Wednesday, June 16, 2010
“At times of crisis, the irrationality of capitalism becomes plain for all to see. Surplus capital and surplus labour 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?” David Harvey’s The Enigma of Capital examines the current economic crisis by investigating the different potential barriers to “capital flow.” In the book, Harvey adopts a popular, accessible style (no footnotes, no detailed historical/geographical case studies except for the first chapter on the current crisis, no elaborate explications of specific Marxist texts, etc.), and synthesizes a number of arguments that he has laid out more rigorously elsewhere. The book works extremely well as an introduction to the crisis and to Marxist economics, but readers familiar with Harvey’s Limits to Capital and A Brief History of Neoliberalism might want to pass on reading this one (the important ideas of the last chapter have already circulated in a readily available article published in Monthly Review). Harvey begins with a fine but rather standard outline of the current crisis. In 2007, a wave of home foreclosures made the white middle class anxious about a housing crisis that had long inflicted minorities. By 2008 the subprime mortgage crisis hit Wall Street, causing the collapse of financial institutions and a massive government bailout that did not manage to reverse the recession. The crisis spread across the globe, and over $50 trillion in assets was eventually destroyed. Harvey emphasizes how unexceptional this pattern is: “There have been hundreds of financial crises around the world since 1973, compared to very few between 1945 and 1973; and several of these have been property- or urban-development-led.” He adds, “Crises associated with problems in property markets tend to be more long-lasting than the short sharp crises that occasionally rock stock markets and banking directly. This is because . . . investments in the built environment are typically credit-based, high-risk and long in the making: when over-investment is finally revealed . . . then the financial mess that takes many years to produce takes many years to unwind.” He concludes, “There is, therefore, nothing unprecedented, apart from its size and scope, about the current collapse. Nor is there anything unusual about its rootedness in urban development and property markets.” He turns to the economic history that led up to the crisis, beginning with the limits placed on profits by the strength of the labor movement in the 1960s. Over the following decades, businesses responded by encouraging immigration of cheap labor, integrating automation and other labor-saving technologies, getting governments to enact neoliberal policies, globalizing production to take advantage of cheap surplus labor, and creating a new global financial architecture. The power of labor was crushed, but “disempowered labour means low wages, and impoverished workers do not constitute a vibrant market. . . . One barrier to capital accumulation – the labour question – is overcome at the expense of creating another – lack of market.” In response to what Harvey calls the “capital surplus absorption problem,” financialization, particularly the spread of private debt, including subprime mortgages, has expanded since the 1970s. Another response was the export of capital to new markets around the world, but this soon led to sovereign debt problems, which the IMF attacked with its infamous structural adjustment programs. Finally, the creation of a truly global and highly deregulated financial system broke down the last international barriers to capital flow. The shadow banking system grew immensely and asset values went up, but of course this could not last forever, and the current crisis may signal the end of the U.S.’s reign as hegemon of the capitalist world system. Having looked at the crisis and its immediate origins, Harvey devotes the bulk of his book to examining the more general types of barriers to capital flow that cause such crises. He offers a basic Marxist explanation of capitalist production and the circulation of capital, emphasizing the perpetual problem of finding an outlet for surplus capital. He argues, “Continuity of flow in the circulation of capital is very important. . . . Any interruption in the process threatens the loss or devaluation of the capital deployed.” Harvey argues that capitalists are forced to always “reinvest in expansion rather than consume away their profits in pleasures” because if they don’t reinvest, competition will drive them out of business. “In the absence of any limits or barriers, the need to reinvest in order to remain a capitalist propels capitalism to expand at a compound rate. This then creates a perpetual need to find new fields of activity to absorb the reinvested capital: hence ‘the capital surplus absorption problem.’” During a crisis, “growth stops and there appears to be an excess or overaccumulation of capital relative to the opportunities to use that capital profitably. If growth does not resume, then the overaccumulated capital is devalued or destroyed.” “In a general crisis, a lot of capital gets devalued (the $50 trillion or so loss in global asset values so far estimated for the current