World Development Report 2009: Reshaping Economic Geography. Washington, DC: The World Bank, 2009. xvii + 383 pp. $26 paperback.

Something ominous began to happen in 2006. The rate of foreclosures in low-income areas of older US cities began to increase. Officialdom and the media took very little notice because, as had happened many years before in the early stages of the HIV/AIDS pandemic, the communities affected were low-income, mainly African-American or immigrant (Hispanics), in cities like Cleveland and Detroit that were in any case already blighted and deteriorated. It was only in mid-2007, when the foreclosure wave had spread to white middle class areas as well as to the US South (Florida in particular) and Southwest (California), where new housing tract developments, often in peripheral areas, were becoming vulnerable, that officialdom started to take notice and the mainstream press began to comment. By the end of that year, nearly 2 million people had lost their homes and estimates began to emerge that another 4 or perhaps 6 million more might be lost before it was all over. By the autumn of 2008, the phenomenon of the ‘sub-prime mortgage crisis’ had led to the demise of all the major Wall Street Investment Banks, either through change of status or through forced mergers, and the outright bankruptcy of Lehman that triggered a worldwide collapse of confidence in financial institutions. The contagion then spread outwards from banking to the major holders of mortgage debt (Fannie Mae and Freddie Mac) along with insurance giants like AIG, before hitting the rest of the economy big- time towards the end of 2008. By early 2009 the export-led industrialization model that had generated such spectacular growth in East and Southeast Asia was contracting at an alarming rate; at the same time, many icons of American capitalism, such as General Motors, were moving closer to bankruptcy.

While many elements were involved in the crisis that has rocked the world over the last two years, it should be clear from this description that urban processes played a key role. The so-called sub-prime foreclosure crisis was in fact an urban crisis. If, therefore, the roots of the crisis lie in urban malformation then the solutions must also surely lie, in part if not in whole, in urban re-formations.

It was therefore with great anticipation that I turned to the 2009 World Development Report which seeks to investigate the relations between macro- economic growth and the reshaping of economic geography in general and regional development and urbanization in particular. The impulse behind this initiative to explore the ‘influence of geography on economic opportunity’ and to elevate ‘space and place from mere undercurrents in policy to a major focus’ (p. 3) seemed particularly praiseworthy given that the World Bank had for years not taken such questions seriously. It was only in 1999, at the World Bank Conference on Development, that Jeffrey Sachs and Paul Krugman debated, from very different perspectives, the question ‘Is Geography Destiny?’. I was not only curious as to where World Bank thinking was on this question: I also hoped for insights into the urban difficulties that now beset us and for coherent ideas on urban and regional development policies as to how to stem the bleeding and the losses (recently put at over US$ 50 trillion in asset values worldwide, with a US$ 11 trillion loss of asset values for US households in 2008 alone).

On this last question, the Report is, unfortunately, not only lamentably silent, but deeply complicit with the kinds of policies that got us into this mess. We are told (p. 206), without a hint of critical commentary, that:

Since the deregulation of financial systems in the second half of the 1980s, market-based housing financing has expanded rapidly. Residential mortgage markets are now equivalent to more than 40 percent of gross domestic product (GDP) in developed countries, but those in developing countries are much smaller, averaging less than 10 percent of GDP. The public role should be to stimulate well-regulated private involvement…. Establishing the legal foundations for simple, enforceable, and prudent mortgage contracts is a good start. When a country’s system is more developed and mature, the public sector can encourage a secondary mortgage market, develop financial innovations, and expand the securitization of mortgages. Occupant-owned housing, usually a household’s largest single asset by far, is important in wealth creation, social security and politics. People who own their house or who have secure tenure have a larger stake in their community and thus are more likely to lobby for less crime, stronger governance, and better local environmental conditions.

Now it might be plausible for the authors to maintain that they, along with everyone else (including Alan Greenspan), have been blindsided by recent events and that they could not be expected to have anticipated anything troubling about the rosy scenario they painted. In any case, by inserting the words ‘prudent’ and ‘well-regulated’ into the argument they had hedged themselves against potential criticism. But this excuse cannot possibly wash given their own curious way of mixing (as they do in this passage) the ideological nostrums of neoclassical theory (including the myth of home-ownership) with ‘prudently chosen’ historical evidence. Did they not notice that the crisis of capitalism that began in 1973 originated in a global property market crash that brought down several banks? Did they not notice that the end of the Japanese boom in 1990 corresponded to a collapse of land prices (still ongoing); that the Swedish banking system had to be nationalized in 1992 because of excesses in property markets; that one of the triggers for the collapse in East and Southeast Asia in 1997–8 was excessive urban development in Thailand; that the commercial property-led Savings and Loan Crisis of 1987–90 in the United States saw several hundred financial institutions go belly-up at the cost of some US$ 200 billion to the US taxpayers (a situation that so exercised William Isaacs, then Chairman of the Federal Deposit Insurance Corporation, that in 1987 he threatened the American Bankers Association with nationalization unless they mended their ways)? Where were the authors when all this was going on? There have been hundreds of financial crises since 1973 (compared to very few prior to that) and many of them have been property or urban development led. Something is going on here that requires careful analysis and attention. But this Report ignores this empirically obvious connection between urbanization and macro-economic development entirely.

Of course, the authors (all economists) could also claim that this sort of thing has nothing to do with their concept of what geography is and should be about. If so, then their conception of geography is radically different from mine and bears no relation to the work done by political-economic geographers over the last three decades.

So what, then, is their concept of economic geography all about? The basic idea is that proper spatial ordering can improve efficiency, lower transaction costs and thereby liberate growth. The Report provides general guidelines to policy makers and seeks to define optimal policy mixes which, when combined with spontaneous entrepreneurial activity in the private sector, will contribute to overall growth. What constitutes ‘proper’ spatial ordering and how that ordering can best be achieved are, of course, the main questions.

The central theme of the Report is that not only is uneven geographical development inevitable but that, properly managed, it can be a primary vehicle for stimulating growth. Too often, unfortunately, ‘governments intervene (usually incorrectly) to spread the benefits of economic growth more evenly across space . . . (and) the economic costs of mistakes can be large and lasting: recognizing the importance of economic geography means realizing that once producers and people make decisions on where to locate, they can be difficult to reverse’ (p. 34).

Attempts to level out development across space inevitably backfire and hinder the ultimate achievement of higher and more equal per capita incomes for everyone. If only the Chinese had not restricted migration and urbanization processes they would have grown even faster than the 10 per cent they have achieved until recently! The authors note a pervasive historical- geographical pattern to development, in which economic activity tends initially to concentrate geographically, thus producing spatial inequalities in income. Over time, as an economy matures, the spatial inequalities flatten out, even as the distinction between geographical concentrations of economic activity and a more geographically dispersed well-being for the population remain. The task of policy makers is to accept and facilitate this ‘natural’ progression, but they have to do so at a variety of different scales — local, regional and global. Policy thinking has to ‘telescope in’, as it were, policies and processes operating at these different scales. But no matter what scale is involved, the general (and, I have to say, remarkably conventional) approach is clear:

Governments can do better by promoting the market forces that deliver both the concentration of economic production and the convergence of living standards, and augment them with policies to ensure affordable basic services everywhere. They can do this by helping people and entrepreneurs take advantage of opportunities, wherever they arise. The market forces that help most are agglomeration, migration and specialization. (p. 34)

The Report concentrates on the economic benefits that can arise from such an approach. While they concede that ‘the unintended social and environ- mental effects are important policy matters’ (ibid.), lack of space prevented them from serious consideration of these effects in a report focused on ‘how economic geography is shaped during development’. Many, including me, will find these exclusions seriously damaging. It means that the authors felt no obligation to consider how increasing social inequality and poverty along with environmental degradation might actively be produced through capital- ism’s market-led uneven geographical development. The slums which they describe as problem areas that will surely one day disappear if only the correct policies are put in place, are viewed as unfortunate residuals produced by rapid migration to the cities, along with lack of development (partly caused, in the case of Mumbai, by wrong-headed government interference in land markets which would otherwise have led to a far more efficient allocation of land to uses) rather than contemporaneous creations of primitive accumulation in rural zones and processes of exclusion and marginalization of a disposable reserve army of labour and productive capacity in urban areas.

