Part 3 The Limits to Capital: Afterword

______________

___________________

Retrospect on The Limits to Capital

David Harvey
Graduate Center, City University of New York, New York, USA; dharvey@ gc.cuny.edu

It is, needless to say, a source of considerable gratification to find that a work more than twenty years old can still have meaning and even stir controversy. So I thank the contributors to this symposium who have so generously re-examined and critically engaged with their experience of reading The Limits to Capital over these twenty years. Since I cannot possibly respond to all the issues raised, I thought I would construct my own commentary and let readers judge how far it parallels or diverges from those of other contributors. I wrote Limits very much under the tutelage of Marx and with very little reference to the rest of the Marxist tradition. I did not seek to go outside of Marxs basic assumptions nor to depart from what I saw as his dialectical method. I wanted to see how far I could get in understanding urbanization and geographical transformations from within the frame laid out in Marxs Capital, Theories of Surplus Value, the Grundrisse and some of the ancillary writings on political economy. The Eighteenth Brumaire, so crucial to my subsequent writings on Paris, scarcely rates a mention in Limits. The aim was, therefore, exegesis and extension of Marxs political economy onto the terrain of geography. This entailed first finding a path through well-worn controversies over, for example, value theory and the falling rate of profit. More interesting for me was the reconstruction and exposition of those materials directly relevant to my objective. Some of these Marx had gone over at length (eg fixed capital), others he had worried inconclusively about to the point of tedium (eg rent) while still others (eg money and finance capital) had been left in a very muddled state. The final aim was to take fragmentary comments about spatiality, territoriality and geography and try to weld them into a more systematic theory of the production of space, urbanization, and of uneven geographical development. There were, therefore, crucial limits to Limits, defined by the way I set up the project. I see no reason to apologize for that because I believed then as I do now that you do not abandon some framework
2004 Editorial Board of Antipode. Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA

Retrospect on The Limits To Capital

545

until you have explored all of the possibilities latent within it, taken it, as it were, to its own limits. This proved very hard to do. Writing Limits was, quite simply, the hardest intellectual struggle I have ever had. At times I gave up on it and in the end cut some corners in order to have done with it. But what I think I did manage to reveal was that Marx had constructed an extraordinarily rich theoretical framework for understanding a whole host of phenomena of interest to urbanists and geographers. The insights and intuitions generated have provided a foundation for all the works I have written since. But to say the book is foundational is not necessarily to say it is fixed and certainly not singular (consider, for example, the significance I later accorded to the Eighteenth Brumaire). I was always too well aware of the corners I had cut and the restrictions I had placed on the inquiry to view Limits as a fixed frame of reference within which everything had to be cast. Curiously, the greatest difficulty I had in Limits and therefore, to me, the least satisfactory part of the argument is the third cut on crisis theory which examines the geographicalspatial dimensions to the theory. In a way this should not be surprising because, as I have frequently observed elsewhere, the introduction of space and matters geographical (in which I would include environment and the problematic of the relation to nature) into any theoretical framework usually exercises a disruptive effect on how the theory works. This is as true for Marxian political economy as it is for economic theory more generally. It is, furthermore, not easy to be dialectical about space. My strategy had been to bring the Marxian theory to bear on spatial/geographical questions towards the end of the analysis. This was difficult to do without engaging in all sorts of intuitive leaps (some of which, like the idea of a spatial fix or of geopolitical confrontations, have proven useful, at least to me). But a decent theoretical understanding of uneven geographical development still remains to be written (in spite of some of the excellent work by, for example, Shepherd and Barnes, Webber and Rigby, Smith, Massey, Walker and Storper, Swyngedouw, Cox, and several others). To do this requires, in my judgement, that the issues of spatio-temporality and the relation to nature be integrated into the argument at the very start rather than at the end of the analysis. This would, I am sure, change the paths of analysis substantially. It would also probably muddle things considerably, but what would be lost in narrative clarity would be gained in applicability and realism. Here, I think, we see one of the limits to Marxs own style of argument that needs to be transcended. How this might be done is far too complicated a problem to be taken up here. But I do not believe this would entail abandonment of Marxs insights on, say, the role of fixed capital circulation, the production of built environments, or the circulation of interest-bearing capital. The trick will be to take many of the
2004 Editorial Board of Antipode.

