Part Two: Historical Materialism
Historical materialism is the name given to Marx’s theory of history. As with Darwin’s theory of natural selection, when it arrived it was breathtakingly simple and elegant. Great solutions are that way being contained within the problem they are attempting to solve. Formulating the problem correctly is to virtually solve it. This tends to make even the more unenlightened wonder why they hadn’t thought of it themselves.
Prior to Marx, history was believed either to have no developmental logic at all, it merely proceeded mechanically or in metaphysical circles and could be taken at face value, or was heading towards some sort of god-given destiny or pre-determined absolute ideal. Marx answered the call for a scientific theory of history. He rejected these two contradictory approaches for an approach to contradictions. He sought a theory that could encompass and reveal history’s true inner dynamic.
Marx started from the empirically verifiable real activity and conditions of human existence examining the way in which humankind produces its means of subsistence which is the materialist side of the equation. He did not start from a collection of dead, unconnected facts or from human consciousness. `Life is not determined by consciousness, but consciousness by life,’ he argued. In producing their means of subsistence, human beings enter into social relations. History proper begins when those relations become class relations and unfolds by way of a reciprocal conflict between these social relations, or modes of production, and the ever expanding means of production.
Schematically speaking, primitive society gave way to the social relations of ancient slavery which gave a huge boost to the growth of the means of production at humanity’s disposal but these means eventually outgrew that mode. Great slave-based empires fell into ruin including the greatest of them all, Rome, to be replaced by great feudal empires in Europe and Asia. These were replaced by capitalism and its own great empires which now, in their turn, are facing their end. Capitalism is the last antagonistic form; the economic conditions having entirely outgrown the possibility of continued private ownership and control of the productive capacity by a minority ruling class. It must give way to socialism and finally a classless society.
At society’s base is the class struggle between two historically conditioned classes, a ruling class and a working class, corresponding to a particular mode of production and appropriate to the prevailing means of production. Slaves and slave owners, feudal lords and peasants, capitalists and proletariat, and all of society’s institutions, ideas, discourses etc are superstructural to this political-economic base.
Here nothing remains of the tedious notion of history as just a series of events to be simply reconstructed or of the equally tedious but opposite notion of human beings working their way towards a pre-determined perfection or pre-existing consciousness. Marx shows that consciousness itself evolves as a result of practical activity reflecting interests but in an ideological way because the logic is external and unknown to its participants.
There has always been a mode and a means of production but they haven’t always been in contradiction and in the future they will be in harmony again but on a whole new level. The new unity of opposites will be that of humanity with nature re-established on a conscious level.
The study of the hundreds of centuries of human existence prior to the process of class formation, or pre-history, whilst obviously of more than passing interest and relevance, is little more than a natural history of the species. History proper, as a discrete social process with its own logic and therefore a fit subject for study in its own right, begins with the production of surplus and the ensuing efforts of the first emerging ruling class to establish its rights to this surplus. It will end as an ongoing subject of scientific study when classes have finally disappeared and there is nothing driving humanity’s development outside of its own conscious activity. When there is nothing taking place that is not the result of conscious activity, or when results are consciously sought and attained, then there is no process outside of and separate from that purposeful activity that can be studied. That is the real end of history.
So much for history in general. What is attracting people now is Marx’s incredibly insightful analysis of capitalism.
Part Three: Capitalism (to follow)
Saturday 28 February 2009
Why Marxism is true
Part One: Introduction
The current global economic crisis which threatens to engulf us all like some natural disaster has sparked a revival of interest in the ideas of the great 19th Century political economist and scientific socialist, Karl Marx. His two most famous works, `The Communist Manifesto’, written jointly with life-long collaborator Friedrich Engels, and the three or four-volumed, depending on your point-of-view, `Das Kapital’ are, apparently, flying off the bookstore shelves at an unprecedented rate of knots. The urge it seems is to rationally understand what on earth is going on.
That people are looking for a scientific explanation for the crisis is surely to be welcomed but there is also a philistine or eclectic tendency amongst some to see Marx as just one possible contributor among many. A tendency to view him as just another theorist competing with many other theorists from whose work one can select the bits one likes and discard the bits one doesn’t. That would be a mistake because Marxism is not just a unified, holistic theory it is a fact.
Darwin
It is a pleasant co-incidence that the global economic crisis and the renewed interest it has sparked in Marxism are happening at the same time as the 200th anniversary of the birth of the celebrated natural scientist and expounder of natural evolution, Charles Darwin. The anniversary has sparked a spirited defence of his work by a host of renowned modern day scientists against a growing army of fundamentalists, biblical literalists, creationists of all religions and the pseudo scientific intelligent design narrative.
This happy co-incidence has helped strengthen an atmosphere generally sympathetic to enlightened values. One stand-out contribution amongst the many to have appeared this year intent on defending Darwin’s theory of evolution by natural selection is Jerry A Coyne’s ` Why Evolution is True’. In his book Coyne presents a spirited defence of the general scientific method of reason applied to empirical research where practical results act as the yardstick of truth. He develops a contemporary demonstration of the truth of Darwin’s theory and how it has been proved again and again. Evolution by natural selection, he rightly argues, is a proven fact.