The authors naively believe, for example, that the extension of microfinance into slum areas and the subsequent market integration of the billions currently living on less that US$ 2 a day is one key solution to global poverty, when there is plenty of evidence that this ‘raiding’ of ‘the wealth at the bottom of pyramid’ by financial institutions extracting high rates of return actually constitutes a system of ‘debt-peonage’ for the mass of the population at the same time as it functions, in Juliet Elyachar’s (2005) phrase (derived from detailed ethnography in Cairo), as a ‘market of dispossession’. The authors also naively believe that the spread of homeownership, mortgage finance and securitization is by definition a healthy thing — even as it is currently leading to massive dispossessions and loss of asset wealth for the most vulnerable populations (particularly black) in the United States and creating a whole series of ‘financial Katrinas’ of neighbourhood destruction in many cities. This separation of the social and environmental from the economic is illegitimate; until World Bank economists get out of this way of thinking we may well have to face another decade of bad policy advice followed by yet another scramble to clean up the ‘unintended consequences’ of free market determinations, as the economists and policy makers (like Alan Greenspan most recently) express unimaginable surprise that things could have gone so wrong, because the world did not conform to their particular theories.

But let me be generous and set all this aside to see what the Report actually does say for there is, in fact, much that is useful and interesting to reflect upon here. There is something important to be gained from a careful and critical reading of both the theoretical framework and even more importantly the empirical examples of historical-geographical dynamics drawn from all around the globe. On the empirical side the report is a mine of information which, when reformulated, provides a huge base of evidence and information for thinking more clearly about the role of uneven geographical development in the reproduction of capitalism and for this I am extremely grateful. Researchers interested in that question will have a field day with the data assembled here. This is precisely because no economic theory can ignore the production of spaces, places and the ‘second nature’ constituted by the infrastructures of the built environment.

It is also laudable to have the question of scale introduced at least in principle, since this is a generally neglected arena in economic thinking. Unfortunately the arbitrary and fixed distinction between local, national and international scales does not work very well. In the geographical literature, scale is defined by processes and not determined a priori. The spatial externality effects observable in housing markets are differently scaled from those generated by airports or sulfur dioxide emissions from power stations. And space is not necessarily continuous. High educational attainments in India have externality effects in the Seattle labour market. While the authors may be correct to suggest that erroneous spatial planning practices in the Soviet Union (that curbed urban concentrations and attempted to industrialize Siberia) had something to do with the inefficiencies that led to the downfall of communism, they might also want to consider how the increasing porosity of state boundaries (including the iron curtain) after 1970 or so to the spatial movement of cultural images and influences also played a role. They might even one day want to study (self-reflexively) the spatial effects of the spread of neoclassical and increasingly neoliberal economic doctrines around the world, followed by their rejection in much of Latin America and even more startlingly by some mainstream economists in the United States in recent times. Furthermore, while they fully recognize that what is important at one scale is not so at another, and that the spatial scale at which data are aggregated makes a big difference to statistical analysis (the so-called ‘ecological fallacy’), they conspicuously fail to recognize that policies that make sense at one scale do not necessarily aggregate up to make sense at another scale.

The authors make a laudable and by and large successful attempt to reduce what I know only too well to be complicated questions of geography into a comprehensive and comprehensible structure of exposition. They do so around three fundamental facts of density (of populations and economic activity), distance (flows over space of people, goods and capital) and division (of labour as well as religious and cultural divisions within populations). These correspond, they argue, to fundamental processes of agglomeration, migration and regional specialization which require distinctive policy responses at the local (urban), national (territorial development) and international (regional integration) levels. The authors are careful throughout to keep their terminology consistent and in their empirical work note a number of interesting tendencies. The reduction of artificial spatial barriers such as tariffs and border restrictions, for example, increases regional integration rather than long distance trade.

Each one of these configurations deserves critical but, I would hope, constructive engagement. While the framework set up in the Report is not perfect, it is certainly able to illuminate many aspects of spatial dynamics, but the big questions are those of interpretation and of policy responses rather than of framing. On this point the Report contains not a word of criticism for how the market works, only finger-wagging at all those who seek to restrain it.

For purposes of illustration, consider how the Report handles the theme of density, agglomeration and urbanization. Increasing density, the authors argue, with the help of abundant empirical examples, is conducive to economic development and rising incomes in particular places in such a way that proximity and accessibility to that density later become crucial to the economic development of proximate areas. The policy conclusion is not to be fearful of increasing density and open migration of people and economic activity (something I tend to agree with) but to go with the flow of market forces and let concentrations increase until increasing congestion costs counteract the benefits that accrue from increasing economies of scale through agglomeration. For this to happen requires that planners stop worrying about inequalities (something I definitely disagree with). Furthermore:

[cities that] provide fluid land and property markets and other supportive institutions — such as protecting property rights, enforcing contracts, and financing housing — will more likely flourish over time as the needs of market change. Successful cities have relaxed zoning laws to allow higher-value users to bid for the valuable land — and have adopted land use regulations to adapt to their changing roles over time. (p. 142)

But land is not, as Polanyi (following Marx) long ago insisted, a commodity in the ordinary sense. It has fictitious value based on expectations of future rents and this is by definition always speculative. This is precisely the kind of activity that has driven low- or even moderate-income households out of Manhattan and central London over the last few years, with catastrophic effects on class disparities and well-being. This is what is putting such intense pressure on the high-value land of Dharavi in Mumbai (a so-called slum that the Report correctly depicts as a productive human ecosystem even though it is both informal and environmentally challenged). The Report advocates the kind of free-market fundamentalism that has spawned urban social movements of opposition to gentrification, neighbourhood destruction and the use of eminent domain to evict residents to make way for higher value land uses. In other words, the Report favours speculative capital and not people.

Plainly, the authors have never considered questions of urban democracy and the notion that people might have ‘the right to the city’, as specified in the Brazilian constitution and now the object of struggle in many cities around the world. Social movements of this sort have no place, although by implication their objectives fly in the face of the superior economic rationality that the Report relentlessly advocates. The idea that a city can do well while its people do badly is never examined.

But there is something else very curious here. We are told that economists have in the past favoured competitive models (and presumably given pol- icy makers bad advice) instead of emphasizing the market forces that create agglomeration economies. We are then told that recent hard work by economists has remedied this mistake. This is a strange assertion be- cause the economic geography courses I taught in Bristol back in the 1960s were full of references to the significance of agglomeration, along with the Myrdal (1957) notion of circular and cumulative causation, gravity models, geographical inertia, and all the rest of it, that are here cited as if they are new. The materials assembled in this report were, for me, like a trip down memory lane. And my understandings came from reading economists like E.M. Hoover (1937), Benjamin Chinitz (1961) and Alfred Marshall (Marshall and Paley, 1881) on industrial production districts, as well as reading the conventional literature in economic geography (including a wonderful piece on agglomeration economies in the nineteenth century jewellery and gun trades in Birmingham by the geographer Michael Wise, 1949), while mulling over the significance of the different location theories of von Thunen (1966), Alfred Weber (1965) (cost-minimizing) and August Lo ?sch (1954) (profit-maximizing). So it seems that economists abandoned the question of space and agglomeration in favour of purely competitive and largely a-spatial models. The question is why?

I am no expert in the history of economic thought but I suspect this happened because, as Chamberlin (1942) followed by Lo ?sch (1954) showed, all spatial competition is a form of monopolistic competition (and therefore anomalous for standard theory) and the location-allocation problem first posed so elegantly by Hotelling (1990) in the 1920s turned out, as Koopmans and Beckman (1957) showed, not to be amenable to equilibrium analytics (prices were unstable) and therefore not open to the mathematical modelling that made economics a true science. So economists, in spite of the noble efforts of Walter Isard in founding the Regional Science Association and its journal in the 1960s, gave up on agglomeration because they could not mathematically model it. All this began to change in the 1980s as Paul Krugman (1995) and others began to find the mathematics at least partially satisfactory for this purpose. This was just as well because during those years economic geographers along with the few urban and regional economists left (like Bennett Harrison, 1974) were writing reams and reams about the ravages and social costs of deindustrialization in the traditional heart- lands of industrial capitalism, from the Sheffield steel industry to the textile mills of Mumbai (a phenomenon not mentioned in this report) as well as the rise of industrial production districts like the Third Italy, Bavaria and Silicon Valley that were cultivating agglomeration economies like mad. But the consequence of the theoretical work was that the Ricardian doctrine of comparative advantage in trade had to be junked as well as a whole slew of other favoured nostrums of the neoliberal canon. As a result of intellectual inertia it has taken the World Bank economists until now to get us back to where we were in the 1960s, but this time backed by mathematical models that tell us once more how capitalist space should be organized so as to produce more capital in the hope that one day this will redound to the benefit of all.

