Spaces of Capital

Harvey, David. 2001. Spaces of Capital: Towards a Critical Geography. New York: Routledge. [Chapters from Part II].

Geography of Capitalist Accumulation (1975)

In this first chapter, we can see Harvey beginning to develop much of what later becomes central aspects of later works, e.g. uneven development, the role of credit, overaccumulation and imperialism, spatial fixes, and space-time compression. He writes that locational theory provides a bridge between Marx’s theories about the accumulation of capital and imperialism. He faults theorists of imperialism for providing one-sided analyses that fail to grasp the necessary links between accumulation and imperialism. The unavoidable tendency for the overaccumulation of capital—i.e. a surplus of labor and capital without any conceivable means for bringing them profitably together—constitutes the paramount crisis dynamic that forces capitalism to make new room for itself (in either temporal or spatial terms).

Improving modes (that is, faster) modes of transportation help overcome spatial distance, with credit providing the temporal stepping-stone for this “annihilation of space by time.” This leaves a very physical trace in the landscape with infrastructures, but these same forms of fixed capital are also superseded and destroyed in the process of capital’s need for endless expansion: “Capitalist development has to negotiate a knife-edge path between preserving the values of past capital investments m the built environment and destroying these investments in order to open up fresh room for accumulation” (247). Marx’s ideas are thus really different from bourgeois economists since it presupposes not an equalization of various spaces, but rather their uneven (differentiated) development. Harvey says that the geographic expansion and intensification of capital accumulation in fact constitutes Marx’s theory of imperialism. “In Marx’s own thought it appears that the crucial intermediate steps encompass a theory of location and an analysis of fixed and immobile investment; the necessary creation of a geographical landscape to facilitate accumulation through production and circulation” (266).

As a side note, I think this statement by Marx is interesting in relation to my own interests: “Merchant’s capital, when it holds a position of dominance, stands everywhere for a system of robbery, so that its development among the trading nations of old and modern times is always directly connected with plundering, piracy, kidnapping, slavery and colonial conquest” (1967, Vol. III, 331-332).

Marxian Theory of the State (1976)

Harvey begins by setting out the state as the dialectical medium and product of antagonisms between classes, but the trick to this form of power is the way it is made to appear above or outside of society and social relations, in Marx and Engels’ words an “alien power.” One means for accomplishing this abstraction is through the ever-more universalizing discourses of equality and rights, which in practice are not realized; or, at least, in terms of money and the supposed equality it provides (the great leveler) is theoretically and equalizer but actually a modality through which inequality is produced and maintained.

He sums up Marx’s position on the state in terms of an outline of some of its bare-minimum functions: “We have so far shown that Marx’s analysis of the capitalist mode of production can be paralleled at each step by a theoretical derivation of certain minimal state functions: the equality and freedom of exchange must be preserved, property rights must be protected and contracts enforced, mobility preserved, the ‘anarchistic’ and destructive aspects of capitalist competition must be regulated, and the conflicts of interest between fractions of capital must be arbitrated for the ‘common good’ of capital as a whole” (275). He cites Gramsci to describe the complicated ways that this plays out, highlighting how subordinate classes are enrolled via hegemony and ideology into the state project.

“The state should in fact be viewed, like capital, as a relation  (Oilman 1971: ch. 30) or as a process:  in this case a process of exercising power via certain institutional arrangements” (280).

Spatial Fix: Hegel Von Thünen and Marx

Harvey traces the thread of spatial fixes through these three thinkers, showing how Marx settled upon certain ideas from them for his own thinking. Against these thinkers, Harvey says that one reason Marx ended Capital with the chapter on colonialism was to simply show that colonialism was no remedy for capitalism’s contradictions, as Hegel posed. Marx said that spatial expansion and attempts at the displacement of crisis merely reproduced these contradictions on a widening and intensifying geographical scale.

Colonialism for Hegel was an outcome of the resolution of the internal dialectic (the contradictions) of civil society that can have no internal resolution. Von Thünen concocted a frontier thesis of social harmony between capital and labor that I don’t wholly understand, except that I remember that its treatment in Capital is based on the false notion of surplus labor being embodied in the “extra hour” beyond which the laborer has produced his means of subsistence. As long as frontier expansion was possible, Von Thünen believed are profit-sharing agreement between labor and capital was possible.

With colonialism, Marx showed how primitive accumulation and other forms of violence are a constitutive part of capitalist relations that had long been papered over by bourgeois economists. Harvey shows how the inner dialectic of capitalist crisis (overaccumulation, devaluation, etc) drive this necessity for expansion and intensification. “Primitive accumulation and new forms of class struggle necessarily reassert themselves at the frontier. This is what Marx’s final chapter on colonization truly signals” (306).

He makes an interesting link between crisis and priitive accumulation: “In the depths of crises, capitalists unleash the violence of primitive accumulation upon each other, destroy vast quantities of capital, cannibalize and liquidate each other in that ‘war of all against all’ which Hobbes had long before seen as an inherent characteristic of market capitalism. What Marx nowhere anticipates,  but Lenin emphasizes, is the conversion of this process into economic, political and military struggles between nation-states” (310).

Geopolitics of Capitalism:

Harvey summarizes many of the arguments he’s made elsewhere in this essay. This could really be the cliff-notes to his entire ouvre. Once more he defines capitalist crisis as that of overaccumulation (which is underconsumption) as a surplus of labor and capital without any seemingly profitable way of putting them together. Harvey ties this trend directly to technological dynamism and competition. Anytime a leg-up is gained in profits more capital is produced, but then the means by which that profit was produced (technology, location, or some other comparative advantage) is unavoidably equalized across the playing field. The excess capital needs to find new horizons for investment.

Space and time are key variables in the process; Harvey here introduces the notion of “socially necessary turnover time,” which is the average of time it takes for capital to be reinvested for average profit rates under normal conditions of production and circulation. The shrinking of this time requires heavy investments in fixed kinds of capital (infrastructures, transportation, etc). This investment in infrastructure and long-term things is a temporal fix against overaccumulated capital mentioned earlier—other kinds, could be even worker re-education programs. It’s a temporal fix. Credit plays a key role by making these heterogenous kinds of investments fungible into an annualized rate of return.

“It does this by facilitating the daily buying and selling of rights and claims to a share in the product of future labour. The rate is sometimes fixed (bonds) or variable, according to what labor actually produces year by year (shares). But it is measured in terms exactly comparable to the rate of profit over socially-necessary turnover time in current production” (320). Capital can now slither around via all these physical forms in a more mobile form. But because credit is a claim on future labor, it introduces really unsteady factors into the mix. At any point of crisis, the credit system can fall apart almost like a pyramid scheme.

Harvey writes, “Spatial organization is necessary to overcome space. The task of spatial theory in the context of capitalism is to construct dynamic representations of how that contradiction is expressed through historical-geographical transformations” (328). Indeed, the organization of space is certainly one way in which capital crises are staved off, but: “The more an industry depends upon fixed and immobile capital equipment of relatively long life, the less easily it can move without devaluation.  These differential capacities for geographical mobility of capital in different states within the overall circulation process of capital introduces all kinds of tensions within that circulation process in space” (330).

The physical infrastructure put in place to help the mobility of capital presents a contradiction between fixity and motion that is constantly being created and destroyed, which is partly Smith’s point about equalization and differentiation. And, finally: “As temporal and geographical solutions to the inner dialectic of overaccumulation run out, the crisis tendencies of capitalism once more run amok, interimperialist rivalries sharpen and the threat of autarky within closed trading empires looms” (343).