Dr David Harvey on the economic crisis, and his detractors

This excellent video produced by the Royal Society of Arts (RSA) has been doing the rounds a bit recently, and for good reason. Dr David Harvey’s explanation of the deep roots of the economic crisis is the sort of lucid and compelling analysis that has been missing from the general public discourse since the penny (and pound) dropped – and the sort that is becoming ever more desperately needed as the neoliberal axeman emerges from the resulting fog. The RSA’s format for presentation is as enthralling as it is impressive, and brings the thesis to a wider audience than it would have almost certainly otherwise reached. It’s clear and accessible, which is something the left needs to work on in general. (Sorry, Adorno.)

I won’t run through the argument in the video here because I won’t do it justice – the best thing to do is watch it. The rest of the RSA series is well worth checking out as well. For anyone not aware, the RSA is a rather admirable establishment body that, as part of it’s remit, generally goes out of its way to challenge any prevailing orthodoxy and give a respectable platform for radical ideas. It counts figures as diverse as Charles Dickens, Karl Marx and Benjamin Franklin amongst its alumni.

Slightly less worthy than Harvey’s lecture is one of the top Related Videos linked to it on YouTube:

Judging by the ratings of and comments on the video on YouTube (certainly a terrible way to begin any sentence, but I’ll bite anyway) this rather nasal self-styled critique of Harvey’s lecture seems to have gained a bit of traction with at least a hundred people, which is broadly disappointing, but not really surprising.

I’ll be charitable and not dwell too long on the most obvious problems with it – mainly for brevity rather than sympathy. To give you an idea of where this guy is coming from, the author makes an oh-so-tasteful-and-well-judged attack on Harvey’s self-depricating assertion that he’s one of few people doing a Marxist analysis of the economic crisis – watch, it’s rather cringe in a Peep Show sort of way. He also makes a point that Harvey “says that he’s literally a Marxist! I’m not being hyperbolic!” as if he’d never actually met one before, which is nice. He also uses a lot of codewords, like “No true free market capitalist…” Yeah, not like that bloody commie Alan Greenspan.

The main “grand rebuttal” that the video makes basically consists of the author “mishearing” Harvey (again, I’m being charitable) when he says that the proportion of national output going to wages has fallen since the 70s. The author then digs out some statistics about personal household income (not mentioned by Harvey) and talks about how adjusted personal income has risen since the 60s, (yes, 60s, yes not even the same statistic) although not by much. I suspect that the confusion arose because he had already heard a knee-jerk blogosphere libertarian talking point reaction to the mention of wage depression, and didn’t bother to check whether it was actually applicable to the video.

Harvey’s assertion about the proportion of wages as a share of national income is important because it suggests that less and less of the total wealth of society is being paid in renumeration to workers, and more of it accumulated by capital: the critic either does not understand this or simply mishears. Either way, he does nothing to address it.

The video also contains a lot of general misconceptions and right-wing blogosphere memes – like the idea that anti-union laws decreased unemployment. I won’t debunk that, you can do it yourself with access to this annotated 20th century UK unemployment figures graph and a basic knowledge of history:

Despite its somewhat charming, glaring faults, the video does make one broad error that I think it’s actually important to explore on in a bit more depth, simply because of its apparent opacity. The practice of merely replacing a word with negative connotations with a word with more positive ones is repeated throughout the piece: “offshoring … also known as free trade.” Oh, see that? It’s not bad anymore. Saying that “businesses went offshore due to unprofitable regulations” is an interesting one when you remember that by “unprofitable regulations” he means “workers not being paid 10p an hour.”

The main underlying problem with the critique is that it completely fails to take into account capitalism’s antagonistic relationship between capital and labour. That is: it is in the workers’ interests to receive as much of the fruits of their labour as possible, whilst it is in the capitalists’ interests to expropriate as much of that as possible as profit. So when the critic does his word/concept replacement trick on the idea of profits for the capitalist being sacrificed for workers wages (indicated by the higher proportion of national income going to wages) with “it’s bad for the economy!” he is actually saying that it is bad for the capitalist, whose profits fall.

Now, quite rightly the argument could be made that it is the capitalist who makes the productive investment and that the share of the income going to workers as wages is now “dead” and “not productive,” or at least not to the extent that such wealth would be in the hands of the capitalist. Thus, because the means of production are in the capitalists’ hands, any wealth of society in the workers’ hands cannot be as productive and is positively wasted, with the economy at large suffering, because resources are directed to “the wrong place,” away from the means of production.

Therein lies the basis of the argument for worker control of the means of production, and against their oligarchical enclosure. The economic arrangement of capitalism, with the means of production concentrated in the hands of a few, forces us to chose between a poverty where that few with the means of production cannot produce because an insufficient share of wealth goes to the only productive part of the economy (them, thank you very much) – or a poverty where that few sees as much of the national income directed to them as possible, to the detriment of the wages of everybody else, because that few are the only productive part of the economy, and anything else would be an unproductive waste, thank you very much.

The most direct way to break this dilemma between the fair renumeration of labour and the direction of wealth to the means of production is, of course, to unite labour with the means of production.