harvey on capitalist crisis, fixes and uneven development ...ccs.ukzn.ac.za/files/bond isa harvey in...
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Harvey on capitalist crisis, ‘fixes’ and uneven development:
Territorial alliance formation and dissolution as building blocs for geopolitical theory Patrick Bond (University of KwaZulu-Natal, Durban, South Africa)
• David Harvey identifies (in The New Imperialism) “a cascading and proliferating series of spatio-temporal fixes” to persistent economic crisis.
• These fixes do not result in crisis resolution, but instead, lead to new contradictions associated with uneven development: “increasingly fierce international competition as multiple dynamic centers of capital accumulation emerge to compete on the world stage in the face of strong currents of overaccumulation.”
• “Since they cannot all succeed in the long run, either the weakest succumb and fall into serious crises of devaluation, or geopolitical confrontations erupt in the form of trade wars, currency wars and even military confrontations.”
• The territorially-rooted power blocs generated by internal alliances (and conflicts) within national boundaries, or occasionally across boundaries to regional scale, are the critical units of analysis when it comes to fending off the devalorization of overaccumulated capital.
• By uncovering these units – which, aside from ‘circuits of capital’, are not sufficiently studied within IR and IPE – it is feasible to root a durable geopolitical theory appropriate for understanding uneven and combined development.
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uneven and combined development
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territorial competition
linked to recent overaccumulation
pressures
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not everything can be explained through uneven development theory:
‘contingent geopolitical considerations…’
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http://davidharvey.org
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capital flowing through three circuits
CRISIS
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http://www.mtholyoke.edu/~fmoseley/working%20papers/PWCRISIS.pdf
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http://www.gonzotimes.com/wp-content/uploads/2012/03/dumenillevyprofitratechart.jpg
Secular profile of the profit rate: U.S. nonresidential private economy (percent, yearly). In the numerator, profits are measured in a broad definition, as the net domestic product minus total labor compensation. (A correction is made for self-employed persons.) The denominator is the stock of fixed capital, net of depreciation.
‘tendency of the rate of profit to fall’
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‘overaccumulation’ and financialisation: sources of decline in US manufactuing profits
• US corporate profits derived much less from manufacturing products;
• much greater sources of profits from abroad;
• profits also came more from returns on financial assets.
• Source: Gerard Dumenil and Dominique Levy
crisis of surplus value extraction
‘temporal fix’
‘spatial fix’
GDP stagnation
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US economy becomes debt-addicted from
early 1980s (source: John Bellamy Foster and
Fred Magdoff, 2009)
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finance delinks from world’s real economy: market value of financial
assets and aggregate global GDP at current
prices (billion US dollars) Source : Leda Paulani, USP with
McKinsey Global Report data
14
fin.assets
GDP
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US corporate profits become finance-
addicted in mid-1980s (source: John Bellamy Foster and
Fred Magdoff, 2009)
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‘hollowing corporations’ from mid-1980s
(source: John Bellamy Foster and Fred Magdoff, 2009)
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Context: US economy as core site of overaccumulation and financialisation
‘shifting’, ‘stalling’, ‘stealing’ as displacement strategies:
the spatial fix, temporal fix and accumulation by dispossession
Source: John Bellamy Foster and Fred Magdoff, 2009
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because of overinvestment, a
subsequent investment drought from early
1980s
(late 1990s was mainly IT, especially software)
(source: John Bellamy Foster and Fred Magdoff, 2009)
Investment by US private capital
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overaccumulation of capital remained
through 1980s-2000s (source: John Bellamy Foster and Fred
Magdoff, 2009)
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Production crash in historical terms
Initially as bad as 1929
Source: Eichengreen and O’Rourke
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Trade crash in historical terms
A worse crisis than 1929!
Source: Eichengreen and O’Rourke
Initially worse than 1929
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Stock market crash in historical terms
Source: Eichengreen and O’Rourke
Initially worse than 1929
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Crash of GDP, industrial
production and FDI
… vast implications for the ‘real sector’ too…
Source: The Economist
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Keynes, PLEASE HELP!
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Source: IMF, Global Financial Stability Report, April 2010
temporal fixes: derivatives, ‘Quantitative Easing’
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wealthy governments’ debt reaches (political) ceiling
vast increase mainly reflects bailout of US and European banks in late
2008
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sub-prime disaster isn’t going away
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uneven development in GDP growth roots of crisis:
long-term stagnation of EU, US and Japan after Post-War ‘Golden Years’
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uneven development in GDP growth
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uneven and contradiction-ridden spatial
fixes (source: Unctad 2009)
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stock market volatility: all markets in ‘08
Source: Unctad
… widespread, dramatic loss of paper wealth
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Commodity devaluations:
Change in prices, July – December 2008
…particularly devastating for African countries addicted to export-led extractive-industry ‘growth’…
Source: Unctad, The Global Economic Crisis, May 2009
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Manmohan Singh Xi Jinping Jacob Zuma Dilma Rousseff Vladimir Putin
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The opening up of global markets in both commodities and capital created openings for other states to insert themselves into the global economy, first as absorbers but then as producers of surplus capitals. They then became competitors on the world stage. What might be called ‘subimperialisms’ arose… each developing centre of capital accumulation sought out systematic spatio-temporal fixes for its own surplus capital by defining territorial spheres of influence…
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The benefits of this system were, however, highly concentrated among a restricted class of multinational CEOs, financiers, and rentiers. Some sort of transnational capitalist class emerged that nevertheless focused on Wall Street and other centres such as London and Frankfurt as secure sites for placements of capital. This class looked, as always, to the United States to protect its asset values and the rights of property and ownership across the globe. While economic power seemed to be highly concentrated within the United States, other territorial concentrations of financial power could and did arise.
Source: IMF
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short-term gut reaction: run from the
emerging markets
Source: UNCTAD
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Berlin, 1884-85
‘Scramble for Africa’
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Britain, France, Belgium, Portugal, Germany, Italy, Spain
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SOUTH AFRICA
in context of global crises, enter BRICS
“a new global economic
geography has been born”
– President Lula da Silva, BRICS Brasilia Summit, 2010
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SOUTH AFRICA (added in 2010)
why BRICs? answer from New York/London: building-block ‘bricks’ of 21st century world capitalism
Jim O’Neil, Goldman Sachs
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useful Africa Source: Le Monde Diplomatique, Feb 2011
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Africa’s existing oil
• substantial reserves • oil and wars: Sudan,
Angola, Chad, Congo • US imports more
than 20% from Africa
http://www.catholicrelief.org/images/oil/Africa-Map-Web-PS0301-Da.jpg
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1. South Africa 599
2. Botswana 92
3. Zambia 75
4. Ghana 43
5. Namibia 32
6. Angola 32
7. Mali 29
8. Guinea 21
9. Mauritania 20
Tanzania 20
Zimbabwe 20
Africa’s mining
production by country,
2008
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territorially-rooted power blocs generated by internal alliances (and conflicts) within national boundaries, or occasionally across boundaries to regional scale, are the critical units of analysis when it comes to fending off the devalorization of overaccumulated capital