Crises of Capitalism
“If you watch just one funny and handsome Marxist critique of the financial crisis, make it the Royal Society for the Encouragement of Arts, Manufactures and Commerce’s animated version of David Harvey’s RSA speech “Crises of Capitalism.” It’s been making the rounds this afternoon, and for good reason: Mr. Harvey, a Marxist scholar who heads CUNY’s Center for Place, Culture & Politics, describes not just the failures that caused the ongoing fiasco, but the failure of how we’ve explained it.”
I don’t agree with most much of this discussion, but nonetheless I found it amusing.
In this RSA Animate, radical sociologist David Harvey asks if it is time to look beyond capitalism towards a new social order that would allow us to live within a system that really could be responsible, just, and humane?
Hat tip Chris C
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June 30th, 2010 at 9:58 pm
very interesting-
but- unfortunately- Marxism has been tried and failed-people look after their family and themselves first- so it’s all bullshit-
I prefer anarchy- I am certain that I could carve out my own fiefdom-
and then- long live feudalism!
June 30th, 2010 at 10:04 pm
As Ive gotten older, Ive found it harder and harder to be amused by deep ideological ignorance; e.g. George Carlin, he became so political that even his non-political humor was simply not funny.
Mr. Harvey, well what does one expect from a Sociologist… along with journalist majors are the most deeply self-deluded and ignorant of critical academics.
Seriously, they are no different than watching a room full of high school seniors in a lunch room “study hall”…. in fact I’d give the edge to the youngsters.
June 30th, 2010 at 10:05 pm
I loved anything Carlin did — he was thoughtful, provocative, and very much recognized the shift in power away from the public and to the corporatocracy earlier than most . . .
June 30th, 2010 at 10:06 pm
Barry don’t know what exactly you disagree on. The explanations are to me historically and culturally correct. Particularly bullet (4) on housing is correct. The crushing of labor is also spot on. I don’t think you disagree that financiers hold all the cards of power. May be you disagree that the solution is Marxism and so do I. However, he is no proposing Marxism. He just happened to be a Marxist explaining the whys…
June 30th, 2010 at 10:09 pm
Capitalism didn’t fail as much as it was prevented from succeeding.
What the big banks succeeded in doing was Socializing their failure. And as long as they continue to receive Main Street’s wealth for free via the back door of low rates, they really don’t need Main Street.
June 30th, 2010 at 10:34 pm
@ HCSKinght – “Seriously, they are no different than watching a room full of high school seniors in a lunch room ‘study hall’…. in fact I’d give the edge to the youngsters.”
I believe the same argument can be made attacking Economists.
June 30th, 2010 at 10:39 pm
Thanks for posting this Barry, I’ll share this with some other folks. I really don’t see much to disagree with here. Fairly obvious this free market religion ain’t working, and it’s not just one person’s (Greenspan) fault.
June 30th, 2010 at 10:50 pm
Peter Drucker wrote a book 20 years ago, along the same lines as this, called “The Post-Capitalist Society”.
June 30th, 2010 at 11:29 pm
I would have to argue that capitalism hasn’t really failed: It succeeded extremely well, only it succeeded at the wrong things.
The real problem is we allowed ourselves to be deluded into some serious erroneous thinking. Simply put, we believed we could all get rich doing the same things, such as trading paper investments or flipping houses, and we convinced ourselves paper investments and financial instruments were real wealth.
Two basic facts of economics are:
(1) We can never all become wealthy in real terms by making the same investments, goods, or services. When we all try to get rich doing the same thing all we will ever end up creating is overproduction or bubbles. Overproduction of anything, whether consumables or homes, will eventually have to be corrected by a contraction and all bubbles will eventually have to burst. At least when we overproduce goods and services we have a chance at raising our standard of living. When we overproduce paper financial instruments we’ve really only created a larger pile of paper.
(2) Paper investments are never real wealth. At best the paper can represent the real wealth in an economy but at worst the production of paper financial instruments will eventually lead to a major misallocation of resources within the economy.
Did millions of baby boomers really believe we could all retire wealthy and live the high life on our stock market profits? Did we all really believe we could become rich selling houses to each other at ever higher prices? If so, then we were extremely naïve. In all honesty, capitalism didn’t really fail. It simply sold us some lies and not only did we buy, we became rabid believers.
http://sites.google.com/site/jpetervanschaik/the-cross-of-paper-the-downfall-of-the-us-economy
June 30th, 2010 at 11:53 pm
Funny to see the proponents of other d-bag ideologies/disciplines that have been proven so correct dumping on the marxist/sociologist.
