Prof. Harvey argues that contemporary capitalism is heavily inflected towards accumulation by dispossession as opposed to accumulation through exploitation of living labor in production. Large capital takes over smaller capital and in the end you get a quasi monopolistic situation of the large capitalist dominating all else.
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This transcript has been edited for clarity.
This is David Harvey and you're listening to the Anti-Capitalist Chronicles, a podcast that looks at capitalism through a Marxist lens. This podcast is made possible by Democracy at Work.
Recall a seminar some time ago I was involved in with my good friend Giovanni Arrighi and we were talking about some of the processes that were going on around the world because Giovanni was very much concerned with how to understand the global structures of capital accumulation. At some point or other I recall saying: “Look we're not only dealing with an accumulation of capital which is based on the exploitation of living labor in production in the way that Marx describes in Volume 1 in Capital in great detail, but we're also dealing with practices of accumulation which are really based upon dispossession.” Giovanni looked at me and he said: “Oh you mean to say we have to think about accumulation by dispossession?” and I said: “Yeah, I think we have to look at that.” Since then I have been writing about accumulation by dispossession because I think that this is something, which parallels the exploitation of living labor in production as a way in which capital works.
Now, when I talk about accumulation by dispossession I'm really talking not so much about primitive accumulation, which forces people off the land, encloses the Commons, leads to the creation of a wage labor force. What I'm talking about is the fact that accumulated wealth in some form or other is being appropriated and by certain sectors of capital and there's a number of ways in which this is going on. I would want to make the argument that the form of contemporary capitalism is heavily inflected towards accumulation by dispossession as opposed to accumulation through exploitation of living labor in production. What do I mean by this? For example, Marx himself actually talks at a certain point in Capital about the way in which capital centralizes. The centralization of capital means that capital steals from small producers the assets that they have. One of the big forms of activity in their own society is mergers and acquisitions in the market in which big capital takes over small fish, as it were, gobbles them up and starts to expand its power and its mass simply by takeovers of more and more small capital. Marx talks about all of this as being what he calls the laws of centralization of capital in which increasingly within particular sectors large capital takes over smaller capital so in the end you get a quasi-monopolistic situation of the large capitalist dominating all else.
So if you look at something like the rise of Google, for example, how many small operations did Google takeover in its expansion to the point where it now is this major corporation? In fact, this is the way in which Silicon Valley works; people work on developing small apps and this kind of thing. At some point or other, they're bought out by the big capital and they become part of this vast conglomerate. So, individual capitalists can therefore accumulate not by employing labor but by simply taking over the assets of others. We then see certain situations arising in which, as Marx says, the credit system becomes one of the major vehicles of centralization of capital. It works in this kind of way: If you cut the flow of liquidity to some sector of the economy then there is a great difficulty in that sector of the economy of firms actually refinancing their debt and if they can't refinance their debt then essentially they get forced into bankruptcy. This is what happened in East and Southeast Asia in 1997-98. For some time the liquidity was constrained, good firms couldn't refinance and they were forced into bankruptcy. And so you get a crisis in the economies of East and Southeast Asia of good companies basically going into bankruptcy. What then happens is that big capital from outside steps in, buys up these firms, which are filing for bankruptcy, which are perfectly viable firms it's just that they can't get the finance to continue. The outsiders buy up the companies and then what they do is essentially acquire all of the assets, hold the assets for a while and when the flow of liquidity resumes the economy recovers and then you can sell back these assets at a great profit.
We see something similar happening, not only in East and Southeast Asia, but we saw something like that going on during the housing crisis here in the United States. For example, a lot of people found themselves forced, in some instances illegally it turns out, to surrender the asset value of their home so we have foreclosures. They couldn't pay their mortgage and so you get a vast number of houses, which are being sold, at foreclosed prices. So, in steps a private equity company like Blackstone and it starts to buy up all of these [foreclosed] houses again at fire sale prices. So, Blackstone is now I think the largest landlord in the country. It has thousands and thousands of houses, which it’s bought up. What it then does is to turn them around and rent them out at some sort of profit and as the housing market recovers—and depending upon which market you're in if you're in San Francisco and New York it recovered fairly fast in other places it didn't—then you can sell them back at a vast profit. What this says is that actually large segments of the economy are being run on the accumulation of capital, which is not involved in producing anything. It's all about the trading of asset values. But trading of asset values under conditions in which the asset values are forced to be devalued at a certain historical moment by mechanisms in the market and then revalued and as they’re valued so the private equity companies can capitalize upon the revaluation.