546

Antipode

substantive findings in Limits and by switching the focus learn to interpret them differently. So what of the other limits to Marxs analysis? I take up just two issues of considerable import. The first is the muted role of class struggle. The second is the curious habit of assuming that all commodities trade at their value. There is an internal relation between these two featuresclass struggles affect the value of labor power and disturb value relations more generally. The emphasis upon equilibrium in Marxs argument derives from assuming away such problems. Why did Marx deploy such modes of argument and why did I replicate them? It is surprising that someone who proclaimed that all history is the history of class struggle should pay so little attention to such struggles in his politicaleconomic as opposed to in his historical and political writings. Class relations are, of course, central to the argument in Capital but the activity of struggle shows up only episodically (as in the chapter on the working day or in the consideration given to the luddite movement in the chapter on machinery). Class struggle barely gets a mention in volume 2 of Capital. My guess is that Marx chose this tack because he wanted to show the inevitable implications of the commodification of labor power and thereby to answer in its own terms the utopian fantasy of the political economists that freely functioning markets (particularly that for labor power) would produce a result that was in any way beneficial to the laborer. What Marx shows, in effect, is that capital left to its own devices (absent restraints) would not only destroy the laborer as a human being but destroy the two primary sources of all wealththe laborer and the soil. Class struggle therefore becomes necessary to the stabilization of capitalism. In the chapter on the working day we see that a certain level of class struggle on the part of the laborers can help save capitalism from its own self-destructive tendencies. For this to happen requires that workers put their heads together and organize. Problems arise for capital when this class struggle spirals out of control to transform reform into revolutionary movement. The analysis seems largely geared to show (a) that capitalism cannot do without collective class struggle, (b) that the account given by the classical political economists of labor markets was based on a deliberate mystification, and (c) that the laborers must and inevitably would also organize (as he repeatedly emphasized in his historical writings). But the analysis permits Marx to outline very clearly what it is that laborers must organize against. The tactic of taking the political economists at their word and assume perfect markets permits him to reveal all the mystifications within the wage system. Marx was, in effect, simultaneously attempting to critique the classical political economists and to understand how capitalism works.
2004 Editorial Board of Antipode.

Retrospect on The Limits To Capital

547

But in order to accomplish the former he had to theorize the latter in a pure state, uncontaminated by the contingencies of organized class struggle on the part of the laborers. This last move explains Marxs adoption of wide-ranging initial assumptions in building his theory of capital accumulation. These include: freely functioning competitive markets with institutional arrangements of private property, juridical individualism, freedom of contract and appropriate structures of law and governance guaranteed by a facilitative state which also secures the integrity of money as a store of value and as a medium of circulation. The role of the capitalist as a commodity producer and exchanger is already well established and labor power has become a commodity that trades generally at its value. Primitive or original accumulation has already occurred and accumulation now proceeds as expanded reproduction (albeit through the exploitation of living labor in production). These assumptions allow us to see what will happen if the liberal project of the classical political economists or, in our times, the neoliberal project of the economists, is realized. The brilliance of Marxs dialectical method is to show that market liberalizationthe credo of the liberals and the neoliberalswill not produce a harmonious state in which everyone is better off. It will instead produce ever greater levels of social inequality (as indeed has been the global trend over the last thirty years of neoliberalism). It will also produce serious and growing instabilities culminating in chronic crises of overaccumulation (of the sort we are now witnessing). These are, surely, immense insights worthy of preservation. To expose the utopian fantasy of liberalism (and for us, neoliberalism) is a major achievement. But is this an adequate way to understand actually existing capitalism? Obviously not. Consider, for example, the world of primitive accumulation. Marxs account emphasizes the role of violence, force, fraud, oppression, looting and the resort either to outright illegality or the abuse of state power. But it is hard not to infer from the structure of the argument that this gets left behind once capitalism is established. What looks on the surface to be a more peaceful and legalized world of the organized market takes over, though it certainly conceals the systematic exploitation of living labor within production. Marxs description of primitive accumulation reveals a wide range of processes. These include the privatization of land and the forceful expulsion of peasant populations; conversion of various forms of property rights (common, collective, state, etc) into exclusive private property rights; suppression of rights to the commons; commodification of labor power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neo-colonial and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of
2004 Editorial Board of Antipode.

