This great animation of one of David Harvey’s lectures has been making the internet rounds in the past few days.
Explaining the current crisis from a Marxist perspective, Harvey does a great job of listing the various other ways it has been accounted for: human nature/psychologism; institutional failure; bad economic theory; cultural explanations; and a failure of policy. None of these explanations take into account what Marx called the internal contradictions of capitalism: that the need for a constant expansion of markets, coupled with the pressure of keeping employee wages down, would lead to a falling rate of profit. Havey also makes the insightful point that the crises of capitalism are never resolved but simply shifted around geographically (Greece, Spain), thereby perpetuating a different kind of crisis: one of sovereign debt.
My only complaint is that he doesn’t delve deeper into this problem. By about the 8:30 mark of the video, after stating that capital accumulation requires getting over barrier points like resolving matters of finance and investment, Harvey points out that this ultimately results in the increased influence of financiers, who are needed to fund the expansion of capitalist enterprises. As many scholars have pointed out, the economic boom of the 1990s was premised almost entirely on wealth created through financial manipulation, just as the domestic manufacturing sector was suffering and jobs were exported. But if this is the heart of the problem, then it requires a more deeper structural analysis of how and why this shift from manufacturing to finance occurred, also involving questions of geopolitics and technological development. Pointing to the power of financiers alone can’t account for this transition, and I think risks falling back into ‘institutional failure’ explanation – namely that the financial ingenuity and the short-term profit motive of Wall Street was able to circumvent institutional regulations meant to prevent such a crisis from happening. This was part of it, to be certain; for example, see Jeff Madrick’s essay “At the Heart of the Crash” in the New York Review. But if crisis is a constant feature of capitalist economies, then there has to be more to the explanation than just that.