Good vid. Wouldn’t say it represented absolute reality (how the fuck would I know?), but Faeces 2 was def in Bailout Nation ballpark.
July 1st, 2010 at 12:14 am
We desperately need way more Marx in this country and to drop our pathetic, dogmatic veneration of capitalism and the private sector. Disagree with his prescriptions and predictions if you will, but Marx’s analysis of the world as he saw it and his critique of classical economics and its practitioners (i.e., apologists for the status quo, then as now) were nothing short of brilliant.
July 1st, 2010 at 12:18 am
IMHO, the video is spot on. What could be simpler. Agree with all points.
Other approach?
Humans have an uncanny ability to do what it takes for personal survival and little more. Well, OK, at important times there was a notion we were all better off being in it together. Share the wealth share the pain. Kind of like a herd of elk that will circle together as predators approach. Sure a few might get taken down, but together they had a better chance of the herd surviving, and most of the individuals.
Not today. Our social fabric is ripped, and it ain’t coming back short of catastrophe.
So, it’s kind of like watching Nero fiddle again.
There’s no pain for the elites. Things are better than they ever have been before. As the video pointed out.
The situation is trivially simple. The Masters of the Universe are in control and loving it. And until they get taken down things will only get worse.
What will happen is the sheeple will become united in a single cause – their survival. And it does not matter what you call the subsequent form of economy or government. Or what form it actually is. There has never been such a thing as free enterprise.
What will matter is they will have reconstructed the social bond needed for the human race to survive.
July 1st, 2010 at 1:18 am
What folks don’t get is that Capitalism is working. Folks just don’t like this aspect of it. The circuitous route to balancing the books is never pretty. Interfering with it makes it even uglier as we are finding out. But, what’s a few trillion thrown on the fire amongst friends.
July 1st, 2010 at 2:08 am
Unfortunately, this is the way capitalism, especially crony capitalism, works. The top 5% through luck, skill, connections, or the fact they have access to enormous financial resources, government or otherwise, end up with 95% of the money. We’re not quite back to where we were in 1900, but seem to be headed in that direction. The old saying that “those who do not study history are doomed to repeat it” seems appropriate here.
July 1st, 2010 at 3:17 am
I, too, am curious to know Barry disagrees with specifically in this presentation. A few of the comments are simply generalized attacks on Marxism or broad defences of capitalism. As opposed to BR, I would say there is much in this I agree with, but I don’t support Marxism. On the other hand, the economic model we have is not capitalism, which I don’t fully support either in its unregulated form.
Marxism, socialism, and capitalism are all economic theories which are diluted and adulterated in application . Measuring the success of any economic theory is done by measuring the conclusions of the theory itself. For example, if I believe that creating millionaires is good and the measure of capitalism’s success, I will say capitalism is better than socialism because it creates more millionaires. A socialist might measure education or healthcare, which makes him prefer socialism.
So, what do use as your yardstick for judging an economic belief system? And are you objective?
July 1st, 2010 at 5:42 am
After the american civil war the US entered the gilded age of capitalism, cheap labor, cheap raw matyerials and greed were the economic realities of the day. The country was dominated by the trusts. The dominated the political process by control of the senate, since senators were appointed by govenors, They dominated the economic system by subjugating the working class; 6 days at 12 to 16 hour work days at minimal wages along with child labor and comany towns. Complaining workers were fired and attempts at organizing were put down by state militias. The slums in major cites were huge and horrific living conditions were common.
Aroun 1915 things started to change due to trust busting by TR, election of senators and the rise of communism in Russia and the growth in the size of the american communist party The thought of being lined up and shot, like what was occuring in Russia, softened the capitalist and resulted inlabor unions, 40 hr weeks, ending child labor and company towns, Eventually even government paid retirements were created.
After WW!!, it apppeared that communism,the USSR, might be the dominated world power and things got even better for labor. , affordable housing, higher education resulted in the creation of a large middle class,
About 1980 it became obvious that communism was an ecconomic failure and the USSSR was not going to dominated and the capitalist started taking over control, labor unions were broken and manufacturin jobs were relocated overseas, the government guaranteed these investmentsw againt seizure or nationalizaion and gave the capitalist money through nontaxation on foreign assets.
