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The Enigma of Capital: and the Crises of Capitalism Paperback – Aug 23 2011
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"The narrative delineates with admirable clarity the arcane details of the current financial crisis, while rehearsing the rise of capitalism as a historically specific 'process' plagued by fundamental dilemmas."--Publishers Weekly
"A lucid and penetrating account of how the power of capital shapes our world."--Andrew Gamble, Independent
"Elegant... entertainingly swashbuckling... Harvey's analysis is interesting not only for the breadth of his scholarship but his recognition of the system's strengths."--John Gapper, Financial Times
"Brisk and persuasive... Looking at the Unites States, it is hard to see anything as Benign as the New Deal coming out of the present situation. If it does, it will probably owe a good deal to David Harvey's students."--The Literary Review
"[T]he recent near-collapse of the global economic system has added new plausibility to Marxist analysis, and David Harvey is certainly its most elegant and persuasive spokesperson . . . Harvey's [The Enigma of Capital] reminds us of the fundamental instability of the capitalist system, despite its remarkable innovations."--Tikkun
--This text refers to the Hardcover edition.
About the Author
David Harvey is Distinguished Professor of Anthropology at the Graduate Center of the City University of New York. He is among the top twenty most cited authors in the humanities and is the world's most cited academic geographer. His books include The Limits to Capital, Social Justice and the City, and The Condition of Postmodernity, among many others.
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Top Customer Reviews
Using clear, concise, and riveting language, he explains and explores the most important (and dangerous) challenges of our time, namely the mechanisms of late capitalism.
I wish everyone interested in how the world and its power systems work, and anyone wondering how and why the great recession occurred, should read this book.
Most Helpful Customer Reviews on Amazon.com (beta)
The book focuses on analyzing capitalism as it presents itself now - there is not much political commentary in terms of opposition to capitalism, except for some general comments at the end. This avoids, as too many Marxist economic books do, the question of realistic alternatives. It also does not pay particular attention to the 'prehistory' of capital. But both of these are very irrelevant objections, as the virtue of this book is not to be yet another rehash of things that have been done very well by others already. Its virtue is in integrating the analysis of space, crisis, and capital into a work for a general public that is hostile to Marxist terminology and skeptical about economists in general (both probably with good reason). For that reason alone, this book comes with warm recommendation - even more when combined with his other recent major works, "The Limits to Capital" (The Limits to Capital (New and updated edition)) which works at a more in-depth theoretical level, and his companion to Marx's Capital (A Companion to Marx's Capital).
I was particularly impressed with the final chapter, as anyone with such a cogent criticism must be able to imagine a better world. Harvey answers the eternal question "What is to be done?" with a pragmatic and undogmatic response that recognizes the variability that necessitate a multi-pronged approach to moving to a post-capitalistic world that looks to the future and not the past. I am still pessimistic about the short term future, but it is hard to have too much pessimism when there are talented individuals like David Harvey out in the world teaching and writing - I just hope more people start listening.
Harvey uses the first chapter to explore the facts building up to the current crisis, starting with the displacement of Keynesian economics by neoliberalism during the 1970s and progressing to the growth of the financials-based capitalist economy of today. He looks at a few smaller crises that arose along the way, including the Arab Oil Crisis in 1973, the New York City bankruptcy, problems in Japan, Norway and south-east Asia, and the U.S. savings and loan crisis. He also looks at various small scale attempts at correcting the current crisis, many of which were failures in and of themselves. Upon examining these issues, he writes "there is, we have to conclude, some inherent connectivity at work here that requires careful reconstruction." (Location 150). Harvey also explains the underlying principles of neoliberalism, which he describes as a "class project" that served to centralize wealth and power in the hands of elites by spreading "rhetoric about individual freedom, liberty, personal responsibility and the virtues of privatization, the free market and free trade" (Location 161). The results of this "class project" included a strengthening of the notion that banks need to be protected at all costs, a loosening of governmental regulations meant to protect society from capitalist abuses, the weakening of workers' rights, and a growing global economy through laissez-faire economics. It is these factors, according to Harvey, that started the world on the path of a growing wealth inequality between the social classes.
