CityReads│David Harvey on the Ways of the World

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David Harvey on the Ways of the World: How Capitalism Has Changed Our World Over and Over

David Harvey analyzes how the forces of capitalism have re-engineered the world many times over since 1750.

David Harvey. 2016. The Ways of the World. Profile Books.

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Let us start by reading some numbers. The United States Geological Survey reports that China consumed 6,651 million tonnes of cement in the years 2011–13 compared with the 4,405 million tonnes the United States used over the period 1900–1999. 

China consumed some 60 per cent of the world’s copper and more than half of world’s output of iron ore and cement after 2008.

China has produced more steel in two years (2013-14) than Britain has since 1900.

How and why could this be? And with what environmental, economic and social consequences? The simple answer to the question of why this is happening is: because the reproduction of capital accumulation requires it.

In his latest book, The Ways of the World, David Harvey asks these kinds of questions that he tries to shed light on in the whole book. The aim of this book is to find a framework to understand the processes making and remaking our geography and the consequences there of for human life and the environment of planet earth. 

After he experienced the riots, despair and injustice of 1970s Baltimore, David Harvey started to seek an explanation of capitalist inequalities via Marx and to a sustained intellectual engagement ever since, which has made him the world's leading exponent of Marx's work. The book takes the reader through the development of his unique synthesis of Marxist method and geographical understanding that has allowed him to develop a series of powerful insights into the ways of the world, from the new mechanics of imperialism, crises in financial markets and the effectiveness of car strikers in Oxford, to the links between nature and change, why Sacré Coeur was built in Paris, and the meaning of the postmodern condition.

Reading the Ways of the World is an intellectual journey through a sequence of landmark works of David Harvey over the past five decades, compiling chapters and article excerpts from different periods in his career accompanied by retrospective commentary and insight from Harvey himself. The short commentary addendum in accompanying each chapter is a most helpful feature of the book, providing important hindsight considerations as to what has worked and what hasn’t. Taken together, this collection serves as an excellent introduction to the theorist’s influential body of thought, particularly for readers unfamiliar with his work and ideas.

There is nothing new under the sun: spatial fix as a way to solve the economic crisis

David Harvey argues that what have happened in China after 2008, the the housing and property boom in China, along with a huge wave of debt-financed infrastructural investments, is the typical way of solving the economic crisis due to the overaccumulation: spatial fix, as had happened to Haussmann in Paris in 1867 and to Robert Moses between the end of the 1960s and the New York fiscal crisis of 1975. What makes China exceptional is the scale and the speed.

Overaccumulation within a given territorial system means a condition of surpluses of labor (rising unemployment) and surpluses of capital (registered as a glut of commodities on the market that cannot be disposed of without a loss, as idle productive capacity, and/or as surpluses of money capital lacking outlets for productive and profitable investment).

The term ‘fix’ has, however, a double meaning. A certain portion of the total capital becomes literally fixed in some physical form for a relatively long period of time. The spatiotemporal ‘fix’, on the other hand, is a metaphor for solutions to capitalist crises through temporal deferment and geographical expansion.

Such surpluses may be absorbed by: (a) temporal displacement through investment in long-term capital projects (e.g. in the built environment) or social expenditures (such as education and research) that defer the re-entry of current excess capital values into circulation well into the future, (b) spatial displacements through opening up new markets, new production capacities and new resource, social and labor possibilities elsewhere, or (c) some combination of (a) and (b).

After 2008 at least a quarter of China’s GDP was derived from housing construction alone and when to this is added all the physical infrastructures (such as high-speed rail lines, highways, dam and water projects, new airports and container terminals, etc.), roughly half of China’s GDP and almost all of its growth (which bordered on 10 per cent until recently) were attributable to investment in the built environment. This was how China got out of the recession.

Accelerating demand for raw materials meant that all those countries supplying minerals, oil, agricultural products (timber, soya beans, hides, cotton, etc.) quickly shook off the effects of the crash of 2007–08 and experienced rapid growth (Australia, Chile, Brazil, Argentina, Ecuador…). Germany, which supplied the Chinese with high-quality machine tools, also thrived.

Crisis resolutions move around as fast as crisis tendencies. But there is no question that China took a leading role in saving global capitalism from disaster after 2008 with its massive urbanization and investments in the built environment。

How did the Chinese do it? The basic answer is simple. They debt-financed. The growth of the Chinese debt has been spectacular. It has nearly doubled since 2008. China’s debt to GDP ratio is now one of the highest in the world. But unlike Greece, the debt is owed in renminbis and not dollars or euros.

Threats of devaluation of property values and of overaccumulated capital in the built environment began to materialize by 2012 and crested in 2015. China experienced, in short, a predictable problem of overinvestment in the built environment.