crisis is a case in point). Devalued capital can exist in many forms: deserted and abandoned factories; empty office and retail spaces; surplus commodities that cannot be sold; money that sits idle earning no rate of return; declining asset values in stocks and shares, land, properties, art objects, etc.” Harvey spends a great deal of time discussing “six potential barriers to accumulation,” six factors that can block capital flow and cause a crisis. These barriers are “insufficient initial money capital” (capital’s response: accumulation by dispossession or the credit system), “scarcities of, or political difficulties with, labour supply” (response: political repression, the creation of what Marx called an industrial reserve army, or the movement of production to new parts of the globe), “inadequate means of production” (one response: construction of infrastructures and urban environments, which also absorb plenty of surplus capital), “inappropriate technologies and organizational forms” (response: R&D, perpetual innovation), “resistance or inefficiencies in the labour process” (response: technological innovation, management manipulation, etc.), and “lack of demand backed by money to pay in the market” (response: marketing, imperialism). Capitalism has regularly overcome these types of barriers, but they all continue to remain potential obstacles to capital accumulation. Harvey argues that too often one of these barriers is singled out and made into the primary cause of crises: “There has been a tendency within the history of crisis theorizing to look for one dominant explanation for the crisis-prone character of capitalism. The three big traditional camps of thought are the profit squeeze (profits fall because real wages rise), the falling rate of profit (labour-saving technological changes backfire and ‘ruinous’ competition pulls prices down), the underconsumptionist traditions (lack of effective demand and the tendency towards stagnation associated with excessive monopolization).” Harvey, however, wants a more “fluid and flexible” approach to how the different barriers interact. He says of his list of six barriers, “Any one of these circumstances can slow down or disrupt the continuity of capital flow and so produce a crisis that results in the devaluation or loss of capital. When one limit is overcome accumulation often hits up against another somewhere else. . . . The crisis tendencies are not resolved but merely moved around.” Throughout the book, Harvey repeats this tactic of making lists rather than identifying one item as being ultimately determinate. It’s a refreshing tactic, one perhaps learned from Mandel, but it can also get excessively general and abstract and function as an obstacle to a more concrete analysis that really takes a specific stance on the conjuncture. After examining the potential barriers to capital flow, Harvey offers a list of seven “activity spheres” that affect the evolution of capitalism. These spheres are: “technologies and organizational forms; social relations; institutional and administrative arrangements; production and labour processes; relations to nature; the reproduction of daily life and of the species; and ‘mental conceptions of the world.’” As with his previous list, he argues, “No one of the spheres dominates even as none of them are independent of the others.” He adds, “The danger for social theory as well as for popular understanding is to see one of the spheres as determinant.” The spheres are “inextricably interwoven with each other,” and the dialectical interaction of all them explains the evolution of capitalism. The final chapter, “What is to be Done? And Who is Going to Do It?,” offers Harvey’s suggestions on how the crisis might be resolved in a way that doesn’t simply reproduce capitalist class power. Harvey warns that there may be no real solution to the problem of finding outlets for surplus capital. He argues, “There may be no effective long-term 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.” In other words, compound growth simply cannot continue as it has. But this possibility is rarely acknowledged; businesses are already lining up to jump back into the finance game and the government is more than willing to simply move the problem around from one barrier to another. This is the moment when a strong leftist political force is needed, but Harvey admits “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.” The traditional working class movements have been decimated, and there are significant differences and even conflicts among social movements such as feminism, environmentalism, and anarchism. But drawing from his earlier explanation of the co-evolution of activity spheres, Harvey asks if such spheres might also “form the basis for a co-revolutionary theory? A political movement can start anywhere (in labour 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 power). The trick is to keep the political movement moving from one sphere of activity to another in mutually reinforcing ways. . . . the first rule for an anti-capitalist movement is: never rely on the unfolding dynamics of one movement without carefully calibrating how relations with all the others are adapting and reverberating.”
