In this final episode of the season, Prof. Harvey starts with the protests in Chile and then talks about the unrest emerging all over the globe. Capitalism, particularly Neo-liberalism, is working for the 1% but is failing the rest of society. People are starting to notice and taking to the streets in protest.
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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.
For a variety of reasons, I've always tried to keep tabs on what is happening in Chile. And the reason in part was because Chile was one of the big initiators of the neoliberal turn back in 1973 when Pinochet dislodged Salvador Allende, a democratically elected government, in a military coup and installed the Chicago boys, who created the neoliberal turn in Chilean politics. So I was intrigued in the beginning of October when there was a piece in the Financial Times which is an interview with President Piñera who is a businessman, right conservative kind of figure who was very, very content with the conditions in Chile. And he so depicted Chile as an oasis in Latin America of sound growth, of strong development, and all good economic indicators. So he seemed to be saying that Chile is in very good shape.
About three weeks after I read that, suddenly I get the news that there's been serious uprising going on in Chile, and after a few days it became even more serious, and millions of people are on the streets. The initial problem was an increase in subway fares. And in Chile there's been a tradition since 2006 or so that very often students, high school students, can begin movements, and that is what happened. Piñera didn't like it and said well okay, we're going to have to curb the lawlessness, which was an invitation to the police to go out and start to quell the discontent. But the only effect of that was to bring out more people. Some subway stops were burned down, three churches were burned down, so suddenly there is this huge eruption.
And it goes on for some considerable time, and Piñera suddenly started to have to say, well he needed to listen. They had to do something new. There was some huge, million march of people, peaceful march, in effect demanding that there be a new constitution, because the constitution in Chile is one that was drawn up under Pinochet. It's a neoliberal constitution. It mandates that all the pension systems shall be privatized, that health and education shall be privatized. So that was eventually agreed upon.
Now this event in Chile was not isolated, because shortly before this something rather analogous had happened in Ecuador. The IMF had stepped in and mandated structural adjustment in Ecuador, and the result of that was the usual kind of imposition of new taxes. But in particular, again like in Chile, a transport issue came up because gas prices in Ecuador are subsidized, and the IMF said the subsidy should be dropped, and so the government agreed to do that. This immediately caused distress amongst the mass of the population, and so we find the population starts to protest. Indigenous populations had already been in motion, and it was a great sort of march upon Quito, the capital city. And it became so strong and so fearful that the government got out of Quito and went off to the coastal city of Guayaquil because they felt rather exposed in Quito. And so there was, if you like, a similar kind of mass movement which erupted in Ecuador which resulted in the end of the president of Ecuador (whose name is Lenín, by the way, which always amuses me somewhat). So Lenín Moreno had to agree that he was going to drop a lot of the proposals taken from the IMF and he would start to negotiate.
So you have Chile and Ecuador in turmoil. At the same time, in a rather different direction, you had a turmoil in Bolivia. And there had been an election. There was widespread suspicion that Morales, the president, had not really got as many votes as he said he had got. And what we saw was kind of, in a sense, a right-wing mass demonstration. And the president and his government actually had to flee the country and ask for asylum in Mexico, which they were granted. And so again mass movements on the streets, conflicting groups clashing with each other.
So Bolivia is in turmoil, Chile is in turmoil, Ecuador is in turmoil. And then suddenly you notice that across the other side of the world in Lebanon – Lebanon is also in turmoil, that suddenly people are taking to the streets. There's a mass movement of a protest against the government. And in this one, it was fairly peaceful, but there were some casualties.
But at the same time, the same thing is going on in Baghdad, in Iraq. And in this one there were two or three hundred people that were killed in mass demonstrations which were mainly coming out of the low-income, impoverished areas of Baghdad that basically were complaining they had been left behind. And the next thing we know is something analogous is also going on in Tehran.
And then you look at it, and you kind of say, well this is a lot of turmoil going on. And you come back and you look at France, and gilets jaunes protests have been going on for a whole year, and they suddenly connect to a whole set of protests against the government, and essentially Paris and the major cities in France are all closed down in a mass protest.