So how do the Chinese propose to deal with their current problems of disposing of their surplus capital in the face of overaccumulation in the built environment and rapidly escalating indebtedness?

But for the Chinese, doubling down on city building is not enough. They are also looking beyond their borders for ways to absorb their surplus capital and labor. There is a project to rebuild the so-called ‘Silk Road’ that linked China to Western Europe through Central Asia in medieval times.‘Creating a modern version of the ancient trade route has emerged as China’s signature foreign policy initiative under President Xi Jinping,’

The rail network would run from the East Coast of China through Inner and Outer Mongolia and the central Asian states to Tehran and Istanbul, from where it will fan out across Europe as well as branching off to Moscow. It is already the case that commodities from China can get to Europe by this route in four days instead of the seven taken by ocean transport. Lower costs and faster times on the Silk Road in the future will convert a largely empty area in central Asia into a string of thriving metropolises.

This is not the only global infrastructure project that interests the Chinese. The Initiative for the Integration of the Regional Infrastructure in South America (IIRSA) was launched in 2000 as an ambitious programme to create transport infrastructures for the circulation of capital and commodities over twelve South American states.

Transcontinental links pass through ten growth poles. The most ambitious projects connect the West (Peru and Ecuador) to the East (Brazilian) Coast. But the Latin American countries do not have the finance. Enter China, which is particularly interested in opening up Brazil to their trade without the time-consuming detours of sea routes. In 2012 they signed an agreement with Peru to begin upon the route over the Andes towards Brazil. The Chinese are also interested in financing the new canal through Nicaragua to compete with that in Panama.

In Africa the Chinese are already hard at work (using their own labor and capital) integrating the transport systems of East Africa and are interested in constructing transcontinental railways from one coast to the other.

The Chinese, who have absorbed and then created an increasing mass of surplus capital over the last thirty years now desperately seek a‘spatial fix’ to their problems of surplus capital.

It still provides a robust way for thinking through the role of long-term fixed capital investments in the built environment in the reproduction of capital. It also invites enquiries into how the tendency towards overaccumulation gets transferred from one circuit of capital to another and with what effects. The obvious danger is a crisis of overaccumulation in the built environment.

The framework explains how China compensated for a substantial decline in its export trade after 2008, following the collapse of consumer demand in the USA, by a state-led strategy of forcing surplus capital and labor into huge urbanization and physical infrastructure projects. These allowed China to maintain relatively high rates of growth after 2009 while the rest of the world floundered.

Capital evolves

The forces unleashed by the rise of capitalism have re-engineered the world many times over since 1750. Capital necessarily creates a physical landscape in its own image at one point in time only to have to destroy it at some later point in time as it pursues geographical expansions and temporal displacements as solutions to the crises of overaccumulation to which it is regularly prone.Thus is the history of creative destruction (with all manner of deleterious social and environmental consequences) written into the evolution of the physical and social landscape of capitalism.

The saga of capitalism is full of paradoxes. On the negative side we have not only the periodic and often localized economic crises that have punctuated capitalism’s evolution, including inter-capitalist and inter-imperialist world wars, problems of environmental degradation, loss of biodiverse habitat, spiralling poverty among burgeoning populations, neocolonialism, serious dilemmas in public health, alienations and social exclusions galore and the anxieties of insecurity, violence and unfulfilled desires.

On the positive side some of us live in a world where standards of material living and well-being have never been higher, where travel and communications have been revolutionized and physical (though not social) spatial barriers to human interactions have been much reduced, where medical and biomedical understandings offer for many a longer life, where huge, sprawling and in many respects spectacular cities have been built, where knowledge proliferates, hope springs eternal and everything seems possible (from self-cloning to space travel).

This is the contradictory world in which we live, and it continues to evolve at a rapid pace in unpredictable and seemingly uncontrollable ways.

The historical geography of capitalism cannot be reduced, of course, to questions of capital accumulation. Yet it also has to be said that capital accumulation along with population growth has lain at the core of human evolutionary dynamics since 1750 or so. The world’s geography has been and is being constantly made, remade and sometimes even destroyed in order to absorb rapidly accumulating surpluses of capital.

It is both logical and imperative in our times to seriously consider the changing geography of the world from a critical anti-capitalist perspective. If sustaining and reproducing capital as a dominant form of political economy requires, as seems to be the case, pouring concrete everywhere at an ever-increasing rate, then surely it is time to at least question if not reject the system that produces such excesses. We need to raise the issue of whether we can afford to continue on this path or whether we need to check or abolish the impulse to the endless accumulation of capital that lies at its root.

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