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ECONOMY

'The Neoliberal Project is Alive

But Has Lost Its Legitimacy':
David Harvey
In an interview with The Wire, the well-known Marxist scholar talks
about the surge of populist and right-wing politics and the future of
neoliberalism, capitalism and technology.
 David Harvey. Credit: Robert Crc - Subversive festival media, FAL.

Jipson John and Jitheesh P.M.

5.4K
interactions

ECONOMҮ EDUCATION 09/FEB/2019

British scholar David Harvey is one of the most renowned Marxist scholars in
the world today. His course on Karl Marx’s Capital is highly popular and has
even been turned into a series on YouTube. Harvey is known for his support of
student activism, community and labour movements.

In an interview with The Wire, he talks about the problems arising out of the neo-
liberal project, the resulting surge of populist politics and right-wing movements.
He also talks about the relevance of Marx’s critique of capitalism in the present
context and the threat to labour from automation.

The interview has been edited slightly for style and clarity.

Could you trace the origin of neo-liberalism? What were the structural reasons
for its emergence?

The idealist interpretation of liberalism rests on a utopian vision of a world of

individual freedom and liberty for all guaranteed by an economy based on
private property rights, self-regulating free markets and free trade, designed to
foster technological progress and rising labour productivity to satisfy the wants
and needs of all.

In liberal theory, the role of the state is minimal (a “night-watchman” state with
laissez faire policies). In neo-liberalism it is accepted that the state play an active
role in promoting technological changes and endless capital accumulation
through the promotion of commodification and monetisation of everything along
with the formation of powerful institutions (such as Central Banks and the
International Monetary Fund) and the rebuilding of mental conceptions of the
world in favor of neoliberal freedoms.

These liberal and neo-liberal utopian visions have long been critiqued as
inadequate because as Marx so clearly shows in practice, they both support a
world in which the rich get richer at the expense of the well-being and exploited
labour of the mass of the population.

Keynesian policies and the redistributive state after 1945 proposed an alternative
utopian vision that rested on the increasing empowerment of the working classes
without challenging the power of private property. In the 1970s, a counter-
revolutionary movement arose in Europe and the Americas organised by the
large corporations and the capitalist classes to overthrow the Keynesian system
and to replace it with a neo-liberal model (along with all its ideological baggage)
as a means for the capitalist class to recuperate its waning economic strength and
its fading political power.

This is what [Margaret] Thatcher, [Ronald] Reagan, [Augusto] Pinochet, the

Argentinian generals etc did throughout the 1980s. It is continuing today. The
result has been rising economic and political inequality and increasing
environmental degradation across the globe.

Cutouts of Ronald Reagan and Margaret Thatcher. Credit: Flickr/Andrew CC BY NC ND 2.0

You describe accumulation by dispossession as one of the most important

characteristics of neo- liberalism. How does it work and what are its structural
consequences?

Capital can accumulate in two ways. Labour can be exploited in production to

create the surplus value that lies at the basis of the profit appropriated by capital.
Capital can also accumulate by thievery, robbery, usury, commercial cheating
and scams of all sorts.

In the theory of primitive accumulation, Marx points out how so much of the
original accumulation of capital was based on such practices. These practices
continue but have now been supplemented by a mass of new strategies.

In the foreclosure crisis in the USA of 2007-8 maybe 6-7 million people lost the
asset values of their homes while Wall Street bonuses soared. Speculation in
asset values (land and property for example) provides a non-productive avenue
for accumulation.

Also Read: The Failed National Improvement Scheme That Was

Demonetisation

Bankruptcy moves by major corporations (e.g. airlines) deprives employees of

their pension and heath care rights. Monopoly pricing in pharmaceuticals, in
telecommunications, in health care insurance in the USA provide lucrative
avenues for profiteering. Increasing extraction of wealth through indebtedness is
evident. Rentier extractions based on accumulation by dispossession (e.g.
acquiring land or mineral resources illegally or at cut rates) have become more
common because the rising mass of global capital is finding increasing difficulty
in procuring productive uses for surplus capital.

