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

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David Harvey has taught at City University of New York Graduate School since 2001, where he is currently Distinguished Professor of Anthropology and Geography.  Harvey has authored over twenty books, including The Enigma of Capital, and The Ways of the World, and Seventeen Contradictions and the End of Capitalism as well numerous articles and has hosted a vast number of lectures. 

Harvey, a Marxist scholar, explores themes within the political economy such as social injustice and the nature of the capitalist system.  His most recent work Marx, Capital and the Madness of Economic Reason is underpinned by one of Karl Marx’s most influential writings – Capital.  Harvey makes Capital applicable by contextualising it to the contemporary world by addressing the changes experienced around the world including technological, industrial and economic and its effects on the operation of capital.  Most importantly, the role that global capitalism plays in the crises we see arising in the 21st century, such as the 2007-2008 financial crisis.

The book begins with an explanation of the movement of capital as value in motion, comparing it to the water cycle.  Just as water takes on different forms during different phases, so does capital.  Harvey explains that, “It begins as money capital before taking on commodity form passing through production systems and emerging as new commodities to be sold (monetised) in the market and distributed in different forms to different factions of claimants (in the forms of wages, interest, rent, taxes, profits) before returning to the role of money capital once more.”  This directly correlates with Marx’s definition of capital as value in motion.  This value, according to Marx, is the labour time spent in producing goods and services for markets (socially necessary labour time) and by its very nature is intangible.  In order to quantify this value, we use money as a representation thereof. 

Because value is based on this socially necessary labour time or average time, it is not an accurate depiction of the actual labour time and thus exploits the labourer.  For this reason, Harvey explains the dual character of capitalist production.  Besides producing commodities for use, capitalists are only interested in making a profit, and therefore appropriate any surplus value produced by labourers as profit – in other words, the labourers do not receive this surplus value in the form of a wage. 

We often see this play out in our own country, where we see CEOs like Whitey Basson receiving bonuses amounting to R100 million while a regular Shoprite employee receives a minimum wage that often doesn’t even see to basic needs. 

This would result in what Harvey terms “alienation”. The labourer who creates value is separated (alienated) from access to the means of production, from command over the labour process, the product and the surplus value.  Whatever surplus value that these employees earn for their companies is expropriated in the form of profit, for the benefit of the capitalists only.  This makes one understand why modern capitalism is best described as inhumane. 

Harvey goes on to highlight how one financial crisis born in the US in 2007, had a spiralling effect on the global economy, thanks to capitalism.  With the crash of 2007-2008, China’s export market was highly compromised resulting in massive job losses.  In an effort to stave this off, massive debt-financed infrastructure development projects were encouraged by the state.   By 2015, this construction boom came to a halt, leaving China with massive steel reserves which it began dumping in the foreign market, at the expense of many domestic markets, including South Africa which simply cannot compete with the Chinese market.  Harvey laments that this metamorphosis of the global economy is not a good idea, nor is it wanted or needed but it is the best way to stave off depression and devaluation. 

In conclusion, Harvey states that whilst capital is not the sole cause for our current ills, it would be an offence not to stress the role that its workings, circulation and accumulation play in perpetuating crises. 

Whilst Harvey aims to make this read accessible to all by using simple terms and providing definitions for key concepts, it is sometimes difficult to wade through the density of the text which is quite wordy.  Although it is aimed for a general audience, a layman such as myself would most certainly find this book more enriching if Harvey’s previous works are explored prior to reading Marx, Capital and the Madness of Economic Reasons.  Nevertheless the book still remains highly valuable in trying to provide insight to contemporary economic crises facing the world and the role that capitalism plays in it.  Free-market capitalism bathed in madness will never bring about the utopia of increased standards of living for all. 

This book review was compiled by Zaahedah Vally. She is an educationalist in the making, pursuing a Masters in Development and Economics at the Wits School of Governance, whilst fulfilling the role of research officer at JET Education Services.