David Harvey's "The Limits of Capital" (Book Note)

 

 

The essence of David Harvey's book lies in its exploration of the limits, contradictions, crisis tendencies, and irrationality inherent within capitalism. Grounded in a meticulous analysis of Marx's writings, Harvey's mastery of the original texts is commendable, offering readers a profound understanding of Marx's arguments. Harvey's writing is clear and engaging, effectively conveying his views while navigating through conflicting interpretations of Marx's work. He fearlessly critiques Marx's analyses where he perceives shortcomings, thus initiating an inquiry into the boundaries of Marxian thought.

 

The initial seven chapters of the book constitute a meticulous examination of Marx's theory, culminating in what Harvey describes as a "first cut" theory of capitalist crisis rooted in the contradictory nature of capitalist production, particularly influenced by Marx's notion of the falling rate of profit. Harvey skillfully addresses various critiques of Marx, illustrating the depth and nuance of Marx's work and refuting claims of technological determinism by emphasizing the social dimensions of Marx's analysis. However, Harvey is not merely a blind adherent to Marx; he adeptly critiques Marx's own limitations, notably regarding the transformation problem and the concept of the falling rate of profit. Harvey resolves some of these issues, particularly by reconciling the differing notions of accumulation presented in different volumes of Capital. He argues that the credit system serves as a mechanism to standardize turnover times of capital, with the rate of interest acting as a common basis.

 

Chapter One sets the stage by delving into the foundational concepts of Marxian analysis, with a particular emphasis on the labor theory of value, class relations, and principles of accumulation central to capitalism. Harvey adeptly elucidates these concepts, steering clear of the intricate debates often found in Marxist literature, such as the transformation problem. Throughout the book, the issue of value remains prominent, informing various aspects of Harvey's examination.

 

Chapter Two shifts focus to the structure of production and distribution, particularly highlighting the nature of wage labor. Subsequently, the consumption sphere takes center stage in Chapter Three, where Harvey endeavors to integrate Keynesian and Kaleckian theories with Marxian analysis, albeit with some divergence in thought.

 

Chapters Four and Five delve into the dynamics of technological change, the labor process, and the organization of capitalist production. Harvey contends that technology is not an autonomous force but rather a tool shaped by class relations to sustain labor productivity and drive capital accumulation. He elucidates how technological advancements reflect and perpetuate class antagonisms, ultimately leading to the domination of labor in service of capital accumulation.

 

By the end of Chapter Four, Harvey lays the groundwork for a Marxian theory of the capitalist labor process, emphasizing the pervasive influence of class domination throughout production. He highlights the de-skilling of labor and the intensification of exploitation as manifestations of capitalism's imperative for accumulation.

Chapter Five of the book stands out as an exemplary exploration of the inherent tensions within capitalism, particularly regarding its structuring around principles of market decentralization. David Harvey adeptly captures the ongoing struggle between decentralization and centralization within the capitalist framework, going beyond the surface-level behaviors of individual enterprises to unveil the conscious design underlying capitalism's organization. In doing so, Harvey's analysis aligns with contemporary efforts, such as those by Piore and others, to comprehend the formal organization of alternative market exchange regimes.

 

Harvey portrays capitalism not as a natural or inevitable phenomenon but rather as a deliberately crafted system governed by rules and procedures. Throughout the book, his aim is to unravel the tensions and contradictions inherent in capitalism, a task formalized in Chapters Six and Seven, which focus on accumulation, reproduction, and crisis. Here, labor's relationship with capital and the overarching structure of capitalism take center stage, revealing how the seemingly rational behavior of individual capitalists can pose existential threats to the entire system.

 

Harvey's "first-cut" theory of crisis revolves around the falling rate of profit, over-accumulation, and the devaluation of capital.

 

Harvey suggests that the focus on the falling rate of profit somewhat obscures the fundamental insight of Capital: the perpetual disequilibrium between productive forces and social relations under capitalism. By the end of the initial section, readers are treated to a clear and insightful introduction to Marxist theory, characterized by Harvey's constructive and candid approach.

