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. The first time I taught Marx’s Capital was
back around 1970, and I taught it every year after that for many many years, but I haven’t
taught it for about the last five/six years. This year I’m back doing Volume I again, and
it’s always interesting to come back to that text because the circumstances in which I
was teaching it in 1970 are very different from the circumstances of 2019. For example, the last time, the last class
was really beginning on looking at the long chapter in Capital about machinery and modern
industry. And in it, Marx comments on how capital, for
many years, struggled to develop a technology, which was appropriate to its own development
on the basis of late feudal technologies, and particularl labor skills and organization
of cooperation and the like. And the preceding chapter talks about the
manufacturing system, which was in place from about 1650 onwards, up until the Industrial
Revolution that led to the creation of the factory system. So when I was teaching in 1970, we all went
through the manufacturing materials as if: “Well, that’s historical. Let’s get to the real stuff,” which is stuff
about the factory system, and then you get this fantastic account that Marx makes of
what happened with factory labor and how the factory system spread; and how the factory
system was not just one machine, it was about a system of machines: machines producing machines,
machine technology everywhere, generic forms of technology, like the steam engine, that
could be applied in all sorts of different areas. So Marx has this wonderful chapter about this
with a lot of materials, of course, called from the factory inspectors reports about
conditions of labor, which were accompanying the spread of this factory system, so it seemed
like the factory system was what was truly relevant. But this time through I was thinking to myself,
“a lot of young people these days probably wouldn’t know very much about what a factory
looks like– they probably wouldn’t know a factory laborer. They wouldn’t know a unionized factory laborer,”
which in the 1970’s most households would have had some contact with that sort of world
and some understanding of it. So in our part of the world, the factory system
has disappeared, and then you ask the question, “what has replaced it?” And what intrigued me this time was that a
lot of the things that were being said in the chapter on manufacturing actually resonated
as being rather similar to some of the things we are now looking at: precarious labor; the
cost of shifting of skills; the attempt by those who command skills to monopolize them
and to use them in some way to try to isolate for themselves a privileged position in a
workforce; a battle against that by capital, which tries always to proletarianize them
so that the monopoly skill disappears. So in this regard, I was thinking, “How strange?”
because there is an element in Marxist thinking which is teleological– that is, that it seems
to be postulated on the idea that there is a trajectory, and that trajectory is unfolding
inexorably, and we’re moving towards some point. So if you said, “Well, actually things are
moving backwards” then this would be very odd from a Marxist perspective. But I always had some problems with the way
in which Marx sets up that teleological angle. He’s not deeply committed to it, but it crops
up again and again in little ways because even in his time, it was pretty clear that
there were many aspects of society where the labor process was not of the factory sort;
that non-factory labor organization was often the basis for a factory-form of organization,
and that this even continued into what we would consider the “Fordist Period” of a factory
labor. For instance, the Japanese automobile industry:
very large corporations and factory labor at one level, but on the other hand, when
you looked at the supply of all the parts to the auto industry, it was all being done
in small workshops with skilled labor and the like. So I’d always thought that maybe Marx is not
quite right in suggesting that factory system would drive out these other forms of labor. And this was also the case when I started
to look at labor processes in Second Empire Paris. And instead of seeing the large factories
coming in (there were, of course, some that did come in), what you saw was a proliferation,
an increase in specific divisions of labor. For instance, around 1850, Paris had a sort
of significant artificial flower industry making artificial roses and artificial flowers
of all kinds, and by the time you get to about 1855, they’ve started to specialize in particular
flowers. So here you would find artificial roses, and
another place you would find artificial daisies, and another place you find other artificial
flowers. By the time we get to the 1860’s, you find,
actually, some of the workshop are specializing in petal production, some of them are specializing
in the flower production, some of them are specializing in the leaves. So, in fact, in Second Empire Paris, you don’t
see a move towards factory labor, but you see an increasing dispersal of the division
of labor across these many small enterprises, which were sort of becoming more decentralized
