What do economists think of David Harvey

RE: Capital (8/9)Value and anti-value - crises are always possible anywhere

"Das Kapital" by Karl Marx was published 150 years ago. Conjectures about the end of capitalism have long been discussed not only by socialists who have stood still, but among the elites of the world economic summit. Reason enough to read "Das Kapital" again carefully.

Last year, in a series of Deutschlandfunk programs, six authors examined the usefulness of the book for understanding our present. The American-British Marxist and social theorist David W. Harvey, born in 1935, is the eighth author to present his theses.

With his work "Social Justice and the City" he established a historical-materialistic contemporary geography. In December 2016 he showed a six-part video lecture on Marx and "Das Kapital: The Concept, The Book, The History" on the Internet.

In his contribution to Deutschlandfunk, Harvey examines the concept of value in "capital" with a view to current phenomena such as debt crises, weak growth and the possibilities of anti-capitalist movements.

Mathias Greffrath, who also curated the series, also publishes the Deutschlandfunk essays as a book. "RE: Capital: Political Economy in the 21st Century" was published by Antje Kunstmann in March 2017.

Introduction to the program by Mathias Greffrath

In the foreword to the first edition of "Capital", Karl Marx advises all readers who are not used to "dialectical thinking" to skip the first chapters of the book with the value form analysis, which to this day many readers (and unfortunately also the students of economics) block entry into "Capital" reading. Many popular accounts and well-meaning teachers from Karl Korsch to Louis Althusser followed this advice and recommended starting with the 4th chapter "Transformation of money into capital" or with the 5th chapter "Working process and valorization process", and only then on these first to come back to the "philosophical" chapter.

But those are about the actual driver of the process. And that is not the capitalist (who, as a driven person, receives absolution in the preface), but rather the "self-utilizing value" or, as David Harvey, the author of today's essay, calls it, the "value in motion ": The capital that changes in cycles or spirals from one form to the other, from money into capital, into labor, into raw materials and means of production, into commodities, back into money and so on and so on.

The three volumes of "Capital" should represent this cycle as "totality", that is: proceeding from the "elementary form" of the commodity and its contradiction, from the inside, as it were, layer by layer to the surface of reality, the capital cycle and the crises penetrate and thus "ideally reflect the life of the material", as Marx writes. Marx was no longer able to complete this "artistic whole", as he called it, himself. Volumes II and III have remained piecemeal, but only in them does the anatomy approach the surface of the mode of production, on which the destructive reality comes to what is present in the "elementary form" right at the beginning: the fundamental contradiction in the "double character" of the commodity: of use value and exchange value, of concrete and abstract work - or, as David Harvey unfolds in his brief passage through the entire process of circulation: of value and anti-value. Anti-value is a term that Harvey uses to identify the disturbances of the cycle, the causes of the crisis, and the growth-driving and destructive side of the debt economy.

David Harvey is a human geographer, urban researcher, and social theorist. In numerous works he has interpreted Marx's theory and made it usable for an analysis of the connection between social processes and spatial forms. Harvey has been teaching at City University New York since 2001. In addition to a number of books on Marx's theory, he has given lectures as an introduction to reading "Capital" on the Internet.

Value and anti-value - crises are always possible anywhere

By David Harvey

I am a geographer by nature, and in geography there are these visualizations of the water cycle, which depict water in all of its metamorphoses and states of aggregation: ocean water, evaporation, precipitation, gas, solid matter, water that falls on land, into the ocean flowing back, water that is dammed underground in caverns until it finds a new route, water that is stored in ice caps. It is a system in a constant cycle, driven by the sun.

The water cycle, one could say, is H2O in motion and changing forms.

And capital, as Marx puts it, is value in motion and changing forms.

Money becomes capital when it buys labor and means of production that are brought together in a production process.

The production process creates value and added value through the production of goods. Goods are put on the market and sold. Your worth is realized.

The capital cycle and its interactions

Then when the capital has been realized in the form of money, it is distributed: some as wages, some as profit of industrial capital, some as rent to landowners, some as interest to banks, some as taxes to the state. A part of this money turns into demand: for food, for luxury consumption, for government investments. And another part goes back into production, as reinvestment.

A bust of Karl Marx, created by his great-grandson Karl-Jean Lonquet (1904-1981), is in the Karl-Marx-Haus in Trier on May 6th, 2016. The bust was previously owned by the family. (dpa / picture alliance / Harald Tittel)

Each of the three volumes of "Capital" deals with a different segment or moment in this process. The first volume is about the production process, in the second volume Marx examines the process of realizing capital, in volume III the mechanisms of distribution and equalization between profit, interest, rent, taxes and so on. That is, if we want to know what "value-in-motion" is, we have to see all of these moments of the capital cycle, and their interactions, and we have to think about all possible perturbations of this circulation process. As in the water cycle, disturbances in the circulation of capital have various causes and can occur at different points in the cycle.

