[David Harvey, 2013] Editor’s note: This is an excerpt from an interview that ran in Red Pepper and the Irish Left Review in which Harvey sets out some ideas from his new book on the contradictions of capital. He says creating a post-capitalist world requires changing the monetary system and creating a common property regime.
Q. Is the era of finance capitalism which has developed in the last thirty years fundamentally different from the kind of capitalism which preceded it?
DH. Yes and no.
The credit system has been around for a long time. I did some studies of second empire Paris to see what was going on between 1850-70 and then in the Paris Commune. Finance capital was behind the reconstruction of the boulevards and the new housing. It was a classic case of finance capital entering into urban development. If you look at city-building over the centuries you couldn’t have it without finance capital. These were long-term investments and recuperating the interest rate is critical.
There’s a long history of financialisation in capitalist development. Theorists have not necessarily paid much attention to it because, particularly on the Left, the concentration has always been on the factory. Whereas in my own work I’ve been looking at what is happening in cities – so I see the finance side clearly in urban development, which has become more significant. City building in the 19th century was big, but city building over the last fifty years has been huge. We’ve moved from a situation where about 25% of the world’s population is urban to one where 50% of a much larger population is. What’s going on in China right now, it’s massive. I would argue that finance has become more significant because urbanisation has become more significant.
Financialisation is a continuation of a trend you can see from the 18th century, in that sense there’s continuity, but its scale is now much bigger than ever before. And because its scale has increased its complexity has – with collateralised debt obligations, mortgage pools, etc. There has been a lot of innovation in the financial sector to facilitate this massive transformation on planet Earth which means you’re building cities all over the place.
We need to pay more attention to this and recognise its increasing scale and importance. But don’t imagine that it is something entirely new. I saw it operating very clearly in second empire Paris. What we’ve got now is a blown up version of that and, by the way, there was a crash in the property markets in 1867 in Paris which came down just like 2007/’08. There was a fiscal bankruptcy in New York in 1975. The precursor to the Great Depression in the 1930s was a property market crash in 1928. So you go back and there’s a lot of history of similar crashes.
Q. Another area of your work which is becoming increasingly popular in anticapitalist circles is the idea of the commons. Could you briefly explain what it means and why it is important to the struggle against capitalism?
DH. Let’s examine the question of housing for the moment. It is almost standard thinking that in order to get housing you have to be a homeowner. Therefore the private property system dominates housing provision. I think that’s really problematic. For a lot of people being a homeowner is not good economics – they don’t have the incomes. But being a tenant is a vulnerable situation. So, you might want to have a completely different kind of property regime for the delivery of use values to a significant section of the population.
I think there are ways to try to reorganise what goes on in housing provision through common property regimes. Not state-owned, I want to be clear. This would be social housing which would be co-operatively developed, managed and structured. There are interesting schemes in the United States, for example, called ‘limited equity co-operatives’. If you participate you can’t sell out at a market price. You can only get close to the value you started with. If you got into the housing co-op for €100,000 and twenty years later you want to get out – you get €100,000 plus the inflation or something similar. You can’t go and sell it for a million. So this means there is a permanent pool of housing which is available for a population that can’t afford a million but could afford €100,000 on a reasonable mortgage.
On housing provision, we have to get out of that frame of mind that says ‘the only way you can really do this is through home ownership’. That idea of home ownership has been pedaled for political and economic reasons. Most people have absorbed the idea that this is the only way in which housing can be provided. Arguing for a different property rights regime seems to me to be critical. Many areas that have been commodified need to be returned to a common property idea. I think education and health care are common property rights. To the degree that our world is not delivering good use values for those things it is because it is privatised and turned into a private property right. I’m concerned to support wherever I can initiatives which start to generate common property rights regimes in place of private ones.
That common property regime is not state ownership. We’ve got a dichotomy right now between state and market which is misleading. Neither state nor market but a collective form of provision.
Q: You have said often recently that one of the things we should be doing on the left is engaging our postcapitalist imagination, starting to ask the question of what a postcapitalist world would look like. Why is that so important? And, in your view, what would a postcapitalist world look like?
DH. It is important because it has been drummed into our heads for a considerable period of time that there is no alternative. One of the first things we have to do is to think about the alternative in order to move towards its creation.
The left has become so complicitous with neoliberalism that you can’t really tell its political parties from right-wing ones except on national or social issues. In political economy there is not much difference. We’ve got to find an alternative political economy to how capitalism works, and there are some principles. That’s why contradictions are interesting. You look at each one of them like, for instance, the use and exchange value contradiction and say – ‘the alternative world would be one where we deliver use values’. So we concentrate on use values and try to diminish the role of exchange values.
Or on the monetary question – we need money to circulate commodities, no question about it. But the problem with money is that it can be appropriated by private persons. It becomes a form of personal power and then a fetish desire. People mobilise their lives around searching for this money even when nobody knows that it is. So we’ve got to change the monetary system – either tax away any surpluses people are beginning to get or come up with a monetary system which dissolves and cannot be stored, like air miles.
But in order to do that you’ve also got to overcome the private property-state dichotomy and come to a common property regime. And, at a certain point, you need to generate a basic income for people because if you have a form of money that is anti-saving then you need to guarantee people. You need to say, ‘you don’t need to save for a rainy day because you’ll always be getting this basic income no matter what’. You’ve got to give people security that way rather than private, personal savings.
By changing each one of these contradictory things you end up with a different kind of society, which is much more rational than the one we’ve got. What happens right now is that we produce things and then we try to persuade consumers to consume whatever we’ve produced, whether they really want it or need it. Whereas we should be finding out what people’s basic wants and desires are and then mobilising the production system to produce that. By eliminating the exchange value dynamic you can reorganise the whole system in a different kind of way. We can imagine the direction that a socialist alternative would move in as it breaks from this dominant form of capital accumulation, which runs everything today.