David Harvey’s Crisis of Capitalism, Animated

David Harvey has been doing a lecture tour for his Marxist critique of both the financial crisis and the narratives told about it. I hadn’t heard the lecture, but just now, I got to see it animated. From the New York Observer, this is the lecture of the Crisis of Capitalism with animation:

Clever. Click here for full-sized. I don’t care what your economic politics are: the 5 genres of financial crisis storytelling that start the video, animated in fast-motion, are hilarious and wonderful (your call to stick around for the internal contradiction of capitalist accumulation, but it does get helpfully explained by being drawn onto a monopoly board). It’s by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), and the art is fantastic at telling the story. Great job.

RSA has a collection of these videos, including one by Barbara Ehrenreich. Best way to kill 11 minutes online today.

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6 Responses to David Harvey’s Crisis of Capitalism, Animated

  1. noompa says:

    The video is pretty brilliant, no doubt about it- more so for the animations I would say. Talented folks over at the RSA.

    However, I’m still a little unclear on what his “Marxist” critique truly gives us i.e. what is at stake here? Prof. Harvey himself admits that he has identified the problem, but is yet to identify a solution (beyond talking about it and encouraging debate and discussion that falls outside the standard narratives that he identifies). However, a rose by any other name…what difference does it make how we identify systemic failures? I think narratives that identify misaligned incentives to financial innovation and fixable flaws in the existing system (regulatory loopholes et al.) identify systemic issues that aren’t too far from those talked about by Harvey….so then what? No doubt he has more to say about it, but I really fail to see how his own ideas are substantively improving the debate beyond a semantic distinction (based purely on this video of course).

  2. Mike says:

    Noompa,

    Don’t look at me. I’m a boring liberal. I’m all about technical fixes with a few major structural ones to engineer competition where there wasn’t before and break up concentrations of power.

    I think he does have an argument about how inequality and the power of workers versus capital and management distorted the economic playing field, leading to debt-fueled consumption which collapsed. Which is sort of Rajan’s argument, actually. And some other arguments that people are feeling out about inequality and major financial crisis. If anyone who reads this knows more, feel free to take over the comments section.

    • alexyc says:

      On structure, consider what would happen if the interchange fees to merchants were replaced with wages instead. We’d hear screams about rampant inflation which, ideologically speaking, doesn’t seem to apply to asset prices.

      Rather than reduce principal, we’re effectively pledging a portion of peoples’ incomes to sustain the value of mortgage-backed assets (referred to as “legacy assets” in the beginning stages of TARP) by inventing the concept of strategic default. Less income goes to the productive sector of the economy, demand falls, unemployment rises, etc.

    • noompa says:

      Fault Lines is on my list of books to read, but based on what little I know of the book (from Rajan’s own talks, Arpit Gupta’s review, Planet Money’s Deep Read, etc.) I think you’re right that this is basically Rajan’s point as well- stagnating wages required the credit expansion in order to have consumption continue to grow.

      However, I think this is precisely where we should push Harvey: where did the source of these stagnating wages lie? Harvey points to Reaganomics and Thatcherite reforms, but this doesn’t quite address the “where” of the problem. There are a number of possible answers: for instance, you could point to Monica Prasad’s explanation in “The Politics of Free Markets” and say that the source of the problem was in the peculiar political structures of these countries, which allowed for political entrepreneurs to push the neoliberal agenda. Or you could argue that the rise of neoliberal ideas (monetarism, etc…explanations that Prasad does not favor) in the face of stagflation is where the source of the imbalance lies. Or you could make the cultural argument (rejected by Prasad and a whole bunch of people) that debt is just seen as an acceptable substitute for wages in the Anglo-Saxon world, an explanation that I do not find particularly convincing. Regardless of which explanation you choose, they all at some level identify “systemic” issues, but at the same time could fall within any of the standard narratives that Harvey identifies, if tweaked sufficiently.

      This is just my sense of the issue- I agree that Harvey’s argument is important, but I still don’t see how it is a novel view as opposed to those put forward by others like Rajan. He seems to call for a radical overhaul of the way in which we think about the financial crisis and systemic risk…how so?

  3. Magpie says:

    I suppose, up to 7:10 minutes into the lecture, everyone understands Prof. Harvey’s message. It’s basically his critique of the 5 narrative genres.

    From that point on, he draws a link between the loss of labour power in the market place and increasing private debt.

    The content of Prof. Harvey’s lecture is quite similar to what I gather Paul Krugman tried to argue in his own lecture:

    Inequality And Crises
    http://krugman.blogs.nytimes.com/2010/06/28/inequality-and-crises/

    The thing gets much less clear after Prof. Harvey mentions the Grundrisse (about 7:30). His explanation is much more vague and generic.

    I believe this is what appears to be Prof. Harvey’s views at the end of the lecture:

    Paraphrasing what Jeff Goldblum’s character says about life in the Jurassic Park movie: capitalism finds a way

    Capitalism requires financial services. Financial institutions are innovative and learn how to circumvent regulations and make greater profits and won’t accept limits from regulatory authorities (the barrier remarks).

    In the US and UK, financial services have replaced manufacturing as mainstay of investment and have become more influential among decision makers.

    By solving the recession through fiscal stimulus, governments have become vulnerable to a sovereign debt crisis. Financial institutions exploit this weakness to make profits.

    I am not sure whether this covers all his points (and I am not stating whether I consider his explanation complete and fully satisfactory), but this is what I could gather.

  4. Pingback: The Revolutionary Wave of 2011? « Reflections on a Revolution

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