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RSA Animate: Crisis of Capitalism? June 18, 2011

Posted by Afflatus in Economics, Politics, World Affairs.
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In this RSA Animate series entitled “Crisis of Capitalism,” sociologist David Harvey lays out the standard analyses of what went wrong in the 2007-2009 Financial Crisis, and then then offers a Marxist interpretation of his own. The categories he lays out at the beginning  are instructive, and he presents some important facts about wage stagnation, wealth accumulation at the top, and the dominance of capital over labor. The video is thought-provoking and worth-watching, however his ultimate conclusions are unpersuasive.

Harvey argues that capitalism “never solves its crisis problems,” instead “it moves them around geographically.” He asserts that this is exactly what has happened: the US is recovering from its financial crisis, but Greece is experiencing a sovereign debt crisis. While both of these things are happening, Harvey makes no attempt to provide a causal link between the US recovery and the crisis in Greece. Without strong contrary evidence, I’m inclined to believe that the US recovery has little to do with the Greek sovereign debt crisis. Greece’s fiscal problems and economic stagnation date back decades, and why would US economic production cause Greece to be unable to repay maturing debt? Harvey doesn’t say.

Finally, Harvey concludes on a revolutionary note arguing that “any sensible person right now would join an anti-capitalist organization.” This is an overstatement. There is clearly room to solve the problems that led to the financial crisis within a capitalist system. In America, Dodd-Frank was a start. We still need more consumer protection safeguards and regulatory reform in the financial sector. I do like how Harvey concludes by suggesting that we need a broader discussion to solve these problems. A more inclusive dialogue will help bring about an economic system that is more responsible, just, and humane. However, it will be a capitalist system, and it should be.

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