Marx, Capital, and the Madness of Economic Reason - David Harvey

Published in 2018 by Oxford University Press, New York, NY

256 pages

ISBN: 9780190050795 (pbk)

LCCN: 2017032817

LCC: HB501.M37 H3364 2018

Most of us who have attempted to read Marx’s multivolume, seminal work Das Kapital have likely run up against failure at some point in our venture. Like the Bible, Marx’s Capital is perhaps one of the most widely cited works by those who have never read it. This is not without good reason. Marx’s Capital is multilayered and complex, as it is situated in its 19th century social and economic context, contains copious amounts of footnotes, and references both obscure economists and classic works of philosophy and literature such as Sophocles, Shakespeare, and Cervantes. This is further compounded by the fact that Volumes II and III of Capital, often overlooked by many commentators of Marx, are incomplete, compiled from his notes posthumously by Engles. For such a monumental work, it is a wonder how the average reader can even begin to approach it. 

As a result, since Capital’s publication, there have been myriad attempts to synthesize, condense, and summarize Marx’s work. Unfortunately, much of the time, these introductory guides to Marx’s Capital tend to be only slightly less dry and verbose than its source material. Yet, every once in a while, there are individuals who can accomplish this momentous task with a remarkable sense of clarity and insight. One of the forefront interpreters and teachers of Marx’s work in the late 20th century is none other than David Harvey.

As Distinguished Professor of Anthropology and Geography at the Graduate Center of the City University of New York, Harvey has been teaching courses on urban and Marxist geography for over half a century, as well as continuously offering reading courses focused on Marx’s three volumes of Capital. In most of Harvey’s prodigious and wide-spanning work, he has attempted to help readers understand the relevance of Marx’s thought for our present day, especially in how we organize ourselves and our environment. As such, in his latest 2017 book, Marx, Capital, and the Madness of Economic Reason, Harvey provides the novice reader with a basic framework for understanding Marx’s Capital, and how Marx remains prescient for our current economic conditions in the 21st century. 

Overview: 

Written as an introduction to Marxist economics, Marx, Capital, and the Madness of Economic Reason explores the dynamic relationship between the three volumes of Marx’s Capital. Instead of getting bogged down in the historical context and reading of Marx, Harvey focuses on the economic importance of Marx’s work in addressing our current economic crises. Far from being only applicable to 19th-century European economic conditions, Harvey argues that Marx’s Capital is perhaps one of the most relevant theoretical models for understanding the prevalence of capitalism in our world today.

Today, perhaps more than ever, it is important for more people to understand how capital reproduces itself, and how it invariably lends itself to crises. As such, Harvey emphasizes the importance of the circulation of value within capitalism, using the hydrological cycle as a guide. Value must remain constantly in motion; when motion stops, capital dies. Just like the various stages of the water cycle (evaporation, condensation, precipitation), capital goes through different states as it moves (production, realization, distribution, etc). All of the stages of capital reproduction are interrelated, and an interruption in one will lead to disruptions in the others. 

Yet, to make the problem worse, capital does not move in a perfectly cyclical fashion like water does within the hydrological cycle; rather capital runs in an endless spiral, driven by the logic of accumulation and the centralization of wealth toward capital-rich regions from labor-intensive regions. Engaging with a wide range of examples from our modern world, such as the Greek debt crisis, international trade agreements such as the TPP, and the emergence of China as a global economic superpower, Harvey utilizes Marx’s economic theory to point out the contradictions and antagonisms that lie at the heart of capitalism: foremost, how capital rests on the contradiction between production and realization. 

As a quick recap, in Vol. I, the center of attention for Marx is commodity production and labor exploitation. In the process of accumulation, the expanding capitalist system requires labor power. It also directs technological development and has an interest in extracting surplus value (both relative and absolute) from workers. The consequence of all this is an immense concentration of wealth at the top and a deficit of wellbeing and the degradation of living conditions among the working class. This important finding for Marx refutes the philosophy of Adam Smith as articulated in his 1776 work, the Wealth of Nations, in which the invisible hand of the free market, by encouraging individual self-interest, benefits all. In contrast, Marx argues that all this does is make the rich richer and the poor poorer. In Vol. I of Capital, the question of production is the classic capital vs labor struggle; the worker is the center of anti-capital struggle and anti-value strategies. 

