O enigma do capital: e as crises do capitalismo

by David Harvey

Nesta obra, o autor parte da análise da crise do subprime imobiliário de 2008 com o objetivo de demonstrar que, apesar de seu alcance e tamanho, ela não difere das crises passadas. Para tanto, o autor estuda as condições necessárias para a acumulação do capital e utiliza teoria econômica para expor o papel fundamental que acredita que as crises tenham na reprodução do capitalismo e os riscos sistêmicos de longo prazo que o capital representa para a vida no planeta.

Genres: Economics, Politics, Nonfiction, Philosophy, Sociology, History, Theory

240 pages, Paperback

First published January 1, 2010

About the author

Librarian Note: There is more than one author by this name in the Goodreads database.

David Harvey (born 1935) is the Distinguished Professor of Anthropology at the Graduate Center of the City University of New York (CUNY). A leading social theorist of international standing, he graduated from University of Cambridge with a PhD in Geography in 1961.

He is the world's most cited academic geographer (according to Andrew Bodman, see Transactions of the IBG, 1991,1992), and the author of many books and essays that have been prominent in the development of modern geography as a discipline.

His work has contributed greatly to broad social and political debate, most recently he has been credited with helping to bring back social class and Marxist methods as serious methodological tools in the critique of global capitalism, particularly in its neoliberal form.

Reviews

[Maru Kun · Rating 4 out of 5]

I first read this book in 2013, two years after it was written, and found it an eye-opening critique of events leading up to the global financial crisis.

I came across a review of the work in the London Review of Books and this encouraged we to revisit some of the passages I had highlighted when I first read through it. After all, it's five years since the book was written - a long time in economics as well as politics these days.

Well, quite a few passages have passed the test of time. To start off with, I see no change here:

The problem is that the economic theories and orthodoxies which manifestly failed to predict the crisis continue to inform our debates, dominate our thinking and underpin political action.

It looks like our "mental conceptions" are still being manipulated by the parts of the media that prefer to treat "free markets" as synonymous with "liberty" instead of making an objective analysis of the facts. Brexit and its "taking control" are one good recent example of this phenomenon with Fox News or the whole of the State of Texas being another:

Mental conceptions of the world were reshaped as far as possible by appeal to neoliberal principles of individual liberty as necessarily embedded in free markets and free trade.

Brexit, the rise of right wing governments in Eastern Europe, Le Pen, Trump threatening to betray NATO promises and default on America's debt ("do a deal" is how he puts it); this passage still seems spot on:

While there are innumerable parallels now being drawn between the crisis of the 1930s and the current one, the one potential parallel that is almost totally ignored is the collapse of international collaboration, the descent into geopolitical rivalries

This also still sounds about right; post-truth politics and politics as reality TV:

Throughout much of the capitalist world, we have lived through an astonishing period in which politics has been depoliticised and commodified.

This book was written before the Occupy movement. Sadly it foresaw the key flaw in Occupy's aspirations even before the first Occupy protests:

double blockage exists: the lack of an alternative vision prevents the formation of an oppositional movement, while the absence of such a movement precludes the articulation of an alternative.

And now we see even more than in the past the right encouraging the divisions of identity which are an important bulwark of their position. We'll build a wall, and you will pay for it:

The class inequalities upon which capital accumulation rests are frequently defined by identities of race, gender, ethnicity, religion

But if only the following passage was still true. In the UK we have an unprecedented series of Doctor's strikes opposing a further step in the de-facto privatization of the UK national health service.

Many of the key achievements of distributive socialism in the period after 1945, in Europe and beyond, have become so socially embedded as to be immune from neoliberal assault.

Would Medicare survive Trump? I doubt it. Might we see a Trump High School every bit as successful as Trump University? You bet we might.

Well, I wish I had something cheerful to say after this trip down memory lane. Unfortunately I don't, although I would say - in fact I hope I have proved - this is a book still very well worth reading for a whole new perspective on the factors which lead us to the GFC which are unchanged nearly a decade later.

[Andrew Martin · Rating 2 out of 5]

Picked this up because Harvey was the only person I had run into who had a plausible explanation why $500K+ condo towers were suddenly being thrown up in downtrodden parts of Brooklyn, as summarized in n+1:

Harvey’s answer was that under capitalism land becomes “a pure financial asset”; land price is a claim on future revenue treated as a present-day asset. “Mortgages,” Marx said, “are mere titles on future rent.” And Harvey completes his thought: “Land price must be realized as future rental appropriation, which rests on future labor” (our italics). The big risk, naturally, is that you will attribute to real estate far more present-day value than can later on be returned to it by labor (in the form of the portion of total income devoted to housing). A bubble occurs not when people pay for real estate with money they don’t yet have—as always happens, given the availabilty of credit—but when they pay with money they will never have, out of wages they will never receive—out of wages no one will ever receive.
http://nplusonemag.com/intellectual-situation-your-marx

Let me save you some time and distill the argument he's making here:

1) Capitalist economies expand. They generate surplus on the order of 3%/year.
2) That money needs to go somewhere. New investment opportunities are pursued! The financial sector can never stay still, as new surpluses require new outlets.
3) 3% compound growth gets really, really big over a long time horizon. Think Archimedes, give me a lever long enough, etc.
4) Need to continually expand makes the entire system prone to shocks and crises. Misallocation is inevitable when searching for new places to make use of the surplus.

Let's give Harvey his due -- as far as it goes, this is some incredibly insightful analysis as to why financial crises seem to constantly reoccur. If this was a long magazine article that laid out 1-4 and called it a day, it'd be a hugely important work. But Harvey's technical analysis is interwoven with a hazy, poorly articulated political program that calls the whole work into question. In brief:

1) He doesn't engage with any other thinker beyond Marx. Hayek gets a dismissive mention 200 pages in. Krugman and Samuelson are quoted, but only to establish that economists "didn't see it coming." Fine. But what about the bigger question about the (un)sustainability of growth? This is literally the central argument in the book.

