper tantrums” to change/control the conversation/topic and “avoidance”, when the reality is still the same.
    that two or three year old knows how to “control” things via temper tantrums.
    or St. Ronnie’s reply of “there you go again” non reply.

    there has always been and always be the great scope of human beings, from the Welfare Queen to the Corporate Queen and all those in-between, where most of us are.

    the apparent unwillingness to live within this “large” (dare i say it, diversity, lol!) spectrum of human behavior lest an encouragement of such “unwanted behavior be “officially sanctioned.” in our society, the American myths of superiority, are first and foremost the standard bearers we are told to respect and obey. and suck on…

    only those invested in such a society will deign to uphold such outright intolerance. their payback is assured, others may not have such an interest or may actively work to counter such behavior.

    for me, that we consign those of “lesser” mien to “being left behind” is not the sign or type of society that is worth saving. nor will such a society survive such extreme behavior that undercuts the foundations it is premised upon. eventually the “outs” will outnumber the “ins” and the recipe for collapse is stirring.

    appears that cutting the last trees on Easter Island was the judgement of those in charge and also the actions of blatant stupidity. as we will never know why they cut all the trees down, it sounds like the master/slave. high priest/commoner relationship. Otherwise we have some really dumb idiots who believe that shooting themselves in the foot will help them run faster in the next race.

    and that is the same behavior of those enabling the Elites today. same results. that i would encourage, abet, or quietly honor such stupidity that comes from these “Elite” Decision makers, aka St. Ronnies’ values, would be a sign of an ignorance and stupidity i choose to have no part of. that they can force me to pay for these abhorrent actions through various coercive measures is a simple fact.

    i could never willingly endorse such stupidity/St. Ronnie’s thievery/, nor hold my tongue about the brazenness of such an implacable evil. there appears to be great numbers of people that do. the American Idiocracy. such is America since the use of propaganda , the “other” used so well by the Republicans during the last 30 to 40 years.

    such evil is protracted and insipidly entrenched in America today. A response to such an evil society by those called the “Welfare Queens” is a part of human nature. a form of theft from the Thieves. Now, that is really upsetting to the Elite group of Rulers/Thieves, for such forms of flattery are not all appreciated or welcomed. This is “Our Game.!” How dare they!, lol.

    what strange bedfellows Greed makes

  24. Jim

    AlanW and Richard Kline, although it maybe somewhat peripheral to your main discussion, I think the issue of knowledge workers, post-industrial professional classes, and modern intellectuals are of key importance in understanding the evolving structure of power in the U.S.

    It just may be that the old markers of class distinctions are indeed weakening and those with the necessary linguistic and intellectual capacties play a much more significant role in this modern-day structure of power than is ever admitted (since it is intellectuals who do most of the talking and writing and they, as a group, are definitely not interested categorizing themselves, in some sense, as part of the problem).

    Intellectuals, historically, never seek power in their own name and it might be valuable to look at this strategy more closely.

    1. AllanW

      Thanks for the suggestion Jim but I’d need a lot of convincing about your thesis. Feel free to do this outside this site though, if you want.

  25. Ben Allen

    Also, many of you seem to have never read Marx yet some on here repeatedly parrot the same anti-Marxist nonsense that get’s tossed around by conservatives and nonthinking people. All this talk about ‘Marx’s prescriptions for society’ are nonsense and a a dead give away to anyone who has read Marx that you have not read one iota of the primary source. Marx occasionally makes very general, nonprescriptive comments about what communist society would look like, but he never lays out in great detail what a communist society ought to look like, because doing so would contradict his own thesis: that working people should have the ability to design and control their world in a way that they see fit. In the introduction to Capital he specifically warns against “writing the recipes for the cookshops of the future.” The closest he ever comes to describing what communist society will look like is in Part One of the Critique of the Gotha Program.

    Also, lol at all of the people going “heh, Marxism, what about Stalin/Mao.” You are the same people who don’t bat an eye when 36 million people die every year from starvation under capitalism. Twentieth century socialism was indeed a failure, but all of mankind’s great undertakings have been preceded by multiple failed attempts. What is important is that people study why they failed and correct the mistakes, rather than simply dismissing the entire premise of a better planned, more economically just society.

    1. Progressive Ed

      I’ve read some Marx, but compared to his overall output, very little. Perhaps this is because throughout the world, wherever tyranny and the eliminations of individual liberty are present, more often than not, the government is “Marxist”.