The idea that free markets really benefit the capitalist class and only incidentally do something for the well-being of the people is never, of course, considered. The concept of class inequalities (of power as well as of wealth and incomes) never enters into the analysis. Only monadic individual entrepreneurs (including migrants and diasporas) figure. Sadly, this Report plays the same old capitalist game while promoting a spatial version of the old neoliberal ideology: let the market rule and one day we will all be better off. What Marx showed, and what has empirically happened over the last thirty years of neoliberalism, is that the closer we get to free market situations the more the rich get richer and the poor get poorer. Billionaires have erupted all over the place (including in India and Mexico). By the mid-1990s, the UN was reporting that the net worth of the 358 richest people in the world was by then ‘equal to the combined income of the poorest 45 per cent of the world’s population — 2.3 billion people’ (UNDP, 1996, p.2).

The idea that market-led neoliberalism produces uneven geographical development is clear, but what the authors of this Report do not consider is how neoliberalism uses uneven geographical development as a means to promote the universality of its own world project, which has nothing to do with the well-being of the whole of humanity but everything to do with the enhancement of dominant forms of class power. One of the ways in which the rich get richer, for example, is through speculation in asset values. One kind of asset that works beautifully to that purpose is precisely the increasingly deregulated land and property markets that have underpinned so many financial excesses over the years (viz., Japan in the 1980s and the USA now). Markets of this sort have a Ponzi-like character: invest in them and prices go up which encourages more investment until the bubble pops. Meanwhile the poor become homeless and affordable housing disappears.

While the reintroduction of the production of space, place and environment into the analysis is surely as welcome as it is absolutely necessary, the grounding of this Report in conventional neoclassical and neoliberal nostrums unfortunately renders it useless for confronting the difficulties we face in these tumultuous times. Regrettably, the hegemony of the ways of thinking portrayed in this Report is part of the problem rather than a template for solutions. It does not, after all, take a mathematically sophisticated economist to recognize the fundamental irrationality of escalating homelessness and the emergence of tent cities in the United States in the midst of a landscape of innumerable foreclosed upon and abandoned houses. Nor will it require a policy maker to concede that the invasion of such abandoned buildings by those in need is an appropriate and humane response that deserves massive public support.

REFERENCES
Chamberlin, E. (1942) The Theory of Monopolistic Competition: A Re-Orientation of the Theory of Value. Cambridge, MA: Hasrvard University Press.
Chinitz, B. (1961) ‘Contrasts in Agglomeration: New York and Pittsburgh’, American Economic Review 51: 279–89.
Elyachar, J. (2005) Markets of Dispossession: NGOs, Economic Development and the State in Cairo. Durham, NC: Duke University Press.
Harrison, B. (1974) Urban Economic Development, Suburbanization, Minority Employment and the Condition of the Central City. Washington, DC: Urban Institute.
Hoover, E.M. (1937) Location Theory and the Shoe and Leather Industries. Cambridge, MA: Harvard University Press.
Hotelling, H. (1990) The Collected Economics Articles of Harold Hotelling. New York: Springer Verlag.
Koopmans, T. and A. Beckman (1957) ‘Assignment Problems and the Location of Economic Activities’, Econometrica 25: 53–76.
Krugman, P. (1995) Development, Geography and Economic Theory. Cambridge, MA: MIT Press.
Losch, A. (1954) The Economics of Location (W.Woglom trans). New Haven, CT: Yale University Press.
Marshall, A. and M. Paley (1881) The Economics of Industry. London: Macmillan.
Myrdal, G. (1957) Economic Theory and Underdeveloped Regions. London: Duckworth.
United Nations Development Programme (1996) Human Development Report. New York: Oxford University Press.
Von Thunen, J-H. (1966) Isolated State (Carla Wartanberg trans). Oxford: Pergamon Press.
Weber, A. (1965 [1929]) Theory of the Location of Industries (K. Friedrich trans). Chicago, IL: Chicago University Press.
Wise, M. (1949) ‘On the Evolution of the Jewellery and Gun Quarters in Birmingham’, Institute of British Geographers, Transactions and Papers 15: 59–72.

David Harvey is Distinguished Professor of Anthropology at the Graduate Center, City University of New York, 365 Fifth Avenue, New York, NY 10016-4309. His most recent books are A Brief History of Neoliberalism (Oxford University Press, 2005) and Cosmopolitanism and the Geographies of Freedom (Columbia University Press, 2009).

The historical geography of capitalist development is at a key inflexion point in which the geographical configurations of power are rapidly shifting at the very moment when the temporal dynamic is facing very serious constraints.  Three percent compound growth (generally considered the minimum satisfactory growth rate for a healthy capitalist economy) is becoming less and less feasible to sustain without resort to all manner of fictions (such as those that have characterized asset markets and financial affairs over the last two decades). There are good reasons to believe that there is no alternative to a new global order of governance that will eventually have to manage the transition to a zero growth economy.  If that is to be done in an equitable way, then there is no alternative to socialism or communism.  Since the late 1990s, the World Social Forum became the center for articulating the theme “another world is possible.”  It must now take up the task of defining how another socialism or communism is possible and how the transition to these alternatives are to be accomplished.  The current crisis offers a window of opportunity to reflect on what might be involved.

The current crisis originated in the steps taken to resolve the crisis of the 1970s.  These steps included:

(a) the successful assault upon organized labor and its political institutions while mobilizing global labor surpluses, instituting labor-saving technological changes and heightening competition. The result has been global wage repressions (a declining share of wages in total GDP almost everywhere) and the creation of an even vaster disposable labor reserve living under marginal conditions.

(b)  undermining previous structures of monopoly power and displacing the previous stage of (nation state) monopoly capitalism by opening up capitalism to far fiercer international competition. Intensifying global competition translated into lower non-financial corporate profits.  Uneven geographical development and inter-territorial competition became key features in capitalist development, opening the way towards the beginnings of a hegemonic shift of power particularly but not exclusively towards East Asia.

(c)  utilizing and empowering the most fluid and highly mobile form of capital – money capital – to reallocate capital resources globally (eventually through electronic markets) thus sparking deindustrialization in traditional core regions and new forms of (ultra-oppressive) industrialization and natural resource and agricultural raw material extractions in emergent markets.  The corollary was to enhance the profitability of financial corporations and to find new ways to globalize and supposedly absorb risks through the creation of fictitious capital markets.

(d) At the other end of the social scale, this meant heightened reliance on “accumulation by dispossession” as a means to augment capitalist class power. The new rounds of primitive accumulation against indigenous and peasant populations were augmented by asset losses of the lower classes in the core economies (as witnessed by the sub-prime housing market in the US which foisted a huge asset loss particularly upon African American populations).

(e)  The augmentation of otherwise sagging effective demand by pushing the debt economy (governmental, corporate and household) to its limits (particularly in the USA and the UK but also in many other countries from Latvia to Dubai).

(f)   Compensating for anemic rates of return in production by the construction of whole series of asset market bubbles, all of which had a Ponzi character, culminating in the property bubble that burst in 2007-8.  These asset bubbles drew upon finance capital and were facilitated by extensive financial innovations such as derivatives and collateralized debt obligations.