So, this is a mode of accumulation, which has nothing to do with production. When you look at it very carefully, you see that actually, a lot of wealth in society is being developed in this way but it also means that certain kinds of increase in value are occurring and that accumulation of capital is occurring through these processes as asset values are revalued upwards. So that accumulation is no longer the result of production, it's a result of trading upon asset values. Now, there are other ways in which we will see this process occurring. For example if there is a part of town which is beginning to look like it's going to go up in quality we get the famous gentrification process in which you need to expel certain populations from the space. How is that done? Well, in a number of ways it can be done, some of it legal, some of it illegal. Landlords, of course, have wonderful ways to try to get tenants out of their buildings. There are all kinds of strategies for doing that. Of course, in the 1970s there was this strategy of burning down buildings and the Bronx was burning as it was said at the time. These processes of eviction are actually becoming very very significant in urban areas throughout the capitalist world. As you evict populations at a certain point, the evicted populations have to go live somewhere.
This is a little bit like what Marx talked about in primitive accumulation on the land except this is not happening to create wage labor this is going on to try to liberate spaces so that capital can come in and rebuild in a certain area, re-gentrify through a strategy of accumulation through urbanization. When we look at something like this again it's accumulation by dispossession. People are dispossessed of their rights, of their access to good areas of the city to live in. They're forced out to live on the margins where maybe they have long commutes to get to work and that. And so again and again and again we will see a kind of history of eviction, of an expulsion going on. We will see similar things going on back again upon the land. There is a process of what we call land grabbing, which is going on all over Africa and throughout Latin America as well in which capital looking for good places to invest will say: “Look, the future lies upon control over land and the assets on the land like raw materials and mineral resources and productive capacity of the land.” So, big capital starts to move in and to speculate in land values and speculating on land values you find that land value starts to be forced upwards and upwards to the point where actually value is now accumulating in the hands of the rentiers rather than in the hands of the direct producers.
There is another way in which we start to see accumulation by dispossession occurring. People employed frequently by a company will have on [of] behalf that company will have healthcare rights often in their contracts. They will have pension rights and pension rights become a terribly important feature of contemporary society, particularly in the advanced capitalist world. But, we're now seeing some of these issues being raised even in countries like China. Pension rights are a form of future income, which is supposedly guaranteed, based upon certain contributions people have made to their pension funds. But, many corporations find themselves in a situation where the obligations of the pension funds, in the healthcare are far too much to be really continually funded over time. So, what we've seen major corporations, and actually the airlines have been good at this, United Airlines declares bankruptcy. American Airlines declares bankruptcy. That doesn't mean they stop flying. They go into Chapter 11 or what[ever] it is and they have to renegotiate all of their obligations. They go to a judge and they basically say: “Look, we need to resume our operations and we can do so on a clean lean basis provided we get rid of our past obligations.” And the judge says: “Well, what do you mean by that?” The answer is: “Well, look we need to get rid of our pension obligations. We need to get rid of our health care obligations.” So in effect, the company will renege upon its health care and pension obligations and suddenly people find they've lost their pension rights and they don't have their pension anymore. In the United States, there is a pension insurance fund, which will say: “Well, if United Airlines gives up its pension system and American Airlines gives it up then the state will pick it up. But the state usually picks it up not according to the value that people were expecting. So, somebody working for American Airlines might expect to get $80,000 a year in the way of pensions but the pension fund only pays $40,000 a year, which is very difficult to live on for many people. So, the loss of pension rights becomes a very important mode of accumulation. This is what happened to many people in Greece. If you were in the public sector and you retired, I have a colleague who retired there three years ago and only last month did he get [the] first payment of his pension. So, he spent three years without any payment whatsoever from the state pension because the state pension was not funded. Actually, there's a big problem over pension right so all around the world where actually big capital is accumulating in some ways on the basis of not paying for the pension rights.