rather than centralized. So the industrial form has always been something
which is in motion, and capital is always, in a way, acted to say, “Well, OK; there are
different kinds of labor processes and different forms of organization. I’m going to go for the form which is most
appropriate and most amenable to the particular style of exploitation in which I am engaged.” And one of the reasons why you get this decentralization
of labor processes in the neoliberal period is because workers in the factories were organized
and unionized. And in order to avoid that, capital thought
they’d go to an alternative labor process, which could not be so easily organized. So all of this is going through my mind when
I’m teaching these two chapters on the machinery system and the factory system. And thinking about how capital moves from
kind of one structure of exploitation to another, and that if labor becomes very strongly empowered
(as it had in the 18th century) through the monopolization of certain skills, then capital
would try to break that power, and one of the ways to break it was through the factory
system, which, in effect, devalued labor power and de-skilled labor power. But by the time you get to 1970, exactly the
opposite problem was there. Labor was employed in the large factories
and was well-organized and was exercised in considerable power vis-a-vis capital. So the best in capital could do is to go for
another labor system that was decentralized, which couldn’t challenge capital in the same
way. And so what we’ve seen is a lot of dispersal
of industrial activity: horizontal forms of organization rather than hierarchical forms
of organization. And incidentally, I find it very interesting
that that is the predominant move that capital made, but it also turns out that this is the
dominant move that has occurred in Left organizing. The Left organizing wants to be decentralized,
and it wants to be horizontal, not hierarchical; and the way that, say, the “Fordist Labor
Process” was regulated through labor. Now, all of that points to a very interesting
way in which when you read Capital, ideas come to you about what’s going on; questions
get posed, and these questions are rather critical to look at today. And again, I’m going to use a little example
from a reading of Marx to illustrate this point. There’s an interesting feature of any economic
system. By and large, economists and policy makers
and politicians and financial press and the like are very concerned about the rate of
growth. And the rate of growth then becomes absolutely
critical for policymaking. But there’s another aspect to growth which
I think is significant and important but which is largely neglected, and that is the mass
of the growth that exists; how much growth has there been, and what are we going to do
with the mass that is produced? Now, this came up to me the other day because
I was reading my favorite financial journal, which is the Financial Times, and it reported
on a discussion of the Bank of England’s study of whether quantitative easing had contributed
to inequality. And this is something which I probably mentioned
before, but it was a very interesting study because what it showed was that, on average,
the bottom 10% of the population in Britain received about [..] £3,000 in aggregate over
the period 2007 to about 2010, whereas the very rich (the top 1%) received £325,000
over that period. Now, when you look at that, you would immediately
say (as I would say), “Well this shows how quantitative easing benefited the wealthy
[more] than it did the poor.” And, actually, this was a widespread claim,
and I even was surprised to find that the British Prime Minister Theresa May complained
that this was what had happened. The report, however, said: “No, that’s not
the case”. That when you look at the rate of change,
the £3,000 that the bottom 10% received was a greater proportionate increase than the
£325,000 pounds of the very rich which means that actually quantitative easing benefited
the poor more than it benefited the rich. And then the report went on to say, “You see? People […] don’t understand […] properly
how to read these things in a way which really tells us what is actually happening.” Now, my point here is that £3000 over six
years it’s less than £1 a week for the very poor. Now, that doesn’t exactly increase anybody’s
economic and political power, and it doesn’t do them much good. I mean, it’s a fairly trivial amount, actually. So even though it was proportionately greater,
the quantity was largely irrelevant to their lives, whereas for the top 10%, £325,000
is quite relevant, although they will probably (given the amount of money they’ve already
got stashed away) also consider it rather trivial, but it seems to me this a significant
contribution to the mass of the wealth that they control and the mass of the wealth that
they can use for political, economic, and other purposes to sustain their power. Now, what this means is that, in effect, a
low rate can produce a very large mass if there’s enough of it. In other words, put it this way: would you
rather have a 10% rate of return on $100 or a 5% rate of return on $10M? Now, clearly the 5% rate of return on $10M