2) His conception of the politics of "the capitalist class" is so reductive as to be childish. The interests or thinking of "the capitalist class" are a get-out-of-jail ticket that Harvey uses to resolve any apparent contradiction in his political analysis. p. 270: "But the Party of Wall Street, having won its battle to preserve tax cuts for the most affluent, then came to its senses. It decided that two years of total austerity was too much to take." Oh did it!? Not only is total unanimity in the "capitalist class" assumed, but apparently they have the ability to change course on a dime. Whatever your politics, this is nonsense, and it's plainly lazy analysis.

3) The matter of alternatives. I'll even concede to you that the "no alternative" argument is the last refuge of a scoundrel etc etc. Here is what I am saying: If you don't have an alternative to offer (and I don't think Harvey's even fooling himself with his vague call for 'political mobilization'), don't casually throw out a call for revolutionary violence. p. 250: "It would also be comforting to think that all of this could be accomplished pacifically...but it would be disingenuous to imagine that this could be s, that no active struggle would be involved, including some degree of violence. Capitalism came into the world...bathed in blood and fire...the odds are heavily against any purely pacific passage to the promised land."

[Foppe · Rating 5 out of 5]

In this book, David Harvey tries to explain the causes of the current economic crisis, which he argues is the last in a string of crises that started roughly in the early 1970s, but for which the ground-work was laid basically at the end of World War II.
Harvey argues that the boom/bust cycles we've seen in the past 20-30 years, and especially the current one, are the consequence of the fact that too much investment capital is chasing too few investment opportunities (a problem that is actually exacerbated by lowering wages, because the money saved on production-worker/low-skiled labor becomes available for raising managerial wages and dividend payouts, thus leading to increased profits, and a decrease in aggregate demand, because this money then becomes available for saving or reinvestment rather consumption). And because capitalism requires, as Harvey puts it, 'yesterday's profits to be reinvested in tomorrow's production', a process that must result in an effective yield of ca. 3% every year, currently more than 1 trillion dollars has to be (re)invested to ensure the system doesn't grind to a halt, resulting in "recession" -- that is, little to no growth. Yet because the growth can only happen when the products produced are also sold, this means that a decrease in demand (caused by lowering working class wages) causes instability in that circle. And, at the same time, when there is a large and growing gap between the amount of money available for investment, and the amount of money needed for the new and existing investment opportunities, investors start to panic, and turn to asset, stock or commodity speculation, resulting in the frequent bubbles we've seen happening in housing, tech stocks, but also in oil, sugar and grain, in order to maintain their yields on their savings. And this bubble blowing, in turn, has allowed the banks and large speculators to transfer the wealth contained in things like pension funds to themselves (helped along by, for instance, bush's privatization of pension plans), simply because the former, as a rule, are better at guessing when to get out of 'bull markets' before they deflate and drop back to normals levels again, while small investors (people trying to get higher yields on their 401ks from the stock market, because normal saving had become impossible because of Greenspan's low interest rate policies) lose time and time again.
The most important problem, then, is the enormous gap between supply and demand in the world economy, which is largely caused by the fact that the (aggregated) wages of those who are expected to consume the goods produced have been dropping ever since the 1970s. Because of the development of the Chinese, Japanese, and 'Asian Tiger's' industrial base -- funded, in large part, by western investors -- competition for especially low-skilled, but increasingly high-skilled labor has been increasing for decades, and this has had served as a strong downward pressure on working and (lower) middle class wages. (A second downward pressure being efficiency gains and redundancy caused by technological innovation.) Consequently, aggregate demand has been dropping (or at least not increasing at the same pace as investment on the side of production has been growing), serving as an additional reason for factory owners to downsize or outsource their workforce. However, because of the fact that prices didn't drop appreciably, this has meant that more money was available for people in high-skilled and managerial positions, (whom we might call 'investors', defined as people who save a lot, and who expect their savings to yield 'decent' returns), there has been a growing mismatch between the amount of money invested and the amount of money being available for consumption needed to keep the cycle going. Now, one way in which consumption was kept at higher levels than was actually sustainable was by relaxing or removing restrictions on borrowing, and by allowing a bubble to develop in the Real Estate market, because the on-paper gains in wealth could serve as collateral for the loans that were extended, which meant that enough people appeared to manage when they really weren't. (It also helped because the rising housing market led to more home construction and sales, which gave people jobs, which -- incidentally -- cannot be outsourced.) This borrowing-funded consumption, then, helped along by first the dot-com, and subsequently the real estate bubbles, is the proximate cause of the current crisis, and its bust seems to have marked the end of the road for that behavior.
However, this leaves us with the question what can be done. This is an enormously difficult question to answer, because of the fact that any sharp disruptions (e.g. by banning imports from china to help domestic industries) would immediately result in a rise in prices for consumer goods, which would mean that people whose wages can barely sustain them at the current low prices would then really go under. Harvey knows he does not have the answer to this question, but he does suggest that, if we want to end the boom-bust cycles, we have to intervene in the profit-wage equation. Only when aggregate demand can absorb the products supplied in a year can an economy grow in a 'healthy' fashion, but at the same time, all profit made over and above the amount of money necessary for reinvestment (+ some growth) leads to instability, because of the fact that mismatches between investment opportunities and money available for investment encourages investors to start speculating.
Note/conclusion. I have now rewritten this review a number of times, but because of the interrelatedness of all of the aspects that play a role in the system, I am finding it quite hard to come up with a way to write it that works. I hope, however, that this makes you curious enough to pick up Harvey's book and to see how much more clearly Harvey can explain this mechanism than I can, because I cannot really do justice to his contribution.
I would suggest, however, that it really *is* worth your time, if this crisis interests you. (And even if it doesn't, because even if it doesn't interest you, it does affect you.)

