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e for
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David
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Harvey John Hopkins
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harid you see a capitalist development
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at an inflection point where the 3%
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compound growth is becoming less and
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less feasible without the fictions of
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the asset markets and the financial
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affairs in the short run and in the
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Middle Run what can we expect I think
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we've already seen the signs of what the
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consequences are and I think it's very
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significant that over the last 30 years
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a lot of the investment has not actually
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gone into production it's gone into
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assets uh and asset values it's gone
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into land rents it's gone into property
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prices it's even gone into the Art
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Market um and of course it's gone into
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stocks and shares and the financial
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sector has come up with all sorts of
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Innovations which allow you to make
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money by playing with money in other
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words uh over the last 30 years we've
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been in a A system that has been very
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crisis prone and the crisis have nearly
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always F focused on fictitious
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values uh debt in particular has been
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one of the big ones many of the crises
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have been Urban but crises because uh a
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lot of urban Investments are speculative
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Investments and uh so this time around
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it's the Foreclosure crisis it's the
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housing crisis and and it continues this
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way with for example the crisis of Dubai
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over investment in the built environment
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so in a sense I would would say that
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this is a foretaste of what is to
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come that uh in the way that these
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crisis sort of moved around the world
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but then increasingly moved more rapidly
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around the world and became deeper
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eventually uh becoming more Global that
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I think that that pattern is likely to
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be resumed uh unless we see a radical
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reconfiguration of a of the capitalist
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system but actually you see that there
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is not too much space s for capto
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Surplus absorption yes this is this is a
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problem yes this is a this is a this is
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the problem which I think began to be
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experienced during the 1980s uh and
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1990s and now that is why I think it
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then went into the fictional markets
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because it couldn't find the areas for
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expansion I mean during the 19th century
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the British had Surplus capital and they
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had abundant places to put it they could
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put it in Argentina or South Africa and
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of course A lot of it went to uned
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United States so they didn't have a
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problem of absorbing their Surplus
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Capital because they all these Open
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Spaces uh when China became integrated
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into the global economy when the Soviet
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Union and the ex Soviet block became
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integrated now that India and Indonesia
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and the rest of it have become and you
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kind of say well where is there the
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surface Capital can go yes there there's
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some areas of Africa and some remote
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interior regions of Asia that haven't
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yet been fully colonized or integrated
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but that's not like it was in the 19th
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century when you had the rest of the
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world to play with but let's come back
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to this inflection point and try to
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understand to explain better the growth
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of the so-called emerging economies that
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includes Brazil and of course and mainly
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China I think uh there are two ways in
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which Surplus Capital can be absorbed by
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geographical expansion one way is uh to
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find some space and say this is going to
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be our market and this is what the
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British did with India in the 19th
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century they said this is going to be
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our market so they destroyed Indian
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industry and then they turned India into
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its great market and they sold all their
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goods there the other way in which
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capital surpluses get absorbed is by
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Capital export and capital moves to some
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place and sets up new Industries now
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China is in a very interesting case very
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different from the way British treated
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India Capital moved into China China and
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set up new Industries so in so that
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China produces a lot but as it produces
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a lot so it Demands a lot from the rest
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of the world so for example Latin
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American economies have grown healthily
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to the degree they have it's been upon
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the China trade because China is
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demanding an immense amount of raw
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materials and semi-finished products and
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some machinery and all the rest of it
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and Latin American Trade is reoriented
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from North America to to China as a
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result now that form of of geographical
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expansion uh has been very much more
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important uh over the last 30 40 years
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than simply the sort looking of the
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India sort you know so that the
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developing countries have actually
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become producers I mean Brazil is a
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producer uh and of course China is an
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immense producer a lot of production
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moved into the maila zones of Mexico it
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moved into Indonesia so so production
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has has has moved moved to different
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parts of the world with the result that
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much of uh what used to be the center of
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capitalism has become
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de-industrialized I mean industry has
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disappeared from much of the United
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States and from Britain and and also
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from Germany and it's it's got displaced
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this is a very different model of of
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geographical expansion which is not
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based on clear imperialist domination
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although it does of course depend very
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much on multinational corporations many
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of which are based in the global North
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that then come South and set up their
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production activities in Brazil or set
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them up in in China I mean there's a
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joke in the United States that the only
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place where General Motors is profitable
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is in China when we think about China's
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future are we talking about a global
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capitalism without hegemony or are we
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talking about a new
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hegemon uh I don't know that's a big
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question which uh actually
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is being worked out right now I think
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it's very interesting to study it uh to
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see to what degree uh China is beginning
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to move into a hegemonic
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position uh but Power relations between
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the great powers are one thing for
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instance uh it cannot challenge US
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military power I mean the US has uh
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still has the capacity to destroy the
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world from 30,000 ft up not on the
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ground the Chinese can do it on the
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ground but they can't do it from 30,000
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ft up the difficulty is it can't
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maintain its Hony in production it lost
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that some time
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ago uh financially it constructed
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hegemony for itself during the 1990s and
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that in a sense is what is crashed right
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now so the big question is can China
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actually now reinsert itself to into the
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global economy in such a way that it by
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the it's controlling
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uh of of global surpluses of capital can
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actually then start to diminish the
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power of the United States I mean the
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Chinese own in many ways they are the
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principal uh creditor of of the United
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States the Chinese have shifted a lot in
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the last two years to developing their
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internal Market but in so in doing so
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they've actually used their Banks almost
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in exactly the same way that the United
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States was using its banks in the 1990s
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in other words they're perpetuating the
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same system inside of China today today
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as was is the one that crashed in the
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United States right now so for me I my
