Apparently, only a few book-length Marxist works were published until now grappling with the current crisis: John Bellamy Foster and Fred Magdoff’s The Great Financial Crisis: Causes and Consequences (2009), Chris Harman’s Zombie Capitalism: Global Crisis and the Relevance of Marx (2009), and Alex Callinicos’s Bonfire of Illusions: The Twin Crises of the Liberal World (2010). David Harvey’s Enigma of Capital and the Crises of Capitalism (2011) is the most compelling and profound contribution in this area.
For over forty years, David Harvey has been one of the world’s most brilliant and trenchant critical analysts of capitalism. In The Enigma of Capital, this prominent Marxist scholar delivers an impassioned account of how unchecked neoliberalism produced the system-wide crisis that now engulfs the world.
Beginning in the 1970s, profitability pressures led the capitalist class in advanced countries to shift away from investment in industrial production at home toward the higher returns that financial products promised. Accompanying this was a shift towards privatization, an absolute decline in the bargaining power of labor, and the dispersion of production throughout the developing world. The decades-long and ongoing decline in wages that accompanied this turn produced a dilemma: how can goods–especially real estate–sell at the same rate as before if workers are making less in relative terms? The answer was a huge expansion of credit that fueled the explosive growth of both the financial industry and the real estate market. In The Limits to Capital (2006) Harvey explained that the credit system involves “the creation of what Marx calls “fictitious capital” – money that is thrown into circulation as capital without any material basis in commodities or productive activity’”. When one key market collapsed–real estate–the other one did as well, and social devastation resulted.
Harvey places today’s crisis in the broadest possible context: the historical development of global capitalism itself from the industrial era onward. Moving deftly between this history and the unfolding of the current crisis, he concentrates on how such crises both devastate workers and create openings for challenging the system’s legitimacy. The battle now will be between the still-powerful forces that want to reconstitute the system of yesterday and those that want to replace it with one that prizes social justice and economic equality.
Along with the reveling analysis and specific insights in the book, The Enigma of Capital could be viewed as is a confirming summary of Harvey’s lifetime scholarship, and an unfortunately reasonable sequel of his great and comprehensive work on neoliberalism — A Brief History of Neoliberalism. (Open access to Enigma of Capital‘s 5th chapter “Capital Evolves”)
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