      1. Ben Allen

        “Tyranny” and “Individual liberty”

        Sounds like you have been listening to your friends in the Tea Party. You are completely insane if you seriously believe that any historical revolutionary government, from the US to France to Russia to China, has been able to come into existence without the individual wills of singular actors acting in concert to form a revolutionary movement. I suggest you read the article “Farmers, Mao, & Discontent in China” by Dongping Han:


        Also, as stated in another post, Marx makes very few prescriptions of what a communist society looks like, yet you are still willing to sling the term Marxist around, while at the same time admitting you have not read much of the mans work. Which of course begs the question – what Marx have you read? Would you characterize our own current government as Jeffersonian or Madisonian?

        1. Progressive Ed

          Ben: Thanks for your comment to my post. The Communist Manifesto was about all I needed to know of Marx. I actually read it twice, not believing any rational adult could believe such nonsense could lead to anything beneficial. Yes, I know that real communism has never been tried, but Cuba seems to come pretty close, doesn’t it? Or maybe North Korea?

  26. Jim

    Ben, as a Marxist, how do you view the role of revolutionary intellectuals in the history of socialism?

    From my perspective intellectuals have tended to be a disaster for Marxism since the success of the Bolshevik revolution.

    Intellectuals often seem to be a social strata shopping for an historical agent to boost them into power in the name of the working class or the oppressed or whatever.

    In addition intellectuals seem quite partial to using the state as a vehicle for rising to power.

    1. NOTaREALmerican

      You mean the smartest amoral scumbags might be intellectuals too?

      Nooo. Say it ain’t so!

    2. Ben Allen

      Jim, thank you for your question. Often in this discussion, Westerners often discuss the cultural revolution in China and the relation of revolutionary forces such as the Red Guard to the so called intellectuals. This is done with a tone that leads a sympathetic tone to said intellectuals, and gives the role of oppressor to the Red Guards. However, I think that considering the fact that Deng Xiaoping, one of the targeted leaders in Mao’s “Bombard the Headquarters” campaign was successful in his coup de etat, thus instating a reactionary capitalist government, this suspicion of certain intellectuals is quite valid. On the other hand, there are so-called revolutionary intellectuals who are selfless and dedicated to serving the needs of a revolution; they have been present in every revolution, American, French, Russian, Chinese etc, and have been called upon by revolutionary leaders. So to stroke a broad brush over intellectuals as either revolutionary or reactionary seems silly.

      A revolutionary person, that is to say, any person who is committed to the cause of bettering the conditions for the totality of humanity by undertaking whatever actions that are necessary to give collective, democratic control over the means of producing wealth for society, more than they are committed to bettering themselves, must ask this question: where should these intellectuals stand in relation to other revolutionary forces? David Harvey, the fellow lecturing in the posted video, has said before that one of the things that we should learn from reading Marx is how technological conditions relate to social conditions, which means asking, what do the technological conditions of socialism look like and how can we build them? So to me, when I think of what it means to be an intellectual, it is to say someone with a grasp of reality that reflects technical knowledge of one or a variety of subjects that are not necessarily immediate in their life. The role of the intellectual in the revolution is to use his or her alleged fortunate physical endowment of above average brain power to understand the technical conditions necessary to allow the working class to have control over their own destiny. In Marxian language, this is to say, what kind of social relations enable the reproduction of useful labor, vis a vis satisfying the physical necessities of the laborer in such a way that will enable them to live what are seen to be meaningful lives, while at the same time removing the ability for capitalists to extract surplus value from the products of this labor. To someone who isn’t familiar with Marxian language this may seem like something for the dreamer, however, we can see what this means by reflecting on certain movements of the modern ‘left.’ Look at the focus of the current ‘green’ movement on alternative energy. Technologies like wind power and solar power appeal to us since we can see how they can close the gap on the profitability of energy distribution, and it offer us the ability to integrate such things as public domain. It’s for this same reason that we see the reluctance of the current owners of energy technology to invest their capital in these alternative structures. The forms of mass communication that have emerged since the 1990’s such as the internet and cell phones also are of interest, because we can see that they offer us nearly instant two- or multi- way communication, whereas the mass communication technology of the previous century consisted of a one way transmission of information in film, tv, and print, which of course was filled with the message of the state or our corporate sponsors. We can of course see this in the some called ‘twitter’ revolutions in Iran and elsewhere. Of course, centrist and liberal commentators laud the revolutionary actions of twittering Iranians because it makes them feel as if they were somehow part of the process because they are using “our” twitter technology, yet any mention of revolution using such methods in our own country is met with disdain by the same ilk. I even recall reading about some folks being arrested recently for organizing protestors in the US using twitter. So, to be concise, intellectuals can have a useful role in revolutionary movements, but in order for that role to be useful, they must abandon selfish interests and be disabled from muting the voices of workers.

  27. Conor

    Well, at least David Harvey admits that he doesn’t have a solution to this crisis… Because he doesn’t. Marxism certainly is not the answer, thank-you-very-much!!! (Proletariat of the dictatorship?) *puts finger down throat*

    Anyway, the “crisis” is nothing other than the second law of thermodynamics at work. We basically have two choices: Burn our candle at one end. Or burn our candle at both… Punto!!!