[Malcolm · Rating 5 out of 5]

Every now and then I read something that helps make sense of the really big picture; this is one of those books – and it is simply superb. For at least the last 25 years or so I have been involved in work with friends and comrades (I use the word broadly) on ways to make sense of the post-Really-Existing-Communist world of finance capital, and in doing so have tried to keep up with developments on the left and in the broad social movements. Our early, and unsuccessful, efforts centred on ideas of ways to integrate the struggles around race, gender and class as well as related social antagonisms and identities – but in reality that was little more than a souped up version of what used to be called ‘tripod’ theory (race/gender/class as the society’s shaping antagonisms) where we added a bit of dialectical and historical materialism to get beyond much of the voluntarism and idealism of tripod theory. Not surprisingly, we didn’t get far and the initial moves just happened to begin to come to fruition with the collapse of the Soviet Union, the Chinese attack on protestors in Tiananmen Square, and the growing hegemony of neo-liberalism – the organisational base of this work collapsed. Since then, there has been enormous developments in the theory, practice and shape of the left – but little that has effectively rethought what it is that we are dealing with (although Marta Harnecker’s Rebuilding the Left is one of the better attempts).

This book is a profound and essential retheorising and reanalysis of the contemporary world of finance capital that challenges and extends Marx’s and Marxist analyses of our socio-political-economic world in essential ways. The analysis of the current crisis of capitalism is lucid and clear, the outline of capital’s development and operation – both industrial and financial is demanding but about as sharp and transparent as that obscure world can be, and the spatialisation of capital and capital flows in itself an essential addition to contemporary understandings of global capitalism (as would be expected from a geographer).

Important as these are, the real strengths of the book lie elsewhere. The first is Harvey’s model of the co-evolution of capitalist development based in the dialectical interaction of seven ‘activity spheres’: the production of new technological and organisational forms; social relations; institutional and administrative arrangements; production and labour processes; relations to nature; the reproduction of daily life and the species; and mental conceptions of the world. This is a sophisticated critique of the crude attribution to Marx of a base-superstructure model (thanks Joe Stalin), and a rejection of the primacy of any sphere while also accepting the basic truth of a materialist mode of analysis. Each of these seven spheres interacts (dialectically) to shape and make the modern world, but that interaction varies across space. The corollary of this model is that transformative action against capitalism must be co-revolutionary attending to all of these spheres, but that the ‘way in’ – the dominant contradiction of the moment – is likely to be different in different places. This co-revolutionary politics centres on several key points: development is not the same as growth; developments in each sphere will require a sophisticated grasp of the operational form and character of each other sphere (that is, we need some ‘grand theory’); we need to be aware of and confront feedbacks and impacts from the global economy; and we need some common objectives.

In the contemporary world, Harvey sees two broad groups of activists marginalised by the politics of capital: the discontented and alienated – including intellectuals, cultural workers and others whose material interests may lead them to ally with those in power but whose cultural and political outlooks lead them to see the current path of capitalist development as at best a dead end and at worst a catastrophe meaning that they reject that alliance – and the deprived and dispossessed, those whose experience of the conditions of work and life deprive and dispossess them of control over their labour, material, cultural and natural relations of existence. In a shift from the old Leninist model of the role of intellectuals to teach the deprived and dispossessed (to teach the workers) Harvey sees our role as trying to make sense of the underpinning conditions of deprivation and dispossession and to work with the deprived and dispossessed to make sure those explanations have meaning and are effective contributions to struggle (the terms, shape and structure of this relationship need further work).

Having built this model, Harvey finds our existing organisational forms inadequate but sees great potential emerging from the interwoven action of 1) NGOs (at best, ameliorative), 2) anarchist, autonomist and grassroots movements, 3) ‘traditional’ (his word) left parties and the labour movement, 4) social movements that are not necessarily philosophically based but are pragmatic responses to and resistance of displacement and dispossession, and 5) identity-based emancipatory movements (race, gender, class, youth, children, religious minorities and the like). It is at this stage that I find Marta Harnecker’s excellent (Bolivarian/Chavezesque) book Rebuilding the Left so helpful, with its pragmatic and challenging ‘what-do-we-do-now?’ approach, and find the inclusive approach to the left of magazines like Red Pepper so useful and inspiring. In some ways what Harvey has done here (and don’t get me wrong, there are flaws, but with one exception they are minor and I wouldn’t a good lefty if I didn’t find something to niggle about – but the relations between the discontented and alienated and the deprived and dispossessed needs much more work) has provided these new developments (of the kind Red Pepper and Harnecker represent) with a update of Capital for our times. Right at the end he reminds us, in the words of Shakespeare “The fault … is not in the stars, but in ourselves that we are underlings”. This is not neo-liberal self-blame for failure, but a reminder that no-one else is going to change the world for the better if we don’t.

[Rurae · Rating 5 out of 5]

In between reading smut, I like to read serious shit. Shocking I know! And this book is the best *serious shit* book a person can read. I have read a lot of books on the financial crisis and woeful state of the Western economies and this is hands down the best.

Harvey paints a very accurate picture of everything wrong with late stage, neo liberal capital. And he does so in an easy to read and understand manner. He looks at the issue from a macro perspective and shows how the whole system is unstable and on the verge of collapse.

I think neo liberal, every one for themselves, economics are terrible. Not just for the individuals crushed by the harsh system but for all of us on the planet.

Inequality is now at an all time high. The last few times we've been in this position we ended up in two world wars. You can't divorce the ever increasing conflict in the world from the fact that masses of ordinary people are struggling while a tiny elite gets richer and richer...and richer.

If things don't change we are heading for very dark days.

Right, off my soapbox and back to the smut. Because there's only so much reality a girl can take. But if you want to know why we are in the mess we're in, you could do a lot worse than read this book.

[Tyler · Rating 3 out of 5]

I wish this book had had more footnotes and less exclamation points. Harvey's strong points are on his analysis of urban living and how capital moves from country to country.

I suppose I agree with his analysis that there is something about capitalism in general that is doomed to fail (the constant quest for more of it), but I guess after having read this book I came away wondering if I would have been better off just reading "Das Kapital" by Karl Marx instead.

[Tara Brabazon · Rating 5 out of 5]

David Harvey is a remarkable scholar. His work on postmodernity transformed my thinking on the subject. The Enigma of Capital is similarly revelatory. This is the finest analysis I have read of the financial crisis. Most impressively, he explores why capitalism is "irrational" and probes the problematic gap between the reality and representation of capitalism. This book is outstanding.

