The enigma of capital : and the crises of capitalism

by David Harvey

Paper Book, 2011


"Since the moment the deeply unsettling financial disaster erupted in September 2008, a crisis of confidence has gripped the economic mind. Experts of all stripes, from Alan Greenspan on down, were at a loss to explain what had happened. David Harvey saw this moment coming. A legendary scholar and critic of capitalism, he has been warning of problems for decades. Now, in The Enigma of Capital, Harvey provides a sweeping and brilliantly clear explanation of how the disaster happened, and how we can avoid another like it. Unlike other commentators, Harvey does not focus on subprime loans or mortgage securitization as the root cause of the calamity. Instead, he looks at something that reaches far deeper into the heart of capitalism--the flow of money through society. He shows how falling profit margins in the 1970s generated a deep transformation. With government assistance, capital was freed to flow across borders, and production moved to cheaper labor markets, depressing workers' incomes in the West. But as more and more money moved out of the laboring classes and into the pockets of the wealthy, a problem arose--how could the workers afford to buy the products which fueled the now-global economy? To solve this problem, a new kind of finance capitalism arose, pouring rivers of credit to increasingly strapped consumers. Moreover, these financial institutions loaned money to both real-estate developers as well as home buyers--in effect, controlling both the supply and demand for housing. But when the real-estate market collapsed, so did this financial edifice, an edifice that dominated our economy. We cannot afford to simply shore up this financial system, Harvey writes; we need to undertake a radical overhaul. With this landmark account, he offers a richly informed discussion of how we can turn our economy in a new direction--fairer, healthier, more just, and truly sustainable"--Publisher's description.… (more)



Call number



Oxford ; New York : Oxford University Press, 2011.

User reviews

LibraryThing member MeditationesMartini
Coming to this book, all I really wanted was for Harvey to talk about the financial crisis in a way that made sense and overcame my economic learning disability and was useful and droppable into conversation in a way that people would find interesting and made me feel exhilarated about the
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possibilities to make things better and doing my part and so on, and that did all these things in a way that made extensive use of Marx and left him feeling throbbingly relevant. I really wanted that, enough that I got the hardcover, which I never do. It was mostly successful--the surplus capital/housing bubble stuff I'm okay on, although I have to think about it, and the general take on capital and the complexities and unsustainabilities involved in sustaining a compound rate of growth, on which the whole enterprise depends, and the problem where you're always dealing with yesterday's surplus production to make ready the production of tomorrow's surplus--these things make sense, but I really have to grind through them. This book made me understand a lot of things, and it loses the half star basically for not teaching me to fish--that is, for giving me pieces of the picture but not making me economically literate enough in a socialist context to go out and fend for myself (a tall order!).

So you learn a tonne, and get a tonne of context, and are reminded of Henri Lefebvre's thing about the Right to the City, which is apparently a whole nascent movement and of which Harvey is a major exponent (and which I always have been too--that's what we were doing with rooftop Capture the Flag, man--and now it has a name). You get the crises of capitalism represented as "creative destruction", a commonplace thought to be sure but now I think I understand why. Harvey really succeeds in his goal to speak to real peeps, and if I can't follow some of the $$$ stuff I suspect it's my issue not his. You get a "co-evolutionary theory" of social change, which proceeds or doesn't at related but variable rates in seven spheres: mental conceptions; the relation to nature; daily life and reproductive practices; social relations; technologies and organizational forms; labour processes; the capture of institutions and their revolutionary transformation. And of course, it is easy to see the unsuccess of past revolutionary movements (excepting only the permanent revolution of capital itself) as stemming from their failure to move ahead on all seven of these fronts.

You get the idea of an alliance between "the discontented and the dispossessed", which globally is where this change has to come from--an end to atomization, where peasant groups, NGOs, militias, political parties, academics, unions, protest groups, people of the Left in general, focus on one of the seven spheres, and too often one issue in one geographical area. A splitting-the-difference on the tired and simplistic binary of taking direct action or getting the assholes on board; a coming-together, stirringly represented in the last chapter, "What is to be done? And who is going to do it?" which in some ways teaches you the least and on other ways is the jewel of the book. We need our motivation and our determination and our optimism back.

