Published online 14 March 2009.
Dear readers, I would like to call your attention to the analysis of David Harvey in this weekend’s — “Is This Really the End of Neoliberalism?” Harvey’s analysis points to a further consolidation of class power in light of the failure of the financial system to expand asset bubbles and in light of the collapses in lending.
Harvey is important as one of the main thinkers of “neoliberalism,” the period of recent history in which the wealthiest interests have been separating the rest of us from our assets through what Harvey calls “accumulation through dispossession.”
(crossposted in Docudharma)
OK, first, David Harvey. David Harvey is famous as a professor of Geography (tho’ Wikipedia lists him as a Professor of Anthropology), who wrote a book A Brief History of Neoliberalism, which serves as one of the primary texts on the economic history of the neoliberal era (1973-present day). Important stuff. (There’s also this video, tho’ it’s not much of a video.) Harvey’s stuff ranks up there with Robert Brenner’s The Boom and the Bubble, Levy and Dumenil’s Capital Resurgent, and (my favorite, for its clear style) Harry Shutt’s The Trouble With Capitalism.
The text featured in Counterpunch is, however, not the most recent thing he’s put out. If you go to his webpage, you can see a very cool video of Harvey’s interview with Laura Flanders with Alexander Cockburn sitting in, as a response to the Geithner plan for rescuing the economy.
In the interview video with Flanders, Harvey suggests that US financial power is in steep decline. Remember, Minqi Li argued (as we saw in my earlier diary) that no other nation (China included) could really substitute for the United States as the global hegemon. In this interview, Harvey also projects massive labor unrest. Of course, unrest doesn’t have to amount to much of anything; it could just as well be another sign of social decay. Cockburn’s suggestion that “back then there was a real Left” might be the right way to go, or we might have to invent a different movement entirely. But we do need a movement.
Now for a brief summary of the article. As Harvey points out, the financial powers-that-be have further consolidated their power in light of the crisis. This isn’t really a crisis for them:
What happened in the US was that 8 men gave us a 3 page document which pointed a gun at everybody and said ‘give us $700 billion or else’. This to me was like a financial coup, against the government and the population of the US. Which means you’re not going to come out of this crisis with a crisis of the capitalist class; you’re going to come out of this with a far greater consolidation of the capitalist class than there has been in the past. We’re going to end up with four or five major banking institutions in the United States and nothing else. Many on Wall Street are thriving right now. Lazard’s, because it specialises in mergers and acquisitions, is making megabucks. Some people are going to be burned, but overall it’s a massive consolidation of financial power.
Of course, neoliberalism was itself a tool for consolidation of power. There is, one big difference between the present period of crisis and the neoliberal period:
The collapse of credit for the working class spells the end of financialisation as the solution for the crisis of the market.
The Keynesian solution, as Harvey points out, will probably not work out. He doesn’t really say why, here, but my guess, reading from his piece on the stimulus, is that he thinks that dollar hegemony is too weak these days to allow the US the deficit spending necessary to allow for some massive stimulus to bail out the economy. That, and organized labor is too weak, thus the banks and the corporations will gobble up what is left of the US government’s credit rating.
Thus Harvey concludes:
What I think is happening at the moment is that they are now looking for a new financial set-up which can solve the problem not for working people but for the capitalist class. I think they are going to find a solution for the capitalist class and if the rest of us get screwed, too bad. The only thing they would care about is if we rose up in revolt. And until we rise up in revolt they are going to redesign the system according to their own class interests.
The problem, of course, is that the “movement,” so far, is much too small, and so things are going to get worse until there actually is a movement, and so meanwhile Obama spends his time placating capitalists. Sure, what else is he supposed to do, that’s where the power is, and that’s where it’s going to be unless we band together and grab off a chunk of it for ourselves.
Harvey also has another suggestion which makes a lot of sense: reconfiguring the cities.
If I could develop an idealised system now I would say in the US we should create a national redevelopment bank and take $500 billion out of that $700 billion they voted and the bank should work with municipalities to deal with neighbourhoods which have been hit by the foreclosure wave, because the foreclosure wave has been like a financial Katrina in many ways; it has wiped out whole communities, usually poor black or Hispanic communities. You go into those neighbourhoods and bring back the people who used to live in those communities and re-house them on a different basis of tenure, residency rights, and with a different kind of financing. And green those neighbourhoods, creating local employment opportunities in those fields.
I mean, sure, this sounds great, especially insofar as it addresses the problem of people in cities, people who were attracted to cities by the last century-and-a-half of urbanization but have suddenly discovered that the global neoliberal economy is a big Ponzi scheme and that the scheme is now up and the winners have suddenly just run away with the winnings, and moreover have retained control of our government. One just has to wonder how much suffering urban people will have to endure under such a set-up before the will to effect comprehensive social change arises within the masses.
I would say, though, that what you really need to make this work, though, is a general de-urbanization of the cities and suburbs, and a return back to the land, possibly accompanied by some sort of urban/suburban land reform with the added blessings of French Intensive/ Biodynamic gardening.
At any rate, this stuff deserves our focused attention, since Harvey is one of the main chroniclers of our times.