[Holly · Rating 4 out of 5]

So concise and yet could be made still more concise. Just slightly too obtuse (but only slightly) to be accessible to the lay reader as an introduction to the 2008 collapse. Very recommended, however, to anyone who wants all the disparate puzzle pieces of neoliberalism brought together into one chronological argument.

[H Wesselius · Rating 3 out of 5]

AS much as I agreed with his views and thought his analysis to be dead on, I oculdn't get excited about reading this book. In order to dissuade people from the prevailing neo-liberal bs, leftist writers need to be far more readable.

[Avery · Rating 2 out of 5]

Meandering, few references, little statistical analysis. Topped off with a round of social movement dungeon master. What's not to like?

[Ed · Rating 4 out of 5]

David Harvey isn't more Marxist than Marx but he does a good job of making one think that is the case. His masterful explication of Capital, Volume One (available on YouTube) shows that he knows the critiques of capitalism extremely well. One point he returns to often is the resiliency of this system of production and social organization--in order to survive capitalism must reinvent itself in response to crisis something that it has been able to do for a couple of centuries. While the fabric is getting very frayed it might hold together for a bit longer.

Or perhaps not. Updated as far as the beginnings of the Greek Euro crisis and covering the events of 2008 to early 2011, "The Enigma of Capital" does not give one the idea that Harvey is completely confident in the continuation of the system.

"The Enigma of Capital" is a summary and recapitulation of a lifetime of teaching, writing and thinking by Harvey. As such it is missing much scholarly apparatus (a full bibliography for example) and shows some lack of familiarity with issues that barely existed when initially published. The role of micro-credit in India is one of them, the prevalence of HIV/AIDS infection in southern Africa another, but it is excellent as an introduction Harvey's thinking and to Marxist analysis.

He isn't an economist or historian but a geographer--it seems the more qualitative social sciences, particularly anthropology, are coming to the fore in economic analysis. Actually they are filling a void since the economists failed so miserably in predicting the housing collapse that we are still feeling now. Gillian Tett in "Fools' Gold" and David Graeber in "Debt" are two other anthropologists shouldering aside their quantitative brethren.

[Andrea · Rating 4 out of 5]

The newest book on the crisis, it certainly succeeds in Harvey's aim to make it as accessible and readable as possible. I love Harvey's incredible skill in combining decades of thought and experience around complicated economic analysis, with the ability to rethink, retheorize, expand our repertoire of how to understand today's world and economy as a foundation for building something better and something new. In it you can see the effects of his work with the grassroots justice groups forming New York's Right to the City Alliance in ways that shall hopefully have an impact both on work on the ground and work in academic circles, the only hope we have for radical change. And I love the growing flexibility and practicality in expanding the traditional Marxist frameworks of analysis and struggle to respond to all we have learned in the past 150 years or so. We're not there yet, but I believe this is an incredibly valuable contribution to growing discussions around ways to collectively and understand and fight root causes of fading democracy, inequality, environmental destruction, and growing militarization.

[Med · Rating 5 out of 5]

یه کتاب بی نظیر. بار اول که خوندمش زیاد متوجه نشدم و نصفه ولش کردم اما اینبار لذت بردم. برای درک همه مسایل جهان( بوجود اومدن کشورها، دانشگاهها، پیشرفت علم و حتی دوربین های توی شهر و اداره باید سرمایه داری زو فهمید) برای درک جهان بدون دانستن اقتصاد سیاسی نمیشه چیزیو درک کرد و این کتاب شروع خوبی هست برای اینکار

[Robert C · Rating 2 out of 5]

Frankly, if he had a point, I never saw it bring made. It was an interesting look at economic history and philosophy; However, it was unreadable dull. As stated, I never did get to the part where he makes a meaningful point, it just meanders about.

[Andrew · Rating 4 out of 5]

Score: 4.5

"The Enigma of Capitalism": wherein David Harvey attempts to show the reader that capitalism is inherently self-contradicting.

Harvey's book tackles capitalism at a very high level. He never refers to behavior of individual people and rarely of individual corporations, but instead tackles broad trends: growth, surplus absorption, international finance controls. At this level, Harvey takes on the daunting task of explaining not that markets can fail, not that "greed" can cause crises, but that capitalism is fundamentally flawed and has inherent contradictions that will prevent it from continuing to work in the future the way it has worked for the past few centuries.

He describes how capitalism, as a system, is able to evolve from feudalism, due in no small part to state-sanctioned dispossession (enclosure, eminent domain, and more violent methods). He describes how capitalism uses social division (racism, sexism, political affiliations to maintain the status quo:

In the sweatshops of the so-called developing world it is women who bear the brunt of capitalist exploitation… The capitalist has to mobilise any social relation of difference, any distinction within the social division of labour, any special cultural preference or habit, both to prevent the inevitable commonality of position in the workplace being consolidated into a movement of social solidarity and to sustain a fragmented and divided workforce.

This sounds mildly conspiratorial until you reach the last chapter, where, in tackling how capitalism could possibly be moved away from as a system, he emphasizes the necessity of social solidarity among the working class.

He describes how capitalism influences social behavior to continue its growth (marketing is one aspect of this):

Once technology became a business in its own right then a social need sometimes had to be created to use up the new technology rather than the other way around. In the pharmaceutical sector we see in recent times the creation of whole new diagnostics of mental and physical states to match new drugs (Prozac is the classic example).

He describes the role China has played in the changing markets of recent decades:

The urbanisation of China over the last twenty years has been hugely important. Its pace picked up after a brief recession in 1997 or so, such that since 2000 China has absorbed nearly half of the world's cement supplies.

Caveat: I've never studied economics formally, and reading this book is part of my self-driven introduction to the subject, so I expect that my understanding is most likely flawed. That said, the main thesis appears to be:
- Capitalism needs to continue a 3% growth rate to sustain itself
- A lot of this is focused on "surplus absorption"---finding ways to reinvest profits or excess product that doesn't necessarily have a market. This is often accomplished by expanding into other industries or geographical areas.
- Recently (1980's on), a lot of surplus absorption has been driven (and therefore the 3% growth rate maintained) by the American housing boom and the development of suburbia. This growth has also been sustained in part by the development of speculative markets (see: recent banking practices.). Both of these factors have required a substantial expansion of credit, which should really only be used to hold over until profits can be realized.
- Essentially, this is not sustainable. We are running out of ways to reinvest capital, we are running out of consumers who need to consume, and we are digging our own grave the more we expand credit/print money/invent markets to maintain the 3% growth rate that capitalism needs.