The political forces that coalesced and mobilized behind these transitions had a distinctive class character and clothed themselves in the vestments of a distinctive ideology called neoliberal.  The ideology rested upon the idea that free markets, free trade, personal initiative and entrepreneurialism were the best guarantors of individual liberty and freedom and that the “nanny state” should be dismantled for the benefit of all. But the practice entailed that the state must stand behind the integrity of financial institutions, thus introducing (beginning with the Mexican and developing countries debt crisis of 1982) “moral hazard” big time into the financial system.  The state (local and national) also became increasingly committed to providing a “good business climate” to attract investments in a highly competitive environment.  The interests of the people were secondary to the interests of capital and in the event of a conflict between them, the interests of the people had to be sacrificed (as became standard practice in IMF structural adjustments programs from the early 1980s onwards).  The system that has been created amounts to a veritable form of communism for the capitalist class.

These conditions varied considerably, of course, depending upon what part of the world one inhabited, the class relations prevailing there, the political and cultural traditions and how the balance of political-economic power was shifting.

So how can the left negotiate the dynamics of this crisis?  At times of crisis, the irrationality of capitalism becomes plain for all to see.  Surplus capital and surplus labor exist side-by side with seemingly no way to put them back together in the midst of immense human suffering and unmet needs.  In midsummer of 2009, one third of the capital equipment in the United States stood idle, while some 17 per cent of the workforce were either unemployed, enforced part-timers or “discouraged” workers. What could be more irrational than that!

Can capitalism survive the present trauma?  Yes. But at what cost?  This question masks another.  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.”  But the mass of the people will have to surrender the fruits of their labour to those in power, to surrender many of their rights and their hard-won asset values (in everything from housing to pension rights), and to suffer environmental degradations galore to say nothing of serial reductions in their living standards which means starvation for many of those already struggling to survive at rock bottom. Class inequalities will increase (as we already see happening). All of that may require more than a little political repression, police violence and militarized state control to stifle unrest.

Since much of this is unpredictable and since the spaces of the global economy are so variable, then uncertainties as to outcomes are heightened at times of crisis. All manner of localized possibilities arise for either nascent capitalists in some new space to seize opportunities to challenge older class and territorial hegemonies (as when Silicon Valley replaced Detroit from the mid-1970s onwards in the United States) or for radical movements to challenge the reproduction of an already destabilized class power.  To say that the capitalist class and capitalism can survive is not to say that they are predestined to do so nor does it say that their future character is given.  Crises are moments of paradox and possibilities.

So what will happen this time around?  If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030.  This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted).  Real problems of finding adequate outlets for surplus capital began to emerge after 1980, even with the opening up of China and the collapse of the Soviet Bloc.  The difficulties were in part resolved by creation of fictitious markets where speculation in asset values could take off unhindered. Where will all this investment go now?

Leaving aside the undisputable constraints in the relation to nature (with global warming of paramount importance), the other potential barriers of effective demand in the market place, of technologies and of geographical/ geopolitical distributions are likely to be profound, even supposing, which is unlikely, that no serious active oppositions to continuous capital accumulation and further consolidation of class power materialize. What spaces are left in the global economy for new spatial fixes for capital surplus absorption?  China and the ex-Soviet bloc have already been integrated. South and SouthEast Asia is filling up fast. Africa is not yet fully integrated but there is nowhere else with the capacity to absorb all this surplus capital.  What new lines of production can be opened up to absorb growth? There may be no effective long-run capitalist solutions (apart from reversion to fictitious capital manipulations) to this crisis of capitalism. At some point quantitative changes lead to qualitative shifts and we need to take seriously the idea that we may be at exactly such an inflexion point in the history of capitalism. Questioning the future of capitalism itself as an adequate social system ought, therefore, to be in the forefront of current debate.

Yet there appears to be little appetite for such discussion, even among the left. Instead we continue to hear the usual conventional mantras regarding the perfectibility of humanity with the help of free markets and free trade, private property and personal responsibility, low taxes and minimalist state involvement in social provision, even though this all sounds increasingly hollow. A crisis of legitimacy looms.  But legitimation crises typically unfold at a different pace and rhythm to that of stock markets.  It took, for example, three or four years before the stock market crash of 1929 produced the massive social movements (both progressive and fascistic) after 1932 or so. The intensity of the current pursuit by political power of ways to exit the present crisis may have something to do with the political fear of looming illegitimacy.

The last thirty years, however, has seen the emergence of systems of governance that seem immune to legitimacy problems and unconcerned even with the creation of consent. The mix of authoritarianism, monetary corruption of representative democracy, surveillance, policing and militarization (particularly through the war on terror), media control and spin suggests a world in which the control of discontent through disinformation, fragmentations  of oppositions and the shaping of oppositional cultures through the promotion of NGOs tends to prevail with plenty of coercive force to back it up if necessary.

The idea that the crisis had systemic origins is scarcely mooted in the mainstream media (even as a few mainstream economists like Stiglitz, Krugman and even Jeffrey Sachs attempt to steal some of the left’s historical thunder by confessing to an epiphany or two).  Most of the governmental moves to contain the crisis in North America and Europe amount to the perpetuation of business as usual which translates into support for the capitalist class.  The “moral hazard” that was the immediate trigger for the financial failures is being taken to new heights in the bank bail-outs.  The actual practices of neoliberalism (as opposed to its utopian theory) always entailed blatant support for finance capital and capitalist elites (usually on the grounds that financial institutions must be protected at all costs and that it is the duty of state power to create a good business climate for solid profiteering).  This has not fundamentally changed. Such practices are justified by appeal to the dubious proposition that a “rising tide” of capitalist endeavor will “lift all boats” or that the benefits of compound growth will magically “trickle down” (which it never does except in the form of a few crumbs from the rich folks’ table).

So how will the capitalist class exit the current crisis and how swift will the exit be?  The rebound in stock market values from Shanghai and Tokyo to Frankfurt, London and New York is a good sign we are told even as unemployment pretty much everywhere continues to rise.  But notice the class bias in that measure. We are enjoined to rejoice in the rebound in stock values for the capitalists because it always precedes, it is said, a rebound in the “real economy” where jobs for the workers are created and incomes earned.  The fact that the last stock rebound in the United States after 2002 turned out to be a “jobless recovery” appears to have been forgotten already.  The Anglo-Saxon public in particular appears to be seriously afflicted with amnesia.  It too easily forgets and forgives the transgressions of the capitalist class and the periodic disasters its actions precipitate. The capitalist media are happy to promote such amnesia.

China and India are still growing, the former by leaps and bounds.  But in China’s case, the cost is a huge expansion of bank lending on risky projects (the Chinese banks were not caught up in the global speculative frenzy but now are continuing it).  The overaccumulation of productive capacity proceeds a-pace and long-term infrastructural investments whose productivity will not be known for several years, are booming (even in urban property markets).  And China’s burgeoning demand is entraining those economies supplying raw materials, like Australia and Chile.  The likelihood of a subsequent crash in China cannot be dismissed but it may take time to discern (a long-term version of Dubai).  Meanwhile the global epicenter of capitalism accelerates its shift parimarily towards East Asia.

In the older financial centers, the young financial sharks have taken their bonuses of yesteryear, collectively started boutique financial institutions to circle Wall Street and the City of London to sift through the detritus of yesterdays financial giants to snaffle up the juicy bits and start all over again. The investment banks that remain in the US – Goldman Sachs and J.P.Morgan – though reincarnated as bank holding companies have gained exemption (thanks to the Federal Reserve) from regulatory requirements and are making huge profits (and setting aside moneys for huge bonuses to match) out of speculating dangerously using tax-payers money in unregulated and still booming derivative markets. The leveraging that got us into the crisis has resumed big time as if nothing has happened.  Innovations in finance are on the march as new ways to package and sell fictitious capital debts are being pioneered and offered to institutions (such as pension funds) desperate to find new outlets for surplus capital. The fictions (as well as the bonuses) are back!

Consortia are buying up foreclosed properties, either waiting for the market to turn before making a killing or banking high value land for a future moment of active redevelopment.  The regular banks are stashing away cash, much of it garnered from the public coffers, also with an eye to resuming bonus payments consistent with a former lifestyle while a whole host of entrepreneurs hover in the wings waiting to seize this moment of creative destruction backed by a flood of public moneys.