is gonna outweigh, immensely, the rate. So we should be thinking more seriously about
the mass as a way in which inequality can be developed at the same time as it can appear
as if inequality is being reduced. Now, there are some areas in which this sort
of question becomes significant. For example, outside of the normal channels,
take something like the issue of global warming. While it’s clearly important that we intervene
in the rate of increase of carbon emissions, (and that is a very important political question)
there is another political question, which is, “What do we do about the mass of concentration
of greenhouse gases currently already in the atmosphere?” That, it seems to me, is the immediate severe
problem that we should be looking at and that looking simply at the rate of increase is
not going to help you with that. So there are situations in which the mass
becomes very much more significant. Now, I mention all of this because when you
go to the financial press and all the rest of it, you find very little discussion of
the mass and the quantity and the consequences of the mass. And interestingly, amongst Marxist economists
there’s also a fetishization of the rate and very little consideration in any detail of
the mass, and this comes out very much with a famous discussion that Marx had about the
falling rate of profit. Now, this is something that is proposed in
Volume III of Capital. It was something that became a very important
statement that really framed a lot of Marxist thinking about crisis formation, which is
that there is a tendency of the rate of profit to fall; that that tendency is actually embedded
within the capitalist dynamic because it’s about the application of labour saving innovations
in the labour process; and that application comes out of competition between individual
capitalist firms for what Marx called “relative surplus-value”– which really means a firm
with a superior technology is always in a position to sell at the social average while
it’s producing below the social average and, therefore, get an excess profit. And the competition for that excess profit
drives technological innovation. If I have a superior technology, I get the
extra profit, and you don’t. So what you do is you innovate, and trump
my superior technology by getting a super superior technology of your own, and then
I have to catch up to you. So part of the dynamism of capital is this
competition for a technological advantage, but the competition for technological advantage
is constantly economizing on labor and raising the productivity of labour. And by raising the productivity of labour,
you are, of course, reducing the value which is absolutely an aggregate available. So in a sense, that competition per “relative
surplus-value” produces a class consequence, which is that there’s less value and surplus
value to go around, and there is, therefore, this tendency for the rate of profit to fall–
that was the argument that is being made. Now, this argument is laid out in Volume III
of Capital, and the Volume III of Capital most of us use is the one that Engles edited,
and Engles edited in a certain way. And it’s important to do to acknowledge the
tremendous work that Engles did but of course he couldn’t do that tremendous work without
shaping some things which may or may not have been consistent with Marx’s intent. And that problem comes up in the text in the
following way: Marx wrote about this problem of the falling rate of profit in one long
chapter, which is really a notebook, and it’s not even shaped as a chapter; it’s just a
sort of a continuous argument about how to understand this phenomenon that he’s focusing
on. What he does is to lay out the following profit
argument that I just put forth, and he’s very pleased with himself that he’s done it, and
then what he does is that he starts to say, “Well, this is a starting point for us to
look at some more very general questions.” Engles divided this chapter into three component
parts: the first is called “The Falling Rate of Profit”, second is “Countervailing Influences”,
and the third is “Contradictions in the Law”, and Engles made it seem as if the law was
the central thing and everything else was modifications of the law in practice. So you come out of it thinking “The law is
really what it’s about”, but actually, when you’re reading the notebooks, it appears that
Marx has something else to say, and I’m just going to read you some of the comments that
come from these these notebooks because they are really fascinating to follow. In effect, far from being a countervailing
force, the increasing mass that is involved here is in fact part of a joint product. Marx puts it this way: that within the capitalist
mode of production, […] he says, “Despite the enormous decline in the general
rate of profit, the number of workers employed by capital, i.e., the absolute mass of labour
set in motion by it, hence the absolute mass of the surplus labor absorbed, hence the mass
of surplus value it produces, hence the absolute magnitude or mass of the profit produced by
it; that mass can, therefore, grow and progressively so, despite the progressive fall in the rate
of profit. This not only can, but must be the case, of
