Book Review — Marx, Capital, and the Madness of Economic Reason


Marx, Capital, and the Madness of Economic Reason by David Harvey is a modern critique of Marx’s three volumes of Capital. Harvey is the Distinguished Professor of Anthropology at the Graduate Center of the City University of New York (CUNY). A leading social theorist of international standing, he graduated from University of Cambridge with a Ph.D. in Geography in 1961.

Madness seems to be the description of modern capitalism.  It’s destroying the planet.  It is built like a Ponzi scheme were continual growth is required to keep it alive.  It’s nearing its limits as an economic system.  Wages have remained stagnant in the US while the standard of living is propped up by cheap imports and rising personal debt (not to mention worldwide debt).  More and more people around the world are buying cars only to sit in them for hours in traffic.  Climate change is real and brought on by mankind by the burning of hydrocarbons and the stripping of the land.  We have planned obsolescence of consumer goods.  We are hit at every turn with fees; look at a cell phone bill, for example.  Companies charge convenience fees to pay online over mailing a check.  As a whole, we are not living as well as our parents did.  We, as a whole, also, don’t have the jobs that gave us affordable comprehensive health care.  Skilled labor is disappearing as industries deskill the labor force and create a surplus of workers to keep jobs scarce.  We are living in times much like those Marx and Engles had witnessed in their lifetimes.

Harvey covers all three volumes of Capital with real-world explanations and where Marx got things wrong.  Marx many times forget to take into account expanding technology.  Machines were seen and are things not to make the worker’s job easier but as something to increase profits.  Today machines take many old jobs away as well as the expansion of globalization.  In early industrial England, wages were set to the price of bread.  Workers had to eat to remain productive.  To increase profits, industrial leaders pushed for laws allowing the importation of cheap grain.  Workers backed this idea; cheaper bread meant better living.  Industrialists supported it because they could keep wages lower if bread was cheaper maximizing their profits.   Today this exists in the big box stores keeping prices down so workers do not realize their wages are stagnating and subsidized processed food keeps prices down so we think we are well fed.

One particular case in the book concerns China.  It is 200 years of capitalism rolled up into a handful of decades.  When thinking of New York City, Los Angeles, the highway systems, and the concrete sprawl of America consider that in the 100 years between 1900-1999 the United States used 4,500 million tons of concrete to build all of that.  Between 2011 -2013 China used 6,500 million tons of concrete. In a two year period, China used more concrete than the US did in 100 years.  The banking crisis that started in the US in 2007-2008 could have been a worldwide disaster.  When US and western markets crashed, imports went down.  China found itself in a crisis.  A totalitarian state does not want labor unrest and with millions now out of work China began a massive public works project.  Roads, dams, and even ghost cities were built with borrowed money.  The government told the banks to loan money and loans pour out of the banks.  China prevented its collapse by temporarily diverting labor to other projects until the crisis passed.  The command economy of China is not Marxist; it is a totalitarian system that mimicked a century of capitalism in a handful of years.  China, like the US, now sits under a mountain of debt.

Harvey writes an interesting study of Capitalism as seen by Marx and sometimes as revised for the modern world.  The ideas are the same.  Capitalism exists not to make a better life for everyone, but to maximize profits.  Totalitarian regimes paid lip service to Marx in the past but none really came close to following his theories, hence, Leninism, Stalinism, and Maoism where Marx was merely a wrapper covering atrocities.  Today, in America, socialism is misunderstood and feared.  People hate socialism except for public roads, public parks, public schools, subsidized food…  Some of that has changed after the bank collapse and the recognition that hard work and a good education will still leave many poor and deeper in debt.  The 1% has changed from being a symbol of outlaw motorcycle gangs to bankers, vulture capitalist, and CEOs.

No one is saying that we need a revolution or the Marx was 100% correct.  We have seen what capitalism can and will do when its free to operate on its own or even forced as the case of China.  Instead of condemning Marx to the dustbin of history we need to take look at it without the lens of the Cold War.  Marxism did have a positive effect on Europe in the mid to late1800s.  Workers organized work weeks were shortened.  Leisure and vacations became more common for workers.  Labor is an important part of any economy but rarely gets the respect it deserves.


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