Crisis, Rent and David Harvey

Submitted by quint on 2 May, 2008 - 18:18.

I drunkenly accosted David Harvey at a wine and cheese reception after a talk he gave last night and was asking him about whether or not he thought that some portion of urban building site rent could be attributed to the low organic composition of capital of the building industry. Politically the man's a social democrat, and just wants things like "free education" (that is state-funded as opposed to privately funded), but I am still trying to figure out if he has anything interesting to say about more abstract political-economy issues. As we talked, he basically said that he doesn't really believe that the building industry necessarily has a low organic composition, or that the whole idea of absolute rent is useful at all. Or even that the tendency of the rise of organic composition exists, as machines tend to just get cheaper. Unfortunately I have not read enough of Harvey's stuff, and I was pretty drunk, so I didn't exactly follow his entire argument... or remember it all.

Anyway, I'm wondering if people have read Harvey's crisis theory and what you think of it. To what extent is it a rejection of Marx's theory. Does it make sense? What about the rise in organic composition of capital? And also what's the difference between "organic composition" and "value composition"... which I vaguely remember being important.

At the moment I am very unconvinced by the concept of "accumulation by dispossession", but would like to hear what people have to say.

3 May, 2008 - 21:56

not sure about the organic composition vs. value composition thing - but I found the accumulation by dispossession concept helpful - what didn't you find convincing? as far as I could make out it was just arguing that the process of dispossessing people of their means of a livelihood (and therefore creating a pool of people who have no choice but to sell their labour power) is ongoing and not just something that occurs at the beginning of capitalism - due to the tendency for crises of over-accumulation (which, if I remember rightly, aren't to do with organic composition or value composition but rather just to do with the instability that comes from having a systemt that requires constant expansion at the same time as competition is limiting the opportunities for that expansion) - this all seems pretty straightforward, but nevertheless quite helpful, no?

3 May, 2008 - 22:20

I tend to agree with john's view above. "Accumulation through dispossession" is an expansion of the concept of primitive accumulation. Harvey uses it to argue that processes of accumulation outside of the "normal" circuits of capitalist accumulation continue alongside "normal" capitalist processes and in fact greatly assist them.

That is, while events like the expropriation of peasants were vital to the birth of capitalism (primitive accumulation) similar and analogous events continue alongside capitalist development and interact with and assist "normal" capital accumulation. This seems to me to be a very useful concept.

As for Harvey being a "social democrat" because he is in favour of free education, I don't think that this is a remotely reasonable assessment.

4 May, 2008 - 03:08

"Accumulation by dispossession" seems to be a catch all phrase that Harvey uses to describe a lot of different things that seem to me should be looked at in their own right: primitive accumulation, commodification, state violence, financialization, cheating, etc...

Primitive accumulation (or "original accumulation") is a concept Marx uses to explain how capitalism gets started, as the circuits of capital start and end in the same place: with a dispossessed working class and a capitalist class. He's not arguing that brutality, or that cheating or commodification only exist before capitalism starts. And of course throughout the life of capitalism there are constant tendencies of proletarianization (and embourgoisement).

The problem with accumulation by cheating, is who is being cheated? If it's one capitalist cheating another (which it mostly seems like in Harvey) then it is just a different way of dividing up surplus value. It isn't any sort of aid or fix for capitalism as a whole. If it's not other capitalists, is it outside of capitalism? (I believe Harvey specifically says "no"). Is it then the dispossession of the working class?

I definitely don't think that privatisation of the university is like the enclosure of the commons. If you want to talk about taking away things like free education or health care for the working class, then some sort of concept like the "social wage" seems to me more appropriate. But then the argument just becomes: when capitalism is in crisis, it puts more pressure on the workers, which is much less than the argument he wants to make.

Anyway, that's why i am very unconvinced by the idea of "accumulation by dispossession", but I haven't actually read enough harvey so I'm interested in what other people have to say... I still maintain he's a social democrat, (his latest book contains an appeal for a "new new deal") if i'm not mistaken, but I'm not looking at him for political proposals. If people want to debate free education or that sort of stuff, then lets start another thread for that. I'm most interested in his ideas about rent, which relates to his ideas on crisis and organic composition of capital.