the basis for the capitalist mode of production.” So, far from being a countervailing force
as Engles entitled, this outcome is a joint product. “The same laws,” says Marx, “produce both
a growing absolute mass of profit, which the social capital appropriates and a falling
rate of profit.” And now, this poses Marx with a problem: “How
then should we present this double-edged law…” So it’s not a law– it’s a double-edged law.
“…of a decline in the rate of profit coupled with a simultaneous increase in the absolute
mass of profit arising from the same causes?” This is like the top 1% getting a lot more
in the way of value. So how are we going to present this? “The same reasons”, he said, “that produce
an absolute decline in surplus value and, hence, profit bring about a growth in the
mass of the surplus labor, surplus value, and, therefore, profit produced and appropriated
by the social capital. How”, he says, “can this be explained? What is it dependent on? On what conditions are involved in this apparent
contradiction?” So what Marx, himself, is saying is that we
have here a very central contradiction: that the rate of profit may be falling but the
mass of profit may be rising, and under those conditions that then tells us something very
critical about the nature of a capitalist mode of production. And you could actually turn this to reverse. A couple of weeks back, was a little article
again in the Financial Times in which it said, “There’s been a falling rate of growth in
China over the last six months or so, and there’s a great deal of nervousness in financial
markets. This is absolutely going to cause some real
serious global problems.” So if you [asked] “What [is] a potential source
of instability in the global capitalist system right now?”, many people would say, “Well,
China is a potential source of serious recession, maybe even depression”, but it seems the Chinese
have not been terribly concerned about it. And so somebody who’d been in China was asking
people, “Why are you not concerned about this?”, and the answer came back was very easy. It was this: that actually right now what
the Chinese were concerned about was labour absorption. They wanted to create 10 million jobs a year–
10 million. And that’s of course a lot compared to 300,000
in this country. We’re talking a lot of jobs to be created
in any one year, but the Chinese could could actually generate 10 million jobs on a much
lower rate of growth than was possible back in 1990, when they had a very high rate of
growth around 12% or more, but it was still very hard out of 12% to generate 10 million
jobs, but with the aim of 10 million jobs right now they could go for a 6% rate of growth
and have no trouble, and they could get 10 million jobs. And so as far as they were concerned as policymakers
they got the number of jobs they wanted because they now had a sufficient base where a lower
rate of growth could produce the 10 million jobs they needed. So they were not bothered, and, therefore,
they were not taking action to change the growth rate because they didn’t need to give
them their policy objectives. And here, too, we see a situation in which
you would expect the larger the economy the lower the growth rate would have to be, but
it’s fascinating to see Trump going around saying, “We’ve got to have 4% growth!”, and
he swore when he was on his way into power that, “Yeah we’ll soon have 4% growth”. Of course, we have low growth rates, but we
haven’t seen a great deal of disruption, and that says something about the fact that some
of the things which are required and needed society are being supplied with only a very
modest rate of growth. A high rate of growth would pose another kind
of problem. For example, if you doubled the output of
automobiles because of the productivity in the automotive industry… you’re going to
have twice the number of automobiles on the street. And if you did that globally, what would that
do to global warming? So in other words, we really have to take
very seriously the question of the mass. We can take it in a positive way as in the
Chinese case of absorbing labor or in the negative way, which would be contributing
to global warming because even though the growth rate is low, the growth rate is low
on an automobile industry that’s very large and that growth rate applies to the automobile
industry; that means a vast number of new cars on the road, which increases the mass
of carbon emissions, which… the mass becomes worse and worse! So we ought to be really very concerned about
the relationship between rates and masses, which is not generally considered in the in
the literature. When it is, as in the Bank of England case,
it turns out that, by and large, working on rates instead of working on masses, it’s very
convenient for the upper classes; that there was a class bias (in the way in which economists
and all the rest of it are approaching the world) in which, well, we are concerned about
the rate, and you can have a higher rate, and will tell you you’re better off but in
terms of the mass, it’s one cup of coffee a week, whereas I’m gonna get a good vacation
in the Bahamas. So this is the world, it seems to me, that
we need to to be very aware of. 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.