The theory, he says, makes testable predictions leading to the discovery of genes and DNA and makes retrodictive sense of facts and data that without its illuminating effect would otherwise not. It becomes ever more rounded, deep, rich and complete as we observe and recreate its principles on a daily basis.
Given the overwhelming success of Darwin’s theory why, asks Coyne, are there still those who attack it? We don’t we have to defend other scientific theories such as the germ theory of disease in this way he muses. He does not answer the question but, after a devastating defence of the theory and a withering assault on its religious opponents, he counsels that to recognise the full import of the theory does not lead to despairing nihilism or rob your life of purpose and meaning. It won’t make you immoral, he insists, and is in fact, as Darwin said, is really quite ennobling. It doesn’t even necessarily make of you an atheist even while it destroys the basis of literalism and particularity in religion.
Marxism
Marx’s main interest was not the natural evolution of the human species but its social and historical evolution from that point on. Incredibly, his scientific insights into society were made prior to Darwin’s explanation of human kind’s biological origins. Even before Darwin had solved the riddle of human evolution, Marx had already solved the more difficult riddle of history. He had explained and revealed the drivers for historical evolution.
Needless to say Marx immediately embraced Darwin’s theory as soon as it was made public recognising a scientific theory brilliant in its own right but that complemented and reinforced his own. He even sent Darwin a copy of Volume One his own great work `Das Kapital’ for which he received a thank you letter though sadly there is no evidence that the naturalist ever actually read it.
There are, in actual fact, three different elements to Marxism each a piece of brilliance in its own right. They are historical materialism, the analysis of capitalism and dialectical materialism.
Part Two: Historical Materialism (to follow)
The current global economic crisis which threatens to engulf us all like some natural disaster has sparked a revival of interest in the ideas of the great 19th Century political economist and scientific socialist, Karl Marx. His two most famous works, `The Communist Manifesto’, written jointly with life-long collaborator Friedrich Engels, and the three or four-volumed, depending on your point-of-view, `Das Kapital’ are, apparently, flying off the bookstore shelves at an unprecedented rate of knots. The urge it seems is to rationally understand what on earth is going on.
That people are looking for a scientific explanation for the crisis is surely to be welcomed but there is also a philistine or eclectic tendency amongst some to see Marx as just one possible contributor among many. A tendency to view him as just another theorist competing with many other theorists from whose work one can select the bits one likes and discard the bits one doesn’t. That would be a mistake because Marxism is not just a unified, holistic theory it is a fact.
Darwin
It is a pleasant co-incidence that the global economic crisis and the renewed interest it has sparked in Marxism are happening at the same time as the 200th anniversary of the birth of the celebrated natural scientist and expounder of natural evolution, Charles Darwin. The anniversary has sparked a spirited defence of his work by a host of renowned modern day scientists against a growing army of fundamentalists, biblical literalists, creationists of all religions and the pseudo scientific intelligent design narrative.
This happy co-incidence has helped strengthen an atmosphere generally sympathetic to enlightened values. One stand-out contribution amongst the many to have appeared this year intent on defending Darwin’s theory of evolution by natural selection is Jerry A Coyne’s ` Why Evolution is True’. In his book Coyne presents a spirited defence of the general scientific method of reason applied to empirical research where practical results act as the yardstick of truth. He develops a contemporary demonstration of the truth of Darwin’s theory and how it has been proved again and again. Evolution by natural selection, he rightly argues, is a proven fact.
The theory, he says, makes testable predictions leading to the discovery of genes and DNA and makes retrodictive sense of facts and data that without its illuminating effect would otherwise not. It becomes ever more rounded, deep, rich and complete as we observe and recreate its principles on a daily basis.
Given the overwhelming success of Darwin’s theory why, asks Coyne, are there still those who attack it? We don’t we have to defend other scientific theories such as the germ theory of disease in this way he muses. He does not answer the question but, after a devastating defence of the theory and a withering assault on its religious opponents, he counsels that to recognise the full import of the theory does not lead to despairing nihilism or rob your life of purpose and meaning. It won’t make you immoral, he insists, and is in fact, as Darwin said, is really quite ennobling. It doesn’t even necessarily make of you an atheist even while it destroys the basis of literalism and particularity in religion.
Marxism
Marx’s main interest was not the natural evolution of the human species but its social and historical evolution from that point on. Incredibly, his scientific insights into society were made prior to Darwin’s explanation of human kind’s biological origins. Even before Darwin had solved the riddle of human evolution, Marx had already solved the more difficult riddle of history. He had explained and revealed the drivers for historical evolution.
Needless to say Marx immediately embraced Darwin’s theory as soon as it was made public recognising a scientific theory brilliant in its own right but that complemented and reinforced his own. He even sent Darwin a copy of Volume One his own great work `Das Kapital’ for which he received a thank you letter though sadly there is no evidence that the naturalist ever actually read it.
There are, in actual fact, three different elements to Marxism each a piece of brilliance in its own right. They are historical materialism, the analysis of capitalism and dialectical materialism.
