Capitalism, the Stimulus Package, and the Intellectual Blogosphere

It was with some excitement that I noticed David Harvey decided to post his class lectures openly on his own website a few months back. I was such a fanboy I even created an aggregated Reading capital site (which has been recently overhauled) that would allow anyone who was discussing this lecture to share their RSS feeds more centrally. Hell, I even installed an integrated forum for discussion ’cause I’m that good 🙂

But what is even more exciting for me is the fact that professor Harvey is openly publishing his talks, such as “The Enigma of Capital” and “A Financial Katrina”, both of which trace his understanding of our current financial crisis. More recently, he has been blogging his thoughts about why the recently passed stimulus package is bound to fail. Harvey examines why the idea of a stimulus package in the US, inline with a Keynesian approach to recovery, is destined to fail. The analysis is unabashedly Marxist—which I love—and is rooted in a larger, conceptual consideration of geopolitical shifts of power in an attempt to both imagine and map the changing landscape and scale of capital in our moment. The discussion focuses specifically on China as an emerging hegemonic power, discussing why, in fact, it may very well be the most likely candidate for a real Keynesian stimulus package that could radically shifts the poles of geopolitical power. It is a fascinating reading of the larger geographic, national, and political factors that inform our current crisis.

While reading the post, I found Harvey’s observations about the different tenor of issues regarding state-controlled banks and redistributing resources in China (both of which have created a violent reaction in the US during this crisis as a kind of “dirty socialism”) quite telling and resonant:

In China, on the other hand, both the economic and political conditions exist where a full-fledged Keynesian solution would indeed be possible and where there are abundant signs that this path will likely be followed…the Chinese have the economic wherewithal to engage in a massive deficit-finance program and have a centralized state- financial architecture to administer that program effectively if they care to use it. The banks, which were long state owned, may have been nominally privatized to satisfy WTO requirements and to lure in foreign capital and expertise, but they can still easily be bent to central state will whereas in the United States even the vaguest hint of state direction let alone nationalization creates a political furor.

There is likewise absolutely no ideological barrier to redistributing economic largesse to the neediest sectors of society though there may be some vested interests of wealthier party members and an emergent capitalist class to be overcome. The charge that this would amount to “socialism” or even worse to “communism” would simply be greeted with amusement in China. But in China the emergence of mass unemployment (at last report there were thought to be some 20 million unemployed as a result of the slow-down) and signs of widespread and rapidly escalating social unrest will almost certainly push the Communist Party to massive redistributions whether they are ideologically concerned to do so or not.

How wild that the unlikely marriage of communism and capitalism that so many have remarked on in China over the last twenty years may be the reason for its ultimate emergence as the dominant world power after this crisis! There is so much intelligent re-mapping of how we look at the world in some larger sense in this post that I couldn’t begin to do it justice.

And it has led to reactions from scholars far better equipped than a lowly instructional technologist to take issue with Harvey’s argument. Two days ago, Berkeley professor and [[Neoliberal]] economist Brad DeLong responded vehemently to Harvey’s post, and after a few tired attacks on Harvey for being unreadable, he responds to the point that the US can, indeed, borrow as much money as it wants because [[John Hicks]] told as much. Now, I’m out of my depth here, and I haven’t read John Hicks, additionally I’m not an economist (nor would I ever want to be) and when I see DeLong discussing interest rates in response to Harvey’s attempt at a conceptual framing of larger shifts in world power—there is no doubt in my mind who is earning their salary as a scholar. Therein lies my bias for philosophical and politically relevant thought. With that said, I’m happy DeLong responded as he did because it led to a follow-up response from Harvey that marks a moment wherein the world’s top political economists and geographers are engaging in a cross-disciplinary debate openly, online about issues that are absolutely critical to the world in which we live, as well as the future shape it takes.

This is real school, and it is happening out in the open, free of charge. Want to know how Marxist geographers and Neo-Classical Economists think in the wild? Now you can! And what’s more, to quote Harvey’s response to DeLong, “What is needed is generous critique, the taking of whatever is positive in competing accounts and a real struggle to come to terms with ways we might better proceed.” Amen to that, and now we have the tools to think through these issues like we never have before. Let’s not fall prey to obeisance and anti-intellectualism, join in the discussion and figure out what the hell is going on in our moment of global insanity, which has been proudly brought to you by capital run amok.