And suddenly you get the sense that there is something going on in the world. I sometimes fantasize, let's suppose I was in a spaceship way above Earth and all those places on planet Earth where there were eruptions going on sort of flashed. And what you would see is a world in turmoil, that pretty much everywhere there are mass protests. Some of them are labor related. In the United States, for example, we've had a whole wave of teachers' strikes over the years, and culminating in Chicago again back in September. There have been some major strikes occurring in Bangladesh and also some major movements of this kind even occurring in China.
So you look at the situation and you say well, there's something going on here which suggests that globally what we're seeing are some mass protests of various kinds. And what is it that all these protests are about? Do they have anything in common? In each instance you would say okay, there's particular kind of concerns. But the common thread in all of this is that it seems that in many parts of the world there has been a realization that the dominant economic model – to which we appeal in terms of getting our daily bread, and getting our daily supplies, and getting employment, and all the rest of it – that model is not working. And it's not working for the mass of the people. It may be working for the top one percent, the top 10 percent, but it's not working for the mass of the people. And the mass of the people are becoming aware of that, and they're taking to the streets, and protesting, and saying this model is not satisfying to us.
And the situation has nearly always been, as in Chile, that the top one percent in Chile controls about 33 percent of the wealth. The same problem arises in other parts of the world that there is mass inequality. And therefore it is not only the lower classes, but the middle classes, who are suffering a great deal in terms of the economy not working well.
So what is it about the economy that is not working? In two or three of the cases, in fact – in Tehran, in Ecuador, and in Chile – there was a similarity, and it was the trigger for the whole uprising. The trigger was the increase in fuel prices and increasing costs of transportation. Now, having mobility in a city is a terribly important attribute. For most people, getting around in a city is critical, and the cost of getting around is critical. And if the cost becomes prohibitive, then low-income populations in particular are very hard hit by any increase in transport costs or any increase in fuel costs. So that there is a trigger, but then the interesting thing is how the trigger moves into something else. And so what we start to see is protests which are based very much on food prices; on transport cost prices; on, in some instances also, lack of access to urban services and to adequate, affordable housing. Those sorts of issues come into the situation, into the scene.
So there you have a kind of a base, an economic basis, and there are two ways in which you can think about this economic basis. The first is to say, this is a problem of the particular form of capital accumulation, the particular form of capitalism, which we generally refer to as neoliberalism – that the problem is not capitalism but the neoliberal form of capitalism. And there's been some agreement, even in corporate sectors and so on, that this may indeed be part of our contemporary problem. A Business Roundtable group of corporate heads got together and said look, over the last 20 or 30 years we have been far too much concerned with just merely questions of efficiency and profitability, and that we should really be concerned about the social impact of what we're doing, the social consequences of what we're doing. Which is a way of saying that the neoliberal model has brought us this far, but we've had enough of the neoliberal model; we ought to go to a broader-based version of what capital accumulation is all about.
And we have a sort of movement, which is beginning to be expressed, of saying we need a more socially responsible form of capitalism. We need, indeed, even a more equitable form of capitalism. Because one of the questions which lies behind nearly all of these protests is the increasing social inequality almost everywhere in the world, and the recognition that such social inequality has gone too far. So there is an argument that kind of says the neoliberal form of capital is the problem.
And in Chile that is very explicit, because to the degree that the protests and the violence climbed down, it was because the president and the congress got together and collectively decided they would have a referendum, a plebiscite, next April on the question of whether or not they would want to have a new constitution. And the new constitution would address the fundamental neoliberal qualities of that constitution, which mandates that all pensions shall be private, that health and education shall be private, and that the market system should be the basis of the social relations and economic development in the country.
So there is that way of looking at things. I don't share that view. I think yeah, there are some acute problems with the neoliberal form of capitalism, but there are certain parts of the world where you don't really have strong neoliberal capitalism and you've still got the judgment that the economic system, the economic model, is not working, and that economic model is that of capitalism. So I would beg the argument that there is, in fact, the real, very serious kind of question. And we're now becoming aware of that. We've become conscious of it.
And there are a number of things about these protest movements which I think it would be important to note. The first is that they're not new. There's been over the last 30 years a growing set of protest movements which has been arising which are not purely labor centered. In fact, many of them have been centered around the question of the quality of urban life, the quality of daily life, and the defects which exist in terms of delivery of public services, delivery of qualities of life which are adequate for the population in general.