Monday, June 7, 2010
In Underworld, DeLillo is clearly writing in Great-American-Novel mode, pushing for a big statement about History while at the same time highlighting the insufficiency of traditional historical grand narratives. Given its massive scale and scope, multiple narrative threads and forms, and cameos by famous historical figures, Underworld might be considered a postmodern equivalent of Dos Passos’s U.S.A. trilogy. The book opens in 1951 with a masterfully crafted description of the baseball game between the Giants and Dodgers at the Polo Grounds that concluded with Bobby Thompson hitting his game winning “Shot Heard Round the World.” The book then jumps to the present, and over the next 700 pages slowly works its way back toward that momentous homerun. As history runs backwards, DeLillo fills in the lives of a large group of characters, most of whom have some connection to the homerun baseball. Covering the last half of the 20th century, the novel situates this labyrinth of individual narratives within the larger history of the Cold War. DeLillo drives home the point that the Russians tested an atomic bomb on the same day as the baseball game in 1951. References to the Cold War, from Lenny Bruce cracking jokes about the Cuban Missile Crisis to New Left protests against the Vietnam War, are essential to the sense of history that hovers over the rewinding narrative. Throughout, this geopolitical History is juxtaposed with the subterranean history of the homerun baseball’s passage through the hands of a series of owners (one character even notes that “the radioactive core [is] the exact same size as a baseball”). But written after the collapse of really existing socialism and in an era when baseball seems to have become hopelessly commercialized and mediated, Underworld concludes by doubting whether contemporary times can adequately register or even create something like history. In the final section, unambiguously titled “Das Kapital,” Nick Shay, the eventual owner of the baseball, travels to the former Soviet Union to see a demonstration by a new firm that specializes in using nuclear explosions to destroy nuclear waste. Nick grew up in a poor but vital neighborhood of the Bronx in the 1940s and 50s. His father disappeared when Nick was young, leaving him without a sense of personal history and perhaps leading to his involvement in a fatal shooting that sent him to a youth correctional center. Although the shooting - the decisive moment in his personal history - remains a mystery to Nick, he manages to reconstruct a life and history for himself, in part by adopting the world of business. Nick thinks, “Corporations are great and appalling things. They take you and shape you in nearly nothing flat, twist and swivel you. And they do it without overt persuasion, they do it with smiles and nods, a collective inflection of the voice. You stand at the head of a corridor and by the time you walk to the far end you have adopted the comprehensive philosophy of the firm, the Weltanschauung.” DeLillo has some fun with Nick’s job in waste management, offering descriptions of sublime landfill mountains, mock philosophies about civilization evolving as a response to garbage, and accounts of Nick and his wife’s tendencies to see all new commodities first as garbage, then as products to be used. The novel links waste to history by questioning whether historical truth is not just potentially hidden but even lost as waste, like the scraps of paper that blow away unnoticed from the baseball game. But as he flies to a formerly socialist country, Nick recognizes the loss of difference that accompanies the worldwide extension of capital. Repeating an argument he heard earlier, Nick reflects, “Capital burns off the nuance in a culture. Foreign investment, global markets, corporate acquisition, the flow of information through transnational media, the attenuating influence of money that’s electronic and sex that’s cyberspace, untouched money and computer-safe sex, the convergence of consumer desire – not that people want the same things, necessarily, but that they want the same range of choices.” “But even as desire tends to specialize, going silky and intimate, the force of converging markets produces an instantaneous capital that shoots across horizons at the speed of light, making for a certain furtive sameness, a planing away of particulars that affects everything from architecture to leisure time to the way people eat and sleep and dream.” Although his inner history has been one of redemption, Nick remains nostalgic for the past: “I long for the days of disorder. I want them back, the days when I was alive on the earth, rippling in the quick of my skin, heedless and real.” Klara Sax, an older woman who had an affair with Nick when he was only sixteen, makes a related comment when interviewed about her art, which involves painting discarded B-52 bombers. She states, “Power meant something thirty, forty years ago. It was stable, it was focused, it was a tangible thing. . . . And it held us together, the Soviets and us. Maybe it held the world together. You could measure things.” But “Things have no limits now. Money has no limits.”DeLillo ends the novel with a reflection on history and the internet, pointing out that on the web there is no space or time, “only connections." DeLillo seems enticed by yet skeptical of the utopia of cyberspace, where all of history seems to coexist in a virtual electronic present. He ends with a glimpse of the real world and history still “offscreen, unwebbed.”