In the second chapter Harvey explains the nature of capitalism, focusing primarily on it as a system of capital flow, but looking also at how it operates within and upon society and the social order. He points to its origin as a means by which money is sent in search of more money, which in the beginning was through the power of production. The continuing profits allowed for reinvestment, which is viewed by economists as a requirement for competitive reasons. This reinvestment allowed capitalists to `grow' their business in order to stay competitive, all the while creating new (though not always good) opportunities for a growing and willing labor supply. Chapter 2 also looks at the beginning of a "state-finance nexus", a system that ties together politics and economics due to the controlling influence of the bourgeoisie class on the government. This change gave the growing capitalist class greater opportunities to build wealth through the "dispossession and destruction of pre-capitalist forms of social provision" (Location 675). Harvey then points to the growing elite financial class that was able to gain control over producers, merchants, landholders, developers, wage laborers and consumers" through the growing credit system (Location 735). Capitalism, it seems, needed capital to gain more capital, something those with the greatest wealth took advantage of early on through lending and debt creation. The new paradigm put money at center stage in the commodities market.
In chapters 3 through 5, Harvey looks primarily at how the flow of capital has affected society through the creation of an economic system which attempts to balance the surpluses within the capitalist system. He also defines seven activity spheres capable of creating barriers that capitalism must overcome in order to continue its minimum 3% growth. These include; 1) technologies and organizational forms, 2) social relations, 3) institutional and administrative arrangements, 4) production and labor processes, 5) relations to nature, 6) the reproduction of daily life and of the species, and 7) mental conceptions of the world (Location 1825). In overcoming one barrier as it is met, new barriers often arise in other areas. Harvey says this occurs because "the relations between the spheres are not causal but dialectically interwoven through the circulation and accumulation of capital" (Location 1915).
In chapters 6 and 7, Harvey looks at the role globalization has played in the history of capitalism, including the flow of capital across borders, the change in societies due to labor relations, the consumption and dispossession of natural resources, all through "creative destruction". He relates the effects of a growing financial capitalism throughout this process, including the notion of spreading risk as well as opportunity, and the idea of a global community ripe for the picking. Harvey points out that global capitalism has its internal problems as well. One is brought about by the disconnection between individual financial players, which he sees as a likely catalyst to the current crisis - the "radical disjuncture in time-space configurations" that made it difficult for financiers to fully see what their investors/traders were doing (Location 2840).
In his final chapter, Harvey reminds us that "at times of crisis, the irrationality of capitalism becomes plain to see" (Location 3246). It is here that he asks if capitalism can, or even should, survive, and if so, what needs to change and who should initiate that change. The increasing political unrest around the world would be too costly and dangerous for the capitalist class to fight with armies and violence - but because it is unlikely elites would be willing to change (the thrill of the profits game is so tightly woven to their way of life) it is more likely that they will use their current political power to keep the masses under control. These capitalist elites will push for the status quo option, continue to exert their power over the government to keep trade unregulated, thus ensuring that any change would bring little or no negative affect on their profit-seeking abilities. And what of those that have been so drained of wealth during the last thirty years of neoliberal policy? The lack of any clear leadership or vision will surely diminish their ability to push for change that ensures some kind of fairness and equality.
In summation, Harvey's analysis of the current economic crisis is well written and easily understood, and his explanation of capitalism is helpful to those less knowledgeable of the subject. His use of Marxist theory serves to challenge readers to look at the current crisis from a different angle, and helps to show the reader how thirty-plus years of neoliberalism has changed our mental conception of the world - from one that placed value on the hard work of laborers to one that places the value of money above that of the individual. But the use of Marxist theory could possibly scare away those individuals who might benefit most from the information Harvey wants to share - working and middle class citizens raised during the era of the `communist menace'- those hard-working citizens whose mental conception of the world includes a strong aversion to all things Marxist due to thirty plus years of neoliberal propaganda.
Harvey leaves the reader with no real solution, but instead leaves the reader thinking about the possibilities for change. That leaves us with what looks to be a long and difficult debate - should we retain capitalism as our economic driving force? Should the masses dispossess the wealth the capitalist elites have worked so long to accumulate? Harvey writes of the "moral hazard" prevalent in modern capitalism as a major factor in the current economic crisis - the same factor that was taken into account after the U.S. stock market crash of 1929 - the same factor that brought the systems of socialism and communism into fruition at the end of the robber-baron era. But those systems proved weaker than capitalism and according to Harvey should not be re-visited. So where do we go?
Based on my interpretation of Harvey's Enigma of Capital: And the Crises of Capitalism, the ugly head we have seen over the last few years wears the mask of this "moral hazard". The desire of capitalist elites to achieve greater wealth no matter what the cost to society, be it people's homes or jobs, people's present or future ability to provide for their needs, this desire has played the major role in the creation of this crisis. To bring real change will require a major change in society's mental conception of the world, something the ugly head is already beginning to bring, and once that change happens can we begin the debate as to which direction will lead us to prosperity. Only then then will we be able to remove the mask and see the true face of capitalism, not just the enigma.
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