The last chapter takes on a difficult topic: if capitalism is inherently flawed, Harvey argues, we need a fundamental change of system. But how, practically speaking, can that kind of drastic change occur? Here he uses his theories of economic evolution, taking into account different "activity spheres" of life and their interactions, to describe things that would need to be taken into account. Most interesting to me was the attack on private property as incompatible with trying to launch an egalitarian/classless society (which he blames, at least partially, previous failures of attempts at communism):

The way radical egalitarianism articulates with other spheres in the co-evolutionary process therefore complicates matters at the same time as it illuminates how capitalism works. When the individual liberty and freedom it promises is mediated through the institutional arrangements of private property and the market, as it is in both liberal theory and practice, then huge inequalities result.

A few issues I had with the book:
- There were occasionally strong statements made that I'm not sure if I agreed with: they would be made seemingly without justification, and I don't know if that's because they are standard economic theory that I don't know or because he's just making strong statements.
- I felt like his "seven activity spheres" were presented without explanation or justification for why those and not others. Again, perhaps this is standard economic theory.
In both cases, I would have appreciated more explanation as a reader for certain topics, but overall neither strongly affected what I got out of reading this.

Conclusion: would recommend. It's not too long, but requires pretty heavy focus to get through. My personal experience involved giving a lot of thought to ideas and concepts that I had never thought about before, which to me made the book entirely worth reading.


Other assorted quotes I particularly enjoyed:

On the contrast between the pace of modern financial evolution and of the rest of life:

Raising a child in a city neighbourhood occurs in a radically different time-space from that defined by contemporary financial operations. People reasonably seek a secure personal space--a home-- in which to live out their daily lives and to pursue their reproductive activity on, say, a twenty-year time horizon. But to do so they have to become titled property owners acquiring a mortgage in a debt market organised according to a different time-space logic.

On ways 3% growth is sustained:

For capital accumulation to return to 3 per cent compound growth will require a new basis for profit-making and surplus absorption. The irrational way to do this in the past has been through the destruction of the achievements of preceding eras by way of war, the devaluation of assets, the degradation of productive capacity, abandonment and other forms of "creative destruction."

On the recent crisis:

The rebound in stock market values… is a good sign, we are told, even as unemployment pretty much everywhere continues to rise. But notice the class bias in that measure. We are enjoined to rejoice in the rebound in stock values for the capitalists because it always precedes, it is said, a rebound in the "real economy" where jobs for the workers are created and incomes earned. The fact that the last stock rebound in the United States after 2002 turned out to be a "jobless recovery" appears to have been forgotten already.

[Matthew Carr · Rating 4 out of 5]

Harvey argues that each major capitalist crisis has been worse than the last one, and more difficult to surmount. He accepts that capitalism, with all its resilience and inventiveness, is quite capable of overcoming this crisis too; but he is sceptical, and believes that this is the moment that a revived anti-capitalist movement can seize the opportunity to put forward a realistic alternative to capitalism as a way of organising the economy and society as a whole. In general this is a decent contemporary take on Marx, even if it is somewhat poorly written. There is a bit of an "Enigma of David Harvey", as it is not always exactly clear what he is saying. Harvey thus serves as a decent introduction to Marxian political economy, but will likely leave the reader with a lot of unanswered questions - not that that's a bad thing.

[Michael H. · Rating 4 out of 5]

The Enigma of Capitalism and the Crises of Capitalism, by David Harvey analyzes the 2008 economic crisis and critiques the vast inadequacies and contradictions of capitalism. Harvey explains the occurrences in the world in terms of capitol flows, how colonialism, neocolonialism, culture hegemony, wars, financial crisis’s come about because of the inherent tensions caused by capitalism. An analysis of Harvey’s book, The Enigma of Capitalism and the Crises of Capitalism provides a clear understanding of how capitalism works and the events leading up to the 2008 crisis, but he also points out the many flaws to capitalism. However, Harvey leaves the solution to the problem up to his readers.
Harvey believes the best model to explain capitalism is as flow. The idea is that it flows like a river and you can move it or change it any way you need to, but when the flow gets blocked it creates a crisis with in the system. In order for capitalism to work, the economic system depends on a 3 percent growth with a 3 percent reinvestment in order for it to be sustained. It also depends on absorption of capital surplus in the production of goods and services. The idea of 3 percent growth forever shows the constraints of capitalism. These constraints that are talked about are environment, market, profitability, and spatial constraints.
Harvey explains the crisis’s of capitalism leading up to the 2008 melt down. One of the core principles that emerge from capitalism was the idea that state power should protect financial institutions at all cost. This non-interventionism that neoliberal theory prescribed emerged from the New York City fiscal crisis of the 1980’s. The policy that came from that was the privities profits and social risks; save the banks and put the screws on the people. For example, Mexico felt the debt-crisis firsthand in 1982, the standard of living for an entire population dropped by about a quarter in four years after the International Monetary Fund made Mexico pay back their debt. The term, “moral hazard” resulted from this crisis. As a result, this policy became one of the basic fundamentals of capitalism.
Harvey’s perspective on how wages kept pace during the earlier stages of capitalism is this; the labor force was too strong in relations to capitol, and because the labor force was strong the national economy with states that were in charge of their own policies, until the innovation of capitalist found their way around strong labor by allowing access to labor through immigration and policies. This in return started a wage repression. When prices go down so does the profit, so according to Harvey, capitalist needed another way to generate profit without slowing the flow so they went with the debt economy model. Financial institutions started extending credit to everyone along with dropping the standards of home mortgages and collected the interest. This ensured that the financial institutions would generate profits from more than one source and lent more than they had in deposit. When competition starts and profits go down redistribution of wealth to the upper class takes place, so doe’s innovation. Capitalist created and invested into the asset markets, making money out of money.
Globalization from the Washington consensus onwards was directed at freeing the movement of capital and labor so that businesses could find the cheapest labor in the most convenient locations. Harvey believes that if there is no social control of growth over capitalism there will be a continuation of crisis. He also claims that in order to prevent crisis, capital has to be in the right place in the right quantities at the right time, and that there needs to be a social evolution in order for a crisis not to take place.
The Enigma of Capitalism by David Harvey explores the issues that led to the economic melt down of 2008. Harvey provides an outside Marxist perspective that is easy for readers to follow. Harvey analytically explains the systematic logic of capitalism and the role that each of the crisis played within his logic. As a novice in this subject, Harvey breaks capitalism down into a system of flow that is easy to understand and follow. The problem with American ideology is that the word regulation in our country has been tied to socialism and communism; this may lead to a negative response about book. However, the limitation to capitalism according to Harvey is sustainability by regulation that does not go hand in hand with our American ideology and the success of capitalism. Harvey explains step by step how the system continues to fail, but does not offer any real solutions and leaves it up to the reader to figure out what the answer might be.

