David Harvey’s new thesis is that “capitalism is too big to fail”. Is it?

By Steve Ellner

July 5, 2020 — Links International Journal of Socialist Renewal — Up until now, famed geographer David Harvey has been considered a leading Marxist, even if some on the left have criticized several of his theories as “reformist.” In my opinion Harvey’s contributions to Marxist thinking, with regard to both his theoretical formulations and efforts to make Marxism accessible to large numbers of people, are undeniable. All the more reason to be disappointed by his recent thesis.

In a video lecture in his series “Anti-Capitalist Chronicles,” Harvey cautions against the revolutionary overthrow of capitalism on the grounds that such a strategy is outmoded. His central argument is that capitalism is “too big to fail” and thus the best we can hope for are incremental reforms to prop up the system. Since capitalism is too big to fail, Harvey argues, it is necessary that we not allow it to fail: “We have to actually spend some time propping it [capitalism] up, trying to reorganize it, and maybe shift it around very slowly and over time to a different configuration. But a revolutionary overthrow of this capitalist economic system is not anything that's conceivable at the present time. It will not happen, and it cannot happen, and we have to make sure that it does not happen.” 

One of Harvey’s arguments on the need to tame capitalism rather than replace it is that perilous internecine conflict worldwide has to be avoided at all cost. He calls on the left to try “to manage this capitalist system in such a way that we stop it being too monstrous to survive at the same time as we organize the capitalist system so that it becomes less and less dependent upon profitability … so that the world's population can reproduce in peace and tranquility, rather than the way it's going right now, which is not peace and tranquility at all, but eruptions. And these eruptions can, of course, also lead to conflicts between different parts of the world, and geopolitical conflicts, and the like.”

In my opinion, Harvey’s statements fall short on several grounds.

First, a full discussion of the contradictions of twenty-first century capitalism exposes the fallacy of the "too big to fail" thesis. Too big to fail makes no sense when a system is so much beyond repair that "propping" it entails unbearable sacrifices for the entire population (such as getting the public and private debt under control). Harvey talks of contradictions in the system but only singles out inequality and environmental destruction. But these are just two, and thus he leaves the impression that maybe we can live with the contradictions and just try to soften their harsh effects. Even while Harvey has no illusions about the destructiveness of capitalism, the contradictions need to be brought into the center of any discussion about future scenarios.

Marx demonstrated 150 years ago that the contradictions just get deeper and deeper, even while there is the appearance of greater prosperity. The contradictions in twenty-first century capitalism are glaring: the mammoth public, private and corporate debt; the huge chunk of the economy that produces junk or destructive goods and services; the fact that the alteration of the 40-hour work week which has become more like 55 or 60 hours for so many people, plus the massive incorporation of women into the workforce, occurs at a time when technological developments (computers, AI, etc.) should be reducing the work week at least by half. Above all, Harvey leaves imperialism completely out of the picture.

Another contradiction has to do with fiscalization, namely the gap (though not a complete divorce) between the financial economy, with Wall Street recording record-breaking gains, and Main Street, with the stagnation, if not worsening, of economic conditions for the majority of the population over the past 40 years. This gap has reached a new threshold in recent weeks with the stock market's recovery at a time of massive unemployment catalyzed by the pandemic.

The very profundity of these contradictions points to the opposite conclusion that Harvey has reached: far from being "too big to fail," capitalism, given these objective conditions, has never been so weak. In fact, if it weren’t for unfavorable political conditions, namely the weaknesses of the organized left and labor movement worldwide, one could almost say that capitalism is on its last leg.

Second, the very profundity of these contradictions points to the opposite conclusion that Harvey has reached regarding “propping up” the system. In fact, Harvey makes it seem as if we, the people, can act to avoid an economic catastrophe by “propping up” capitalism. Marx posited the “anarchy of production” which means that no government, and no capitalist, can prevent economic crises. And so why does Harvey think that the people of good will can prevent a collapse?  

Third, very few people on the left, if any, are claiming that this is a revolutionary moment favorable for the seizure of power in the United States or any other developed nations. So Harvey isn’t saying anything we don’t already know. The key issue is whether reforms here and there are going to do the job and, if not, what do you tell people. Do you tell people to relax and be satisfied with the crumbs? Or do you tell people that real change, sooner or later, is an historical imperative, an idea that is completely lacking from Harvey’s lecture. If you caution people against systemic change, and allege that such an aspiration is irresponsible, then the claim that you are an enemy of the existing system loses all credibility, as do your credentials of being an anti-capitalist. 

