March 18, 2009
Reading Marx’s Capital with David Harvey is an example of an academic going online and engaging with contemporary issues. This is in the context of Harvey, a Marxist geographer, deciding to post his class lectures on his own website.This is a text that he has been teaching for 40 years and it informs his political economy understanding of the current global financial and economic crisis.
He says that what we are witnessing in the US is a massive consolidation of financial power in that the US will end up with four or five major banking institutions in the United States and nothing else. Harvey argues that the term ‘national bail-out’ means bailing out the banks, since the money goes to the banks, but not to the homeowners who’ve been foreclosed on. And the banks are using the money not to lend to anybody but to buy other banks. They are consolidating their power.
The analysis in the Why the U.S. Stimulus Package is Bound To Fail is Marxist, and it is grounded within a consideration of geopolitical shifts of power in an attempt to both imagine and map the changing landscape and scale of capital in our moment. The discussion focuses specifically on China as an emerging hegemonic power. In the post Harvey says:
Much is to be gained by viewing the contemporary crisis as a surface eruption generated out of deep tectonic shifts in the spatio-temporal disposition of capitalist development. The tectonic plates are now accelerating their motion and the likelihood of more frequent and more violent crises of the sort that have been occurring since 1980 or so will almost certainly increase. The manner, form, spatiality and time of these surface disruptions are almost impossible to predict, but that they will occur with greater frequency and depth is almost certain. The events of 2008 have therefore to be situated in the context of a deeper pattern.
He adds that the failure to understand the geographical dynamics of capitalism or to treat the geographical dimension as in some sense merely contingent or epiphenomenal, is to both lose the plot on how to understand capitalist uneven geographical development and to miss out on possibilities for constructing radical alternatives.The geographical dynamics refer to the the tectonic shift away from United States dominance and hegemony. Economic hegemony seems to be moving towards some constellation of powers in East Asia. Hegemonic shifts depend upon the emergence of some power economically able and politically and militarily willing to take on the role of global hegemon.
Harvey argument explores the way that the US is only able to implement a weak Keynesian program to deal with the recession whilst the Chinese are in a position to implement a fully fledged Keynesian programe. he adds:
The overall effect will be to accelerate the drift of wealth from West to East in the global economy and rapidly alter the balance of hegemonic economic power. The tectonic movement in the balance of global capitalist power will intensify with all manner of unpredictable political and economic ramifications in a world where the United States will no longer be in a dominant position even as it possesses significant power. The supreme irony, of course, is that the political and ideological barriers in the United States to any full-fledged Keynesian program will almost certainly hasten loss of US dominance in global affairs even as the elites of the world (including those in China) would wish to preserve that dominance for as long as possible.
He adds that the geographical unevenness coupled with fading US hegemony may well be the precursor to a break up of the global economy into regional hegemonic structures which could just as easily fiercely compete with each other as collaborate on who is to bear the brunt of long-lasting depression.
Harvey argues here that his concern is about, the likely uneven geographical impacts and responses to the crisis conditions. The export oriented development model that has dominated in East Asia is in deep trouble:
If the Chinese and other East Asian powers find themselves forced to abandon the Export-Industrialization model (which is now failing catastrophically) and to go to something like an Import-Substitution strategy (which was by no means as unsuccessful as it is usually depicted when practiced in the 1960s in Latin America) and a development of their internal markets (almost certainly coupled with internal repression of dissidence), then they will not have the money to lend to the US.
This entails this then entails a radical re-orientation of the Chinese economy towards the rest of the world.