[Clif · Rating 3 out of 5]

I came to this book on a recommendation that it offered insight into MMT, Modern Monetary Theory, a school of economics that deals with the world as it really is as opposed to the traditional teaching of economics which is buried in ideas and mathematical formulas which, though allowing the construction of wonderfully concise graphs with neatly intersecting lines, don't accord with what we see happening around us. The recommendation led me astray.

David Harvey is obviously fond of the works of Karl Marx who is widely acknowledged as an accurate historian and critic of capitalism. This book mentions Marx' work frequently, adding to the number who believe he was right in his analysis, but wrong in his prediction of how capitalism would, inevitably, be succeeded by communism.

Harvey provides a quite simple but logical summary of capitalism - it is by definition money making money, providing a surplus of about 3% that must always be reinvested to make more. This growth creates an insatiable need for investment that scours the world looking for opportunity. Crisis comes if there are not enough opportunities. If some money sits idle, the system cannot properly function and a recession occurs. If almost all money sits idle the system breaks down and a depression occurs.

Can capitalism survive indefinitely? Since there cannot be infinite expansion, the answer must be no. Strangely, Harvey never states this, only telling us that the problems of capitalism will require that something else replace it because of the increasing number of problems that accompany it. He goes through the problems of limits but sees endless possibilities for technological fixes. He speaks of the different sources that contest capitalism and of the flexibility capitalism has to jump from place to place around the world seeking the lowest wages, the fewest environmental restrictions, the most pliant rules to keep the money ball growing.

It's all well written, easy to follow and makes good sense. At the end of the book, however, my reaction was - so what? He mentions Lenin's famous phrase, "what is to be done?" but, for my money, does not answer it. What purpose does the book serve? It's an good account of capitalism, which is fine, but that's it.

[Gaetano Laureanti · Rating 4 out of 5]

In questo libro, David Harvey, geografo esperto in economia politica, con un linguaggio comprensibile anche ai non addetti, riesce bene ad introdurci al funzionamento della società capitalistica moderna ed alle sue inevitabili e periodiche crisi.

Il capitalismo genera in se' il germe della sua crisi, ricordo dagli studi da liceale, e di crisi si parla ancora spesso, soprattutto con riferimento a quella, che sembra non finire mai, iniziata in America quasi dieci anni fa.

Le crisi – dice Harvey – servono a razionalizzare le irrazionalità del capitalismo; di solito conducono a riconfigurazioni, a nuovi modelli di sviluppo, nuove sfere di investimento e nuove forme di potere di classe… Durante una crisi come quella che stiamo vivendo attualmente, è sempre importante tenere a mente questo fatto. Dobbiamo sempre domandarci che cos’è che viene razionalizzato e qual è la direzione in cui procede la razionalizzazione, poiché questo definisce non soltanto la maniera in cui usciremo dalla crisi, ma anche le future caratteristiche del capitalismo.

Ed allora "che fare"?
Per uscire da questi schemi Harvey intravede diverse aree di opposizione: Ong, organizzazioni autonomiste e di base, organizzazioni sindacali e partiti di sinistra in corso di trasformazione, movimenti sociali e di emancipazione sorti intorno alle questioni di identità (donne, omosessuali, minoranze etniche, ecc.); tutte tendenze non necessariamente reciprocamente esclusive, ma che possono, collaborando fattivamente, contribuire al cambiamento.

D'altronde il capitalismo non cadrà mai da solo: dovrà essere spintonato. ... La classe capitalista non cederà mai volontariamente il suo potere; dovrà essere espropriata.
... Mobilitazioni politiche all'altezza di questo compito sono avvenute in passato, e certamente potranno tornare e torneranno ancora. Credo che abbiamo aspettato abbastanza.

Ho trovato questo libro interessante, per certi versi disarmante, e... illuminante.

[Rjurik Davidson · Rating 4 out of 5]

This is an excellent introduction to the question, "Why is capitalism so crisis prone?" Harvey begins with the events of the 2008 financial crisis and then moves to more abstract considerations such as the widely accepted need for 3 percent growth, the various barriers to this, including geography, labour relations, the environment, technology and so on. In all this, Harvey gives a fairly comprehensible account of his own brand of Marxism. Perhaps the most obvious omission is any sustained attempt to theorise 'imperialism', that is, the division of capitalism into competing power-blocks and the systematic exploitation of the third world by the first world. There's something a bit scholastic and bland about Harvey's exposition - if this were a novel, you'd feel like it was a bit mechanical - but luckily the content is enough to keep the book buoyant. In addition, it's impossible to read this without thinking about the future. Though Harvey doesn't do much with the notion of 'epochs' of capitalism (i.e. Late Capitalism a la Mandel), one can't reflect on the fact that 3 percent growth is fundamentally unsustainable. While one can never rule out another long boom, the last one was brought about by a combination of massive capital destruction during World War Two and the technological revolution that occurred immediately afterwards. This suggests that we're entering a period of ongoing, cycling crises where politics will become increasingly volatile. Radical movements of left and right, terrorism, civil war, state repression -- all these make sense in the context of economic crisis. It's hard not to foresee more of them in the future. If you're interested in these things, this book is recommended.

