Kunkel’s LRB article about David Harvey and crisis

From this LRB article, which more or less digests Harvey’s 1982 book Limits of Capital.

Marx proposed that ‘the tendency to create the world market is directly given in the concept of capital itself,’ and Harvey glosses the idea: ‘The necessary geographical expansion of capitalism is … to be interpreted as capital in search for surplus value. The penetration of capitalist relations into all sectors of the economy, the mobilisation of various “latent” sources of labour power (women and children, for example), have a similar basis.’ Hence both the involution and the imperialism of capital, commodifying the most intimate of formerly uncommodified practices (education, food preparation, courtship) as well as sweeping formerly non-capitalist regions (China and Eastern Europe) into the global market.

The expansion is always to accommodate the surplus value that is unaccounted for on the demand side — nothing of value there to exchange for it in order to realize the profit. So capital absorbs new spaces and makes further claims on time, on future production (through credit).

I’m interested in social media as a manifestation of the subsumption process, the means by which “intimate uncommodified practices” become susceptible to commodification, circulation, valorization, etc. The quest for new profit opportunities, essentially — enclosing commons.

Also interested in how acceleration serves capital’s “overproduction” crises. The acceleration of exchange appears to absorb more production, and allow for valorization to exponentially expand, while at the same time suspending more money capital in the process. The danger for capitalism is always the money and commodities will cease circulating, as capital is critically a process, is always in motion in order to be at all. Static capital is not capital at all within capitalism; it is a pile of worthless shit.

Kunkel discusses three aspects of the Marxist “falling rate of profit” thesis.
1. full employment gives labor too much bargaining power (disproved by flexible capital in globalized system)
2. organic composition of capital shifts: “given increased technological and organisational efficiency, for using relatively less labour than capital in production. Since profitability reflects the ‘rate of exploitation’ – or the ratio of the surplus value produced by the worker to the wages he receives – using less labour relative to capital diminishes profitability, unless capital goods become cheaper or exploitation is ramped up. This problem too can be solved, at least in principle: the capital/ labour ratio can simply be rejigged by deploying more labour relative to capital.” I think this problem also gets solved with “fictitious labor” — immaterial labor invested in symbol/semantic production; and then through labor collected by capital through online networks without requiring the payment of wages. Need to think about this more, but the appeal of digitality for capital is that it allows for near infinite exploitation of labor per unit of hard constant capital. The network effect inverts the organic composition problem. (Would love someone’s help/advice on what to read on that topic.) Social networks allow technology to increase the amount of labor that goes into a commodity, because the “commodity” is reshaped as a bottomless pool of information, an ever-refreshing occasion for data collection; the data becomes the product, the digital medium the occasion and means for data circulation. The circulation process becomes the source of utility, of use value, of pleasure. Am I on to anything with this?
3. underconsumption — a restatement of the missing Surplus Value issue. Not enough paid out in wages to allow for the full realization of profit in exchange. The mother of all contradictions, as Kunkel would have it. Could be solved by ever expanding luxury consumption, but marginal utility of money declines as personal wealth increases, also positional goods and potlatch destruction attract more of the wealth, taking it out socially necessary investment circuit. Another way of saying that overaccumulation has occurred — capital cannot be invested profitably; it can only be devalued — but whose? “In social terms, this will take the form of a contest between creditors and debtors over who is to suffer more devaluation.”

Not sure why this crisis is not solved by “quantitative easing” up until the point of inflation. This would allow for accelerated exchange in order to valorize capital. That gets you the Freidmanite idea of matching the money supply growth to the overall rate of growth.

Not so sure about this either:

The relationship between credit and commodities is in this way translated into spatial terms as an uneasy rapport between one kind of capital, highly mobile or liquid, and another kind – ‘fixed capital embedded in the land’ – defined by its inertness. Here, in the latent conflict between migratory finance capital and helplessly stationary complexes of fixed capital, including not only factories and office buildings but roads, houses, schools and so on, Harvey has found a contradiction of capitalism overlooked by Marx and his heirs.

New capitalism is all about flexibility, mobile capital finding sites of profit. “‘The disjunction of the quest for hypermobility and an increasingly sclerotic built environment (think of the huge amount of fixed capital embedded in Tokyo or New York City) becomes ever more dramatic.’”

This analysis depends on the extent to which fetish about land — that its value always goes up — is widespread. Misrecognizing housing as an investment rather than a commodity good. It depends how seriously we consider land to be better form of collateral than other assets. “Harvey’s bold and ingenious solution is to propose that, under capitalism, ground rent – or the proportion of property value attributable to mere location, rather than to anything built or cultivated on the land – becomes a ‘pure financial asset’” — I kind of suspect that is pure assertion, a speculative postulate necessary for the subsequent analysis. The “spatio-temporal fix” theory sounds a lot like Austrian-ish “recalculation” — investment in future production that turns out to be unwanted. Think the dematerialization of capital rescues it from its contradictions, not spatio-temporal fixes. The material detritus of the circulation process ceases to be capital when it ends up devalued in the hands of the end consumer — what isn’t written off as “consumption” of that material is just deadweight loss for the consumer. That is to say, this sounds about right: “Devaluation, being ‘always on a particular route or at a particular place’, might serially scourge the earth even as capital in general, loyal to no country, remained free to pursue its own advantage.”

This seems like the key paragraph to me — “crude” as it may be:

But it is the broader and more systematic Marxist perspective that ultimately and properly contains Keynesianism within it, and a crude Marxist catechism may be in order. Where does an excess of savings come from? From unpaid labour – for example, that of Chinese or German workers. And why would such funds inflate asset bubbles rather than create useful investment? Because capital pursues not ‘high social returns’, but high private returns. And why should these have proved difficult to achieve, except by financial shell-games? Keynesians complain of an insufficiency of aggregate demand, restraining investment. The Marxist will simply add that this bespeaks inadequate wages, in the index of a class struggle going the way of owners rather than workers.

That is something clear to rally people with. Profit is being extracted from the social system by capitalists, who choose to sit on it or compete with one another in status games or use it in high-finance gambling games that don’t yield productive activity but rather lead to zero-sum redistribution.

The other game, in theory, is to have banks give credit to the poor so that they can consume the surplus, as long as they creditors don’t get wise to the flimsy quality of the credit — suppressed wages are replaced by credit until banks refuse to lend, don’t think they can squeeze it out of the debtors. This is the classic Ponzi scheme/bubble scenario, which inevitably happens when investment becomes speculation — think Minsky and Fisher might be as apt as Marx and Harvey on this subject.

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