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July 13, 2009
We are currently living through a crisis of capitalism in that capitalism is running into serious environmental constraints, as well as market constraints and profitability constraints. The 3 per cent growth rate that capitalism requires to reproduce itself is going to exert tremendous environmental costs as well as pressure on our social situations and institutions.
In an interview at Democracy Now David Harvey usefully addresses this idea of 'crisis'. Harvey, a Marxist geographer, says:
You know, crises are terribly important in the history of capitalism. They are what I would call the kind of irrational rationalizers of the system. What happens is that capitalism develops in a certain way, has real problems, then it goes into crisis, and it comes phoenix-like out of it in another form. We went through a long crisis in the 1970s. There was a long crisis in the 1930s. So a crisis, then, is a moment of reconfiguration of what capitalism is going to be about. And right now, as I’ve said, the powers that be are more about trying to reconstruct the pre-existing power structure or save the pre-existing power structure without intervening in it in any way.
It appears that the US is going to have to bear the brunt of this financial and economic crisis and its global role will be diminished. This would leave the US as one powerful region alongside many others (eg., south east Asia, structured around China?) and without the power it has exercised over the global economy. Regionalisation is one process that we may well see.
What else?
My response to the various sessions on the city at the The Adelaide Festival of Ideas, which were dominated by exploring the mitigation and adaptation to the effects of climate heating, is that urbanisation is another central process.
The last 30 years have witnessed an immense amount of the capital surplus has been absorbed into urbanisation: urban restructuring, expansion and speculation. Our cities are huge building sites for capitalist surplus absorption.
Since the gentrification process was a kind of reconstructing urban environments our cities are also sites for household debt (mortgage and credit card) that helped the property developers who are building the houses in the process of gentrification of the urban fabric. With the collapse of credit from the global financial crisis we are now experiencing asset devaluations with the losses of asset value with the collapse of credit.
How the city develops is largely determined by state governments, their development boards and the developers and the financiers. Most of us in the local community don’t really have a very strong say.
So there is a need for the democratization of the city, of city decision making so that we can all actually not only have access to what exists in the city, but also be able to reshape the city in a different image, in a different way, which is more socially just, more environmentally sustainable and so on.
We do need a new pattern of urbanisation--a more local one concerned with the development of productive systems such as solar power, to create more decentralised employment apparatuses and possibilities.
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It's not 1929 or 1991. It's a more globalised world. This time it's the same as before... but different...
QUOTE:
....because this economy fell off a cliff late last fall, they expect it to roar to life early next year. Hence the V shape.
Unfortunately, V-shapers are looking back at the wrong recessions. Focus on those that started with the bursting of a giant speculative bubble and you see slow recoveries. The reason is asset values at bottom are so low that investor confidence returns only gradually.
That's where the more sober U-shapers come in. They predict a more gradual recovery, as investors slowly tiptoe back into the market.
Personally, I don't buy into either camp. In a recession this deep, recovery doesn't depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery....
www.salon.com/opinion/feature/2009/07/13/reich_recovery/