Part Two: Historical Materialism (to follow)
Thursday 19 February 2009
Britain's Long Term Decline Confirmed
The current slump is both quickening and confirming Britain's century-long slide from global top dog to Third World also ran and the policy of bailing out the financial institutions for the sake of the financial institutions will add to the
bone-crunching impact of such a sharp descent. The banks are doing to Britain
what the victorious allies did to Germany after the First World War. Instead of
crippling war reparations, however, we are paying over the nation's wealth to cover Eton and Harrow's finest `masters of the universe' by racking up a truly staggering public debt. This in the hope that our one and only `industry', if saved, might one day make a few bob again. This madness will be followed by tax hikes, money printing, mass unemployment, deflation then hyperinflation, public sector and welfare
provision meltdown, destruction of the NHS, extreme austerity measures, endemic and
widespread violent gang crime, a police state, pockets of starvation, a growing fascist menace and permanent civil war. How much more sensible would it have been to have nationalised the bankrupt banks, guaranteed deposits then wiped out all individual (mortgages, credit cards, personal loans) and small and medium enterprise debts to these institutions thereby bailing out the people? That would have ended the credit crunch overnight. Instead we have mass repossessions and small business
bankruptcies driving us ever further into permanent depression whilst the trading, energy and manufacturing monopolies (most of which are also technically bankrupt)
squash their competitors underfoot, shed jobs by the hundreds of thousands and put the squeeze on their remaining small suppliers and workers. At the same time, the neo-liberal EU, Gordon and Mandy and the Cameroons tell us that to take these giants into public control would be `protectionist' and that we should get on our inter-continental bikes while they elect a new population. Sacre bleu!
bone-crunching impact of such a sharp descent. The banks are doing to Britain
what the victorious allies did to Germany after the First World War. Instead of
crippling war reparations, however, we are paying over the nation's wealth to cover Eton and Harrow's finest `masters of the universe' by racking up a truly staggering public debt. This in the hope that our one and only `industry', if saved, might one day make a few bob again. This madness will be followed by tax hikes, money printing, mass unemployment, deflation then hyperinflation, public sector and welfare
provision meltdown, destruction of the NHS, extreme austerity measures, endemic and
widespread violent gang crime, a police state, pockets of starvation, a growing fascist menace and permanent civil war. How much more sensible would it have been to have nationalised the bankrupt banks, guaranteed deposits then wiped out all individual (mortgages, credit cards, personal loans) and small and medium enterprise debts to these institutions thereby bailing out the people? That would have ended the credit crunch overnight. Instead we have mass repossessions and small business
bankruptcies driving us ever further into permanent depression whilst the trading, energy and manufacturing monopolies (most of which are also technically bankrupt)
squash their competitors underfoot, shed jobs by the hundreds of thousands and put the squeeze on their remaining small suppliers and workers. At the same time, the neo-liberal EU, Gordon and Mandy and the Cameroons tell us that to take these giants into public control would be `protectionist' and that we should get on our inter-continental bikes while they elect a new population. Sacre bleu!
Saturday 14 February 2009
Capitalist Austerity or Socialism?
Bailing out the financial institutions for the benefit of the financial institutions will be followed by extreme austerity measures. The tax payer has been ruined and next will come the pension funds and pensioners alongside the ruination of the working class through mass unemployment, public sector and welfare slashing and unbridled money printing leading to hyper-inflation and scarce basic goods.
If workers are not to pay for this crisis they must get militant and lead the rest of the country out of it.
Britain needs a workers’ and small business-friendly government that will:
* withdraw from the neo-liberal EU;
* nationalise the banks and write off all debts;
* nationalise the major capitalist monopolies to prevent job slashing, downsizing and the ruination of small business;
* repudiate the anti-union laws;
* initiate a programme of job creation in manufacturing and environmental projects in deprived areas;
* incorporate all unemployed workers into the newly expanded state sector by sharing the work bringing the benefits of the huge productivity gains of recent times to the working class and parents;
* establish a national pension fund;
* localise decision making in planning, tax collecting, health, education etc.
* bring the troops home;
* work immediately towards a Socialist United States of Europe;
* participate enthusiastically in a global carbon-cutting regime that is fair to the colonial and semi-colonial world.
If workers are not to pay for this crisis they must get militant and lead the rest of the country out of it.
Britain needs a workers’ and small business-friendly government that will:
* withdraw from the neo-liberal EU;
* nationalise the banks and write off all debts;
* nationalise the major capitalist monopolies to prevent job slashing, downsizing and the ruination of small business;
* repudiate the anti-union laws;
* initiate a programme of job creation in manufacturing and environmental projects in deprived areas;
* incorporate all unemployed workers into the newly expanded state sector by sharing the work bringing the benefits of the huge productivity gains of recent times to the working class and parents;
* establish a national pension fund;
* localise decision making in planning, tax collecting, health, education etc.
* bring the troops home;
* work immediately towards a Socialist United States of Europe;
* participate enthusiastically in a global carbon-cutting regime that is fair to the colonial and semi-colonial world.