Even during Marx’s time, there were several critiques of capitalism. How do you
differentiate Marx’s critique from these strands?

Many of the critiques of capitalism were based on moral categories (evil and
greedy capitalists versus impoverished and badly treated workers or more
recently, environmentally callous capitalists versus the ecologists). Marx’s
critique is systemic. Moral and ethical objections remain, but Marx treats them
as secondary to the systemic problem of why and how to replace the capitalist
mode of production and its disastrous laws of motion by some other way of
meeting human wants and needs.

Do you think capitalism has reached a dead end, especially in context of the
2008 crisis? Can capital recover?
Capital is not at a dead end. The neo-liberal project is alive and well. Jair
Bolsanaro, recently elected in Brazil, proposes to repeat what Pinochet did in
Chile after 1973.

The problem is that neo-liberalism no longer commands the consent of the mass
of the population. It has lost its legitimacy. I already pointed out in The Brief
History of Neoliberalism (2005) that neo-liberalism could not survive without
entering into an alliance with state authoritarianism. It now is moving towards an
alliance with neo-fascism, because as we see from all the protest movements
around the world, everyone now sees neo-liberalism is about lining the pockets
of the rich at the expense of the people (this was not so evident in the 1980s and
early 1990s).

Marx believed that capitalism would die out due to its internal contradictions.
You don’t agree with this. Why?

Marx sometimes makes it seem as if capital is destined to self-destruct. But in

most instances, he looks on crises as moments of reconstruction for capital rather
than of collapse. “[C]rises are never more than momentary, violent solutions for
the existing contradictions, violent eruptions that re-establish the balance that has
been disturbed,” as he says in Volume 3 of Capital.

Where he does see capital ending, it is because of a class movement. I believe

my position is in agreement with Marx. Capitalism will not end of its own
accord. It will have to be pushed, overthrown, abolished. I disagree with those
who think all we have to do is wait for it to self-destruct. That is not, in my view,
Marx’s position.

You consistently argue that Marx talked not just about value at the production
level but also the arena of realisation. Could you elaborate this in the present
context?

In the first chapter of Capital, Marx recognises that value is created in

production and realised in the market. If there is no market, then there is no
value. So value is dependent upon the contradictory unity between production
and realisation. Realisation depends upon the wants, needs and desires of a
population backed by the ability to pay.
The history of capitalism has been about the production of new wants, needs and
desires (e.g. consumerism of various sorts and the production of daily forms of
life to which we must conform in order to live reasonably such as automobiles
and suburban living). I now teach an audience where everyone has a cell phone
(which did not exist twenty years ago). To live in most US cities, you need an
automobile which pollutes.

Marxists have paid a lot of attention to production, but have neglected issues of
realisation. In my view, it is the contradictory unity of the two (which Marx
mentions as crucial but does not elaborate upon) that should be the focus of our
attention. Extraction and appropriation of value (often via dispossession) at the
point of realisation is a political focus of struggle as are the qualities of daily life.

Marx recognised that value is created in production and realised in the market. Credit: Wikimedia
Commons

German socio-economist Wolfgang Streeck has identified five problems of

capitalism in his How will Capitalism End. Instead, you identified 17
contradictions, not problems, of contemporary capitalism. What is the difference
between problems and contradictions regarding the crisis of capitalism?
Problems have solutions. Contradictions do not: they always remain latent. They
can only be managed and as Marx points out, crises arise when antagonisms are
heightened into absolute contradictions. The contradiction between productive
forces and social relations cannot be solved. It will always be with us. The
contradiction between production and realisation will always be with us, etc.

I listed seventeen contradictions in order to emphasise that crises can arise in

many different ways and that we need to develop a theory of crises which
understands their multiple sources so we can get away from the “single bullet”
theory that too often haunts Marxist thinking.

