This fall marks the 150th anniversary since the publication of Karl Marx’s Capital. In his groundbreaking series, Marx famously defined capital as value in motion, architecting an entire field of study for understanding economics, social relations, and the institutions structuring massive inequality. Set against the backdrop of Europe’s factory system and the relationship between capitalist and laborer, Marx’s ideas spawned revolution and tyrannical regime alike. In writing Capital, the theorist forever altered our perception toward the system’s volatile nature.
Though factories have mostly been replaced by markets, banking systems and credit, capital rules the world over. Following the rise of the international monetary system in the 1970s, interest-bearing capital was cemented as the driving force behind governments, markets, and industries. As capital has grown more powerful and unstable, expanding and plunging into crises when its inherent contradictions are realized, Marx’s theories are even more relevant today.
Navigating Marx in the age of Trump is social theorist David Harvey. A professor of anthropology at the Graduate Center of the City University of New York, Harvey pioneered modern geography as a discipline while putting Marx’s theories into contemporary context. His newest book, Marx, Capital, and the Madness of Economic Reason, examines Capital alongside recent advancements in technology and credit systems. To get an in-depth analysis on the state of global capitalism, we spoke with Harvey about populism, Goldman-Sachs, and Silicon Valley’s elite.
What can Karl Marx’s Capital teach us about contemporary capitalism?
One of the things that Marx emphasized was the idea of the internal contradictions of capital and its perpetuate instability. Conventional economists generally take a tendency towards equilibrium, but it sometimes goes wrong for some reason, whereas Marx thinks it never goes to equilibrium; it’s constantly churning away and making things difficult. It’s a good idea to read Marx because he’s got a good idea of the sorts of contradictions that lead into that kind of crisis.
Are there current symptoms pointing toward what the next crisis could be over within today’s system of global networks and derivatives when capital has become so complex?
One of the things I like about Marx, as opposed to the way in which sometimes people represent him, is that he’s very aware of the incredible flexibility of the capitalist system, that it can solve a problem here by creating a problem there and moving it around. It’s hard to make any general predictions, but I found it very interesting that a few weeks ago, Financial Times had five different articles, completely different sections of the paper, all of them saying the same thing, which was this whole level of global debt has clearly got out of control. They were particularly worried about the Chinese debt. I would go along with that, but whether we’re right or not, who knows?
Part of Madness discusses how debt went from millions to billions to trillions; one day it’s going to quadrillions. Does debt even mean something after a certain point when the numbers get so big?
It’s hard to get your head around what all those numbers what mean. One of the points that Marx makes is that the only form of capital that can increase without limit is money, and we seem to be increasing that by quantitative easing and money creation in the banks. At some point or other, there is this requirement that we somehow or other pay this debt off and that forecloses on our future. I think the different way in which different segments of society have their futures foreclosed on by the debt, students, for example, are a very good example of this. If you owe $100,000 and you come out with a degree, then how are you going to pay it off? It would be nice to say, “Well maybe it just disappears,” but for students it doesn’t disappear.
Do the rapid social changes happening in society right now have any bearing on the capitalist class struggle, or have we lost sight of the larger labor process?
I think there’s an indirect relation. More and more, I think we see labor processes that are very hard to consider as being meaningful. I’ve been introduced to steel workers and, okay, they felt exploited and they had problems, but they were proud of what they did and they had identity of some kind. Whereas now, people are not living very satisfying lives. I think that one of the things that’s happened is that we’ve got more and more evidence of alienation, alienation from the work process, from the troubles of daily life, alienation from politics. Alienated populations behave in rather disconcerting ways. They don’t necessarily go to the left or to the right, but they can start blaming other things, other people for their discontent. So I think the general condition right now is one where there’s a lot of alienation around. I think that that spills over into the instability in many other aspects of social life.
How did the underlying class struggles provide a framework for giving us populist and authoritarian figures from the bourgeoisie, specifically Donald Trump?
I don’t have a simple explanation for that except that there is this ideological configuration that when things go wrong, the question is, “Who’s to blame?” There is a great deal of scapegoating that goes on so that it’s very easy to blame immigrants, foreign competition, in other words you blame everything except the underlying problems of capital because that is something which is you’re allowed to talk about.
Why is that exactly?
I think there’s a long history of protectiveness by the capitalist class that has a great deal of power over the media and has a great deal of power over a lot of thinking in society. I can never understand why it is that you read Karl Marx and people get upset at you. There’s a deep rooted antagonism to Marx which is fueled in the literature by saying all kinds of crazy and outrageous things about him.