Wednesday 11 February 2009
Letter to a Paper
Sir - If Gordon Brown is successful in saving the banks it will cost this
country far more than the victorious allies ruinously managed to squeeze
out of Germany following the First World War in reparations.
Collecting the toxic debts or collecting the taxes needed to cover the
toxic debts will prove impossible and the currency will collapse under the
weight of an unsustainable national debt leading to hyper-inflation,
vicious new levels of gang crime, mass unemployment and even pockets of
starvation as benefits are cut. In this state of near civil war, the only
remaining solvent institutions will be the banks that got us into this
mess in the first place.
The banks will be in a position to carry out the greatest leveraged buyout
the world has ever seen snapping up an entire nation at bargain basement
prices using taxpayers money borrowed from the government at 1% or less.
No doubt the world will welcome its first trillionaires. Then, to
distract us from the fact that the country is owned and run by about a
dozen CEOs and Bankers and the grinding poverty and violence all around
us, they will start to equip the nation for war because everything else is
over-supplied and un-profitable.
We need to nationalise the banks, tear up the toxic debts and stop the
multi-nationals from shedding jobs and closing down the competition. OK,
so a lot of people will get a free house or their debts cleared as a
result as will small and medium companies but surely that is better than
the total ruination of the economy. The debt free can then go on to spend
sensibly and put something aside for their own and the country's future
investment needs.
David Ellis
Campaign for a Debt Amnesty
country far more than the victorious allies ruinously managed to squeeze
out of Germany following the First World War in reparations.
Collecting the toxic debts or collecting the taxes needed to cover the
toxic debts will prove impossible and the currency will collapse under the
weight of an unsustainable national debt leading to hyper-inflation,
vicious new levels of gang crime, mass unemployment and even pockets of
starvation as benefits are cut. In this state of near civil war, the only
remaining solvent institutions will be the banks that got us into this
mess in the first place.
The banks will be in a position to carry out the greatest leveraged buyout
the world has ever seen snapping up an entire nation at bargain basement
prices using taxpayers money borrowed from the government at 1% or less.
No doubt the world will welcome its first trillionaires. Then, to
distract us from the fact that the country is owned and run by about a
dozen CEOs and Bankers and the grinding poverty and violence all around
us, they will start to equip the nation for war because everything else is
over-supplied and un-profitable.
We need to nationalise the banks, tear up the toxic debts and stop the
multi-nationals from shedding jobs and closing down the competition. OK,
so a lot of people will get a free house or their debts cleared as a
result as will small and medium companies but surely that is better than
the total ruination of the economy. The debt free can then go on to spend
sensibly and put something aside for their own and the country's future
investment needs.
David Ellis
Campaign for a Debt Amnesty
The Right to the City
Opening speech at the Urban Reform Tent, January 29, 2009, World Social
Forum, Belem
David Harvey
I'm delighted to be here, but first of all I'd like to apologize for
speaking English which is the language of international imperialism. I
hope that what I have to say is sufficiently anti-imperialist that you
people will forgive me. (applause)
I am very grateful for this invitation because I learn a great deal from
the social movements. I've come here to learn and to listen and
therefore I am already finding this a great educational experience
because as Karl Marx once put it there is always the big question of who
will educate the educators.
I have been working for some time on the idea of the Right to the City.
I take it that Right to the City means the right of all of us to create
cities that meet human needs, our needs. The right to the city is not
the right to have - and I'll use an English expression - crumbs from the
rich mans table. We should all have the same rights to further construct
the different kinds of cities that we want to exist.
The right to the city is not simply the right to what already exists in
the city but the right to make the city into something radically
different. When I look at history I see that cities have been managed by
capital more than by people. So in this struggle for the right to the
city there is going to be a struggle against capital.
I want to talk a little bit now about the history of the relationship
between capital and city building and ask the question: Why is it that
capital manages to exercise so much rights over the city? And why is it
that popular forces are relatively weak against that power? And I'd also
like to talk about how, actually, the way capital works in cities is one
of its weaknesses. So at this time I think the struggle for the right to
the city is at the center of the struggle against capital. We have now -
as you all know - a financial crisis of capitalism. If you look at
recent history you will find that over the last 30 years there have been
many financial crises. Somebody did a calculation and said that since
1970 there have been 378 financial crisis in the world. Between 1945 and
1970 there were only 56 financial crises. So capital has been producing
many financial crises over the last 30 to 40 years. And what is
interesting is that many of these financial crises have a basis in
urbanization. At the end of the 1980s the Japanese economy crashed and
it crashed around property and land speculation. In 1987 in the United
States there was a huge crisis in which hundreds of banks went bankrupt
and it was all about housing and property development speculation. In
the 1970s there was a big, world-wide crises in property markets. And I
could go on and on giving you examples of financial crises that are
urban based. My guess is that half of the financial crises over the last
30 years are urban property based. The origins of this crisis in the
United States came from something called the sub prime mortgage crises.
I call this not a sub prime mortgage crisis but an urban crisis.