 

In the subsequent chapters, Harvey endeavors to extend Marx's analysis into unfamiliar territories. He explores mechanisms that temporarily suppress the inherent tendency towards overaccumulation, such as the development of new circulatory forms and credit regulation, leading to what he terms a "second-cut" theory of capitalist crisis by chapter 10. This theory builds upon the initial framework rather than replacing it, emphasizing the moderating role of credit systems in mitigating the destabilizing effects of capitalist competition.

 

Harvey's second-cut crisis theory posits that while credit systems moderate crises stemming from unbridled competition, they introduce a new set of contradictions, particularly manifested in the antagonism between the financial system and its monetary base. The persistence of overaccumulation, fueled by the proliferation of "fictitious capital," tends to precipitate speculative bubbles and financial crises, necessitating increased state intervention. Consequently, crises transform from purely economic phenomena into political crises, as state involvement becomes crucial in managing financial instability.

 

The final three chapters of the book shift focus back to the built environment, introducing geography as a key element in Harvey's "third-cut" theory of crisis. This integration hinges on a particular conception of space, emphasizing its dynamic and context-dependent nature. Harvey's analysis foregrounds location as a central consideration, yet it remains deeply interconnected with previous discussions. For instance, his examination of capitalism's organization offers insights into the spatial arrangement of the economic system, while his analysis of the labor process lays the groundwork for exploring spatial divisions of labor. Throughout these chapters, Harvey's adept synthesis of economic and geographical perspectives enriches our understanding of capitalism's complexities and sheds light on the intricate interplay between space and socioeconomic dynamics.

Harvey expresses hope that the theoretical discussions presented within the text will not only enhance the study of history but also inform the formulation of political practices. Indeed, the book offers valuable insights that can be applied across various domains, as evidenced by the critical examination of capitalist production and its impact on housing, land speculation, and urban planning.

 

Harvey challenges conventional economic perspectives by shedding light on the inherent contradictions within capitalist housing relations. He argues that phenomena like land speculation and property boom-and-bust cycles are not aberrations but rather integral components of capitalist social relations. By contextualizing these dynamics within the broader framework of capitalist accumulation, Harvey provides a nuanced understanding of the interconnectedness between spatial configurations, financial speculation, and crisis formation.

 

Moreover, Harvey's analysis extends beyond housing to encompass broader discussions on differential rent, government intervention, and the evolving nature of capitalist institutions. He underscores the continuous transformation inherent in capitalist processes, cautioning against oversimplified comparisons that fail to capture the dynamic nature of social change.

 

One of the book's major achievements is its exploration of the contradictory unity of time and space in capitalist society. Harvey demonstrates how capitalist accumulation redefines temporal and geographical horizons, leading to both order and chaos. By highlighting the dialectical relationship between spatial organization and disorganization, Harvey emphasizes the centrality of space to social analysis while acknowledging its complex interplay with temporal dynamics.

 

Throughout his work, David Harvey presents Marx's ideas with a commanding authority, aiming to offer what he perceives as the most developed interpretation compared to previous attempts. However, there are some potential shortcomings in Harvey's approach that warrant consideration.

 

Firstly, Harvey's pursuit of a "correct" interpretation may inadvertently lead to a form of "originalism," wherein he seeks to uphold a definitive interpretation where none may truly exist. Interpretation, by its nature, is subjective and normative, shaped by evolving contexts and perspectives. While Harvey admirably navigates Marx's texts with depth and insight, it's essential to recognize the inherent limitations of attempting to pin down a single authoritative interpretation.

 

Secondly, Harvey's analysis of the state within capitalism appears somewhat conventional, emphasizing its functional role in ensuring the reproduction of capitalist relations. While he acknowledges the state's significance, his treatment may overlook its relative autonomy and the complexities of its actions beyond merely serving capitalist interests. This limited perspective on the state could benefit from further exploration to better understand its multifaceted role in society.

 

Thirdly, Harvey's treatment of time and space may be overly abstract, lacking sufficient integration of Marxist and Keynesian perspectives on economic cycles. By compartmentalizing short-run and long-run dynamics, Harvey risks overlooking the interconnectedness and fluidity of economic processes over time. Additionally, his conceptualization of space as primarily functional rather than inherently dynamic or relational may overlook its broader significance in shaping social and economic relations.