Meanwhile raw money power wielded by the few undermines all semblances of democratic governance. The pharmaceutical, health insurance and hospital lobbies, for example, spent more than $133 million in the first three months of 2009 to make sure they got their way on health care reform in the United States. Max Baucus, head of the key Senate finance committee that shaped the health care bill received $1.5 million for a bill that delivers a vast number of new clients to the insurance companies with few protections against ruthless exploitation and profiteering (Wall Street is delighted). Another electoral cycle, legally corrupted by immense money power, will soon be upon us. In the United States, the parties of “K Street” and of Wall Street will be duly re-elected as working Americans are exhorted to work their way out of the mess that the ruling class has created. We have been in such dire straits before, we are reminded, and each time working Americans have rolled up their sleeves, tightened their belts, and saved the system from some mysterious mechanics of auto-destruction for which the ruling class denies all responsibility.  Personal responsibility is, after all, for the workers and not for the capitalists.

If this is the outline of the exit strategy then almost certainly we will be in another mess within five years.  The faster we come out of this crisis and the less excess capital is destroyed now, the less room there will be for the revival of long-term active growth. The loss of asset values at this conjuncture (mid 2009) is, we are told by the IMF, at least $55 trillion, which is equivalent to almost exactly one year’s global output of goods and services. Already we are back to the output levels of 1989.  We may be looking at losses of $400 trillion or more before we are through.  Indeed, in a recent startling calculation, it was suggested that the US state alone was on the hook to guarantee more than $200 trillion in asset values.  The likelihood that all of those assets would go bad is very minimal, but the thought that many of them could is sobering in the extreme. Just to take a concrete example:  Fannie Mae and Freddie Mac, now taken over by the US Government, own or guarantee more than $5 trillion in home loans many of which are in deep trouble (losses of more than $150 billion were recorded in 2008 alone). So what, then, are the alternatives?

It has long been the dream of many in the world, that an alternative to capitalist (ir)rationality can be defined and rationally arrived at through the mobilization of human passions in the collective search for a better life for all.  These alternatives – historically called socialism or communism – have, in various times and places been tried.  In former times, such as the 1930s, the vision of one or other of them operated as a beacon of hope.  But in recent times they have both lost their luster, been dismissed as wanting, not only because of the failure of historical experiments with communism to make good on their promises and the penchant for communist regimes to cover over their mistakes by repression, but also because of their supposedly flawed presuppositions concerning human nature and the potential perfectibility of the human personality and of human institutions.

The difference between socialism and communism is worth noting. Socialism aims to democratically manage and regulate capitalism in ways that calm its excesses and redistribute its benefits for the common good. It is about spreading the wealth around through progressive taxation arrangements while basic needs – such as education, health care and even housing – are provided by the state out of reach of market forces. Many of the key achievements of redistributive socialism in the period after 1945, not only in Europe but beyond, have become so socially embedded as to be immune from neoliberal assault.  Even in the United States, Social Security and Medicare are extremely popular programs that right wing forces find it almost impossible to dislodge.  The Thatcherites in Britain could not touch national health care except at the margins. Social provision in Scandinavia and most of Western Europe seems to be an unshakable bed-rock of the social order.

Communism, on the other hand, seeks to displace capitalism by creating an entirely different mode of both production and distribution of goods and services.  In the history of actually existing communism, social control over production, exchange and distribution meant state control and systematic state planning. In the long-run this proved to be unsuccessful though, interestingly, its conversion in China (and its earlier adoption in places like Singapore) has proven far more successful than the pure neoliberal model in generating capitalist growth for reasons that cannot be elaborated upon here.  Contemporary attempts to revive the communist hypothesis typically abjure state control and look to other forms of collective social organization to displace market forces and capital accumulation as the basis for organizing production and distribution. Horizontally networked as opposed to hierarchically commanded systems of coordination between autonomously organized and self-governing collectives of producers and consumers are envisaged as lying at the core of a new form of communism.  Contemporary technologies of communication make such a system seem feasible. All manner of small-scale experiments around the world can be found in which such economic and political forms are being constructed.  In this there is a convergence of some sort between the Marxist and anarchist traditions that harks back to the broadly collaborative situation between them in the 1860s in Europe.

While nothing is certain, it could be that 2009 marks the beginning of a prolonged shake out in which the question of grand and far-reaching alternatives to capitalism will step-by-step bubble up to the surface in one part of the world or another. The longer the uncertainty and the misery is prolonged, the more the legitimacy of the existing way of doing business will be questioned and the more the demand to build something different will escalate. Radical as opposed to band-aid reforms to patch up the financial system may seem more necessary.

The uneven development of capitalist practices throughout the world has produced, moreover, anti-capitalist movements all over the place.  The state-centric economies of much of East Asia generate different discontents (as in Japan and China) compared to the churning anti-neoliberal struggles occurring throughout much of Latin America where the Bolivarian revolutionary movement of popular power exists in a peculiar relationship to capitalist class interests that have yet to be truly confronted.  Differences over tactics and policies in response to the crisis among the states that make up the European Union are increasing even as a second attempt to come up with a unified EU constitution is under way.  Revolutionary and resolutely anti-capitalist movements are also to be found, though not all of them are of a progressive sort, in many of the marginal zones of capitalism.  Spaces have been opened up within which something radically different in terms of dominant social relations, ways of life, productive capacities and mental conceptions of the world can flourish.  This applies as much to the Taliban and to communist rule in Nepal as to the Zapatistas in Chiapas and indigenous movements in Bolivia, the Maoist movements in rural India,  even as they are world’s apart in objectives, strategies and tactics.

The central problem is that in aggregate there is no resolute and sufficiently unified anti-capitalist movement that can adequately challenge the reproduction of the capitalist class and the perpetuation of its power on the world stage.  Neither is there any obvious way to attack the bastions of privilege for capitalist elites or to curb their inordinate money power and military might. While openings exist towards some alternative social order, no one really knows where or what it is. But just because there is no political force capable of articulating let alone mounting such a program, this is no reason to hold back on outlining alternatives.

Lenin’s famous question “what is to be done?” cannot be answered, to be sure, without some sense of who it is might do it where.  But a global anti-capitalist movement is unlikely to emerge without some animating vision of what is to be done and why.  A double blockage exists: the lack of an alternative vision prevents the formation of an oppositional movement, while the absence of such a movement precludes the articulation of an alternative.  How, then, can this blockage be transcended?  The relation between the vision of what is to be done and why, and the formation of a political movement across particular places to do it has to be turned into a spiral. Each has to reinforce the other if anything is actually to get done.  Otherwise potential opposition will be forever locked down into a closed circle that frustrates all prospects for constructive change, leaving us vulnerable to perpetual future crises of capitalism with increasingly deadly results.  Lenin’s question demands an answer.

The central problem to be addressed is clear enough.  Compound growth for ever is not possible and the troubles that have beset the world these last thirty years signal that a limit is looming to continuous capital accumulation that cannot be transcended except by creating fictions that cannot last.  Add to this the facts that so many people in the world live in conditions of abject poverty, that environmental degradations are spiraling out of control, that human dignities are everywhere being offended even as the rich are piling up more and more wealth (the number of billionaires in India doubled last year from 27 to 52) under their command and that the levers of political, institutional, judicial, military and media power are under such tight but dogmatic political control as to be incapable of doing much more than perpetuating the status quo and frustrating discontent.

A revolutionary politics that can grasp the nettle of endless compound capital accumulation and eventually shut it down as the prime motor of human history, requires a sophisticated understanding of how social change occurs.  The failings of past endeavors to build a lasting socialism and communism have to be avoided and lessons from that immensely complicated history must be learned.  Yet the absolute necessity for a coherent anti-capitalist revolutionary movement must also be recognized. The fundamental aim of that movement is to assume social command over both the production and distribution of surpluses.

We urgently need an explicit revolutionary theory suited to our times.  I propose a “co-revolutionary theory” derived from an understanding of Marx’s account of how capitalism arose out of feudalism.  Social change arises through the dialectical unfolding of relations between seven moments within the body politic of capitalism viewed as an ensemble or assemblage of activities and practices:

a)  technological and organizational forms of production, exchange and consumption

b)  relations to nature

c)   social relations between people

d)  mental conceptions of the world, embracing knowledges and cultural understandings and beliefs

e)  labor processes and production of specific goods, geographies, services or affects

f )  institutional, legal and governmental arrangements

g)   the conduct of daily life that underpins social reproduction.