This is what happened. In the 1990s there came about a problem of
surplus money with nowhere to go. Capitalism is a system that always
produces surpluses. You can think of it this way: the capitalist wakes
up in the morning and he goes into the market with a certain amount of
money and buys labor and means of production. He puts those elements to
work and produces a commodity and sells it for more money than he began
with. So at the end of the day the capitalist has more than he had at
the beginning of the day. And the big question is what does he do with
the more that he's picked up? Now if he were like you and me he would
probably go out and have a good time and spend it. But capitalism is not
like that. There are competitive forces that push him to reinvest part
of his capital in new developments. In the history of capitalism there
has been a 3% rate of growth since 1750. Now a 3% growth rate means that
you have to find outlets for capital. So capitalism is always faced with
what I call a capital surplus absorption problem. Where can I find a
profitable outlet to apply my capital? Now back in 1750 the whole world
was open for that question. And at that time the total value of the
global economy was $135 billion in goods and services. By the time you
get to 1950 there is $4 Trillion in circulation and you have to find
outlets for 3% of $4 trillion. By the time you get to the year 2000 you
have $42 trillion in circulation. Around now its probably $50 Trillion.
In another 25 years at 3% rate of growth it will be $100 trillion. What
this means is that there is an increasing difficulty in finding
profitable outlets for the surplus capital. This situation can be
presented in another way. When capitalism was essentially what was going
on in Manchester and a few other places in the World, a 3% growth rate
posed no problem. Now we have to put a 3% rate of growth on everything
that is happening in China, East and Southeast Asia, Europe, much of
Latin America and North America and there is a huge, huge problem. Now
capitalists, when they have money, have a choice as to how they reinvest
it. You can invest in new production. An argument for making the rich
richer is that they will reinvest in production and that this will
generate employment and a better standard of living for the people. But
since 1970 they have invested less and less in new production. They have
invested in buying assets, stock shares, property rights, intellectual
property rights and of course property. So since 1970, more and more
money has gone into financial assets and when the capitalist class
starts buying assets the value of the assets increases. So they start to
make money out of the increase in the value of their assets. So property
prices go up and up and up. And this does not make for a better city it
makes for a more expensive city. Furthermore, to the degree that they
want to build condominiums and affluent housing they have to drive poor
people off their land. They have to take away our right to the city. So
that in New York City I find it very difficult to live in Manhattan, and
I am a reasonably well paid professor. The mass of the population that
actually works in the city cannot afford to live in the city because
property prices have gone up and up and up and up. In other words the
people's right to the city has been taken away. Sometimes it has been
taken away through actions of the market, sometimes its been taken away
by government action expelling people from where they live, sometimes it
has been taken away by illegal means, violence, setting fire to a
building. There was a period where one part of New York City had fire
after fire after fire.
So what this does is to create a situation where the rich can
increasingly take over the whole domination of the city. And they have
to do that because this is the only way they can use their surplus
capital. And at some point however there is also the incentive for this
process of city building to go down to the poorer people. The financial
institutions lend to the property developers to get them to develop
large areas of the city. You have the developers but then the problem is
who do the developers sell their properties too? If working class
incomes were increasing then maybe you could sell to the working class.
But since the 1970s the policies of neoliberalism have been about wage
repression. In the United States real wages haven't risen since 1970, so
you have a situation where real wages are constant but property prices
are going up. So where is the demand for the houses going to come from?
The answer was you invite the working classes into the debt environment.
And what we see is that household debt in the United States has gone
from about $40,000 per household to over $120,000 per household in the
last 20 years. The financial institutions knock on the doors of working
class people and say,
"we have a good deal for you. You borrow money from us and you can
become a homeowner, and don't worry, if at some point you can't pay your
debt the housing prices are going to go up so everything is fine".
So more and more low income people were bought into the debt
environment. But then about two years ago property prices started to
come down. The gap between what working class people could afford and
what the debt was was too big. Suddenly you had a foreclosure wave going
through many American cities. But as usually happens with something of
this kind there is an uneven geographical development of that wave. The
first wave hit very low income communities in many of the older cities
in the United States. There is a wonderful map that you can see on the
BBC website of the foreclosures in the city of Cleveland. And what you
see is a dot map of the foreclosures that is highly concentrated in
certain areas of he city. There is a map beside it which shows a
distribution of the African American population, and the two maps
correspond. What this means is that this was robbery of a low income
African American population. This has been the biggest loss of assets
for low income populations in the United States that there has ever
been. 2 Million people have lost their homes. And at that very moment
when that was happening the bonuses paid out on Wall street were coming
to over $30 Billion - that is the extra money that is paid to the
bankers for their work. So $30 billion ends up on Wall Street which has
effectively been taken from low income neighborhoods. There is talk
about this in the United States as a financial Katrina because as you
remember Hurricane Katrina hit New Orleans differentially and it was the
low income black population that got left behind and many of them died.
The rich protected their right to the city but the poor essentially lost
theirs. In Florida, California and the American South West the pattern
was different. It was very much out on the periphery of the cities. And
there a lot of money was being lent to the building groups and the
developers. They were building housing way out, 30 miles outside of
Tuscon and Los Angeles and they couldn't find anybody to sell to so they
actually went for a white population that did not like living near
immigrants and blacks in the central cities. What this then led to was a
situation that happened a year ago when the high gas prices made it very
difficult for communities. Many of the people had difficulties paying
their debt and so we find a foreclosure wave which is happening in the
suburbs and is manly white in places like Florida, Arizona and
California. Meanwhile what Wall Street had done is to take all of these
risky mortgages and to package them in strange financial instruments.