Now China is entering it’s gilded age, child labor, 16 hr work days etc. So if you trully believe in capialism, learn chinese and relocate but be caareful they execute people for economic crimes.
July 1st, 2010 at 5:44 am
maybe, it’d be helpful to view this from a different perspective..
http://www.jhuapl.edu/urw_symposium/proceedings/2009/Authors/Rickards.pdf
h/t MRegan
July 1st, 2010 at 6:30 am
Let’s separate who you all think he is from has analysis, which seems spot on to me. He is offering no solutions, so all your comments about that have jumped the shark.
It’s unlikely we’d get it right right out o’ the gate. Despite our toys we’re still primitive humans who’ve a long way to go. However, I think we should at least expect to get the questions right. Perhaps when things get really very dire and those left begin to ask Why?, some will begin to look to who we are and ask why we’re here, what’s our purpose here. But most important, ask your self now, who am I? It will help to know there’s a spiritual solution to every problem.
July 1st, 2010 at 7:23 am
The critique is mostly spot on. However, no one has found an overall better solution so far. Liberals can start by not pretending that money is dirty but rather learning the basics of economics so they can engage the right wing nuts in control now.
BTW the “regulators” were NOT “asleep at the switch.” The regulators were ideologues determined to not regulate at all. Start thinking clearly folks.
July 1st, 2010 at 8:32 am
I can’t see much, if anything to disagree with in this analysis. I would add to his 70′s debt / credit expansion the “innovations” of jerks like Milken and all the other “extractors of value” who did way more more harm than good, paving the way for the extremes in leverage allowed today.
July 1st, 2010 at 8:35 am
“…if it is time to look beyond capitalism towards a new social order that would allow us to live within a system that really could be responsible, just, and humane?”
There’s a point there.
July 1st, 2010 at 8:50 am
marxist are like film critics. they they will eloquently describe what wrong with the movie but their own movie would look like ed wood’s movies.
July 1st, 2010 at 8:52 am
This video was better than the last one. He had little to disagree with except the naive idea somehow this problem will go away via the organization of the people into a collective movement. As long as someone can buy a piece of paper and sell it to someone else for more money and as long as central banks can print unlimited amounts of currency that end up funding unlimited junk credit then the seeds for self destruction exist.
Having said that, if central banks didn’t create currency then gullible investors would make up their own in the form of excess credit. So, as much as I would like to blame the Fed for printing too much money, they really just supplied the fix for the credit junkies, who would have gone home grown if the Fed didn’t comply.
In essence, this man says he likes people, he just hates human nature. Crooked midway games, scams like the wire room, unwinnable bar room bets, fake reward scams, and the like would exist without Wall Street and Wall Street is only an extension of these games to a very large extent. Take, for example, the hedge fund that gets 2 and 20. You pay 2% on investment funds as a management fee. Then you pay 20% of the gains. If the market goes down you still pay the 2% management fee. When it starts going back up you pay 20% on the gains from the recent bottom again. The house always wins but lets you keep some of your money as an enticement that you might win it back if you play again. They’re real job is getting you invested and keeping you invested. iBanks selling garbage and betting against it afterward fit right in. In 100 years, this will be regarded as a classic with the same stature as the wire room, the fake reward, or the carnival midway.
But wait, there’s more. Uncle Stupid had decided to save the world by socializing the losses. Since we live in a free society, it would be wrong to even try to keep people from doing stupid things with their money. It’s not against the law to be fat, stupid, and poor. It’s often a choice. The real crime is allowing Uncle Stupid to subsidize the gaming industry via his nanny intentions to make it all better after the thieves skin you alive and you smiled while they did it. It’s amazing how smart people become when you force them to accept the consequences of their own actions.
Thus, to really save the world Uncle Stupid is going to have to sit on his wallet and make the poor screaming cry babies who just got snookered to live with their bad decisions. We all know this will never happen.
July 1st, 2010 at 9:22 am
“Thus, to really save the world Uncle Stupid is going to have to sit on his wallet and make the poor screaming cry babies who just got snookered to live with their bad decisions. We all know this will never happen.”
There are also many people hurt by the bad decisions of others.
July 1st, 2010 at 9:32 am
wally Says:
July 1st, 2010 at 9:22 am
There are also many people hurt by the bad decisions of others.
reply:
—————-
So, what are you doing about it? Those people have my sympathy but, otherwise, I don’t care. I was smart enough to avoid most of the mess.