For example, in 2013 in Turkey there was an uprising around Gezi Park. Now, Gezi Park is simply a park in the center of Istanbul which the government decided they were going to sort of turn into, if you like, a big shopping mall. And people kind of got angry about that. Then the usual thing happened. There was overreaction by the police. The police started to become very violent. The police violence actually brought out lots of people. Before you knew it, there were protests emerging not only in Istanbul but in all the other major cities in Turkey. And this created then a major protest which I think that was nationwide.
The same thing happened a few weeks later in Brazil. Again, a transport issue sparked a problem in Brazil. In Sao Paulo the police came out and started to beat up people, and people came out to protest against the police. And pretty soon you find in almost every city in Brazil – about 100 odd cities in Brazil – there are major protest movements, mass movements, protesting not simply about transport but protesting about, at that time, all of the money that was being spent on building new stadiums and building new infrastructures for the World Cup and the Olympic Games. Now, it's not as if in Brazil people don't appreciate soccer, I mean, but what they don't appreciate is the fact that new stadiums were being built, usually by very corrupt financial and developer interests, and a lot of money was being spent on these infrastructures when there was no money for hospitals, and schools, and all the other things that really needed to be there.
So there has been a long history now of mass mobilizations, and the mass mobilizations generally don't last that long. Most of the mobilizations occur, then they quiet down, and people forget about them, and then they erupt again. So what we've seen is a period of the last 30 years of mass mobilizations occurring again, and again, and again. In a sense it may be it started back with the anti-globalization movement when the WTO meetings in Seattle were disrupted. Suddenly all kinds of people descended upon Seattle and protested, and the delegates to the WTO conference couldn't get there anymore. And then after that there was a whole period when every G20, or G8, or IMF, or World Bank meeting was picketed by a large number of protesters. And then came Occupy Wall Street and, you know, all of those. So we've seen again and again mass movements of these various kinds, but they have not actually persisted.
And the other thing that has been very characteristic of them is that they've often been very fragmented, that different groups participate in these mass mobilizations but don't actually coordinate together. Now, one of the things that was very important about Lebanon in most recent times is that in Lebanon there's been a whole history of conflict and civil war, which is largely around religious factions, and religious groups, and all the rest of it. For the first time in many, many years in Lebanon, all of the factions came together and started to protest against the kleptocratic, autocratic, oligarchical form of governance that was existing there. In other words, everybody was agreed, and no matter what their religious faction, that the economic model was not working, and there needed to be something radically different, and that that something different had to be worked out between the different religious factions, and the different religious factions were talking together.
Now, I've had a similar experience of this sort in Brazil after Bolsonaro got elected. And that, of course, is a very right-wing and evangelical Christian government. There are in Brazil several left parties. I mean, of course, there is the Workers Party, which is the big one, but then there are several fragmented parties along now. Each political party has its own think tank which is supported by government. If you have representation in Parliament, you get some money to set up a think tank, which is going to do policy research. And there are six political parties of the left, and they have, generally speaking, not been in good communication with each other. In fact, they've been pretty angry at each other. But this time when I arrived there, all six parties had collectively got together and staged a week-long configure – reflection, really – on the political situation, and that therefore all came together. And at the end of the week, when I was sort of participating in this, there was one sort of mass rally in which all of the political leaders came together. All of them gave talks together, all of them hugged each other on the stage, and so suddenly the left is all together in a way which had not been there before.
The same actually, I gather, is the case in Chile. Different left factions have actually got together and started to talk with each other about the whole kind of prospect of creating a new constitution. So maybe something is different this time, and which is that all of these mobilizations have the potentiality to start to have some staying power because they start to get institutionalized and organized. We see there's a big difference between mobilization and organization. And I think what we've seen is a great capacity to mobilize – with the women's march, or whatever, the immigrant-rights marches, and so on – there's a lot of mobilization going on. But longtime organization seems to be lacking. And what we now see is perhaps the beginnings of the signs in all of these cases of the coming together of all of those people who feel that there is something wrong with the basic economic model and the basic economic model has to be changed in such a way as to provide health, and well-being, and good education, and good pension rights, and all the rest of it to the mass of the population, rather than delivering strong economic growth and strong economic benefits for the top one percent or the top 10 percent.