You take all of the mortgages from a particular place and put them into
a pot and then sell shares of that pot to somebody else. The result is
that the whole of the mortgage financial market has globalized. And you
sell pieces of ownership to mortgages to people in Norway or Germany or
the Gulf or whatever. Everybody was told that these mortgages and these
financial instruments were as safe as houses. They turned out not to be
safe and we then had the big crisis which keeps going and going and
going. My argument is that if this crisis is basically a crisis of
urbanization then the solution should be urbanization of a different
sort and this is where the struggle for the right to the city becomes
crucial because we have the opportunity to do something different.
But I am often asked if this crisis is the end of neoliberalism.. My
answer is "no" if you look at what is being proposed in Washington and
London. One of the basic principles that was set up in the 1970s is that
state power should protect financial institutions at all costs. And
there is a conflict between the well being of financial institutions and
the well being of people you chose the well being of the financial
institutions. This is the principle that was worked out in New York City
in the mid 1970s, and was first defined internationally in Mexico it
threatened to go bankrupt in 1982. If Mexico had gone bankrupt it would
have destroyed the New York investment banks. So the United States
Treasury and the International Monetary Fund combined to help Mexico not
go bankrupt. In other words they lent the money to Mexico to pay off the
New York bankers. But in so doing they mandated austerity for the
Mexican population. In other words they protected the banks and
destroyed the people. This has been the standard practice in the
International Monetary Fund ever since. Now if you look at the response
to the crisis in the United States and Britain, what they have done in
effect is to bail out the banks. $700 billion to the banks in the United
States. They have done nothing whatsoever to protect the homeowners who
have lost their houses. So it is the same principal that we are seeing
at work - protect the financial institutions and fuck the people. What
we should have done is to take the $700 billion and create an urban
redevelopment bank to save all of those neighborhoods that were being
destroyed and reconstruct cities more out of popular demand.
Interestingly if we had done that then a lot of the crisis would have
disappeared because there would be no foreclosed mortgages. Meanwhile we
need to organize an anti-eviction movement and we have seen some of that
going on in Boston and some other cities. But at this historical moment
in the United States there is a sense that popular mobilization is
restricted because the election of Obama was a priority. Many people
hope that Obama will do something different, unfortunately his economic
advisors are exactly those who organized this whole problem in the first
place. I doubt that Obama will be as progressive as Lula. You will have
to wait a little bit before I think social movements will begin to go in
motion. We need a national movement of Urban Reform like you have here.
We need to build a militancy in the way that you have done here. We need
in fact to begin to exercise our right to the city. And at some point
we'll have to reverse this whole way in which the financial institutions
are given priority over us. We have to ask the question what is more
important, the value of the banks or the value of humanity. The banking
system should serve the people, not live off the people. And the only
way in which at some point we are really going to be able to exert the
right to the city is that we have to take command of the capitalist
surplus absorption problem. We have to socialize the capital surplus. We
have to use it to meet social needs . We have to get out of the problem
of 3% accumulation forever. We are now at a point where 3% growth rate
forever is going to exert such tremendous environmental costs, its going
to exert tremendous pressure on social situations that we are going to
go from one financial crisis to another. If we come out of this
financial crisis in the way they want there will be another financial
crisis 5 years from now. So its come to the point when its no longer a
matter of accepting what Margaret Thatcher said, that "there is no
alternative", and we say that there has to be an alternative. There has
to be an alternative to capitalism in general. And we can begin to
approach that alternative by perceiving the right to the city as a
popular and international demand and I hope that we can all join
together in that mission. Thank you very much.
Forum, Belem
David Harvey
I'm delighted to be here, but first of all I'd like to apologize for
speaking English which is the language of international imperialism. I
hope that what I have to say is sufficiently anti-imperialist that you
people will forgive me. (applause)
I am very grateful for this invitation because I learn a great deal from
the social movements. I've come here to learn and to listen and
therefore I am already finding this a great educational experience
because as Karl Marx once put it there is always the big question of who
will educate the educators.
I have been working for some time on the idea of the Right to the City.
I take it that Right to the City means the right of all of us to create
cities that meet human needs, our needs. The right to the city is not
the right to have - and I'll use an English expression - crumbs from the
rich mans table. We should all have the same rights to further construct
the different kinds of cities that we want to exist.
The right to the city is not simply the right to what already exists in
the city but the right to make the city into something radically
different. When I look at history I see that cities have been managed by
capital more than by people. So in this struggle for the right to the
city there is going to be a struggle against capital.
