book review: Marx, Capital and the Madness of Economic Reason

150 years ago, Karl Marx wrote a book called Capital and provided what is probably the most important analysis of political economy ever published. While I haven’t read it (yet), I have read David Harvey’s latest book about it: Marx, Capital and the Madness of Economic Reason (Profile Books). Harvey has been teaching Capital for nearly four decades and his familiarity with Marx’s entire project is virtually unparalleled. And he has a message for us: despite its flaws and archaisms, Capital is as relevant as ever and we should all read and understand it—and, ideally, take off where Marx left us.

For someone like me who has only a casual grasp of Marx and political economy in general, Harvey’s consummate ability to explain complex economic concepts will be seriously appreciated. He pores through Marx’s entire corpus—published works, unpublished drafts, and voluminous notes—to provide what he reckons is a fairly faithful account of Marx’s most central arguments. He does so while contextualising the particular problems Marx was responding to at the time (of which continuities and discontinuities abound) and bringing to bear today’s proliferating economic problems.

At the centre of the book is a great mystery: what exactly is this strange thing we call ‘value’?

Harvey starts by unpacking Marx’s general conceptualisation of capital as “value in motion”. The critical insight here is that capital is not a static thing, but rather must continuously circulate and transform from one state to another and back again. Drawing analogy with the hydrological cycle, Harvey produces a working model of the general flow of capital as comprising a kind of totality. This visualisation of capital flow captures the four basic processes within the circulation of capital: valorisation (the expenditure of capital to produce a commodity plus surplus value); realisation (where a commodity is sold on the market for money value); distribution (of value among the various factions of capital); and finally capturing some of the money value to convert back to money capital to start to the process once again. If capital gets stuck in any one form, a crisis arises.

Of course, at the centre of this analysis is Marx’s insight that if capital is good at producing anything, it is antagonistic class relations premised upon exploitation of labour. “Marx had concluded that value under capitalism was alienated labour exploited by capital in production, secured by private property and commodity exchange in price-fixing markets,” Harvey explains in the chapter on ‘Money as the representation of value’ (55).

Here again I found the conceptualisation of ‘value flow’ useful. It directs us towards the different forms of social struggle that can (and already do) take place within the circulation of capital, such as a product boycott that keeps value locked as commodity, or a labour strike that prevents commodities from being produced at all. By harnessing these forces of what Harvey calls ‘anti-value’—the ever-present antithesis of value itself—crises in capital can be purposely triggered and bent towards perhaps more liberatory ends.

The chapter on ‘The space and time of value’—which for obvious reasons will likely be of most interest to geographers—looks at the processes through which capital produces the space that it requires to achieve a world market. However this spatial process is one of solving one problem only to create another. “Capital,” Harvey explains, “creates a physical landscape and spatial relations appropriate to its needs and purposes […] at one point in time, only to find that what it has created becomes antagonistic to its needs at a future point in time.”

These kinds of contradictions of capital—which are inherent to capital itself, rather than some incidental or accidental by-product—are continuously given centre stage. Capital is neither a neat nor rational system, Harvey argues, but one that must hastily bandaid over its rapidly proliferating blunders and contradictions. It’s a system that operates in such a frenzied, broken way that its logic can only be described correctly as ‘madness’. Harvey follows Marx’s analysis to expose the myth that a perfect capitalist system creates not a glorious utopia, but “a dystopian nightmare of increasing class inequalities, environmental degradations and economic crises galore”.

Throughout, Harvey emphasises again and again that Marx produced not a totalising explanation of capital—something that should only be followed and not questioned. Rather, he offered “an open door through which we could progress to ever higher understandings of the underlying problems that inform our current reality” (209). Harvey’s challenge for us geographers (and everyone else) is to take up the offer.