[D Warner · Rating 5 out of 5]

In The Enigma of Capital, David Harvey outlines an accessible critique of the current economic crisis, which he explains can be accounted for through the fact that excess capital has stopped flowing, and, as a result, compound growth has ceased,thus leading to a, mostly, worldwide crisis, which exposes the interconnectedness of the capitalist marketplace. While, the above is Harvey's thesis his critique goes well-beyond simply mulling over the moment that we are experiencing and offers a comprehensive framework for how change might occur.

In addition to its accessibility--I hate theoretical jargon--what I appreciated most about this book was the myriad applications that it invited me to make on a local level. These applications and connections were particularly rampant in the places where Harvey described the interrrelations between urban spaces and the global move towards neo-liberalism (mass-privitization). I believe that virtually any urban-dweller, particularly somebody who is living in a city where development is the mantra, would be able to make similar connections and perhaps be convinced that, in the interest of the majority, something needs to change. These connections can even go beyond just the urban environment, as Harvey outlines the implication for nearly every element of public life--education, health care, housing, etc...

This book is highly recommended for readers seeking an alternative perspective on the current economic crises--alternative meaning, an alternative to what might be considered alternative (NPR) news sources in the context of what is readily available to the public.

[David Anderson · Rating 5 out of 5]

Rather than review this myself, I'm going to recommend you check out this excellent review by Ed Rooksby at Marx and Philosophy: http://marxandphilosophy.org.uk/revie...

I will make a couple of remarks, however: One nice thing about Harvey is the way he makes the complex concepts employed accessible to the average reader; he avoids obtuse jargon and cant. You won't have to struggle through this as you would with some dense tomes of philosophy and theory.

I also must remark that, not only was his analysis of the crisis of 2007-2008 spot on, as we all know now in retrospect, but recent events bear out the Marxian analysis about the long-term prospects for capitalism. China's booming state-capitalist economy has been keeping the global system afloat by providing that outlet for 'the capital surplus absorption problem' as Harvey calls it. Look at everyone's reaction as China's economy has been deflating lately and they've been forced to resort to currency manipulation to maintain the domestic purchasing power of their workers and boost their sagging exports (the New York stock market has undergone a major 'correction', dropping nearly 10% over the past week).

Finally, I think his theory of co-evolution of 'activity spheres' may hold real potential in formulating a way forward that weaves together all the various strands of the progressive movement. Harvey doesn't provide some concrete blueprint, just a beginning insight into a method of analysis that seems to have real potential for achieving that hitherto elusive goal. It's up to the rest of us to take this ball and run with it.

[Peter Harrison · Rating 3 out of 5]

This is an effective critique of modern capitalism before, during, and after the current crisis. Harvey uses a framework that I first encountered in his "Companion to Marx's Capital". There he picks out 6 categories from a footnote in the original text to form the dialectic underpinning for practical analysis of capitalism: relation to nature, technology, modes of production, social relations, reproduction of daily life, and mental conceptions of the world.

The most compelling part of the book to me was the final section where Harvey uses this framework to analyse the possibilities for radical anti-capitalist protest and resistance, particularly in a largely post-industrial western world. It is a genuine call to arms, with a solid rational exposition of how the modern capitalist world cannot continue forever into the future. Harvey is offering an intellectual underpinning to bind together the Occupy movement with other forms of protest to create a protest movement stronger than the sum of it's parts.

Where the book falls down for me is in the earlier analytical section addressing how capital is structured and what brought the world to it's current state of crisis. This section feels a little more incoherent and occasionally rambling. It is however clearly follows a Marxist schema whilst written in an accessible style

Overall though this is a compelling argument for overthrowing modern capitalism with a strong Marxist analytical core yet remaining accessible to many readers.

[Andrew Marr · Rating 4 out of 5]

Not the easiest read but not hopelessly difficult if one has some patience. Harvey's analysis of the dynamics of capitalism & how it generates crises that hurt a lot of people is compelling. The basic principle seems to be that the economy must perpetually expand at 3% or the economy jams. Unfortunately, the expansion always has serious ecological & human costs. In some ways the expansion of capitalism is self-defeating when accompanied by wage suppression which hampers the buying power of people who could otherwise keep the economy going. Harvey is definitely left-wing & makes critical use of Karl Marx. He suggests that violence will probably be needed to repair the current damage of capitalism because the people hording the money won't give it up voluntarily. It is definitely a situation that will lead to violence sooner or later if reforms are not made but I would enjoin attempts to do what we can without violence. T here is the question of whether or not a stable economy without perpetual expansion is viable. If that can't be viable, then I see a big problem because Harvey gives no way that I can see for perpetual 3% growth to continue ad infinitum.

[Paul W · Rating 3 out of 5]

Harvey bring a neo-Marxist critique of capitalism questioning the environmental and societal costs of capitalism's quest for perpetual 3% growth. He argues that "compound growth forever is not possible" (p227) and that "questioning the future of capitalism itself ought to be in the forefront of current debate." (p217)
The core premise of Harvey's critique of the capitalist system is that 'crises are...as necessary to the evolution of capitalism as money, labour power and capital'. (p117)
He includes a number of facts to highlight the shortfalls of capitalism - including that 300 families control 40% of the world's wealth. He draws parallels between the 1930s and today noting the destructive consequences then of the collapse of international collaboration and the descent into geopolitical rivalries.
Harvey's weakest chapter is his last "What is to be done? And who is going to do it?'. His policy prescriptions are presented more as ideological positions than reasoned arguments.
Harvey's conclusion that "Ideas have consequences and false ideas can have devastating consequences" (p236) is a compelling rationale for understanding the critiques of capitalism and reading this book.