I want to talk a little bit now about the history of the relationship
between capital and city building and ask the question: Why is it that
capital manages to exercise so much rights over the city? And why is it
that popular forces are relatively weak against that power? And I'd also
like to talk about how, actually, the way capital works in cities is one
of its weaknesses. So at this time I think the struggle for the right to
the city is at the center of the struggle against capital. We have now -
as you all know - a financial crisis of capitalism. If you look at
recent history you will find that over the last 30 years there have been
many financial crises. Somebody did a calculation and said that since
1970 there have been 378 financial crisis in the world. Between 1945 and
1970 there were only 56 financial crises. So capital has been producing
many financial crises over the last 30 to 40 years. And what is
interesting is that many of these financial crises have a basis in
urbanization. At the end of the 1980s the Japanese economy crashed and
it crashed around property and land speculation. In 1987 in the United
States there was a huge crisis in which hundreds of banks went bankrupt
and it was all about housing and property development speculation. In
the 1970s there was a big, world-wide crises in property markets. And I
could go on and on giving you examples of financial crises that are
urban based. My guess is that half of the financial crises over the last
30 years are urban property based. The origins of this crisis in the
United States came from something called the sub prime mortgage crises.
I call this not a sub prime mortgage crisis but an urban crisis.
This is what happened. In the 1990s there came about a problem of
surplus money with nowhere to go. Capitalism is a system that always
produces surpluses. You can think of it this way: the capitalist wakes
up in the morning and he goes into the market with a certain amount of
money and buys labor and means of production. He puts those elements to
work and produces a commodity and sells it for more money than he began
with. So at the end of the day the capitalist has more than he had at
the beginning of the day. And the big question is what does he do with
the more that he's picked up? Now if he were like you and me he would
probably go out and have a good time and spend it. But capitalism is not
like that. There are competitive forces that push him to reinvest part
of his capital in new developments. In the history of capitalism there
has been a 3% rate of growth since 1750. Now a 3% growth rate means that
you have to find outlets for capital. So capitalism is always faced with
what I call a capital surplus absorption problem. Where can I find a
profitable outlet to apply my capital? Now back in 1750 the whole world
was open for that question. And at that time the total value of the
global economy was $135 billion in goods and services. By the time you
get to 1950 there is $4 Trillion in circulation and you have to find
outlets for 3% of $4 trillion. By the time you get to the year 2000 you
have $42 trillion in circulation. Around now its probably $50 Trillion.
In another 25 years at 3% rate of growth it will be $100 trillion. What
this means is that there is an increasing difficulty in finding
profitable outlets for the surplus capital. This situation can be
presented in another way. When capitalism was essentially what was going
on in Manchester and a few other places in the World, a 3% growth rate
posed no problem. Now we have to put a 3% rate of growth on everything
that is happening in China, East and Southeast Asia, Europe, much of
Latin America and North America and there is a huge, huge problem. Now
capitalists, when they have money, have a choice as to how they reinvest
it. You can invest in new production. An argument for making the rich
richer is that they will reinvest in production and that this will
generate employment and a better standard of living for the people. But
since 1970 they have invested less and less in new production. They have
invested in buying assets, stock shares, property rights, intellectual
property rights and of course property. So since 1970, more and more
money has gone into financial assets and when the capitalist class
starts buying assets the value of the assets increases. So they start to
make money out of the increase in the value of their assets. So property
prices go up and up and up. And this does not make for a better city it
makes for a more expensive city. Furthermore, to the degree that they
want to build condominiums and affluent housing they have to drive poor
people off their land. They have to take away our right to the city. So
that in New York City I find it very difficult to live in Manhattan, and
I am a reasonably well paid professor. The mass of the population that
actually works in the city cannot afford to live in the city because
property prices have gone up and up and up and up. In other words the
people's right to the city has been taken away. Sometimes it has been
taken away through actions of the market, sometimes its been taken away
by government action expelling people from where they live, sometimes it
has been taken away by illegal means, violence, setting fire to a
building. There was a period where one part of New York City had fire
after fire after fire.
So what this does is to create a situation where the rich can
increasingly take over the whole domination of the city. And they have
to do that because this is the only way they can use their surplus
capital. And at some point however there is also the incentive for this
process of city building to go down to the poorer people. The financial
institutions lend to the property developers to get them to develop
large areas of the city. You have the developers but then the problem is
who do the developers sell their properties too? If working class
incomes were increasing then maybe you could sell to the working class.
But since the 1970s the policies of neoliberalism have been about wage
repression. In the United States real wages haven't risen since 1970, so
you have a situation where real wages are constant but property prices
are going up. So where is the demand for the houses going to come from?
The answer was you invite the working classes into the debt environment.
And what we see is that household debt in the United States has gone
from about $40,000 per household to over $120,000 per household in the
last 20 years. The financial institutions knock on the doors of working
class people and say,
"we have a good deal for you. You borrow money from us and you can
become a homeowner, and don't worry, if at some point you can't pay your
debt the housing prices are going to go up so everything is fine".