You write that traditional leftist movements have not always acknowledged the importance of strategic alliances within the framework of capital creation. What kind of alliances were you referencing specifically?
We are often anticapitalist. For example, the struggles against the price gouging that goes on in the pharmaceutical sector. This is the struggle which is not the classic work-based, factory-based labour struggle that the left is usually focused on. I think that putting those struggles together becomes significant. There’s often been a tendency on the left to downplay the social struggles in urban areas, against gentrification, against evictions, those sorts of struggles and say, “Well they’re secondary kinds of struggles.” I think they should be treated on an equal basis with the struggles that exist in in workplaces.
Viewing them within that framework isolates from the actual root cause of what’s making it happen.
I found it very interesting to think about the way Marx insisted that value was created in production and realized speculation in the market. A lot of appropriation of value, actually, comes in the marketing part of the game rather than in the production part of the game. If that appropriation becomes very significant, which I think it’s become even more significant in our times, then we should focus on that as being one of the major arenas of anti-capitalist struggle in marketing.
Can you elaborate on that?
When a hedge fund manager comes in and takes over a pharmaceutical company and changes the price of a pill from seven dollars to $750, then there’s a huge appropriation going from somebody. When George Soros bet against the value of the British pound in 1992, in seven days he earned over a billion dollars. There’s a lot of, I would call it robbery, going up, but it’s legal now. The point is that the system is structured now so that people can actually get a tremendous amount of money out of the system without really doing anything productive.
A significant number of Trump officials are tied to Goldman-Sachs, more so than any other presidential administration. What does it say about the state of contemporary capitalism when the people tasked with solving the problems are responsible for creating them?
Well, I think Goldman-Sachs eventually held down the position of the U.S. Treasury secretary since the Clinton years actually; there’s only a brief period when it wasn’t Goldman-Sachs. One of the things I am interested in thinking about is the way in which state and financial power coalesce to form what I call a state-finance nexus, which is extremely powerful and has a great deal of say in what shall or shall not happen. And I think that state-finance nexus is anchored partly by Goldman-Sachs and the bankers controlling the treasury, but in alliance with the Federal Reserve. So when you put the Federal Reserve plus the Treasury together, you get a pretty good idea of where that center line.
That type of nexus you described has always been around in American society from when the central banking system was first met with hostility by Jeffersonians, and later Jacksonians. Now, it’s perceived as custom.
The U.S. is rather late in formalizing. The Bank of England came about in 1694 and so state-finance is well entrenched in British politics and then on. There’s always been a somewhat unstable configuration in the United States; finally the Federal Reserve had to come in because the private banking sector couldn’t manage things on its own.
Jeff Bezos was just named the richest man in the world. Have we seen industrial capitalists dominate the bourgeoisie in the sense that the wealthiest people have new money that came under new distribution methods?
If you access borrowed money, you can start off and do anything, and Marx’s comment about that is that the bourgeoisie is never fixed under capitalism, it’s subject to perpetual renewal. And I think we have seen a renewal of who the bourgeoisie is, who the wealthiest people are and who the most powerful corporations were. In 1978, it would have been General Motors and U.S. Steel and the like. Now it’s Wal-Mart and Google and Facebook, which is a completely different configuration. I don’t see them as being industrious. I think they’re actually more like a frontier. They sit there and benefit from the way we use; Google collects all the information about us and what we’re doing and then sells that on to somebody. This is actually a very peculiar situation where we do the work, they extract the value and then use it to become some of the richest and most powerful corporations in the world.
Does a solution to the madness of economic reason lie inside or outside capitalist framework?
I think the situation we’re in right now is it’s got to be changed from the inside. There’s no way we can really go outside capitalism, but we’ve got to find ways on the inside which is why Marx’s analysis of contradictions becomes important. Those are the levers we can use to change things on the inside. So I don’t think, say, a revolution or something like that is going to save us from the problems of the world. We’ve got to really work at changing things on the inside.
Could that start with changing consumer behaviors?
Changing consumer expectations is the important bit. Getting people to see that the problems going on around us are not due to competition, but due to the incoherence of the way in which capitalism works. We can get people to concentrate on that rather than blame other issues- there are many areas that we need to work on either side. I don’t have a silver bullet theory which says, “Okay, just get this one and then everything changes.” I think you have to look at widespread changes across many aspects of social and political life to get people. One of the effects of the Trump presidency is that a lot of people are asking questions around the world. They’re saying, “This is not the way we want to be, so what do we change and how do we change it?” This is an open moment for a lot of people to think through real problems.
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