So this is, then, the issue. And I've been trying to think very much about: Is there a central contradiction in the way in which capital is working these days which really requires to be addressed, and if so, what would that central contradiction be? Well, an obvious serious problem is level of social inequality. Almost every country in the world has experienced an increase of social inequality over the last 30 years. And it has gone so far that I think a lot of people feel it has gone too far, and that therefore there has to be some sort of movement to try to recapture a much greater level of equality in society, that better goods and services have to be delivered to the mass of the population. So that is one question.
The second question is not social inequality but it is the problem of climate change. We know that climate change has reached a point where there has to be some sort of collective response. And the urgency of this, from reports but also from data, I think is becoming clearer to more and more people around the world. For example, I was checking the other day a graph of carbon dioxide levels in the atmosphere. And the National Oceanic and Atmospheric Administration here in the United States has produced a graph of carbon dioxide concentrations in the atmosphere over the last 800,000 years. (How they get that I'm not quite sure, but you can get back in the rocks and see what the carbon levels were from the rock geological record.) So it's not been more than 300 parts per million over the last 800,000 years until around 1960, when it broke through the 300 parts per million. It's now at 400 parts per million, which says basically the carbon dioxide concentrations in the atmosphere have not been seen at this level over the last 800,000 years.
And we've really got to go back to the times of the dinosaurs and all the rest of it to put ourselves in a climate situation of the sort that we've now got, that is predicated by this high level of carbon concentrations. These levels of carbon concentrations, by the way, will not easily dissipate. And even if there are zero emissions from now on, the levels of carbon concentrations in the atmosphere are enough to do serious damage to the world's – for instance, the Greenland ice pack, the Arctic ice, the Himalaya snowpack. All of that will disappear even if there are no more carbon emissions. And it will disappear unless something major is done about carbon extraction from the atmosphere.
So there are environmental questions. There's social inequality; there's environmental questions. And at the same time, there are also other reasons why one can start to say that the kind of form of capital that exists right now is unreasonable. It is actually barbaric, and it needs, therefore, to be replaced by another economic order. In exactly the same way that Marx was outraged by the kinds of factory conditions which he was witnessing or at least he was being told about or learning about in Britain, so we can look at the factory conditions in Bangladesh, or in China, and everywhere, and kind of say look, this is no way in which a civilized world should organize its production.
So there are these things. But I think there is an additional factor right now, one which Marx did not actually have to deal with but which I think is very critical for us right now. We have a situation where capital is always about growth, and has to be about growth, because it's always about the pursuit of profit. And a healthy capitalist economy is one where everybody has positive profits, which means that there's more value at the end of the day than there was at the beginning. And that more value at the end of the day is then used to create even more value. So the capitalist growth – and I've had occasion to point this out in former podcasts – capitalist growth is about compound growth. And compound growth is itself right now becoming the problem. The size of the global economy doubles about every 25 years. Now, in Marx's time the doubling of the size of the economy in 25 years really didn't pose a problem. But it's beginning to pose that kind of problem where we need to go from a $4 trillion economy that existed in 1950, to a $40 trillion economy as of the year 2000, to an $80 trillion economy – we're coming close to that right now – which is then going to be a $160 trillion economy by 2050, which is going to be a 320 by 2075, and a 640 by the end of the century. So the doubling of the rate is going to become a very, very serious problem.
And this is what compound interest does. And Marx is very fond of quoting from something that was written by a man called Richard Price back in 1772, who wrote a tract about compounding interest. And what Price did was to say this: that if you invested one penny on the date of the birth of Jesus Christ, and it grew at a five percent compound rate, by the time you get to 1772 you would need a 150 spheres the size of planet Earth, all solid gold, to give you enough money equivalent of what that penny had become under compounding at five percent a year since the birth of Jesus Christ. If, however, you only charge simple interest – that is, you didn't compound the interest – by the time you get to 1772 the total amount you would need, he counted, was one penny would have become something like seven pounds, 20 shillings and something or other.
Compounding growth is something which cannot be sustained. We are at that point where compounding growth has started to actually accumulate at such a rate that it's become a global kind of problem. And the capitalist economy right now is having real difficulties of satisfying the requirement of profitable investment opportunities for $40 trillion as of 2000, $80 trillion around now, and where is it going to be invested in, and how is it going to be invested. That is the real problem we're looking at. Now, this is a critical, critical problem, and there are various things that are happening in the economy. Because as Marx points out, there's only one kind of capital that can accumulate without limit, and that kind of capital is, in fact, money capital – provided that money is just simply about numbers.