548

Antipode

land; slave trade; and usury, the national debt and ultimately the credit system as radical means of primitive accumulation. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes. All the features which Marx mentions have remained powerfully present within capitalisms historical geography. Some of them have been fine-tuned to play an even stronger role now than in the past. The credit system and finance capital have, as Lenin, Hilferding and Luxemburg all remarked, been major levers of predation, fraud and thievery. Stock promotions, ponzi schemes, structured asset destruction through inflation, asset stripping through mergers and acquisitions, the promotion of levels of debt encumbrancy that reduce whole populations, even in the advanced capitalist countries, to debt peonage, to say nothing of corporate fraud, dispossession of assets (the raiding of pension funds and their decimation by stock and corporate collapses) by credit and stock manipulations, speculative raiding by hedge fundsall of these are central features of what contemporary capitalism is about. Wholly new mechanisms have also opened up: intellectual property rights (the so-called TRIPS agreement), patenting and licensing agreements, the appropriation of genetic materials, seed plasmas, and all manner of other products, biopiracy by a few large multinational companies. The escalating depletion of the global environmental commons (land, air, water) and proliferating habitat degradations that preclude anything but capital intensive modes of agricultural production have likewise resulted from the wholesale commodification of nature in all its forms. The commodification of cultural forms, histories and intellectual creativity entails wholesale dispossessions (the music industry is notorious for the appropriation and exploitation of grassroots culture and creativity). The corporatization and privatization of hitherto public assets (like universities) to say nothing of the wave of privatization (of water, public utilities of all kinds) that has swept the world indicate a new wave of enclosing the commons. As in the past, the power of the state is frequently used to force such processes through even against popular will. The developmental state forces through these processes often through authoritarian practices. These features cannot be relegated to some distant past. A general re-evaluation of the continuous role and persistence of the predatory practices of primitive or original accumulation is very much in order. Since it seems peculiar to call an ongoing process primitive or original I prefer to substitute these terms by the concept of accumulation by dispossession. Capitalism has, then, a dual character. The world of expanded reproduction through the exploitation of living labor in production (so brilliantly dissected in Capital) is paralleled by a world of violence,
2004 Editorial Board of Antipode.

Retrospect on The Limits To Capital

549

fraud and predation geared to accumulation by dispossession. These two aspects of accumulation, Luxemburg argues, correctly in my view, are organically linked and the historical career of capitalism can only be appreciated by taking them together. And this brings us back to the question of class struggle. Accumulation by dispossession can occur in a variety of ways and there is much that is both contingent and haphazard about its modus operandi. Yet it is omnipresent in no matter what historical period and has played an obvious role in imperialism. Class struggles in this realm highlight dispossession. The anti-globalization movement has focussed on these processes. The enclosure of the global commons is one of its most persistent metaphors. But these struggles are very different from those waged within expanded reproduction, over the wage rate, conditions of contract and of labor. In the latter, the organized force of an already existing proletariat is seen as the historical motor of change, whereas in the former the inchoate forms of accumulation by dispossession make for widespread but fragmentary forms of struggle. How to bring these two forms of struggle together is the most pressing political issue for the left in these times. None of this, of course, is taken up in Limits. I followed Marx in assuming that primitive accumulation was over and done with except for some residual problems here and there. I am now in the process of rectifying that omission. But in a curious way the recognition of absences of this sort adds to, rather than detracts from, the potency of the initial formulations. What Marx showed (and I sought to highlight this in my version too) was that there were tools available (dialectics) to unmask the mystifications of liberal and neoliberal theory and to describe in the starkest terms the horror that would be produced the closer politics veered to trying to implement such utopian schemes. This understanding is helpful in the search to shape an alternative politics. But Limits was, nevertheless, a portrayal of just one side of the dual character of accumulation. It was a reasonably accurate portrayal of that one side, even though the way of handling spatiality and the relation to nature was far from satisfactory. The interesting point is to place the other side of the duality into motion. And here a basic intuition does arise out of Limits: the umbilical cord that keeps the dual modes of capital accumulation so irrevocably and organically together lies in finance capital and the credit system. The category of fictitious capital has a key role to play. Furthermore, we see clearly that state power is crucial in regulating and charting the relations within this duality. From this sort of perspective we may be able to construct far more compelling accounts of our current dilemmas than would ever have been possible working from Limits alone. Limits may, for me at least, have been foundational. But there was and is much that remains to be built thereon.
2004 Editorial Board of Antipode.