Now, all of these forms of accumulation are with us right now and they're not the same as those, which existed when Marx was talking about the origins of capital. They're not like that at all. They are actually a value that has already been created under capital is being redistributed and it's being redistributed, of course, from the mass of the population to increasing centralization and creation of a huge asset wealth within the top one or 10% of the population. So, accumulation by dispossession, then, is in fact something that we need to take very seriously in being one of the mechanisms by which capital is currently being reproduced. One of the arguments I would make, however, is that accumulation by dispossession has always been there, has always been significant. It's never gone away. Since Marx was writing about the 17th and 18th century capital and the origins there that actually it never stopped. It's always been there but that since the 1970s in particular we've had more and more accumulation shifting towards the question of dispossession rather than the creation of value through the employment of labor and production. This then raises interesting kind[s] of questions as to the nature of the capitalist society in which we currently exist. To what degree do we have to organize struggle against accumulation by dispossession? Of course, you will find anti-gentrification struggles. You will find struggles against the loss of pensions and the loss of healthcare rights and the losses of that sort. We’ll find struggles against land grabbing but in exactly the same way that Marx talked about in the 17th and 18th century how state power frequently is mobilized by the affluent classes to dispossess the rest of the population. So, we see many forms of dispossession going on in at this time. If you look, for example, at the last reform of the tax code and tax law in this country, what you'll see is a redistribution of wealth and power and a dispossession of certain kinds of forms of rights. At the same time, there are flows [of] value being channeled more and more to the corporations and more and more to the affluent classes.
So, there are many techniques of dispossession and it seems to me that it'd be very important to write, as it were, a sort of text on accumulation by dispossession in the current situation and the various mechanisms that exist for that dispossession to occur. I think that also it's a moment when the original sin that came with the origins of capitalism that this whole thing was built upon violence, lies, fraud, cheating and the like and if you look at what happened in housing markets in this country in 2007-2008 how much of it was based upon dispossession of populations illegally, but through violence, fraud and of course the promulgation of a certain kind of story of conspiracy and the lies which we now are actually confronted with from the standpoint of the way political power works. So, accumulation by dispossession, then, is a terribly important aspect of our current society. It actually is generating a great deal in the way of protests. A great deal in the way of growth is now being channeled in that direction rather than towards the more classic means of appropriation.
We see actually merchant capital re-emerging as a major mechanism for the appropriation of wealth. If you take a company like Google, well it's partly involved in the design of new vehicles for production, but a lot of what Google is about is also appropriation in the market. It's a merchant capitalist operation and so Google has become hugely important and Apple has become hugely important through merchant capitalist practices of appropriation in the market rather than the organization of productive capacity at the point of production. Industrial capitalism has, in a way, given way increasingly to merchant capitalism, rentier capitalism, and the mechanisms by which rentier capitalism and merchant capitalism works are more and more about appropriation and accumulation by dispossession than they are about the organization of production and the exploitation of living labor in production. This is the kind of capitalist society we've moved towards. It's the one, which is not going to be tamed as it were by classical techniques of left organizing. It has to be tamed by a completely different political apparatus and forms of political protest. I think those port forms of political protest have to be targeted in a very different way than is currently the case.
So, let me end with one of the fantasies I have about the end of capital accumulation through class struggle and it goes like this: That actually the nodal points within contemporary capitalism are very much the nodal points of logistics. I have a fantasy that would say if we organized all the airport workers in the world and all the airport workers in the world suddenly decided not to show up to work one day then capitalism would be stopped. It would be stopped dead in his tracks. There is a tremendous power, which exists, which is that if the airports are no longer working the system comes to an end. We've seen some evidence of that. For instance, the shutdown of the federal government, which occurred in this country earlier in 2019, suddenly came to an end. It came to an end a day after three airports in the United States found they could not deal any longer with the stress of working without any kind of pay and suddenly I think there was a recognition that if all of the airports in the United States suddenly shut down then that would be a terrible thing. It was interesting; the government shutdown ended within 24 hours of three airports basically half shutting down because they could no longer operate without the federal workers doing the jobs they were supposed to do. So, there's the power, if you like, and some of that power can also be orchestrated around questions of rights to health care, rights to pensions, rights to Social Security all of those questions, which need to be addressed. But, those questions have to be backed by sufficient power within the system to be able to confront an economy, which is based on accumulation by dispossession as much as it's based upon the exploitation of living labor in production.
Thank you for joining me today. You've been listening to David Harvey's Anti-Capitalist Chronicles, a Democracy at Work production. A special thank you to the wonderful Patreon community for supporting this project.
Transcript by Jake K.
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