I realized that if you borrow money you have to pay it back from income. I was smart enough to know that if someone claim to be able to get you rich if you give them your money to invest, then they would already be rich beyond avarice and wouldn’t even be speaking to me if they could really do it. I was smart enough to know that companies with no earnings shouldn’t have high stock prices. I was smart enough to not bet on which bird would fly off first … the one on the right or the one on the left … which essentially encapsulated the theory of synthetic derivatives.
We have the laws we want. We have the government we want. The existing results of these choices must be what people want. I’m not going to nanny anyone out of their situation to the extent that I am subsidizing Wall Street.
July 1st, 2010 at 9:35 am
Capitalism is right, in the same way natural selection is right.
But here’s the thing, we’ve been fighting and trying to control evolution since we started farming.
When the doctor says your child has cancer, the last thing anybody wants to hear is “Well, we aren’t going to do anything, because it’s just natural selection at work. And who are we to go against natural selection.”
July 1st, 2010 at 9:39 am
DH-
“It’s amazing how smart people become when you force them to accept the consequences of their own actions.”
Nice. Truly astute. Thanks.
July 1st, 2010 at 9:41 am
Dervin Says:
July 1st, 2010 at 9:35 am
When the doctor says your child has cancer, the last thing anybody wants to hear is “Well, we aren’t going to do anything, because it’s just natural selection at work. And who are we to go against natural selection.”
reply:
———–
I’m sorry your kid has cancer. I hope he gets better and thrives with a happy life.
Please take him to the doctor now, but don’t send me the bill. And then review you living habits to see if something you did, such as providing second hand smoke, or terrible food, or something else might have contributed so none of your other kids get sick.
July 1st, 2010 at 9:57 am
“I’m sorry your kid has cancer. I hope he gets better and thrives with a happy life.
Please take him to the doctor now, but don’t send me the bill. And then review you living habits to see if something you did, such as providing second hand smoke, or terrible food, or something else might have contributed so none of your other kids get sick.”
~You know, I generally like your comments, DH, but that was simply cruel and stupid and unnecessary. First, the guy didn’ t say his kid had cancer. Second, it is the mark of a small mind to try and assign causation to things for which causes are not possibly discernible, and almost all childhood cancers fit that bill. Last, when you do assign a cause, it’s to the parent?
You’re a dipshit, DH. My kid’s recovering from his second bone marrow transplant right now from a relapse of childhood leukemia. If you tried to blame me, or him for his cancer you would, first, be wrong, according to all that science understands right now, and two, you’d get a fucking ass-whipping if you did it to my face. Fuck you.
July 1st, 2010 at 10:07 am
Mark Hoffer,
Interesting read, thanks for the link.
July 1st, 2010 at 10:15 am
Yes Sir! Capital has two much power!
The fix is not Socialism or Communism.
The fix is a set time remission of Debt!
We have to make lenders as responsible for the loans they make as we make the borrowers.
Anyone ever heard of a 7 year remission of Debt?
There is one ancient culture out there who has it in their founding documents although there is no evidence that it was ever followed.
If you want to know about it, pull the old dusty black book down off the shelf and look at the 15th chapter of the 5th book.
July 1st, 2010 at 10:21 am
The Curmudgeon Says:
July 1st, 2010 at 9:57 am
You’re a dipshit, DH. My kid’s recovering from his second bone marrow transplant right now from a relapse of childhood leukemia. If you tried to blame me, or him for his cancer you would, first, be wrong, according to all that science understands right now, and two, you’d get a fucking ass-whipping if you did it to my face. Fuck you.
reply:
————
I’m probably showing poor judgment by replying but I’m going to anyway.
I hope your child recovers and lives a happy long life.
First, I didn’t say all sick children are sick due to bad parenting. Dervin was using a straw man argument that many people fall for. It was calculated to misdirect and tug at the heartstrings and manipulate sympathy from casual observers and emotional reactions from people such as those in your situation. Your anger should be directed at him for using people in your situation as a reason to keep the Wall Street subsidies coming. By using the horrors of childhood cancer as his misdirection, he effectively changed the subject from Wall Street fraud to the heartless evil of clear thinking by attempting to turn me into a fiend who hates sick kids.
Most people aren’t morbidly obese due to chance. In a lot of cases, simple exercise will prevent many people from needing drugs. Second hand smoke is said to kill. Getting in massive debt because a nice salesman told you it was OK is a choice.