Now, when money was constrained by gold, it couldn't accumulate infinitely because there's only a finite amount of gold, and that's a finite fund. So but in 1971 we got off the gold standard. The money supply of the world was liberated from any restraints of any contact with gold. And so we get this tremendous kind of growth in the money supply since 1970 or so because the money supply is simply whatever the central banks of the world decide it's going to be – with the US central bank, the Federal Reserve, being critical in this because most transactions in the world occur on their dollar contracts, and so the dollar is the reserve currency. And when we get into difficulties the Federal Reserve simply prints more money.
And we see this compounding of the quantity of the money in circulation, but then the question is what is that money going to do and how is it going to actually earn a profit? And we've seen all sorts of adjustments in the global economy to deal with that problem. But there is what Marx called a "realization problem" of how on earth can you reinvest all of this money in such a way that it creates more profit, and where's that profit going to come from?
So that is, if you like, one half of the problem. But the other part of the problem is this: that in Marx's time if there was a sudden collapse of capitalism, most people in the world would be able to feed themselves and reproduce. Because most people were self-sufficient in their local area with the kinds of, you know, things they needed to live on – in other words, people could put breakfast on their table irrespective of what was going on in the global economy. Right now that's no longer the case. Most people in the United States, but increasingly, of course, in Europe, and in Japan, and now increasingly in China, and India, and Indonesia, and everywhere are dependent entirely upon the delivery of food to them, so that they get the food from the circulation of capital. Now, in Marx's time, like I say, that would have not been true but now this is a situation where probably around 70 or maybe 80 percent of the world's people are dependent upon the circulation of capital in order to assure their food supply, in order to deliver them the kinds of fuels which are going to allow them mobility, going to actually deliver them all the necessities to be able to reproduce their daily life.
So this is a, I think, a situation which I can really summarize in the following kind of way: that capital right now is too big to fail. We cannot imagine a situation where we would shut down the flow of capital, because if we shut down the flow of capital, 80 percent of the world's population would immediately starve, would be rendered immobile, would not be able to reproduce themselves in very effective ways. So we cannot afford any kind of sustained attack upon capital accumulation. So the kind of fantasy that you might have had – socialists, or communists, and so on, might have had back in 1850, which is that well, okay, we can destroy this capitalist system and we can build something entirely different – that is an impossibility right now. We have to keep the circulation of capital in motion, we have to keep things moving, because if we don't do that, we are actually stuck with a situation in which, as I've said, almost all of us would starve.
And this means that capital in general is too big to fail. It is too dominant, and it is too necessary to us that we cannot allow it to fail. We have to actually spend some time propping it up, trying to reorganize it, and maybe shift it around very slowly and over time to a different configuration. But a revolutionary overthrow of this capitalist economic system is not anything that's conceivable at the present time. It will not happen, and it cannot happen, and we have to make sure that it does not happen. But at the same time, the other side of the coin is capital is too big, too monstrous, too huge to survive, that it cannot survive in its current form. So on the one hand, we can't do without it; on the other hand, it is on a suicidal path. So this is, if you like, what I think the central dilemma is.
So there are numerable contradictions in a capitalist system right now. One of the big contradictions, as I've mentioned, is incredible class and social inequality. The second is the environmental aggregates. But then comes the kind of question of this too-big-to-fail, too-monstrous-to-survive contradiction. And I think that that is the major contradiction that we should be addressing. And therefore a socialist program, or an anti-capitalist program, of the sort that I would want is one about trying to manage this capitalist system in such a way that we stop it being too monstrous to survive at the same time as we organize the capitalist system so that it becomes less and less dependent upon profitability and becomes more and more organized so that it delivers the use values to the whole of the world's population – so that the world's population can reproduce in peace and tranquility, rather than the way it's going right now, which is not peace and tranquility at all, but eruptions. And these eruptions can, of course, also lead to conflicts between different parts of the world, and geopolitical conflicts, and the like.
So there it is. I think we need to think about this idea that capital is too big to fail, but at the same time that it's too monstrous to survive.
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 Marilou Baughman
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