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30 thoughts on “Anti-Capitalist Chronicles: Rate and Mass of Growth”

  1. I just want to say how much I appreciate Harvey's work. Not only Harvey himself, but other people who I read use Harvey as touchstone, even when they disagree with him. Harvey is huge; one of the most cited academics in history, and rightly so.

  2. Reality is complexity. Humans are simple minded and don't do complexity well, nor are they capable of
    recognizing that fact….hence it doesn't matter what kind of lens you use, since the purpose of a "lens"
    is to focus "vision" at a specific distance and depth of field and when you do that, you lose focus at other
    other distances and everything out of the particular depth of field currently available. Reality is complexity.
    "Specialization is for insects."

  3. to focus on mass, the theory proposed have to match reality in exact same number, ex: 5 workers together produce 5 bread in 2 hour, 4 worker produce 1 bread in 2 hours => need at least 5 workers to have the team function properly.
    to focus on growth rate, all they have to do is comparing different growth rates and trying "to draw" conclusions from that, ex: same example=> as worker decease, the efficiency decreases
    The level of understanding in the 1st case is far demanding than the 2nd one. To focus on mass, policy makers have to understand exactly what they are trying to do, no BS. This will make things harder for them, especially when they are doing one thing but aiming for something else.

  4. Noticed a problem in simple arithmetic – 3000 pounds over 6 years, i.e. 500 pounds a year, equals 10 pounds a week, not 1 pound a week. Still insignificant compared to what the big guys got, but a new shirt or a dinner out now and then. But what I feel is a very real problem with the left today is their acceptance of the "climate change" narrative. (The fact that this "problem" used to be called "global warming" should by itself note that the evidence for all the warming alarmism simply wasn't there, hence the media adopted more neutral wording.) To me the left should afford much more focus on the fact that 2 billion of our planet's inhabitants still do not have electricity. We in the advanced sector initially got ours with coal – in addition to hydroelectric and oil and more recently nuclear. In other words, whatever works. So how can we not allow the Third World to get their electricity with whatever works – including coal and oil. AOC's Green New Deal will prevent these folks from getting what they truly need – NOW. The same folks who are behind what I consider Climate Change Nonsense used to preach all kinds of Malthusian evils many many moons ago, and this is but another one.

  5. I can't see how capital could decentralised itself. This decentralisation of production is consequence of capital surplus which is acomulated by this industrial factories. Because their production makes prices go down, so others have space for as we see in modern times for entrepreneurs to occur, which are of course only very narrow specialised, because only there thay have space. Its about space that capital acomulation leaves for others because capital conquer space little by little. We can't see the mass because of market, because market make instability how we see mass, so mass becomes elusive. But mass is real everyone knows that and simply doesn't bother with it, like with planet it self everyone knows is there but take it for granted. We can't simply destroy the market it's actually impossible like as we can't stop planet to spin. So how can we see the real mass, this was our biggest problem from the beginning of civilisation, we use to sort it out with the wars, but mass was still out of our reach. I think we can't see the mass no matter how much we try. What should we do then. When scientists can't see something, they focus attention on thing that could be affected by that invisible thing and which is visible, so they can sort out mechanism how this invisible thing works. What is most important thing that is affected by this mass? Of course we are, humans. So we should focus on humans as economy already does, on irrational behaviour of humans as well as rational. What is mehanizam of changes of irrational and rational behaviour of humans, very complex task. Its multidisciplinary task because of complexity, not just economy. Its biggest task that humanity ever took, something like neo humanism, but this time before dark age if its possible.