[Teresa Miller · Rating 5 out of 5]

In the last chapter, What is to be Done? And Who is Going to Do It? Harvey says, “Unravelling the enigma of capital, rendering transparent what political power always wants to keep opaque, is crucial to any revolutionary strategy” (241). Unravelling the enigma of capital is just what Harvey set out to do. Have you wondered why half of the world’s wealth is owned by 1% of the population? Or why, in the 2007-08 US financial crisis, rather than bailing out the millions of victims whose homes were being foreclosed on, the banks received the bailouts? Or why did the 2007-08 US financial crisis have global repercussions? And why did the repercussions look different say in China compared to Iceland? Why did the US national debt to income ratio go from roughly 2% in 1950 to 40% in 2018 and why is the national debt over $35 trillion dollars today? Harvey explains the answer to each of these questions and more by outlining a broader understanding of how capitalism works.
Under the capitalist system, money is turned into commodities and the commodities are turned back into money plus a profit with ideal conditions of continual 3% compound growth. For the cycle to continue, money into commodity into money plus profit, the profit must always be reinvested to make more money. If the profit, or surplus sits idle, a crisis in capitalism occurs, the cycle stops flowing. Borrowing from Marx, Harvey refers to this crisis as the capital surplus absorption problem. This creates a never-ending speculative search on behalf of capitalists for investment opportunities (investment opportunities that the capitalists get to choose and why trickledown economics do not work) and creates a balancing act of keeping wage labor costs low while trying to keep consumption activities high.
Profits, or surplus, are directly affected by spatial distance and speed of transactions. In the chapter The Geography of it All, Harvey outlines an historical understanding of why capitalism relies on geographical diversity and why all “geographical limits to capital accumulation have to be overcome” (155). Competition within capitalism, a necessary component of a successful capitalist, corporation, or state entity, compels competition over geographical space, think of the oil wars in the middle east, and time, who can complete transactions from inception, acquiring resources, completing manufacturing processes, to the final exchange of commodity to money plus profit the fastest. The logic of capitalism moves through space and time speculatively, without consideration of the negative consequences to communities, livelihoods, or to the planet we all live on, in continual search for the next investment opportunity to soak up the surplus absorption problem (and maintain a compound 3% growth), a problem which is never solved, just moved around geographically. The surplus absorption problem, or crisis, however, is necessary for the continued growth of capitalism, after all, crises are the “irrational rationalizers of an always unstable capitalism” (71).
Understanding the process of capital accumulation, driven by competition, to perpetually overcome the surplus absorption problem and the 3% compound growth problem, however, is an incomplete understanding if permanent, necessary, revolutionary change is to be made. A key concept to unraveling the enigma of capitalism lies in Harvey’s theory of interrelated activity spheres; organizational forms, social relations, institutional and labor processes, relations to nature, reproduction of daily life and species, and mental conceptions (our beliefs and understandings) and how capital revolves through each sphere in search of profit. “Each sphere evolves on its own account but always in dynamic interaction with the others” (123) much like an ecological system. Changes in one of the activity spheres may affect one or more of the other activity spheres. Capitalist system crises also occur in the tensions between spheres, such as the introduction of labor-saving technology and the negative effect on labor processes (increasing unemployment to a level that does not support needed consumer consumption activity) and reproduction of daily life (being out of a job and unable to meet basic human reproduction needs), or as in the case of the technological invention of plastic and its negative effects on relations to nature (unrecyclable plastic can be found on 40% of the ocean’s surface) (Center for Biological Diversity). Harvey argues that capital cannot flow, the cycle of accumulation cannot continue without interacting with each of these activity spheres in some way, therefore careful consideration of each of the spheres is necessary if we are to create an alternative to capitalism, be it some form of socialism, communism, or, since socialism, communism, and even anti-capitalism carry negative connotations, we will use Harvey’s alternative, The Party of Indignation.
The complexities of capitalism are difficult to understand (and explains why most economists did not accurately foresee or initially understand the 2007-08 financial crisis that had global ramifications) and without an accurate understanding, as Harvey outlines in the last chapter, revolutionary change cannot occur. Harvey clearly defined the inner workings of capitalism and the mysteries that keep our understanding of the system opaque, however, being armed with this knowledge, as Harvey describes in the last chapter, does not offer specific solutions, only what we need to understand to begin creating solutions. Unfortunately, Harvey himself does not offer any specific solutions, but does point out that when only one of the seven activity spheres is viewed as the only source of problem, as often is the case, then more problems arise. We must confront the problem of capitalism from the co-evolutionary theory of all seven interacting activity spheres.

[Özgür Öztürk · Rating 5 out of 5]

'' Kraliçe Kasım 2008' de LSE' i ziyaret ettiğinde, nasıl olupta hiçbir iktisatçının krizin geleceğini öngöremediğini sormuştu.6 ay sonra, BA'nin mensubu olan iktisatçılar kendilerine bir ölçüde özür kokan mektubu yolluyorlardı: 'Majesteleri, özet olarak, krizin zamanlamasını, kapsamını, ve ciddiyetini öngörme ve ortaya çıkmasını engelleme konusundaki başarısızlık,birçok nedemi olmakla birlikte, esas olarak, birçok parlak insanın kolektif hayal gücünün bir bütün olarak sisteme yönelen riskleri anlama konusundaki bir başarısızlığıydı.' Finans dünyasının temsilcileri için ise : 'Kendi dileklerini gerçekmiş gibi görmenin kibir ile bir araya gelmesinin daha büyük bir örneğini görmek güçtür.' diyorlardı.'' (242)

[Anthony Garcia · Rating 3 out of 5]

I find it difficult to believe this is David Harvey's best.

I think he has some great insights into the fact that money flows around the world, but this book doesn't get very detailed in shedding light on the actors or the specific ways in which investment money moves from place to place in search of interest/profit.

The chapters give the feel of shorter essays that do flow, but not as well as they could.

I will try Seventeen Contradictions and the End of Capitalism next. Some of the videos in which he appears on YouTube are quite good if you want to hear some of his main points.

[Kane Faucher · Rating 4 out of 5]

It is good for what it is. Harvey swings a mighty bat at neoliberal capitalism, but this book is more geared for a general audience than something more academically refined like the works of Peck and Tickell.

[Luke]

Interesting so far. I have much more to read.