Enigma of Capital

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1. David Harvey challenges some of the 19th century notions of Marx. Specifically the reasons for the tendency of profits to fall.

   He disputes that the fall of profit in the manufacturing sector in the 1980s was due to an ‘organic re-organisation of capital’. He attributes it to the fierce competition in manufacturing waged in developing countries (like Malaysia). Thus he says we had low wage, a low profit industrial manufacturing sector.

   The discussion at the end was very interesting. He gives an analysis of the current crisis caused by the banking sector. He mentions the populist opposition to the banks in the US and how Obama has worked that in his favour politically against the Republicans.

   Governments in Europe bailed out the banks again last night over the failed state of Greece.

   Harvey disputes that Greece is the greatest failed state in the world at the moment, he says that it is California … interesting analysis. He says that the Federal Reserve is giving the large banks (the ones that bring everything down if they fail) zero interest rate loans and how those banks are then lending the money at 5% interest. He talks about how the finance sector historically addresses the need for capital to move and respond to changing circumstances and crises like the one we are going through now.

   Perhaps interest in socialism growing bigger in the US right now, ironically in the same place where capitalism is most supported. But where is the organisation needed to respond and defeat the capitalists … when will we learn that change for good does not just happen.

   As an aside. One insomniac night on Thursday 6 May 2010 I listened as BBC world service described how 10% was sliced off the value of shares on Wall Street (1,000-point plunge on the Dow). The slide lasted for 16 minutes …it reminded me of how Long-Term Capital Management nearly brought down US capitalism in 1998.

   Ian Curr
   May 2010

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