Under capitalism, automation causes significant job loss all over the world. Even
the World Bank has raised concerns regarding automation. What is the challenge
of automation under capitalism? What effect will it have on working class
politics?

The parallel with automation in manufacturing and AI in services is useful. In

manufacturing, labour was disempowered by tech change. Plus, offshoring with
tech change is much more important. But manufacturing did not disappear. It
continued to expand in different ways (e.g. fast food restaurants that produce
hamburgers rather than factories that produce automobiles).

We will see much the same thing in services (we check ourselves in or out in
supermarkets and airlines now). The left lost the battle against automation in
manufacturing and is in danger of repeating its dismal record in services. We
should welcome AI in services and promote it, but try to find a path towards a
socialist alternative. AI will create new jobs as well as displace some. We need
to adapt to that.

What do you mean by ‘new imperialism’? What is its basic characteristic? How
is it qualitatively different from classical imperialism?

I called it “the new imperiliasm” since it was an explicit theory advanced by the
neo-conservatives in the US in the run up to the Iraq war. I wanted to critique
that, not to get back to Lenin’s theory, but to point out that the neo-liberal world
order was sucking out value in all kinds of ways from all manner of places (e.g.
through commodity chains). This was, of course, the topic of Brief History of
Neoliberalism, which followed on from The New Imperialism. The two books
should be read together.

Also Read: A Non-Marxist’s Gratitude for Karl Marx

There is an argument and belief, even among left intellectuals in the West, that
the global south delinking from globalisation will result in a return to pre-
modernity. What is your take on this? What should constitute the development
agenda of the global south?

I think the idea of a total delinking would be disastrous. But I think selective
delinking and the search for autonomous regionalities though bioregionalism is a
good idea. The idea is to build alternative geographies of interrelations, but the
global perspective (e.g. on global warming) is critical.

Study on cities is one of your areas of interest. You analyse cities as spaces of
surplus appropriation. How does this work, especially in the context of neo-
liberal cities? What is the importance of the right to city?

Urbanisation and capital accumulation go hand in hand and that is one of the
aspects of Marxist thought that has been historically underdeveloped. Now half
of the world’s populations live in cities. So questions of daily life in
environments constructed for purposes of capital accumulation is a big issue and
a source of contradiction and conflict. This is emphasised politically by the
pursuit of the right to the city: e.g. class struggle in and over the qualities of
urban life. Many of the major social movements in recent decades have been
over such questions (e.g Gezi Park in Istanbul).

Your condition of post-modernity looks into its material base. On a philosophical

level, what is the larger influence of post-modernism on social life? What about
the idea of post-truth?

Like many other broad-based, and to some degree incoherent cultural

movements, the post-modern turn created positive openings along with
absurdities and retrogressive impacts. I liked the fact that it opened up
perspectivism and emphasized space, but I could see no reason why this would
be antagonistic to Marxism, since in my own work, I emphasize how to integrate
space, geographies and perspectivism into Marxism.

At the end of the day, as Eagleton pointed out at the time, the movement went
too far in seeing “no difference between truth, authority and rhetorical
seductiveness” such that “he who has the smoothest tongue and the raciest story
has the power.” It “junked history, refused argumentation, aestheticized politics
and staked all on the charisma of those who told the stories.” Donald Trump is a
product of this post-modern excess.

In the initial stage, we thought internet as the great liberating force. But over the
course of time, big monopolies emerged, profiting from the digital space. Cases
like Cambridge Analytica reveal how personal data is being manipulated by
these monopolies. What is the danger it poses? How to liberate internet as a
public utility?

There is no such thing as a good and emancipatory technology that cannot be co-
opted and perverted into a power of capital. And so it is in this case.

How do you locate the emergence of Donald Trump? How can the rise of
populism in different parts of the world be addressed?

He is a post-modern president of universal alienation.