Richard Sennett’s The Culture of the New Capitalism argues that the new ideal of the lean, flexible firm, which appears to liberate society from oppressive and inefficient bureaucracies, has destructive practical consequences for individual workers. Boltanski & Chiapello, Franco Berardi, and many others have also dealt with this subject, and often in a far more theoretically advanced manner. In this book, Sennett remains within the discipline of sociology, drawing from direct interviews and observations more than from theoretical accounts of post-Fordism, neoliberalism, and precarious labor. Like Boltanski & Chiapello, Sennett claims that the New Left and counterculture’s critique of bureaucratic institutions in the 1960s has been realized today in a “perverse form.” Large, hierarchical, bureaucratic organizations of the mid-20th-century are being dismantled, but the result is anything but a free, active community. Instead, individuals find themselves caught in “unstable, fragmentary social conditions” that generate “ontological insecurity.” The new “culture” of capitalism demands a “self oriented to the short term, focused on potential ability, willing to abandon past experience.” Yet few people come close to this ideal, and even fewer can live by it for long. As a result, “The cultural ideal required in new institutions . . . damages many of the people who inhabit them.” Sennett draws his conclusions from his observations of workers in elite high-tech, finance, and media industries. Though these industries are only “a small part of the whole economy,” they “exert a profound moral and normative force as a cutting-edge standard for how the larger economy should evolve.” That is, they function as a kind of avant-garde for the culture of the new capitalism that Sennett surveys. According to Sennett, the new institutional structures undermine the ability of workers to organize their lives into narratives. Sennett argues that the large bureaucratic institutions of the Fordist era (what he calls the period of “social capitalism”) created a sense of time and narratability: “Rationalized time enabled people to think about their lives as narratives – narratives not so much of what necessarily will happen as of how things should happen. It became possible, for instance, to define what the stages of a career ought to be like, to correlate long-term service in a firm to specific steps of increased wealth.” For example, it was possible to imagine climbing the corporate ladder to the top, even though few ever managed to do so. Sennett argues that this sense of time and narrative was important because it allowed workers to construct themselves as having some agency, albeit in a highly constrained, institutionalized form. It might seem a paradoxical claim, but within what Max Weber called the “iron cage” of bureaucracy, workers discovered a framework of sense in which to cast themselves as agents (Sennett seems to avoid confronting the question of whether this sense of agency always was completely illusory). But the new world of flexible organizations and casualized labor undermines any sense of linear time or narrative; the preeminent narrative today hardly goes beyond “I’m engaged, now I’m redundant.” Even worse, the new flexible institutions cause workers to lose any sense of agency, leading individuals to appear to themselves as passive victims of senseless or uncontestable forces. Sennett links these institutional changes to the “shift from managerial to shareholder power in large companies,” which he dates back to the breakdown of the Bretton Woods agreements. Since the 1970s, what Bennet Harrison terms “impatient capital” has altered how managers run businesses by placing an emphasis on short term returns and what might be called an organizational aesthetic dominated by finance. “Enormous pressure was put on companies to look beautiful in the eyes of the passing voyeur; institutional beauty consisted in demonstrating signs of internal change and flexibility, appearing to be a dynamic company, even if the once-stable company had worked perfectly well. . . . Stability seemed a sign of weakness, suggesting to the market that the firm could not innovate or find new opportunities or otherwise manage change.” New information technologies also played a part by cutting through traditional hierarchies and communication channels. But at the same time as they undermine older forms of bureaucratic command, such technologies also support a new kind of centralization, giving upper management a kind of panoptic control over the far reaches of the firm. Automation, along with the casualization of labor, has exacerbated the relative flattening of hierarchies by eliminating much of many firms’ blue-collar base and white-collar middle strata. Today, automation, globalization, and restructuring cause workers to be anxious about the “specter of uselessness.” One of the traditional protections against uselessness was skill, or the cultivation of craftsmanship, “doing something well for its own sake.” But craftsmanship “sits uneasily in the institutions of flexible capitalism.” To fixate too much and too long on one thing is now considered a flaw. “Instead, the flexible organization puts a premium on portable human skills, on being able to work on several problems with a shifting cast of characters, cutting loose action from context.” Instead of valuing past accomplishments and proven skills, firms today seek out human “potential,” a rather vague sense of the capacity for future performance in unknown conditions. Sennett argues, “The statement ‘you lack potential’ is much more devastating than ‘you messed up.’ It makes a more fundamental claim about who you are. It conveys uselessness in a more profound sense.” Despite any other qualifications or skills they might have, those deemed without potential disappear into an invisible mass of the unwanted. Sennett claims, “those judged without inner resources are left in limbo. They can be judged no longer useful or valuable, despite what they have accomplished.” In his conclusion, Sennett holds out “narrative, usefulness, and craftsmanship” as potential “anchors” for a new, more healthier culture of capitalism. Speaking of narrative, he claims that innovations such as job sharing or a basic income/basic capital might serve as the foundation for the creation of new narratives that move beyond the precarious worker’s constant, pressing anxiety about obsolescence.