Week 8: “The Urban Process under Capitalism: A Framework for Analysis”

In this selection, British geographer David Harvey applies ideas from Karl Marx’s Capital, volumes two and three, to the analysis of the urban process under capitalism. In the wake of the global oil shock of 1973, he opens up our understanding of recurring conditions of contradiction and crisis in capitalism, and their relation to tendencies of overaccumulation and capital switching into various circuits of investment. He explains how the expropriation of surplus value and the subsuming of productivity to profitability under capitalism eventually results in two kinds of social contradiction. One is the conflict and overproduction that results from the competition between capitalists, and the second is the conflict and violence that are the outcome of capitalist exploitation of labor.

Harvey further expands on how the exploitation of labor and overproduction of commodities contribute to a falling rate of profit. The problem of overaccumulation in the primary circuit of capital in production of manufactured goods can be resolved through capital reinvestment in other outlets. This surplus capital can be reinvested in fixed capital machinery applied to the production process, or switched into the secondary circuit of the built environment for production such as infrastructure. The secondary circuit also includes com- modities for worker consumption, as well as the built environment for consumption (which includes worker housing and infrastructure necessary for the reproduction of labor). The money and banking system, or fictional capital sector that is controlled by financial and state institutions, functions as a “nerve center” that mediates and regulates capital flows between the circuits. Capital can also be switched into the tertiary circuit of invest- ments in science and technology.