So more and more low income people were bought into the debt
environment. But then about two years ago property prices started to
come down. The gap between what working class people could afford and
what the debt was was too big. Suddenly you had a foreclosure wave going
through many American cities. But as usually happens with something of
this kind there is an uneven geographical development of that wave. The
first wave hit very low income communities in many of the older cities
in the United States. There is a wonderful map that you can see on the
BBC website of the foreclosures in the city of Cleveland. And what you
see is a dot map of the foreclosures that is highly concentrated in
certain areas of he city. There is a map beside it which shows a
distribution of the African American population, and the two maps
correspond. What this means is that this was robbery of a low income
African American population. This has been the biggest loss of assets
for low income populations in the United States that there has ever
been. 2 Million people have lost their homes. And at that very moment
when that was happening the bonuses paid out on Wall street were coming
to over $30 Billion - that is the extra money that is paid to the
bankers for their work. So $30 billion ends up on Wall Street which has
effectively been taken from low income neighborhoods. There is talk
about this in the United States as a financial Katrina because as you
remember Hurricane Katrina hit New Orleans differentially and it was the
low income black population that got left behind and many of them died.
The rich protected their right to the city but the poor essentially lost
theirs. In Florida, California and the American South West the pattern
was different. It was very much out on the periphery of the cities. And
there a lot of money was being lent to the building groups and the
developers. They were building housing way out, 30 miles outside of
Tuscon and Los Angeles and they couldn't find anybody to sell to so they
actually went for a white population that did not like living near
immigrants and blacks in the central cities. What this then led to was a
situation that happened a year ago when the high gas prices made it very
difficult for communities. Many of the people had difficulties paying
their debt and so we find a foreclosure wave which is happening in the
suburbs and is manly white in places like Florida, Arizona and
California. Meanwhile what Wall Street had done is to take all of these
risky mortgages and to package them in strange financial instruments.
You take all of the mortgages from a particular place and put them into
a pot and then sell shares of that pot to somebody else. The result is
that the whole of the mortgage financial market has globalized. And you
sell pieces of ownership to mortgages to people in Norway or Germany or
the Gulf or whatever. Everybody was told that these mortgages and these
financial instruments were as safe as houses. They turned out not to be
safe and we then had the big crisis which keeps going and going and
going. My argument is that if this crisis is basically a crisis of
urbanization then the solution should be urbanization of a different
sort and this is where the struggle for the right to the city becomes
crucial because we have the opportunity to do something different.
But I am often asked if this crisis is the end of neoliberalism.. My
answer is "no" if you look at what is being proposed in Washington and
London. One of the basic principles that was set up in the 1970s is that
state power should protect financial institutions at all costs. And
there is a conflict between the well being of financial institutions and
the well being of people you chose the well being of the financial
institutions. This is the principle that was worked out in New York City
in the mid 1970s, and was first defined internationally in Mexico it
threatened to go bankrupt in 1982. If Mexico had gone bankrupt it would
have destroyed the New York investment banks. So the United States
Treasury and the International Monetary Fund combined to help Mexico not
go bankrupt. In other words they lent the money to Mexico to pay off the
New York bankers. But in so doing they mandated austerity for the
Mexican population. In other words they protected the banks and
destroyed the people. This has been the standard practice in the
International Monetary Fund ever since. Now if you look at the response
to the crisis in the United States and Britain, what they have done in
effect is to bail out the banks. $700 billion to the banks in the United
States. They have done nothing whatsoever to protect the homeowners who
have lost their houses. So it is the same principal that we are seeing
at work - protect the financial institutions and fuck the people. What
we should have done is to take the $700 billion and create an urban
redevelopment bank to save all of those neighborhoods that were being
destroyed and reconstruct cities more out of popular demand.
Interestingly if we had done that then a lot of the crisis would have
disappeared because there would be no foreclosed mortgages. Meanwhile we
need to organize an anti-eviction movement and we have seen some of that
going on in Boston and some other cities. But at this historical moment
in the United States there is a sense that popular mobilization is
restricted because the election of Obama was a priority. Many people
hope that Obama will do something different, unfortunately his economic
advisors are exactly those who organized this whole problem in the first
place. I doubt that Obama will be as progressive as Lula. You will have
to wait a little bit before I think social movements will begin to go in
motion. We need a national movement of Urban Reform like you have here.
We need to build a militancy in the way that you have done here. We need
in fact to begin to exercise our right to the city. And at some point
we'll have to reverse this whole way in which the financial institutions
are given priority over us. We have to ask the question what is more
important, the value of the banks or the value of humanity. The banking
system should serve the people, not live off the people. And the only
way in which at some point we are really going to be able to exert the
right to the city is that we have to take command of the capitalist
surplus absorption problem. We have to socialize the capital surplus. We
have to use it to meet social needs . We have to get out of the problem
of 3% accumulation forever. We are now at a point where 3% growth rate
forever is going to exert such tremendous environmental costs, its going
to exert tremendous pressure on social situations that we are going to
go from one financial crisis to another. If we come out of this
financial crisis in the way they want there will be another financial
crisis 5 years from now. So its come to the point when its no longer a
matter of accepting what Margaret Thatcher said, that "there is no
alternative", and we say that there has to be an alternative. There has
to be an alternative to capitalism in general. And we can begin to
approach that alternative by perceiving the right to the city as a
popular and international demand and I hope that we can all join
together in that mission. Thank you very much.
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