The first section of the first chapter in the first volume of "Capital" ends somewhat abruptly with the words:

"Finally, no thing can be worth without being an object of use. If it is useless, then the work it contains is also useless, does not count as work and therefore has no value."

For Marx, value only exists in relation to anti-value

With a single succinct sentence, Marx draws our attention right from the start that the circulation of capital is vulnerable, that it can suddenly come to a standstill. The transition from the commodity form to the monetary form of value - the realization of value and surplus value - is a passage full of dangers. Hence the warning right at the beginning of the first volume: Goods love money, but - as Marx puts it with his preference for ironic quotations from great works, in this case Romeo and Juliet:

"The way of true love has never been easy."

Now it would be very unusual for the dialectician Marx to develop a key concept such as value without including the possibility of its negation.

And so with Marx value only exists in relation to anti-value. That phrase may sound strange, but today physicists rely on the relationship between matter and antimatter to understand basic physical processes. Had Marx, who frequently cited parallels between his and the scientific conceptualization, had this analogy available, he would probably have taken it up. For the laws of development of capital depend on the unfolding relationship between value and anti-value in a very similar way as the laws of physics are based on the relationship between matter and antimatter.

Capital doesn't just mess around in our heads

Capital is value in motion, and any interruption or even slowing down of that movement, for whatever reason, means a loss of value. The possibility and the reality of worthlessness are always present. Anti-value must constantly be overcome - in a sense redeemed - if value production is to survive the toilet of circulation.

The capitalists are therefore in a constant struggle not only to produce value but also to prevent its possible negation.

Capital awakens the desire to consume. (picture alliance / dpa / Ole Spata)

Now what circumstances can make it impossible to realize the value in the market? First of all, there has to be someone who wants, needs or desires a certain offered use value in a certain place and at a certain time - and has enough money to pay for this use value. If either of these two conditions is not met, the value disappears. Hence the generation and control of new needs and desires plays an enormous role in the history of capitalism. What we like to call human nature is not a fixed fact. Capital not only messes around in our heads, but also in our desires - the fashion industry and a few others therefore play a role in value analysis, and value theory has to integrate that.

Capital is value in motion

Potential disruptions in the value cycle are ubiquitous - but each disruption also marks an opportunity for opposition or resistance; every disturbance of the circulation points at the same time beyond it. Despite all the manipulation of needs, there are always niches of alternative consumption or sometimes downright social movements of resistance to such. This resistance can have moral, political, cultural, aesthetic, religious or even philosophical reasons. In some cases, resistance is even more broadly directed against the market-mediated management of basic goods and services such as education, health care and drinking water. In such strategies, anti-value no longer acts only as a technical glitch and disruption in the circulation of capital, but takes the form of active anti-value: in political resistance to commodification and privatization.

Capital is value in motion, in other words: capital is value only in its motion. As soon as capital assumes a particular form and remains in it - in the production process, as a product waiting to be sold, as a circulating commodity in the hands of trading capital, as a sum of money that still has to be transferred or reinvested - then capital is "virtualiter devalued". Capital standing still in one of these phases is alternately described by Marx as "negated", "lying fallow", "dormant" or "fixed". So he writes:

"As long as capital remains in the production process, it is not capable of circulation; and virtualiter devalues. As long as it remains in circulation, it is not capable of production [...] As long as it cannot be thrown on the market, it is fixed as a product [...] if it cannot be active as capital, it is negated capital; as long as it has to remain on the market, it is fixed as a commodity. As long as it cannot exchange itself for conditions of production, it is fixed as money. "

Crises arise when supplies pile up

From this compilation of his formulations it becomes clear that Marx does not regard anti-value as an external threat, but as a permanent destructive force at the core of the capital circulation itself. This "virtual devaluation" is overcome or abolished as soon as capital begins to move again.

Bull statue on Wall Street in New York: "... has become a symbol of unleashed capitalism." (imago / Travel-Stock-Image)

Crises arise when stocks pile up, when money is idle longer than absolutely necessary, when stocks remain in production for long periods of time, and so on. A "crisis [arises] not only because goods cannot be sold, but because they cannot be sold within a certain period of time" (theories about surplus value). The same principle applies with equal power to working hours in production: if Korean factories can produce a car in half the time it takes in Detroit, the additional time spent there simply doesn't count.

But the anti-value does not always play a role that disrupts or opposes the circulation. It is also central to determining and securing the future of capital. The fight against anti-value keeps capital on its toes, so to speak. The need to erase anti-value is a driving force behind value production.