Each one of these moments is internally dynamic and internally marked by tensions and contradictions (just think of mental conceptions of the world) but all of them are co-dependent and co-evolve in relation to each other.  The transition to capitalism entailed a mutually supporting movement across all seven moments.  New technologies could not be identified and practices without new mental conceptions of the world (including that of the relation to nature and social relations).  Social theorists have the habit of taking just one of the these moments and viewing it as the “silver bullet” that causes all change. We have technological determinists (Tom Friedman), environmental determinists (Jarad Diamond), daily life determinists (Paul Hawkin), labor process determinists (the autonomistas), institutionalists, and so on and so forth. They are all wrong. It is the dialectical motion across all of these moments that really counts even as there is uneven development in that motion.

When capitalism itself undergoes one of its phases of renewal, it does so precisely by co-evolving all moments, obviously not without tensions, struggles, fights and contradictions. But consider how these seven moments were configured around 1970 before the neoliberal surge and consider how they look now and you will see they have all changed in ways that re-define the operative characteristics of capitalism viewed as a non-Hegelian totality.

An anti-capitalist political movement can start anywhere (in labor processes, around mental conceptions, in the relation to nature, in social relations, in the design of revolutionary technologies and organizational forms, out of daily life or through attempts to reform institutional and administrative structures including the reconfiguration of state powers).  The trick is to keep the political movement moving from one moment to another in mutually reinforcing ways. This was how capitalism arose out of feudalism and this is how something radically different called communism, socialism or whatever must arise out of capitalism. Previous attempts to create a communist or socialist alternative fatally failed to keep the dialectic between the different moments in motion and failed to embrace the unpredictabilities and uncertainties in the dialectical movement between them.  Capitalism has survived precisely by keeping the dialectical movement between the moments going and constructively embracing the inevitable tensions, including crises, that result.

Change arises, of course, out of an existing state of affairs and it has to harness the possibilities immanent within an existing situation.  Since the existing situation varies enormously from Nepal, to the Pacific regions of Bolivia, to the deindustrializing cities of Michigan and the still booming cities of Mumbai and Shanghai and the shaken but by no means destroyed financial centers of New York and London, so all manner of experiments in social change in different places and at different geographical scales are both likely and potentially illuminating as ways to make (or not make) another world possible.  And in each instance it may seem as if one or other aspect of the existing situation holds the key to a different political future. But the first rule for a global anti-capitalist movement must be: never rely on the unfolding dynamics of one moment without carefully calibrating how relations with all the others are adapting and reverberating.

Feasible future possibilities arise out of the existing state of relations between the different moments. Strategic political interventions within and across the spheres can gradually move the social order onto a different developmental path. This is what wise leaders and forward looking institutions do all the time in local situations, so there is no reason to think there is anything particularly fantastic or utopian about acting in this way. The left has to look to build alliances between and across those working in the distinctive spheres. An anti-capitalist movement has to be far broader than groups mobilizing around social relations or over questions of daily life in themselves. Traditional hostilities between, for example, those with technical, scientific and administrative expertise and those animating social movements on the ground have to be addressed and overcome.  We now have to hand, in the example of the climate change movement, a significant example of how such alliances can begin to work.

In this instance the relation to nature is the beginning point, but everyone realizes that something has to give on all the other moments and while there is a wishful politics that wants to see the solution as purely technological, it becomes clearer by the day that daily life, mental conceptions, institutional arrangements, production processes and social relations have to be involved.  And all of that means a movement to restructure capitalist society as a whole and to confront the growth logic that underlies the problem in the first place.

There have, however, to be, some loosely agreed upon common objectives in any transitional movement. Some general guiding norms can be set down.  These might include (and I just float these norms here for discussion) respect for nature, radical egalitarianism in social relations, institutional arrangements based in some sense of common interests and common property, democratic administrative procedures (as opposed to the monetized shams that now exist), labor processes organized by the direct producers, daily life as the free exploration of new kinds of social relations and living arrangements, mental conceptions that focus on self-realization in service to others and technological and organizational innovations oriented to the pursuit of the common good rather than to supporting militarized power, surveillance and corporate greed.  These could be the co-revolutionary points around which social action could converge and rotate.  Of course this is utopian!  But so what!  We cannot afford not to be.

Let me detail one particular aspect of the problem which arise in the place where I work.  Ideas have consequences and false ideas can have devastating consequences. Policy failures based on erroneous economic thinking played a crucial role in both the run-up to the debacle of the 1930s and in the seeming inability to find an adequate way out. Though there is no agreement among historians and economists as to exactly what policies failed, it is agreed that the knowledge structure through which the crisis was understood needed to be revolutionized. Keynes and his colleagues accomplished that task. But by the mid-1970s, it became clear that the Keynesian policy tools were no longer working at least in the way they were being applied and it was in this context that monetarism, supply-side theory and the (beautiful) mathematical modelling of micro-economic market behaviors supplanted broad-brush macro-economic Keynesian thinking.  The monetarist and narrower neoliberal theoretical frame that dominated after 1980 is now in question.  In fact it has disastrously failed.

We need new mental conceptions to understand the world. What might these be and who will produce them, given both the sociological and intellectual malaise that hangs over knowledge production and (equally important) dissemination more generally? The deeply entrenched mental conceptions associated with neoliberal theories and the neoliberalization and corporatization of the universities and the media has played more than a trivial role in the production of the present crisis.  For example, the whole question of what to do about the financial system, the banking sector, the state-finance nexus and the power of private property rights, cannot be broached without going outside of the box of conventional thinking. For this to happen will require a revolution in thinking, in places as diverse as the universities, the media and government as well as within the financial institutions themselves.

Karl Marx, while not in any way inclined to embrace philosophical idealism, held that ideas are a material force in history. Mental conceptions constitute, after all, one of the seven moments in his general theory of co-revolutionary change.  Autonomous developments and inner conflicts over what mental conceptions shall become hegemonic therefore have an important historical role to play.  It was for this reason that Marx (along with Engels) wrote The Communist Manifesto, Capital and innumerable other works.   These works provide a systematic critique, albeit incomplete, of capitalism and its crisis tendencies.  But as Marx also insisted, it was only when these critical ideas carried over into the fields of institutional arrangements, organizational forms, production systems, daily life, social relations, technologies and relations to nature that the world would truly change.

Since Marx’s goal was to change the world and not merely to understand it, ideas had to be formulated with a certain revolutionary intent. This inevitably meant a conflict with modes of thought more convivial to and useful for the ruling class. The fact that Marx’s oppositional ideas, particularly in recent years, have been the target of repeated repressions and exclusions (to say nothing of bowdlerizations and misrepresentations galore) suggests that his ideas may be too dangerous for the ruling classes to tolerate. While Keynes repeatedly avowed that he had never read Marx, he was surrounded and influenced in the 1930s by many people (like his economist colleague Joan Robinson) who had. While many of them objected vociferously to Marx’s foundational concepts and his dialectical mode of reasoning, they were acutely aware of and deeply affected by some of his more prescient conclusions.  It is fair to say, I think, that the Keynesian theory revolution could not have been accomplished without the subversive presence of Marx lurking in the wings.

The trouble in these times is that most people have no idea who Keynes was and what he really stood for while the knowledge of Marx is negligible. The repression of critical and radical currents of thought, or to be more exact the corralling of radicalism within the bounds of multiculturalism, identity politics and cultural choice, creates a lamentable situation within the academy and beyond, no different in principle to having to ask the bankers who made the mess to clean it up with exactly the same tools as they used to get into it.  Broad adhesion to post-modern and post-structuralist ideas which celebrate the particular at the expense of big-picture thinking does not help.  To be sure, the local and the particular are vitally important and theories that cannot embrace, for example, geographical difference, are worse than useless. But when that fact is used to exclude anything larger than parish politics then the betrayal of the intellectuals and abrogation of their traditional role become complete.

