| David Harvey, Profile Books, April 2010, 296 pages, £14.99. |
| Browsing through David Harvey’s book before reading it properly, I
came across this sentence: “The history of technological and
organisational change within capitalism has been nothing short of
remarkable. But it is evidently a double-edged sword that can be as
disruptive and destructive as it can be progressive and creative.”
Together with the information that Harvey is a Professor of Anthropology
at the City University of New York, this sentence delighted me. I
thought that the book would be an exploration of the anthropological and
social roots of the financial crisis, a companion to Gillian Tett’s
wonderful book Fool’s Gold. It’s always been a puzzle that there doesn’t
seem to be more exploration of these institutional details by social
scientists, because surely part of the explanation for the madness that
descended on Wall Street and the City before 2008 lay in way the banks
functioned as institutions, and the mores and behaviour of their
employees? |
| Alas, Harvey’s book is not an illuminating anthropological study. It
turns out to be a Marxist analysis of globalisation, and how this
inevitably led to a crisis of capitalism. This isn’t without its own
interest. It’s always good to test one’s own worldview by dipping into
someone else’s, and it may be hard to think of a greater contrast than
between an academic Marxist and a neoclassically-trained economist.
However, before too long the book’s abstract rhetoric and lack of
reference to any actual evidence started to get on my nerves. |
| Take this example, in a passage about globalization and unions. The
proposition that conditions in developing country factories are not up
to western standards, and organised labour would help improve them, is
surely uncontroversial. But Harvey writes: “In the sweatshops of the
so-called developing world it is women who bear the brunt of capitalist
exploitation and whose talents and capacities are utilised to the
extreme under conditions often akin to patriarchal domination.” Not only
does this seem to dismiss any benefits of rising incomes thanks to jobs
in multinationals, I also happened to read this just after looking at an
interesting paper establishing that Nafta has particularly benefited
Mexican women in particular thanks to jobs in the Maquilladora
manufacturing zone (this is available at1. The Enigma of Capital has no
references to empirical work. It is awash with wordy generalisations
whose basis in fact appears to be weak. |
| However, the book ends with a call for a reworking of “the
architecture of the state-finance nexus”. So oddly enough, after
200-plus pages of growing irritation, I found myself agreeing with its
conclusion. If you agree with Simon Johnson at MIT or our own John Kay
that the power of the financial industry has subverted the political and
regulatory process, then the ’state-finance nexus‘ is indeed the heart
of the problem. Harvey ends by noting regretfully that it’s rather hard
to reintroduce the label ‘Communist’ into the contemporary political
process, but ends with a call for “tenacity and determination, patience
and cunning” to overthrow capitalism. All those qualities will no doubt
be needed to reintroduce effective competition policy and capital
requirements into the banking sector – but I don’t think that’s quite
what Harvey has in mind. |
Diane Coyle
Enlightenment Economics |
|