"The capitalist class will never willingly surrender its power. It will have to be dispossessed. To do what has to be done will take tenacity and determination, patience and cunning, along with fierce political commitments born out of moral outrage at what exploitative compound growth is doing to all facets of life, human and otherwise, on planet earth. Political mobilisations sufficient to such a task have occurred in the past. They can and will surely come again. We are, I think, past due." You have nothing to lose but your chains, and a bunch of other shit that it'll turn out you didn't need anyway.
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LibraryThing member Mandarinate
A very readable book that uses the economic crisis that began in 2008-09 as a platform for explaining Marx's ideas and vocabulary and their continuing relevance for understanding financial crises and the human costs of economic development and technical change (read the novel White Tiger). The
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early part of the book follows Marx's main arguments in Capital quite closely but in less austere language. The more original contributions of the book are the discussions of seven social activity spheres which interact to produce social and economic outcomes. These are called (1) technologies and organizational forms, (2) social relations, (3) institutional and administrative arrangements, (4) production and labour processes, (5) relations to nature, (6) reproduction of daily life and of the species, and (7) mental conceptions of the world. I think of this as a more concrete version of the Frankfurt School's sociological analysis. The author's analysis of the geographical spread of economic and social consequences of capitalist developments is also interesting. On the whole, the book is a very worthwhile read, although the fundamental Marxist assumption that capitalists seek only to reinvest and not to consume should not be taken for granted. While the big industrialists like Bill Gates or Steve Jobs have infinitely more wealth than they can consume directly, it is certainly not self-evident that most shareholders and business owners or pension funds accumulate capital for its own sake regardless of the rate of return. However, the book does make it more evident why government bailouts are occurring: too big to fail refers not so much to individual institutions but to the massive social repercussions of even a temporary systemic collapse. But in avoiding such collapse, governments end up subsidizing capitalists through the bailouts.
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LibraryThing member dazzyj
An unrepentant but not avowed Marxist, Harvey moves (too) briskly from an explanation of the 2008 financial crisis to a very broad ranging and hence rather Delphic and vague critique of capitalism over the centuries. Felt rather like I was back at university struggling through and not really
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understanding marx and Proudhon, but a refreshingly dissentient voice amid the hegemonic racket of modern neo-liberalism nonetheless.
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LibraryThing member wonderperson
A first class book that is an exposition of the true nature of destructive capitalism and why an alternative 'Party of indignation-globally' is needed.
My words do no justice to a well argued text that is rooted in sound economic and geographical analysis as geography 'places' economic growth with
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all it's consequences. This is mean't in a general way.
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LibraryThing member HadriantheBlind
The current financial crisis is one which has unusually lengthy and severe. As also seen in the Great Depression, there have been real questions of whether this is a deeply inherent structural reason behind depression, instead of this being a cyclical matter on a global scale.

David Harvey, noted
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critic of the current neoliberal system, goes after many of the current assumptions of the world system. Capital, he says, is the lifeblood of modern economies. It can contribute to levels of growth and true development, no question. Even Harvey admits this. But there are flaws within this system. But some financial and other extractive institutions have siphoned it away from working classes and towards derivatives and other non-physical sources in an attempt to create a continued sustainable growth. But growth cannot last forever. There must either be a new expansion, a creation of new financial markets, or austerity.

From 1945 to the mid 1970s, there was a period of rising wages and rising productivity. However, real wages began to decline from this period onwards, and continuing increases in supply outstripped demand. So this led to the new trend of financialization, of credit and loan, and that fell apart in 2006. Leverage ratios went too far, people borrowed too much on credit, and boom.

Political entities become subsumed to the all-powerful desire to recieve and control capital. Free trade restrictions, minimizing regulations, efficiency of production, etc.

So what is to be done? Harvey recognizes the benefits of capital, and recognizes the flaws of various alternatives. He recognizes several fields and areas which must be challenged - an astonishingly broad attack list which staggers the mind.

Although if one disagrees with Marxist economics, one might learn something from Harvey's trenchant analysis of what's wrong with the economic system. Capital and Greed endure.
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LibraryThing member roniweb
This is a great book for anyone still trying to figure out what the hell happened to our economy, why the banks failed and why the government bails out banks with taxpayer money but let's those same taxpayers lose their homes.
LibraryThing member csaavedra
If you still defend capitalism after reading this book, you're either a selfish prick, stupid, or both.


Original publication date



0199836841 / 9780199836840
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