Harvey also discusses the concept of “anti-value,” or the devaluation of capital through the refusal to work, debt, and the stagnation of circulation. When goods and commodities idly sit in warehouses, they are not being traded for capital, and therefore represent a kind of negative value. This devaluation of commodities in the face of a slowing or stagnant economy can create crises, and capitalists must vigilantly struggle against this potential devaluation of their commodities, or else risk losing profits. As such, Harvey points out, capitalists often invest heavily in advertising to help generate demand through eliciting the potential consumer’s desire. This creation of desire and its role in degrading human subjectivity is an aspect that Harvey finds markedly lacking in Marx and expands upon this idea, as well as how to utilize anti-value into avenues of resistance against bourgeoise interests (ex. consumers boycotting a company’s goods when workers go on strike, thus utilizing anti-value from two different angles for strategic leverage).

As such, Harvey does not simply give Marx uncritical praise. Instead, Harvey points out the areas where Marx falls short or is incomplete in his analysis. While these are occasionally obvious oversights on Marx’s part, these shortcomings are also features of Marx’s writing. Marx had an interesting and almost backward way of analyzing capitalism: instead of examining the various elements of capitalism from the ground up, he rather isolated individual variables in each of the volumes, working his way backward to determine what could sustain equilibrium within a capitalist system. 

Therefore, in each of the volumes, he examines particular variables (production in Vol. I, realization in Vol. II, and distribution in Vol. III), while assuming that everything else functions smoothly and without any issues. For example, in the most widely read the first Volume, Marx operates under the assumption that there is no problem with the realization of capital, distribution, or existence of social structures that must be in place for capital to proliferate. In Vol. I, Marx creates an isolated sliver of a grander totality and assumes that the rest runs as intended. While he’s been criticized for this, especially since most people only consider the first volume, Harvey argues that this is one of the most interestingly dynamic parts of reading Marx. 

To use another example, in Vol II of Capital, Marx assumes no technological change, which dominates much of Vol I. There is no question of where effective demand comes from, no question of turnover time, circulation, temporalities, etc. It is an incomplete analysis of the realization process, and Marx comes across problems that cannot be resolved without the credit system. Yet, he doesn’t deal with it here, instead choosing to put it off to Vol III. When we borrow, we are hedging our bets in the present in hopes of producing surplus value at some point in the future to pay back the debt. What has saved capitalism from collapsing since the 1970s is the establishment of the debt economy, creating credit cards and consumer debt, which functions by passing on the buck to future generations and exploiting the workers of labor-intensive countries. This creates, to borrow from Hegel, a form of “bad infinity” that inevitably leads to crisis, a bad infinity that also applies to capitalism’s propensity for endless accumulation and the insatiable consumption of commodities. 

This comes to a head in the final chapter, where Harvey analyzes the irrationality of capitalism and the titular “madness of economic reason.” Beyond an endless accumulation of wealth that further exacerbates economic inequality, this madness also applies to consumption, where our insatiable appetite for cheap commodities seems to know no bounds, resulting in environmental catastrophe and the moral devaluation of human life. In contrast to this madness of money that holds our daily lives hostage (172), Harvey argues that Marx reveals these contradictions and gives us a framework for creating a new, emancipatory form of socialism.

Commendations:

First of all, Harvey does a commendable job in distilling the essential ideas of Marx’s economic theory into a readily readable work. His use of the hydrological cycle as a point of comparison helps to show how Marx postulated that capital was “value in motion.” Harvey uses common, accessible language and examples to help guide the reader along, and while it is certainly a bit technical and dense in spots (particularly toward the middle), it is certainly one of the best breakdowns of Marx’s Capital, utilizing a litany of examples and relating it to the 21st century, examining where Marx is remarkably relevant, and also where his analysis falls short. This book serves as a kind of quick distillation of Harvey’s longer, more complex work, updating Marx and applying his thought to our contemporary world. Far from a deterministic reading of Marx, in which the workers will rise, seize the means of production, and establish a dictatorship of the proletariat, Harvey rather emphasizes the importance of contradiction and antagonism within Marx’s analysis of capitalism. 

I also deeply appreciated how Harvey, while appreciating and valuing Marx’s thought, also does not venerate or treat Marx’s theory as gospel. Harvey is not averse to pointing out the inadequacies and frustrations of Marx’s text, explaining the places Marx is both insufficient for our current condition and also where he doesn’t go far enough. This is aided by the fact that Harvey, unlike many commentators on Marx, discusses all three volumes of Capital, and where they conflict or hold tension with one another. There’s a tendency for scholars and critics to only address Vol I of Capital since it is the longest and only complete volume. Yet, by doing so, we miss the important connections that Marx was making across all three volumes. Harvey does a phenomenal job in analyzing all three volumes, as well as the Grundrisse (a wide-ranging collection of Marx’s unfinished manuscripts published in 1939), which allows him to examine the totality of capitalist relations, rather than merely the production of surplus-value as discussed in Vol I. 