Dissolve blockages in the capital cycle

That brings me to the examination of the role of credit. There is a long history of borrowing and lending and of debt and credit along with usury. Relations between creditors and debtors long preceded the rise of capital to the predominant mode of production. But under capitalism this function of credit changes. "Only in circulation based on capital or wage labor", writes Marx, does credit become an "essential [...] relationship of production".

An essential relation of production: that is, credit is necessary in order to dissolve or prevent the blockages in the capital cycle. For example, because capitals have to reckon with completely different turnover times: some capitalists realize the value of their product every two days, others once a year, others every three months. This gives rise to various and different liquidity problems, especially in connection with the need for long-term investments in machines or systems that have a relatively long service life. The share of the value of the machine that flows into the products annually during its service life would have to be put aside (saved) in order to be able to buy a new one after the machine wears out when the time is right. Enormous amounts of dead capital - or in the case of consumers, idle savings for expensive purchases such as houses or cars - would have to accumulate as a treasure, and the necessary size would have to grow with increasing mechanization. As a hoarded treasure, however, capital is dead and devalued.

Debt as a right to future production of value

Without a functioning capitalist credit system, this shutdown of capital would be inevitable. The credit system makes it possible to deposit the capital saved in a bank, which can lend it to other capitalists. It acts as a kind of lubricant to compensate for different turnaround times and re-investment cycles. The industrial capitalist can now decide: either he borrows money to buy the machine and repays his debts in installments over its lifetime. Or he pays for the machine immediately and puts the annual depreciation in the money market to get interest until he needs the money to buy a new machine.

Mongolia (in the picture the capital Ulan Bator) is heavily in debt. Debt paralyzes states too. (dpa / picture alliance / Wu Hong)

In both cases, money now circulates as interest-bearing capital, and debt trading becomes a buoyant element of the financial system. The credit revives the solidified and therefore "dead" money capital and sets it in motion again. But with this the debts become a claim to future value production, which can only be redeemed through value production. The anti-value of debt thus becomes one of the most important incentives and levers for securing the further production of value and surplus value.

The credit prepares the possibility of new disturbances of the economy

For what drives the cycle, the circulation of capital today?

Traditionally, this question has always been answered with the pursuit of profit (greed) of the individual capitalists, and the figure of the small businessman and daring entrepreneur suffering from state regulation is repeatedly celebrated as the hero that supposedly makes capitalism so dynamic. This incantation has probably become more of a rhetorical masquerade than it corresponds to reality.

Just as consumer credit can restart the stagnant demand for consumer goods, in view of the ever increasing amounts of capital required to start production and, in view of declining growth rates, government intervention has become more and more important to drive accumulation through to stimulate the creation of effective demand and the improvement of the implementation conditions. The state finances this through taxes - i.e. redistribution - or through debts.

This is exactly what happened in most of the capitalist world from 1945 to 1980. Keynesian politics created market incentives through debt-financed increases in effective demand. This created a growing dependency on debt financing.More and more bills are drawn on the future production of value, this has already been determined and pledged, and alternatives for development are blocked. By keeping the cycle of capital going, credit prepares the possibility of new and greater disturbances of the economy and the social fabric.

The tentacles of debt

For example, with the introduction of microcredit in India, around twelve million people are now forced to pay off debts by producing as much value as possible. If they do not succeed or if they refuse for political reasons, their collateral - mostly land and real estate - is forcibly auctioned, this is the famous trick of sub-prime mortgages. Putting debt in debt to vulnerable and marginalized populations is one way of disciplining debtors and turning them into productive workers. Or to take closer examples: Highly indebted students and homeowners in the USA are extremely limited in their future degrees of freedom. It is no coincidence that these methods of securing value production have come to the fore, because capital is finding it increasingly difficult to organize value production in the conventional way. The tentacles of indebtedness continue to penetrate society and eventually grasp everyone as soon as they have a single credit card in their wallet.

Symbol of a crisis: decommissioned steelworks in Detroit (dpa / Photo: Benjamin Beytekin)

The indebtedness of the states is even more appalling. In the same way that individuals are disciplined by their debt, states are exposed to the pressures of the anti-worth exercised by bondholders. There is a risk that the economic system and with it the social systems could collapse under the dead weight of anti-value.

Crises leave behind a mass of devalued assets

And unfortunately nothing speaks in favor of Marx's expectation or hope that the development of the credit system and the clearly increasing power of interest-bearing capital over the future (in the sense of organized capitalism) could become a springboard for the transition to some new mode of production. Rather, what emerges before our eyes is the image of a horde of insatiable greedy investors who can buy up almost any serious opposition with their loads of money while force-feeding the rest of the world with indigestible credit money.

The only thing that can save us is the targeted winding up or downright destruction of the debt tower that dictates the future.