 Donald Trump is a “post-modern president of universal alienation”. Credit: REUTERS/Kevin
Lamarque

Does the growing popularity of Bernie Sanders and Jermy Corbyn in the US and
UK elections respectively make you hopeful? Were they just election
mobilisations? What should be the form and content of present day socialist
politics?

There is a big difference between mobilisation and organisation. Only now, we

are beginning to see elements on the left that see that building an organisation is
crucial to gaining and holding political power.

In the British case, the rise of momentum alongside a resurgence of party

building provides hopeful signs, as does the manifesto for bringing key elements
of the economy into the public domain (which is different from nationalisation)
as a political strategy. But the problem is that many in the parliamentary Labour
party are as yet unsupportive. As yet, we do not see enough of this sort of thing
in the US.

Also Read: Of Flags and Anthems: the Evolving Politics of Right-Wing

Patriotism

There is surge of right-wing politics across the world. The latest is example is the
election of Jair Bolsonaro in Brazil. Is the world moving towards fascism,
similar to the 1930s and 40s? What is the political economy behind the sudden
rise of ultra right-wing politicians like Bolsonaro in a Latin American country
which was famous for left politics?

Alienation produced by neo-liberalism managed by the Workers Party, coupled

with widespread corruption, produces a mass base prone to be exploited by neo-
fascist delusions. The left failed to organise and now has to do so in the face of
repressions.

Your course on Marx and Marxism has been very popular worldwide. How
relevant is Marxism today? What do you think are Marx’s contributions?
Marx wrote the beginnings of a stunningly perceptive analysis of how capital
works as a mode of production. Capital was developed in Marx’s time in only
one minor part of the world. But it is now everywhere, so Marx’s analysis is far
more relevant now than it was in his time. Everyone who studies Marx carefully
recognises this, which in some ways, explains why political power is so
desperate to repress this mode of thought.

There exist significant despair and dissatisfaction among the common masses
under neo-liberal capitalism. Where does the hope for a better world lie? What
sustains your hope?

In spite of all the attempts at repression, people are increasingly seeing that there
is something wrong with not only neo-liberalism, but also capitalism. It plainly
does not and cannot deliver on it promises and the need for some other form of
political-economic organisation is becoming ever more obvious.

Jipson John and Jitheesh P.M. are fellows at Tricontinental: Institute for Social
Research and contribute to various national and international publications
including the Indian Express, The Wire, Frontline and Monthly Review. The
writers can be reached at jipsonjohn10@gmail.com and
jitheeshpm91@gmail.com.

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DIPLOMACY
 India Hikes Tariffs on all
Pakistani Imports to 200%
The latest move is likely to grind direct bilateral trade to a halt, though
Indian exporters, who currently sell nearly $2 billion worth of goods to
Pakistan, might end up suffering more than Pakistan's exporters, whose
trade volume is 25% of that figure.

India-Pakistan trade is likely to grind to halt now with the imposition of an across the board tariff rate of 200% on Pakistani
exports to India. Representational image: Reuters

The Wire Staff

DIPLOMACҮ TRADE 17/FEB/2019

New Delhi: Hot on the heels of the withdrawal of most favoured nation status for
Pakistan, India has hiked tariffs on all imports from its western neighbour to
200% with immediate effect, finance minister Arun Jaitley said on Saturday
evening.

Arun Jaitley
@arunjaitley

India has withdrawn MFN status to Pakistan after the Pulwama

incident. Upon withdrawal, basic customs duty on all goods
exported from Pakistan to India has been raised to 200% with
immediate effect. #Pulwama
50.7K 8:45 AM - Feb 16, 2019

19.4K people are talking about this

The decision will almost certainly deal a death blow to Pakistan’s exports to
India, which currently stand at around US$490 million.

However, with Indian exports to Pakistan valued at just under $2 billion, any
retaliatory tariff hike from Islamabad will also adversely impact all Indian
companies currently selling products on the Pakistani market.