Of particular fascination to me was Harvey’s invocations of seven moments serve as the engine of the totality of capitalist relations and circulation. These seven moments -- technologies, the relation to nature, social relations, mode of material production, daily life, mental conceptions, and institutional frameworks -- are autonomous and independent, yet overlap with one another and are relationally bound to one another. As Harvey writes, 

Autonomous changes on the part of one moment may impel dramatic changes everywhere else. The sudden emergence of new pathogens like HIV/AIDS, the Ebola virus, or Zika requires rapid adaptation across all seven moments if they are to be controlled. The difficulty of organising to deal with climate change is that it will require drastic shifts across all seven moments. The fact that some people either deny the problem (mental conceptions) or naively believe that there is a single bullet technological solution (green capitalism) that can be changed without changing anything else (like dominant social relations and daily life) dooms initiatives to failure (113-114).

In short, all seven moments must be balanced, and too much emphasis on one leads to errors. Harvey argues, back in 2017, that the mobilization of all seven must be orchestrated in the face of pandemics and global climate change (a point proved all the more salient since the book’s publication). In the wake of the COVID-19 crisis, the failure of Western governments to implement adequate safety measures in the required time, and the proliferation of misinformation (aka. denying both the seriousness of the virus and the importance, efficacy and safety of vaccines), this conceptual framework seems incredibly salient and slightly foreboding. If we follow Zizek’s thoughts about the virus as a preview of how we are going to handle the climate crisis, then our chances of mitigating the worst effects of global warming do not seem to be in our favor. 

Regardless, Harvey’s framework helps us conceptualize the various avenues in which we must organize if we are to have any hope of changing that trajectory. On a broader scale, Harvey takes the valuable insights of Marx and applies them to our age, giving us a new set of tools to helping to address the problems we are facing that are rooted in the inherent contradictions of capitalism (namely, accumulation and consumption). Harvey encourages the reader to engage with Marx’s Capital with a sympathetic, yet critical lens, challenging us to update Marx for the challenges of the 21st century. 

Critique:

On the other hand, while this book is marketed as a kind of Capital 101, it is a condensed synthesis of Marx’s economic theory, comprising just over 200 pages. As a result, it can be incredibly dense in several places, requiring the reader to take their time and slowly read over several sections. This is especially true if you have no background in Marx’s thought or economics in general, as Harvey tends to get lost in the weeds from time to time, resulting in some dry and confusing sections for the introductory reader. Harvey also tends to meander from time to time, often losing the central thrust of each chapter to tangent thoughts before picking it back up toward the end. 

This desertion of the target audience can perhaps be best seen in Harvey’s utilization of the hydrological cycle as a comparison to the circulation of capital (a point that starts strong in the beginning but then only pops up periodically throughout the rest of the text). The graphs representing the paths of value (Figure 2, pg 6) and the secondary and tertiary circuits of capital (Figure 3, pg 151) are bafflingly complex and are without a key, leading the reader to decipher the difference between light gray boxes from darker gray boxes, and solid lines from dotted lines. While I’m just beginning to make the connections that the graph is communicating after extensive studying and reading through the book, it is still not as helpful of an introductory guide as I think Harvey intends it to be. 

Furthermore, this book seems more like a condensed version of Harvey’s work over the past few decades, rather than a systematic summary of Marx. While Harvey references Marx’s work throughout the text, there were surprisingly few direct quotations in the first section, though they do dramatically increase in the following chapters. As is the case with much of Marxist thinking, there was also a surprising lack of discussion regarding a socialist alternative and how it might address and redress the contradictions of capitalism. Granted, Harvey explores this most interestingly in his analysis of anti-value and how to utilize it to disrupt and resist capitalist reproduction, but beyond laying out some avenues for organizing across different levels of the economy, there’s not much positive exploration of what we should do. Harvey, like many other leftists, has accurately diagnosed the “madness of economic reason.” The next step, and one that the Left desperately needs to discover and articulate on a popular level, must be a cure. 

Conclusion:

Overall, Marx, Capital, and the Madness of Economic Reason is a helpful, if dense, introduction to the economic theory of Marx. While it would serve well for a socialist study group or an undergrad course on Marxist economics, the condensed nature of this book requires some work and slow reading means that it might not be for the half-heartedly motivated reader, who will likely lose interest. However, it is certainly much more accessible than directly reading Capital, and Harvey’s commentary and expansion of Marx’s thought make this book well worth the effort. If you want to read a book that neatly works through Marx’s economic theory while also being willing to critique and apply it to our contemporary world, then, if you have the time and motivation, this might be a great entry point into Marx’s (and Harvey’s) larger, more systematic work.