The Enigma of Capital and the Crises of Capitalism

The prevailing ideology of the modern west - which is political economy - is in the doghouse. Having failed to notice atmospheric pollution, the economists then frightened themselves with the sort of financial crisis they said they had abolished. In the wake of their disgrace, will the Marxists emerge from their cellars and bask in some sunshine?

Well, yes, sort of, maybe, perhaps, within limits, says the veteran English geographer David Harvey. In a sturdy and truculent book, Harvey calls for war on the bosses. "The capitalist class will never willingly surrender its power," he writes. "It will have to be dispossessed."

Harvey's Marxian language is as antiquated as heraldry, and there are such heraldic beasts here as "capital accumulation", "state-finance nexus" and "activity spheres". His chief interest, as one might expect from an urban geographer, is in cities. He argues that capital, in its
relentless need to invest its surpluses, gave us such forms of habitation as the Paris of Haussmann, the US suburbs of the 1950s and the vertical cities of the Pearl River Delta. "Is the urbanisation of China," he asks somewhat unnecessarily, "the primary stabiliser of global capitalism?"

His main argument is that capital, with its imperative requirement for a 3 per cent annual return (which is the return over the long run), exports itself and its crises all over the world, turning limits thought to be ultimate by our forefathers into riding-school jumps. In a vivid passage, Harvey sees capital swirling over ocean, plain and mountain like weather systems seen from space.

Having suppressed wages in the west, capital was confronted with a failure of demand, and so supplied it with securitised sub-prime credit to the poorest people, who, from 2007 on, defaulted in droves. Fortunately for the "Party of Wall Street" (it has long infiltrated government, so that the two are now indistinguishable), the capital destroyed was made good by the public, and so the whole process will continue until at least the next crisis.

Now that the societies of both east and west are driven by consumer fashion, such crises are ever more frequent. While an industrial behemoth such as US Steel can decline for more than a century, Bebo is worth $850m at bedtime and nothing at breakfast. What I missed, and not just in this book, is a philosophy of fashion. Kate Moss's "nothing tastes as good as skinny feels" only goes so far.

Like many modern Marxists, Harvey is so anxious not to underestimate his adversary that he ends up writing panegyric. We are invited to admire the flexibility of capital, its mobility and wide horizons, its miraculous power to increase population and sustain it.

He asks: "Can the capitalist class reproduce its power in the face of the raft of economic, social, political and geopolitical and environmental difficulties? Again, the answer is a resounding 'Yes it can.'"

My objection to capitalism - that it is making a slum of the planet - turns out to be mere sentiment. Nature, Harvey says, is an invention: "There is nothing unnatural about an ant hill, so there is, surely, nothing particularly unnatural about New York City." ("The state of nature," wrote Adam Ferguson contra Rousseau and Adam Smith, "is here, and it matters not whether we are understood to speak in the island of Great Britain, at the Cape of Good Hope or the Straits of Magellan.")

What about the moral squalor of capitalism? What about its worthless arts and letters? What about the epic struggle of the classes? Class for Harvey, is "a role, not a label", which I guess lets Guy Ritchie off the hook.

The factory working class of Marx has disintegrated, while the capitalist class itself undergoes "revolution after revolution". "In 500 years," David Hume wrote, "the posterity of those now in the coaches, and those upon the boxes, will probably have changed places." Now it happens in the rush hour. Reading those passages in Harvey, it struck me that once you dispense with Marx's class conflict, you are left with nothing, except the old boy's bad literary style.

Nonetheless, Harvey makes his call to arms. Against the Party of Wall Street, he assembles his "activity spheres", which turns out to be the usual coalition of workers, gay people, nature lovers and the poor. The "alienated and the discontented" ally with the "deprived and dispossessed". Lloyd "God's Work" Blankfein, you have been warned! Which reminds me - Harvey fails to mention the "activity sphere" from which came the revolution in Iran in the winter of 1978-79. There is nothing here about religion.

My belief, for what it is worth, is that city dwellers cannot understand the world. Insulated from reality by complex and expert systems of provision and police, baffled by fashion and spectacle, city dwellers can distinguish neither the sources of their existence nor the consequences. How much the less, it follows, can an urban geographer.

The Enigma of Capital and the Crises of Capitalism
David Harvey
Profile Books, 256pp, £14.99

James Buchan's latest novel is "The Gate of Air", published by MacLehose Press (£7.99)