If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030. This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted).
--
What spaces are left in the global economy for new spatial fixes for capital surplus absorption? China and the ex-Soviet bloc have already been integrated. South and SouthEast Asia is filling up fast. Africa is not yet fully integrated but there is nowhere else with the capacity to absorb all this surplus capital. What new lines of production can be opened up to absorb growth?
I think there is more potential for growth than Harvey envisions. The massive rural populations of China, India and Indonesia have not been integrated into the consumer or credit markets. Of these countries, only China's rural population has been mostly integrated into production. There is still a long way to go. However, they are some fairly stiff infrastructure and cultural barriers to further extending capitalism, especially on the consumer demand side of things. If one had to guess though, capital will find a crack and open it up, much like water. This does not mean the process will be pleasant, efficient, peaceful or desirable. But capitalism has a long way to go unless it faces significant organized opposition.
---
Having lived in the Philippines, this lack of integration in the rural areas is very evident. There are still a lot of people 'living off the land' in a pre-capitalist mode of production, and even the few who work in factories are mostly producing, not consuming. And no one has access to credit in the way a Westerner does.
1"Organizing for the Anti-Capitalist Transition" - David Harvey
1 comment:
From David Harvey: "If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities... What spaces are left in the global economy .. for capital surplus absorption?"
I would agree with you that "there is more potential for growth than Harvey envisions." And I don't think we need to "find" profitable opportunities. You put it well: "Capital will find a crack and open it up, much like water." Policy must neither find nor create opportunities. It must instead create an environment in which the 'free play of economic forces' takes us in the right direction.
What's funny I think is that since about 1980 our policy emphasis has been favoring "the supply side." Yet the problem is now exactly as it was then: the supply side is not profitable enough that it grows as fast as we need it to grow.
What is the one thing every business needs? Customers, ready to spend money.
"For we have seen that, up to the point where full employment prevails, the growth of capital depends not at all on a low propensity to consume but is, on the contrary, held back by it..." [Keynes, The General Theory, Chapter 24] When the fundamental operating principle is "supply and demand," it is an error to focus only on the supply side.
Post a Comment