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bet is that the Chinese economy will be
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in real serious difficulty within 10
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years because the kinds of Investments
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they're doing in highways and dams and
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you know Urban infrastructures and so on
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and high-speed trains and and the like
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uh the sorts of things you won't find
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out whether they really are highly
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productive until like you know until
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about 10 years
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time well entering in the issue of the
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curent
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crisis uh as you said uh its beginning
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its Origins are in the steps taken to
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solve the crisis of the 70s what has
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really changed since then the big the
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big issue in the
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1970s uh was labor control capitalist
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control over
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labor
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Supply and uh there was a labor market
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problem wages were in the advanced
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capitalist world were relatively High
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labor was well organized it had a lot of
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political power it had political power
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through political parties in Europe and
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and so on and it was exercising that
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power so if you go back and look at what
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was going on at the end of the 1960s and
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1970s early 1970s in the United States
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and Italy and so on tremendous labor
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struggles are going on and capital needs
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to discipline
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Labor uh and it said about disciplining
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labor in a number of different ways one
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was through
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globalization you know take Capital to
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where labor is freely available another
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was through technological
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change uh another was through
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immigration in those early stages they
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thought they could solve the problem by
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immigration for example uh the French
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actually
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uh subsidized the magreb and North
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African laborers to come into France uh
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the Germans brought in the Turks the
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British brought in people from the
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Empire and there was a huge reform of US
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immigration in 1965 that allowed all
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people of the world to come into the
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United States so there was a tremendous
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kind of concern about controlling labor
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because labor was so powerful but by the
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time you get to 1980s and Ronald Reagan
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and Margaret Thatcher and uh and of
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course General pinet and all of that
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they put the end if you like to the
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political power of Labor so there was
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wage repression and the result of that
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is you would not say the current crisis
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has anything to do with the excessive
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power of Labor if anything the current
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crisis has to do with the excessive
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power of capital right now the trouble
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with repressing labor and repressing
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wages is that you actually find that
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what the data show is the share of wages
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in national income in almost every
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country in the world went down now if
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wages are going down it means there's
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less Market power to buy the goods that
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capitalists are making and then the
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question arises well how how what's
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happening to your Market when you're
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repressing wages and the answer in the
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United States was give them credit let
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them Buy on credit so you get the debt
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economy that Rises which is uh this huge
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kind of business which the banks get
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into and US households for example
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tripled their debt in about 30 years and
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and and so in a way you you the loss of
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demand from falling wages was covered by
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Rising rising Rising debt uh but when
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wages are going down and individual debt
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is rising at some point or other there's
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there's a real problem of how on Earth
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people are going to pay off their their
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debts and that was something that began
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to occur in the late 1990s and then that
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too was a signal part of the current
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crash now questioning the future of
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capitalism you returned to Marx to
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explain how the system has been
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successful in keeping always the
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relations between uh his seven
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fundamental moments that allowed the
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transition from theodism
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can you resume for us these seven
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moments working together well the
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easiest way to do this is instead of
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talking about all seven because when you
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talk about all seven you're talking
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about all of these interrelations
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between them uh but consider for example
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the relationship between just three of
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them uh you have production a production
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system and the big question always about
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production is what kind of technology is
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going to be embedded in the production
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system
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and as the production system evolved so
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new technologies had to be invented the
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new technologies that came about
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demanded a complete reorganization of
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people's mental conceptions of the
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world that is you had to see the world
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as something that could be
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scientifically and technologically
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managed and I think it's very
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interesting that in the early years of
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capitalism what we would call IND
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societies concerned with industry were
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always called Arts
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so industry was considered an art not a
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science and a technology and that had to
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shift and people had to say we can break
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down production processes and see them
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scientifically and set up you know these
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new technologies so but that meant that
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meant we had to understand nature in a
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completely different way in other words
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the natural world couldn't be mysterious
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anymore when I'm talking about the
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evolution of all of these elements
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together I'm saying the transition from
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feudalism to capitalism was not just one
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of those elements it was all of them
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moving
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together and and at the same time and
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this is something that uh capitalism kep
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in movement kep movement until today do
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you think that today you can you can see
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you say for instance in the crisis of
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the 70s during the 70s what we have seen
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was exactly all these moments moving
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together mov yes no I mean I I'm old
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enough to remember what it was like
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living in the 1970s and if I ask myself
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well what were the dominant Technologies
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no cell phones no laptops can you
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imagine living without that and the
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mental conceptions were also very very
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different uh in including of course
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political
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sensibilities uh there's much more
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concerned with social solidarities
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things of that kind we've now become
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much more
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individualistic we become individuals on
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our cells phones and with our you know
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on our screen so all of this has changed
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and daily life has changed radically
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which is one of the other moments that I
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talk about so I one of the the the
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Geniuses of capitalism is to keep all of
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those seven elements in perpetual motion
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do you believe that this
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dialectical movement between the seven
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moments is a sort of slowing down on
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these days it's so difficult at the time
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to see what the motion
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is um in some ways it's it's always
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easier to reconstruct after the event
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after things have happened well what was
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it that went on in the
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1970s I think it took me and you know I
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I I'm
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a a very concerned analyst it took me
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into about the 1990s to figure out what
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the 1970s was really about because by
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then I could see elements that were
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going on there which then became very
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prominent in the 19