    1. Hannah Arendt

      Where all are guilty, no one is; confessions of collective guilt are the best possible safeguard against the discovery of culprits, and the very magnitude of the crime the best excuse for doing nothing.

    2. Ben Allen

      First of all, you have it backwards, it’s “dictatorship of the proletariat.” Secondly, what do you think this means? The meaning of the word dictatorship in this sense translates more accurately as “political control.” In essence, ‘dictatorship of the proletariat’ is nothing more than a restatement of the aim of the concept of democracy, i.e. the majority of people collectively deciding their own interests. Surprisingly the wikipedia article on the matter is good enough to explain the intricacies of this term: http://en.wikipedia.org/wiki/Dictatorship_of_the_proletariat

      In reference the the comment about entropy – this is complete and utter nonsense. The only reason you and I are typing at the moment is because our bodies are constantly expending the amount of energy necessary to prevent our own decay. You say we can only burn the candle at one end or the other, yet the rest of the organisms of the planet have been able to replicate their own existence without reducing the ability of the planet to reproduce its Net Primary Product: http://en.wikipedia.org/wiki/Primary_production. The question is how we can take the reigns of our own existence, and live in harmony with the planet. Quite frankly, if you have already given up on the ability to fix the problems of our planet, keep your finger down your throat, because you don’t have any business criticizing the people who are discussing how to fix the problems that plague us.

  28. Daniel

    I balked immediately when Harvey described the problems of the 70’s as “too much power in the hands of unions”. From my perspective growing up in a union dominated town in the 70s, it appeared to me the problem was an *abuse* of power by unions.

    Unions demanded wages far above reasonable in the area, medical care coverage far greater than that enjoyed by others and pensions that guaranteed prosperity long after their short working career.

    Looking at public unions today, it’s easy for me to believe the same thing is occurring there, as well.

    My opinion – he gets the source of the problem utterly wrong and that makes all his following observations garbage, though they may be true despite himself.

    1. Yves Smith Post author


      I don’t know what country you hail from, but in the US, the “unions were too powerful” meme is more than a bit of revisionist history.

      I graduated from Harvard Business School in 1981. I took courses that involved manufacturing process. I also grew up in paper mills town and my father ran the local mill, which was always unionized.

      My father was very much a right winger. I never once heard him say anything bad about unions. Similarly, at HBS, about 1/3 of the class had work experience in manufacturing setting. I never heard a single student or faculty member complain about unions.

      1. dave


        My grandfather was a union organizer, my father a teamster, and my mother was union shop steward in her school. The abusive practices of unions against management and their own members was readily apparent in our family, enough to make us doubt generations of union membership. Modern unions, especially the public sector ones, are slimeball organizations that don’t deserve your support.

        1. Yves Smith Post author


          I also have family members who belong to unions, as well as friends who come from union families (different ones than the ones my relatives are in). I’d take the papermakers side against Cerberus, which is running New Page, the company they formed to acquire Mead/WestVaco mills, any day.

          You make sweeping generalizations based on the conduct of one union that has been singled out as being particularly corrupt. Would you condemn the conduct of ALL companies based on BP and Monsanto? It’s the same pattern of thinking.

          Do you also condemn the AMA, state bar associations, and other professional groups? Those are also unions, tantamount to craft unions. They limit membership, charge dues, lobby, and are very successful in raising rates for their services.

  29. asim

    Marx was prescient in so many ways(fundamental/radical – you name it), that one really could feel at a loss reading the factually uninformed and decidedly hostile comments pertaining his analytical endeavor to come to terms with the unique social formation called capitalism. Just to give a hint to anyone who might be tempted to shed some preconceptions: Marx tried really hard to take capitalism/liberalism serious, discussing Adam Smith, Ricardo, Locke, Hume, Malthus, Hobbes et al at length. So much so that his publisher forced him to come up with DAS KAPITAL, or else.
    He did come up with a very sobering and concise theory of money(thin air, in contemporary parlance). Why do markets behave erratic (rather chaotic on a regular basis) instead of trending toward some nice pattern as envisioned in econometric modeling? – Try his critique of Say’s Law.

    Among one of many reasons that he could achieve that, was his carefulness to do his homework and even work out a theory of ideology (not to be confused with ‘The German Ideology’), to establish his writing in a framework, which shows self awareness to an extent, that makes him an postmodern writer avant la lettre.

    BTW., Marx is the first researcher to make good use of Darwin in identifying capitalisms propensity to innovate technologically at any cost.
    And importantly: Marx was definitely no shill.

    Regarding Harvey: you may check out his lecture at Cornell starting at 1:30 ;-

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