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5 Responses to Capitalism, the Stimulus Package, and the Intellectual Blogosphere

  1. Luke says:

    Wow, Jim; thanks for sharing this.

    I have to say, though, that the sniping from both scholars is really unattractive and serves neither of them well. It also draws away from what I believe is a point of commonality, Harvey’s core argument that “the current US stimulus package is too small to do the job (I am surely not alone in saying that) and that it is poorly targeted towards tax cuts rather than real stimuli for political and ideological reasons.” Anyway, this is a crucially important debate, especially given the utter weakness of Left intellectuals to put any kind of pressure so far on the Obama administration. Hopefully this can proceed in a more generous manner.

    I’d also note that it would reflect well upon Harvey to open up his comments.

  2. Reverend says:

    Luke,

    I too was struck by the sniping, and I saw most of it originating in DeLong’s response to Harvey’s post. I may be wrong, but I felt Harvey’s response was far classier, and less bombastic, especially with the way he ends his post discussing the importance of generosity in thinking through these issues. That said, it must be something to have a neoliberal economist bombastically espousing the very economic philosophy you feel has gotten us into this mess.

    As to the comments, I totally agree with you there. Part of the creation of Reading Capital, was a way to allow the conversation for the courses be centering in a way that would allow discussion and aggregation, but as he blogs more, I think the need for opening up comments becomes essential. We’ll see, I imagine this is new territory for Harvey, and we’ll see what comes of it.

  3. Interesting ideas, indeed, but I think they fail to realize that it is the mixture of socialism and capitalism [aka a mixed economy] that got the US into the current situation in the first place.

    As Rand said in The Ayn Rand Letter [“A Preview,” The Ayn Rand Letter, I, 23, 4]

    “A mixed economy has to reach the day when it faces a final crossroad: either the private sector regains its freedom and starts rebuilding—or it gives up and lets the absolute state take over the shambles.”

    Controls breed more controls. The stimulus package of today are the shackles around our children’s necks.

  4. Chris L says:

    Having just spent significant time examining the claims about FDR and the depression often made by the right, I’ve come to the conclusion that I agree with Krugman’s analysis in the NYT over the past few months. Harvey is right that WWII ended the depression. We all know that. But arguing that the New Deal failed or was failing just doesn’t hold up to scrutiny. Starting in 33 there was a steady trend of improvement (which Kurgman graphs a few times) except for one small recession in 1938, a direct result of FDR giving in, temporarily, to the Right’s free market interest-borne pressure to “pull back,” Then in ’39 things got back on track and continued to trend up until, of course WWII.

    Arguably, the problem was the New Deal was too small. The New Deal was, proportional to the GDP, about half of what Obama has pushed through now.

    Which doesn’t mean I think the stimulus plan will work and I find Harvey’s other analysis pretty convincing. I don’t think, however, that you’re giving DeLong’s argument a fair shake with your characterization.

    And none of this is to obscure the real point here, which is thst experts can engage globally via blogs and though it happens regularly now, how cool is that?

  5. Reverend says:

    @Peter,

    I think the lack of any kind of oversight is the real issue in my mind. I understand that everyone to some degree played the card of I can get mine and get rich, but ho do we square that with predatory lending that goe unchecked and basically fortifies a class of folks that make 10,000x the average citizen. I really think some kind of distributed space for checks and balances needs to be implented. I am not of the mindset that a centralized bank of givernment intervention is going to stop this, it will be more of the same in the other direction, as you note.

    However, I think the Ayn Rand philosophy of laissez faire is really dangerous when it is centered with a culture that is premised above all upon mindless accumulation and material consumption. How can we escape our moment and suggest there is some transcendence of this idea through the individual? A think a collective logic, distributed logic may present a new way of imagining wealth and value.

    @Chris,
    I haven;t read Krugmn, and I have to admit I can;t debate th finer economic particularities of each of these intellectual, particularly DeLong, so in that you may be right I am a bit unfair. But, from what I have read of both, there seems a very different approach to a philosophical world view that buttresses their arguments. harvey is laying out a pretty impressively articulated theory of what could potentially happen, whereas DeLong is holding on to yet another neo-classic “proof” of “crowding out.” suggesting the treasury view is flawed. This may be true, but what gets me is how short-sighted is conceptualization is, and I thinking this has everything to do with the failure of neoliberalism as both a philosophy and a practical policy. And it speak volumes to the failure of capital in my mind. But, agreed, the larger point may very well be how these conversations are happening, and what that might mean in its own right.

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