The effect of anti-value reaches its climax in the massive devaluation that occurs in times of major crises. Why should financiers celebrate the violent outbreak of crises? At first glance, this seems paradoxical. But when it comes to the circulation of anti-value, a crisis is definitely a moment of triumph for the forces of anti-value, even if it makes those involved in the production and realization of value despair. "In times of crisis," said the banker Andrew Mellon as early as 1920, "wealth returns to its rightful owners," that is, to him. Crises typically leave behind a mass of depreciated assets that can be bought up at ridiculous prices by those with the necessary cash (or privileged relationships). That is exactly what happened in 1997/1998 in East and Southeast Asia. Completely healthy companies went bankrupt due to a lack of liquidity, were bought up by foreign banks and sold again very profitably a few years later.

Debt bondage is building the future

But contrary to what many think, for Marx the crises do not necessarily ring in the end of capitalism, but create the conditions for its renewal.

"The crises are always only momentary violent solutions to the existing contradictions, violent eruptions that restore the disturbed equilibrium for the moment."

But the rebuilding of capital is uncertain and has its limits. The accumulation of debt that is, the claims to future value production, can exceed the capacities of future production and realization of value and surplus value. Even if the debt is paid off, the obligation to repay it blocks all future alternatives. Debt bondage obstructs the future of people like entire economies.

Another future is not possible through an automatism of value and anti-value, through a collapse or dissolution of capitalism, but only through the actions, consciousness and values ​​of those who reject the value system in which they still live fight. This brings us to a final meaning and effect of what can be called anti-value: the politics of anti-value.

Between worlds of the capitalist system

If we assume that value is nothing more than the product of alienated labor, then the political search for a non-alienated existence leads to the active and conscious negation of the capitalist law of value in individual and collective life. The production of anti-value thus becomes a force of opposition. Projects of the solidarity economy and communities try, for example, to organize their own reproduction outside of value production. Anarchist communes, religiously oriented communities and indigenous social structures form heterotopic spaces in the intermediate worlds of the capitalist system that are not subject to the rule of the law of value. But there is always the danger that such non-value-producing activities will either be appropriated by capital as the material for its value production - for example as a "free natural force" of human nature - or serve as a kind of retreat for the reproduction of an industrial reserve army of increasingly superfluous labor.

Here we encounter some interesting political paradoxes. In more recent critical commentaries, intensive attempts have been made to include "knowledge" and science as well as culture, household chores and nature in the calculation of values. Aren't they a source of value too?

Marx answers this question in analogy to machinery: They cannot be a source of value in the capitalist sense, even if they contribute to an increase in productivity and thus to an increase in relative surplus value. Their function and effect are contradictory.

Housework as a potential place for anti-capitalist politics

In this way, knowledge and information can be transformed into goods and integrated into capitalism, as can cultural activities. At the same time, her potential for knowledge and free activity, her search for forms of a non-alienated life form an inspiring moment in anti-capitalist politics. Because of this contradicting position, scholars and cultural producers can play an important role in radical political action, even if their production conditions are a contested terrain of capitalist control.

Similarly, the fact that housework is not counted in the appraisal suggests that it, too, is a potential place for anti-capitalist politics. The work done in households and solidarity networks for others, and not for the market, which is about the production and maintenance of common goods (commons), can become a powerful antidote to the domination of capitalist commodity production and the social relations connected with it become.

Attempts were also made to integrate the "free natural forces" into the flow of value production with the help of quite arbitrary evaluation methods, such as those proposed by environmental economists. These amounts to nothing other than subjecting capitalism to a sophisticated "green-washing" and commodifying the forces of nature instead of making them the starting point of a sharp attack on the hegemony of the capitalist mode of production and its (that is, all of us) alienated, commodity-like relationship to make nature.

It is "not luck, but bad luck" to be a producer of value and added value

Science, art, household and nature are excellent places from which an anti-capitalist criticism can be formulated. But the political movements that have prevailed recently would like to incorporate them into the framework of value theory. But if the production of value in capitalism is the same as alienated labor, why on earth should progressive people advocate being subjected to such a regime?

The desire to include the hitherto "unevaluated" in the regime of capitalist value production and circulation is understandable because of the positive connotation that a concept such as value has and the desire to "appreciate" what is all too often ignored. But politically, such a strategy goes in the completely wrong direction. It is precisely from the spaces of non-value and non-alienated work, and not through their integration, that a fundamental and mass-moving criticism of the capitalist mode of production, its specific form of value and alienated relationships can be presented. And it is from these places that the contours of a post-capitalist economy can also be best discerned. Because, as Marx writes, it is "not luck, but bad luck" to be a producer of value and surplus value in the capitalist mode of production.

"The Capital", Part 8. Value and Anti-Value. By David Harvey. From the American by Christian Frings.