  6. This Chinese example kinda goes to show how in China capitalism itself is a state policy. Capitalist logic would dictate that the government aimed for the maximum possible economic growth, when in fact their government sees this growth as just another tool in their belt.

  7. Emmm things we care in China

    路how to make socialism actually work
    路America(eg arms race)
    路jobs taking away by high techs
    路social safe net


  8. Factory systems didn't disappear, they moved and grew larger in other countries with weaker laws and regulations and cheaper labor.
    It's almost similar to the moving and reorganization of farming… which still exists obviously but declined in visibility from most people.
    Ultimately, the vast majority of people will be atomized and disconnected from the means of producing, transforming, utilizing and servicing nearly everything… and completely dependent upon extremely specialized trades and manufacturing.

  9. By "teleological" what do you mean? As far as I understand, Teleology or teleological concepts involve a goal or an end. Marx wrote about a "process of natural history". By "natural history" I understand the history of nature. Marx didn't see communism as an end in itself but an end to class divided society. The end of the infancy of human relations. Class struggle as an aspect of this process of nature.

    "Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence."

    "I paint the capitalist and the landlord in no sense couleur de rose [i.e., seen through rose-tinted glasses]. But here individuals are dealt with only in so far as they are the personifications of economic categories, embodiments of particular class-relations and class-interests. My standpoint, from which the evolution of the economic formation of society is viewed as a process of natural history, can less than any other make the individual responsible for relations whose creature he socially remains, however much he may subjectively raise himself above them." Karl Marx – Capital Volume One 1867 – Preface to the First German Edition

    4:01…"there is an element in Marx's thinking which is teleological that is that it seems to be postulated on the idea that there is a trajectory and that trajectory is unfolding inexorably and we're moving towards some point"…

  10. "3000 pounds over six years is less than a pound a week"… really? Harvey's not listening to himself, bowling on…and he makes a few silly slips like this.
    the anecdote about QE depends only on the distinction between a gain expressed as an amount, and one expressed as a percentage or fraction. It's just a thing you have to notice, when it's done, because it can be very significant, so you have to watch for it (it's easy to miss) but other than that, it's a pretty trivial point. Calling it 'the mass' rather than the 'absolute amount' say, doesn't exactly help – now you need to define what you mean by 'mass'.

  11. I'm very confused here. Marx is anti-capitalist, yet this guy sees Marx as being capitalist – the antithesis of Marxism. Engels is not Marx. The title of this video is VERY misleading and deceptive, just as this man is.

  12. David never ceases to amaze me, his penetrating insights are extraordinary. David H IMHO is the modern day equivalent of Marx, he has no epual.

  13. He is still confused
    He talked about rate of growth as rate of growth of number of cars but the rate of growth is about growth of value not physical products
    You can have twice as much of the cars but because every car is cheaper you can have no growth in value so no profit

  14. I am so glad Harvey brought up global warming. What a great example of the fact that intellectuals can say the dumbest things. CO2 does not "accumulate" in the atmosphere over years. It is produced, used and recycled by the planet every single day. Anyone with a high school education should know this, but one thing that is not taught in schools today is critical thinking, which is why alarmist ideas like AGW can spread so widely.

  15. I wish I could be a factory worker, working producing things in a democratic organisation with secure employment. Instead I push paper to service the production of companies who produce abroad but sell their production here in a job that could be ended on a whim simply due to a manager having a bad day. All for wages that have barely risen above inflation since 1978.

  16. Unfortunately, I was born under capitalism, but fortunately, I was given聽a chance to think聽about anti-capitalism. Fantastic,聽David Harvey!

  17. Very interesting lecture. Rarely come away feeling I've definitely learned something new as was the case here.

  18. I hadn't thought of that. Most of the young I work with have no idea what a factory is except that it is a thing that used to be important. Thank you Dr Harvey

  19. Factories still exist here. I've worked in 2 during the past 20 years. First implicit rule of factories is: Don't talk about unions. (you may get promoted to a new position which unfortunately becomes redundant)

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