That being said, a lot of illness is going to happen anyway. Hate me as you wish for responding to Dervin’s misdirection. I think of the misdirection as the greater evil.
Given the space here, and the fact I am just a minor contributor here, I can only write short answers that are to the point and hope what I mean to say comes across clearly. People will always embellish on their own and the stress you undoubtedly feel played a part in your understanding of my post.
Second, an we all know it.
July 1st, 2010 at 10:28 am
PS, I don’t know where that last partial sentence came from. Sorry if it look a little odd. If I could edit, I would remove it.
July 1st, 2010 at 10:42 am
In the vein of crises, some may find this article of value:
http://www.theatlantic.com/magazine/archive/2010/07/the-politically-incorrect-guide-to-ending-poverty/8134
In reading this, one item to keep in mind might be Korea’s Daewoo and its attempt to acquire a lease on a substantial percentage of Madagascar’s arable land. Some may recall that there was a ‘minor’ military coup there last year. So, food for thought.
July 1st, 2010 at 10:42 am
DH: I’ll consider it removed. Which makes most of my comments superfluous. And I don’t disagree with your premise to which Dervin was responding. Using childhood cancer to pull heartstrings in an argument is like comparing every unpopular leader to Hitler, or making hay out of perceived racism. It just makes you go, “Huh”? Which is why I usually ignore those arguments, as well.
July 1st, 2010 at 12:33 pm
Capitalism has worked well to GROW the world quickly, technology and warfare for example. Something else is needed now for a MATURING phase of Earth. Just as the goals of a teenager change as one gets older.
July 1st, 2010 at 12:56 pm
@genomik,
Why, have people changed?
July 1st, 2010 at 1:30 pm
If David Harvey thinks nobody is blaming our troubles on excessive union power, he should go read Mish. I suppose the “public employees unions must die” argument isn’t based directly on “they caused the financial crisis”. Rather, it is based on the notion that they are causing fiscal disasters. But the “blame evil unions” meme is alive and well. And likely to get stronger in the next few years.
July 1st, 2010 at 7:19 pm
These kinds of presentations make complex things simple to understand. I can use this on my sister. Thank you
July 1st, 2010 at 9:03 pm
I’m extremely disappointed to say he: NAILED IT.
What we are making is a society of Extremely Rich CrackPots. This will Not End Well.
July 1st, 2010 at 9:05 pm
Marx seems to have understood Capitalism very well.
Now, Socialism and Communism don’t work as well.
But, Capitalism cannot go on a Non-Sustainable Path.
Something must be done to control Banks. And the wealth transfer to them.
July 2nd, 2010 at 12:45 am
I think we need to take care not to conflate Marxist analysis with the evils of Stalinist repression and the failures of economic central planning in the former USSR. There is much to learn from reading Marx, whose major work was titled “Capital” and not “Communism.” (The Communist Manifesto predates it by many years and — right or wrong — was mostly a pamphlet responding to worker unrest in the 1840s)
His analysis of capital isn’t the final word on the topic by any means, but it isn’t a blueprint for tyranny either. That a repressive, failed, corrupt system claimed to be the political expression of Marx’s theories only means that some people found it possible to read his work in a particularly destructive way, much like certain Nazis claimed Nietzsche as their intellectual forefather. One can read “Capital” in other ways. At least I did when I read parts of it a few years back. I found much to agree with. Does that make me a communist? What about my (modest) investment portfolio, then?
What I mean to say is that Marxism is not identical to Communism as it was expressed in the 20th century. And as clusterfarked as capitalism has got itself in the US, we’d best be looking for understanding in as many places as are available.
Incidentally, does anybody else find the current centralizing of capital and political power in the US analogous to the sorts of central planning that failed so utterly in the USSR? Or is it just me?
July 2nd, 2010 at 12:10 pm
@kstills
Why yes, in a way, people have changed. For example exponential advances in technology are bringing us to a point where we have oracle like computers in our pockets. Obesity and abundance is a problem in much of the world as it never was before. Our ability to cause environmental destruction is great than it ever has. Soon some people will be given advantages via genetic engineering or computer assistance that makes them essentially cheaters in the game of capitalism.
So yes, some of the variable in the equation of humanity are changing so why should we strive to keep the formula the old one. If we continue to keep capitalism going we may change faster than many people can deal with . the rate of change of earth is already going exponential, more so than most recognize, lets make it a more just place instead of trying to grow as quickly as possible.