The current populations of academicians, intellectuals and experts in the social sciences and humanities are by and large ill-equipped to undertake the collective task of revolutionizing our knowledge structures. They have, in fact, been deeply implicated in the construction of the new systems of neoliberal governmentality that evade questions of legitimacy and democracy and foster a technocratic authoritarian politics.  Few seem predisposed to engage in self-critical reflection.  Universities continue to promote the same useless courses on neo classical economic or rational choice political theory as if nothing has happened and the vaunted business schools simply add a course or two on business ethics or how to make money out of other people’s bankruptcies. After all, the crisis arose out of human greed and there is nothing that can be done about that!

The current knowledge structure is clearly dysfunctional and equally clearly illegitimate. The only hope is that a new generation of perceptive students (in the broad sense of all those who seek to know the world) will clearly see it so and insist upon changing it.  This happened in the 1960s. At various other critical points in history student inspired movements, recognizing the disjunction between what is happening in the world and what they are being taught and fed by the media, were prepared to do something about it. There are signs, from Tehran to Athens and onto many European university campuses of such a movement. How the new generation of students in China will act must surely be of deep concern in the corridors of political power in Beijing.

A student-led and youthful revolutionary movement, with all of its evident uncertainties and problems, is a necessary but not sufficient condition to produce that revolution in mental conceptions that can lead us to a more rational solution to the current problems of endless growth.

What, more broadly, would happen if an anti-capitalist movement were constituted out of a broad alliance of the alienated, the discontented, the deprived and the dispossessed?  The image of all such people everywhere  rising up and demanding and achieving their proper place in economic, social and political life, is stirring indeed.  It also helps focus on the question of what it is they might demand and what it is that needs to be done.

Revolutionary transformations cannot be accomplished without at the very minimum changing our ideas, abandoning cherished beliefs and prejudices, giving up various daily comforts and rights, submitting to some new daily life regimen, changing our social and political roles, reassigning our rights, duties and responsibilities and altering our behaviors to better conform to collective needs and a common will. The world around us – our geographies – must be radically re-shaped as must our social relations, the relation to nature and all of the other moments in the co-revolutionary process. It is understandable, to some degree, that many prefer a politics of denial to a politics of active confrontation with all of this.

It would also be comforting to think that all of this could be accomplished pacifically and voluntarily, that we would dispossess ourselves, strip ourselves bare, as it were, of all that we now possess that stands in the way of the creation of a more socially just, steady-state social order.  But it would be disingenuous to imagine that this could be so, that no active struggle will be involved, including some degree of violence.  Capitalism came into the world, as Marx once put it, bathed in blood and fire. Although it might be possible to do a better job of getting out from under it than getting into it, the odds are heavily against any purely pacific passage to the promised land.

There are various broad fractious currents of thought on the left as to how to address the problems that now confront us.  There is, first of all, the usual sectarianism stemming from the history of radical action and the articulations of left political theory. Curiously, the one place where amnesia is not so prevalent is within the left (the splits between anarchists and Marxists that occurred back in the 1870s, between Trotskyists, Maoists and orthodox Communists, between the centralizers who want to command the state and the anti-statist autonomists and anarchists). The arguments are so bitter and so fractious, as to sometimes make one think that more amnesia might be a good thing.  But beyond these traditional revolutionary sects and political factions, the whole field of political action has undergone a radical transformation since the mid-1970s.  The terrain of political struggle and of political possibilities has shifted, both geographically and organizationally.

There are now vast numbers of non-governmental organizations (NGO’s) that play a political role that was scarcely visible before the mid-1970s. Funded by both state and private interests, populated often by idealist thinkers and organizers (they constitute a vast employment program), and for the most part dedicated to single-issue questions (environment, poverty, women’s rights, anti-slavery and trafficking work, etc) they refrain from straight anti-capitalist politics even as they espouse progressive ideas and causes. In some instances, however, they are actively neoliberal, engaging in privatization of state welfare functions or fostering institutional reforms to facilitate market integration of marginalized populations (microcredit and microfinance schemes for low income populations are a classic example of this).

While there are many radical and dedicated practitioners in this NGO world, their work is at best ameliorative. Collectively, they have a spotty record of progressive achievements, although in certain arenas, such as women’s rights, health care and environmental preservation, they can reasonably claim to have made major contributions to human betterment.  But revolutionary change by NGO is impossible. They are too constrained by the political and policy stances of their donors.  So even though, in supporting local empowerment, they help open up spaces where anti-capitalist alternatives become possible and even support experimentation with such alternatives, they do nothing to prevent the re-absorption of these alternatives into the dominant capitalist practice: they even encourage it.  The collective power of NGOs in these times is reflected in the dominant role they play in the World Social Forum, where attempts to forge a global justice movement, a global alternative to neoliberalism, have been concentrated over the last ten years.

The second broad wing of opposition arises out of anarchist, autonomist and grass roots organizations (GROs) which refuse outside funding even as some of them do rely upon some alternative institutional base (such as the Catholic Church with its “base community” initiatives in Latin America or broader church sponsorship of political mobilization in the inner cities of the United States).  This group is far from homogeneous (indeed there are bitter disputes among them pitting, for example, social anarchists against those they scathingly refer to as mere “lifestyle” anarchists).  There is, however, a common antipathy to negotiation with state power and an emphasis upon civil society as the sphere where change can be accomplished. The self-organizing powers of people in the daily situations in which they live has to be the basis for any anti-capitalist alternative. Horizontal networking is their preferred organizing model. So-called “solidarity economies” based on bartering, collectives and local production systems is their preferred political economic form. They typically oppose the idea that any central direction might be necessary and reject hierarchical social relations or hierarchical political power structures along with conventional political parties.  Organizations of this sort can be found everywhere and in some places have achieved a high degree of political prominence.  Some of them are radically anti-capitalist in their stance and espouse revolutionary objectives and in some instances are prepared to advocate sabotage and other forms of disruption (shades of the Red Brigades in Italy, the Baader Meinhoff in Germany and the Weather Underground in the United States in the 1970s).  But the effectiveness of all these movements (leaving aside their more violent fringes) is limited by their reluctance and inability to scale up their activism into large-scale organizational forms capable of confronting global problems.  The presumption that local action is the only meaningful level of change and that anything that smacks of hierarchy is anti-revolutionary is self-defeating when it comes to larger questions.  Yet these movements are unquestionably providing a widespread base for experimentation with anti-capitalist politics.

The third broad trend is given by the transformation that has been occurring in traditional labor organizing and left political parties, varying from social democratic traditions to more radical Trotskyist and Communist forms of political party organization.  This trend is not hostile to the conquest of state power or hierarchical forms of organization.  Indeed, it regards the latter as necessary to the integration of political organization across a variety of political scales. In the years when social democracy was hegemonic in Europe and even influential in the United States, state control over the distribution of the surplus became a crucial tool to diminish inequalities.  The failure to take social control over the production of surpluses and thereby really challenge the power of the capitalist class was the Achilles heel of this political system, but we should not forget the advances that it made even if it is now clearly insufficient to go back to such a political model with its social welfarism and Keynesian economics. The Bolivarian movement in Latin America and the ascent to state power of progressive social democratic governments is one of the most hopeful signs of a resuscitation of a new form of left statism.

Both organized labor and left political parties have taken some hard hits in the advanced capitalist world over the last thirty years. Both have either been convinced or coerced into broad support for neoliberalization, albeit with a somewhat more human face. One way to look upon neoliberalism, as was earlier noted, is as a grand and quite revolutionary movement (led by that self-proclaimed revolutionary figure, Margaret Thatcher) to privatize the surpluses or at least prevent their further socialization.

While there are some signs of recovery of both labor organizing and left politics (as opposed to the “third way” celebrated by New Labor in Britain under Tony Blair and disastrously copied by many social democratic parties in Europe) along with signs of the emergence of more radical political parties in different parts of the world, the exclusive reliance upon a vanguard of workers is now in question as is the ability of those leftist parties that gain some access to political power to have a substantive impact upon the development of capitalism and to cope with the troubled dynamics of crisis-prone accumulation. The performance of the German Green Party in power has hardly been stellar relative to their political stance out of power and social democratic parties have lost their way entirely as a true political force.  But left political parties and labor unions are significant still and their takeover of aspects of state power, as with the workers party in Brazil or the Bolivarian movement in Venezuela has had a clear impact on left thinking, not only in Latin America.  The complicated problem of how to interpret the role of the Communist Party in China, with its exclusive control over political power, and what its future policies might be about is not easily resolved either.