India’s Trade with Pakistan (US$ million). Source: Directorate General of Foreign Trade,
Ministry of Commerce and Industry, Government of India. From Nisha Taneja et al, ”Emerging
Trends in India-Pakistan Trade, ICRIER Working Paper, 2018.
Cotton, organic chemicals and plastics are India’s major export items while
edible nuts, plastering materials and mineral fuels account for top imports.

As The Wire reported on the day India withdrew Pakistan’s MFN status, one
fallout of New Delhi’s latest decision could be that ‘informal’ or ‘diverted’ trade
between both countries increases.

Trade that is routed between India and Pakistan through third countries such as
the United Arab Emirates or Singapore is estimated to double existing formal
and direct trade at $4.71 billion.

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GOVERNMENT

Expert Committee Fixes Need-

Based National Minimum Wage
at Rs 375 Per Day
The report has recommended different national minimum wages for
different geographical regions of the country to suit the local realities.
 A labourer in Kolkata. Representative image. Credit: REUTERS/Rupak De Chowdhuri/Files

PTI

GOVERNMENT LABOUR URBAN 16/FEB/2019

New Delhi: An expert committee has recommended fixing the need-based

national minimum wage at Rs 375 per day or Rs 9,750 per month as of July
2018, irrespective of sectors, skills, occupations and rural-urban locations for a
family comprising 3.6 consumption unit, an official statement said on Thursday.

The Ministry of Labour and Employment had constituted an expert committee on

January 17, 2017, under the chairmanship of Anoop Satpathy and fellow, V V
Giri National Labour Institute (VVGNLI), to review and recommend a
methodology for fixation of National Minimum Wage (NMW).

The expert committee has submitted its report on ‘determining the methodology
for fixation of the NMW’ to the government through the secretary, Ministry of
Labour and Employment on Thursday, said the Ministry of Labour and
Employment.

“…the report has recommended to fix the need-based national minimum wage

for India at Rs 375 per day or Rs 9,750 per month as of July 2018, irrespective of
sectors, skills, occupations and rural-urban locations for a family comprising 3.6
consumption unit. It has also recommended introducing an additional house rent
allowance (city compensatory allowance), averaging up to Rs 55 per day, ie., Rs
1,430 per month for urban workers over and above the NMW,” the ministry said
in a statement.

Apart from proposing the level of a single national minimum wage at an all-India
level, the ministry said, the report has also estimated and recommended different
national minimum wages for different geographical regions of the country to suit
the local realities and as per socio-economic and labour market contexts.

For the purpose of estimating NMW at regional levels, it has grouped the states
into five regions based on a composite index and has recommended region-
specific NMW.

Listing Assam, Bihar, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh, and
West Bengal in group I, the committee has recommended a minimum wage of Rs
342 per day or Rs 8,892 per month for these states.

For Andhra Pradesh, Telangana, Chhattisgarh, Rajasthan, Jammu and Kashmir,

and Uttarakhand, Rs 380 per day or Rs 9,880 per month.

For Gujarat, Karnataka, Kerala, Maharashtra, and Tamil Nadu Rs 414 per day or
Rs 10,764 per month.

In region IV Delhi, Goa, Haryana, Himachal Pradesh, and Punjab Rs 447 per day
or Rs 11,622 per month.
For Arunachal Pradesh, Manipur, Meghalaya, Nagaland, Sikkim, Mizoram and
Tripura Rs 386 per day or Rs 10, 036 per month.

The report has undertaken a rigorous and meticulous analysis and has generated
a large amount of evidence relating to changes in the demographic structure,
consumption pattern and nutritional intakes, the composition of food baskets and
the relative importance of non-food consumption items to address the realities in
the Indian context by using official data made available by the National Sample
Survey Office (NSSO), the ministry said.

The report has now been placed on the ministry’s website, for facilitating the
process of consultation and dialogue among social partners and stakeholders and
seeking necessary approval of methodology from tripartite bodies, it added.

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