“Aditya Chakrabortty discusses Goldman Sachs’ appearance before a Senate committee, President Obama’s banking reform failure, which British political party has the most convincing economic model, plus we ask Prof David Harvey whether the financial crisis predictable and necessary?”
Exploring the Logic of Capital
David Harvey interviewed by Joseph Choonara, Socialist Review, April 2009
Some commentators view the current crisis as arising from problems in finance that then impinged on the wider economy; others see it as a result of issues that arose in production and then led to financial problems. How do you view it?
It’s a false dichotomy that’s being posed. There is a more dialectical relationship between what you might call the “real” and “financial” sides of the economy. There is no question that there has been an underlying problem of what I would call “over-accumulation” for a considerable time now. And in part the movement into investing in asset values rather than production is a consequence of that. But as the search for new forms of asset value developed you also saw financial innovation that created the possibility of investment in hedge funds and those sorts of things.
There was a long-term process in which the rich looked for reasonably high rates of return and began to invest in a whole series of Ponzi schemes – but without Bernard Madoff at the top. In the property market, stock market, art market and derivatives markets, the more people that invest, the more prices go up, which leads to even more people investing. All of those markets have a Ponzi character to them. So there is a financial aspect to the crisis but unless you ask why the most affluent were taking that path you miss out on the real problem.
The Crisis and the Consolidation of Class Power
David Harvey interviewed by Marco Berlinguer and Hilary Wainwright on December 13th, 2008.
Available at Red Pepper
Does this crisis signal the end of neoliberalism? My answer is that it depends what you mean by neoliberalism. My interpretation is that it’s a class project, now masked by a lot of rhetoric about individual freedom, liberty, personal responsibility, privatisation and the free market. That rhetoric was a means towards the restoration and consolidation of class power, and that neoliberal project has been fairly successful… Read the rest of this article at Red Pepper.