The co-revolutionary theory earlier laid out would suggest that there is no way that an anti-capitalist social order can be constructed without seizing state power,  radically transforming it and re-working the constitutional and institutional framework that currently supports private property, the market system and endless capital accumulation. Inter-state competition and geoconomic and geopolitical struggles over everything from trade and money to questions of hegemony are also far too significant to be left to local social movements or cast aside as too big to contemplate.  How the architecture of the state-finance nexus is to be re-worked along with the pressing question of the common measure of value given by money cannot be ignored in the quest to construct alternatives to capitalist political economy.  To ignore the state and the dynamics of the inter-state system is therefore a ridiculous idea for any anti-capitalist revolutionary movement to accept.

The fourth broad trend is constituted by all the social movements that are not so much guided by any particular political philosophy or leanings but by the pragmatic need to resist displacement and dispossession (through gentrification, industrial development, dam construction, water privatization, the dismantling of social services and public educational opportunities, or whatever).  In this instance the focus on daily life in the city, town, village or wherever provides a material base for political organizing against the threats that state policies and capitalist interests invariably pose to vulnerable populations.  These forms of protest politics are massive.

Again, there is a vast array of social movements of this sort, some of which can become radicalized over time as they more and more realize that the problems are systemic rather than particular and local.  The bringing together of such social movements into alliances on the land (like the Via Campesina, the landless peasant movement in Brazil or peasants mobilizing against land and resource grabs by capitalist corporations in India) or in urban contexts (the right to the city and take back the land movements in Brazil and now the United States) suggest the way may be open to create broader alliances to discuss and confront the systemic forces that underpin the particularities of gentrification, dam construction, privatization or whatever.  More pragmatic rather than driven by ideological preconceptions, these movements nevertheless can arrive at systemic understandings out of their own experience. To the degree that many of them exist in the same space, such as within the metropolis, they can (as supposedly happened with the factory workers in the early stages of the industrial revolution) make common cause and begin to forge, on the basis of their own experience, a consciousness of how capitalism works and what it is that might collectively be done.  This is the terrain where the figure of the “organic intellectual” leader, made so much of in Antonio Gramsci’s work, the autodidact who comes to understand the world first hand through bitter experiences, but shapes his or her understanding of capitalism more generally, has a great deal to say.  To listen to peasant leaders of the MST in Brazil or the leaders of the anti-corporate land grab movement in India is a privileged education. In this instance the task of the educated alienated and discontented is to magnify the subaltern voice so that attention can be paid to the circumstances of exploitation and repression and the answers that can be shaped into an anti-capitalist program.

The fifth epicenter for social change lies with the emancipatory movements around questions of identity – women, children, gays, racial, ethnic and religious minorities all demand an equal place in the sun – along with the vast array of environmental movements that are not explicitly anti-capitalist.  The movements claiming emancipation on each of these issues are geographically uneven and often geographically divided in terms of needs and aspirations.  But global conferences on women’s rights (Nairobi in 1985 that led to the Beijing declaration of 1995) and anti-racism (the far more contentious conference in Durban in 2009) are attempting to find common ground, as is true also of the environmental conferences, and there is no question that social relations are changing along all of these dimensions at least in some parts of the world.  When cast in narrow essentialist terms, these movements can appear to be antagonistic to class struggle. Certainly within much of the academy they have taken priority of place at the expense of class analysis and political economy. But the feminization of the global labor force, the feminization of poverty almost everywhere and the use of gender disparities as a means of labor control make the emancipation and eventual liberation of women from their repressions a necessary condition for class struggle to sharpen its focus.  The same observation applies to all the other identity forms where discrimination or outright repression can be found. Racism and the oppression of women and children were foundational in the rise of capitalism.  But capitalism as currently constituted can in principle survive without these forms of discrimination and oppression, though its political ability to do so will be severely curtailed if not mortally wounded in the face of a more unified class force.  The modest embrace of multiculturalism and women’s rights within the corporate world, particularly in the United States, provides some evidence of capitalism’s accommodation to these dimensions of social change (including the environment), even as it re-emphasizes the salience of class divisions as the principle dimension for political action.

These five broad tendencies are not mutually exclusive or exhaustive of organizational templates for political action.  Some organizations neatly combine aspects of all five tendencies. But there is a lot of work to be done to coalesce these various tendencies around the underlying question: can the world change materially, socially, mentally and politically in such a way as to confront not only the dire state of social and natural relations in so many parts of the world, but also the perpetuation of endless compound growth?  This is the question that the alienated and discontented must insist upon asking, again and again, even as they learn from those who experience the pain directly and who are so adept at organizing resistances to the dire consequences of compound growth on the ground.

Communists, Marx and Engels averred in their original conception laid out in The Communist Manifesto, have no political party.  They simply constitute themselves at all times and in all places as those who understand the limits, failings and destructive tendencies of the capitalist order as well as the innumerable ideological masks and false legitimations that capitalists and their apologists (particularly in the media) produce in order to perpetuate their singular class power.  Communists are all those who work incessantly to produce a different future to that which capitalism portends.  This is an interesting definition. While traditional institutionalized communism is as good as dead and buried, there are by this definition millions of de facto communists active among us, willing to act upon their understandings, ready to creatively pursue anti-capitalist imperatives. If, as the alternative globalization movement of the late 1990s declared, ‘another world is possible’ then why not also say  ‘another communism is possible’? The current circumstances of capitalist development demand something of this sort, if fundamental change is to be achieved.

These notes draw heavily on my forthcoming book, The Enigma of Capital, to be published by Profile Books in April 2010.

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Karl Marx - 1872

COMMODITIES AND VALUES

King’s College London Reading Capital Society

October 20th 2009

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http://www.kclreadingcapital.blogspot.com

http://www.facebook.com/group.php?gid=49539959005

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Thanks to all who attended our re-launch meeting with Ben Fine (apologies for those who had to sit on the floor and stand by the door!). There is an mp3 of the meeting (http://rapidshare.com/files/293932707/Ben_Fine_13Oct2009.mp3) for download along with older sessions on the blog. It’s a big file, but worth the wait!

We hope that everyone found the meeting interesting and will consider reading Capital with us. Details of our first meeting are below:

’Commodities & Values’

The wealth of societies in which the capitalist mode of production prevails appears as an ‘immense collection of commodities’.

Marx begins Capital by looking at the elementary building block of capitalism, the commodity.

Marx identifies in the commodity a dual aspect, use-value and exchange value. One gives the commodity its usefulness for the consumer, the other commensurability with other commodities.

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Chris Harman, editor of International Socialism Journal (http://www.isj.org.uk), introduces a discussion on:

‘Commodities & Values’
Tuesday 27th October 2009
6pm
Room 2.42 F-WB
Waterloo Campus
King’s College London

N.B. We will be reading the first 3 sections of Chapter 1 in preparation.

All welcome!

Posted here by Glenn Rikowski

The Flow of Ideas: http://www.flowideas.co.uk

Interview with David Harvey
(Alternate version with Portuguese subtitles)
October 9, 2009

David Harvey on Urban Utopias
MIT City Visions Course
Spring 2004

THE END OR FUTURE OF CAPITALISM

DAVID HARVEY
Distinguished Professor of Anthropology and Geography;
Author of The Limits to Capital (Verso, 2007)

in conversation with

ALEXANDER COCKBURN
Editor of CounterPunch and columnist for The Nation

Moderated by

LAURA FLANDERS, GRITtv

A Jobless Recovery is NO RECOVERY! The banks are booming on public cash, and Wall Street bonuses are soaring while workers’ wages flat line. Is this the future of capitalism? Are we living it right now? Or is there another way? Another future? Join us on September 22 at CUNY’s Proshansky Auditorium for a conversation about the crisis now with Counterpunch co-editor and Nation columnist Alexander Cockburn and CUNY professor and author David Harvey. Moderated by bestselling author and host of GRITtv Laura Flanders.

Tuesday, September 22, 2009 at 7.30 pm
Proshansky Auditorium
CUNY Grad Center
365 Fifth Ave., at 34th St.
New York, NY 10001

Book-signing reception to follow.