4 May, 2008 - 08:13

I agree with John and IA. It is a useful concept to describe processes that are similar to the historical specific process that Marx referred to as primitive/original accumulation. Among other things what Harvey is referring to is stuff related to intellectual property (gene pool, seeds, information etc.). If I remember correctly I also think he argues that extending credit is also part of accumulation by disposession. Privatization of public services are also part of this process.

In any case if you read The New Imperialism you will understand that concept. It is a very easy read and the relevant part is not that long at all.

As for Harvey being a social democrat. I dunno. It is likely. I've read four of his books and while I enjoy them for their analyses I am not that sure of his political program. In Spaces of Hope he does come off as a reformist, albeit one with radical proposals.

4 May, 2008 - 17:35

To quickly address the "organic composition" question:

Technical composition of capital = the ratio of means of production to the mass of labor employed.
Value composition of capital = the ratio of constant to variable capital.
Organic composition of capital = the value composition of capital "in so far as it is determined by its technical composition and mirrors the changes in the latter" (Marx).

So, for example, a fall in the value of labor power not accompanied by a change in the technical composition of capital would represent a rise in the value composition, but not the organic composition. These concepts are addressed in Mario Cogoy, "The Falling Rate of Profit and the Theory of Accumulation: A Reply to Paul Sweezy." International Journal of Political Economy, Summer 1987.

6 May, 2008 - 03:18

I agree with Quint's assessment of Harvey and specifically of the concept of "accumulation by dispossession."

I explain below:

john wrote:
I found the accumulation by dispossession concept helpful - what didn't you find convincing? as far as I could make out it was just arguing that the process of dispossessing people of their means of a livelihood (and therefore creating a pool of people who have no choice but to sell their labour power) is ongoing and not just something that occurs at the beginning of capitalism

This is simply a definitional issue. For Marx, the definition of "primitive accumulation" is the historical accumulation that created the prerequisites of capitalist accumulation. Marx shows in Capital, Vol. 1 that capital presupposes a class of dispossessed laborers, on the one hand, and a class that owns the means of production, on the other. By combining those two factors of production (working class and means of production), surplus-value is produced, which in turn is accumulated as capital. So you have a "spiralling" process, as Marx calls it. The working class produces surplus-value which is accumulated as capital, which puts the working class to work and dispossesses more laborers (through the general reserve army of labor caused by the rising organic composition of capital), who then produce more surplus-value, which is then accumulated as more capital, and so forth. So capital presupposes wage-labor and wage-labor presupposes capital.

Since humanity did not come into existence with wage-laborers and capitalists, these two classes must be the product of some sort of history. One cannot invoke either wage-labor or capital to explain that initial separation, since the two classes presuppose each other, and if you invoke one then you invoke the other, which is to say you are back to the thing you are trying to explain (how the two classes of people originally became classes). So Marx attempts to describe the historical process of the dispossession of labor, on the one hand, and the concentration of the means of production into the hands of the capitalist class on the other. This must have occurred before capitalism, by definition. The fact that this process occurred with violence, brute force, etc., is, on the other hand, an empirical issue, and not a definitional one. In other words, "primitive accumulation" does not mean the same thing as "violence." That primitive accumulation occurred through a violent process is a fact, not a definition. (Like, "all bachelors are happy" is an empirical claim, whereas "all bachelors are unmarried men" is a definitional statement. The former can actually be true or false, whereas the latter states a definition.)

When Harvey says that "accumulation by dispossession" occurs both at the beginning of capitalism and as a part of capitalism's ongoing history, he is simply using the phrase differently. (You might be thinking,"Well, 'accumulation by dispossession' is a different phrase from 'primitive accumulation' " but Harvey has explicitly said that he thinks the terms are the same. So according to Harvey his "accumulation by dispossession" = Marx's "primitive accumulation". I am trying to show that this is not the case.)

For Marx, "primitive accumulation" is defined as the initial separation of labor from the means of production (and the corresponding separation of society into two classes). Hence it would make no sense to say, using Marx's definition, that the beginning of capitalism (i.e. primitive accumulation) occurs both at the beginning of capitalism and as a part of capitalism's ongoing history. That would be nonsensical. So when Harvey claims that "accumulation by definition" ("primitive accumulation," according to him) occurs both at the beginning of capitalism and as a part of capitalism's ongoing history, we have to conclude that he is using a different definition of "accumulation by dispossession" ("primitive accumulation") than Marx.