Indeed, the problem with Harvey’s thesis is not one of timing, of waiting for the right moment for systemic change. When he says “capitalism is too big to fail,” it’s not a matter of timing, unless you think capitalist enterprises are going to get smaller in the future and that the corporations will get broken up. Reformism is absolutely the issue. If you don’t think that the system can ever be changed, then what are you left with? I’m not one who despises reformists but I do think they are deceiving people. If the contradictions are just getting greater and greater, then saying capitalism is too big to fail is ignoring reality. Does anyone believe that the debt of the private, public and corporate sectors is going to diminish in time? Everything to the contrary (US$3 trillion added on in just the past 2 months). Does anyone believe that under capitalism the work week is going to be reduced? For many it has increased. Does anyone believe that under capitalism we are going to be able to turn the environmental problem around? These are the issues that Harvey should have been dealing with in his effort to paint a picture of what the world may look like in the future.

Fourth, Harvey assumes that the process of revolution will involve a total and protracted breakdown whereby the nation, or the world, will be “stuck with a situation in which…almost all of us would starve.” In fact, there is no way to know what a revolution in an advanced industrial country is going to look like, because it has never happened before. But nowhere in Harvey’s lecture is there a word about transitioning to socialism.

And fifth, Harvey’s statement that the overthrow of capitalism “will not happen” requires a more cohesive discussion of subjective conditions than what he presents. Harvey would probably not be saying what he says about the durability of the capitalist system and the need to defend it if a vigorous well-organized leftist movement, combined with ongoing social protests, prevailed at the international level. So the issue of the anti-hegemonic movement is quite relevant.   

In his discussion of the effervescence of social movements throughout the world, Harvey appears to be both optimistic and pessimistic. He notes how widespread protest movements have become, both geographically and issue-wise. But he also points out that “mass mobilizations generally don’t last that long. Most… occur, then they quiet down, and people forget about them, and then they erupt again.” He goes on to underscore the fragmentation of the movements, “that different groups participate in these mass mobilizations but don’t actually coordinate together.” Then, on an optimistic note, Harvey suggests that “what we now see is perhaps the beginnings of the signs in all of these cases of the coming together” of those who favor a social democratic model in place of a neoliberal one. 

However, the social movements such as Seattle, Spain’s Indignados, the Occupy movement, the anti-gun violence movement of high school students, the #MeToo movement, the Black Lives Matter movement etc. have not really been as ephemeral as they may appear. For example, the slogan of the 99% put forward by the Occupy movement has become very much a part of discourse and not just on the left. 

What is really lacking is what Marxists refer to as the “subjective” factor. That is, a leftist political party (or parties) that is able to connect the dots and unify different struggles beyond a social democratic project. The FBI understands the danger of this well, which is why what they call the “messiah,” that is certain charismatic leftists (and even non-leftist ones), end up becoming a target. The messiah is a leader with a capacity to unify the underclass, the working class and sectors of the middle class, across race and ethnic lines, etc. to bring about change rejected by the ruling class. I first heard of the term in an interview with a biographer (Jeffrey Haas) who indicated that Black Panther leader Fred Hampton was bumped off precisely because the FBI saw him as that type of leader. Martin Luther King and Malcolm X were both assassinated precisely when they began reaching out to larger groups. But what is needed is not a leader who can somehow make the revolution happen. What is lacking is a political party that can unify between different movements, different demands, different slogans, and different social, racial and ethnic groups.

To get back to Harvey, it is surprising that at this moment, when dire circumstances have generated a degree of hope, with the Black Lives Matter protests and such widespread disillusionment with the system, that Harvey comes up with this line of thinking. There was a time with the electoral defeat of the Sandinistas in 1990, and then the collapse of the Soviet Union, when some people on the left such as Marta Harnecker spoke of the end of the anti-imperialist cycle. But then Chávez came along and Marta, among others, revised her thinking. A similar reconsideration or clarification on Harvey’s part would be much in order.

Steve Ellner is a retired professor from Venezuela’s Universidad de Oriente and currently an Associate Managing Editor of Latin American Perspectives. His edited book Latin American Extractivism: Dependency, Resource Nationalism and Resistance in Broad Perspective (Rowman & Littlefield) will be released later this year.