Using a different definition is okay. But Harvey makes it look as if he has made an argument. (John takes it that way, for example, as do most people who read Harvey. John says that Harvey is "arguing [my emphasis] that the process of dispossessing people of their means of a livelihood is ongoing and not just something that occurs at the beginining of capitalism".) Whereas he has really just redefined "accumulation by dispossesion" ("primitive accumulation") to mean, loosely, "the process of dispossessing people." And then once you have defined the phrase in this way, it is possible to say "Look, the separation of producers from the means of production is still occurring today!"

Obviously that cannot have been Marx's definition because if all Marx meant by "primitive accumulation" was the process of dispossessing people, then he wouldn't have distinguished between normal accumulation and primitive accumulation. Marx spent a lot of time discussing the economic means by which people are dispossessed by means of the normal functioning of the capitalist system. If Marx used the phrase how Harvey did, he would've said that all accumulation was primitive accumulation. (Not only this, but actually read the first page of the section on primitive accumulation. My summary of Marx's concept of primitive accumulation is confirmed very clearly and explicitly. http://marxists.org/archive/marx/works/1867-c1/ch26.htm )

So Harvey's "argument" is similar to this sort of "argument". Marx says that chairs are used for people to sit on. Harvey says, "Aha! You are wrong! I was the chair at my weekly meeting last Sunday, and I was never sat on."

So why does Harvey perpetuate this sort of confusion? Because he's an academic and 90% of academia is the result of such confusion.

I already went into the bulk of this stuff in the old thread on Loren Goldner's understanding of "primitive accumulation", which is distinct from Harvey's but is the result of the same general sort of confusion.

6 May, 2008 - 06:10

As for the value composition vs. organic composition of capital stuff.

It's really very confusing. Marx never defined the difference very clearly. Most of the time he seems to have used the two interchangeably. There is the passage that David quoted from Vol. 1, which distinguishes between them but allows for a couple of different distinctions and it's not clear which one he was getting at, and then there's a random passage in Vol. 3 of Capital (maybe in the section on rent?) which I was never able to make sense out of. (Which doesn't necessarily meant that it doesn't make sense -- just that I couldn't do it.)

The way Cogoy distinguished between the two is the way that Grossman distinguished them. I wouldn't be surprised if this definition had already been used before Grossman but I'm not aware of anything in specific.

Ben Fine and Alfredo Saad-Filho defined the terms in a different way (in "Rereading Capital" and in subsequent works), which is used by some other authors as well (Harvey being one of them, if I remember correctly).

Okay, I just went through the math and they actually end up with the same figures even though the definitions are worded very differently. I guess you really do learn something new every day.

Basically the organic composition of capital (OCC) is the value composition of capital (VCC) at old prices. (The "old" prices being whenever you decide to start looking.)

So say you have a commodity produced (during year 1) using $100 constant capital and $50 variable capital, producing $50 surplus-value.

During year 2, the price of the elements of constant capital has doubled. (Like during an oil price spike, or whatever.) The technical production process itself remains exactly the same. So now you have the same physical production process but the constant capital used is $200, while the variable capital and surplus-value remain the same ($50 each).

The value composition of capital and the organic composition of capital in Year 1 are $100/$50, or 2.

In year 2, however, we don't change the numbers of the organic composition of capital because the organic composition of capital is the value composition of capital "in so far as it is determined by its technical composition and mirrors the changes in the latter", and the technical composition of capital (TCC) has not changed. So the OCC remains the same. (Namely, 2.) The VCC, however, has changed, to $200/$50, or 4. (Because the VCC is just the ratio of constant capital to variable capital in whatever period is being looked at.)

So you can say that the OCC is just the VCC at the old prices.

I had always thought that there was a difference between the Grossman/Cogoy interpretation and the Fine/Saad-Filho one, but now that I actually put some numbers on it I don't think so.

That all said, I think that the distinction is totally irrelevant to Marx's theory of rent (which doesn't mean that it couldn't have some relevance in the real world, although I can't see how it would matter), although I know Fine has made a big deal of it (I never really got what he was on about, to be honest) and I hear Harvey has too.