Giulia Page's interview with David Harvey
Many on the left have talked about the damage done by the present administration, but what has really changed under Trump?
My interpretation is that the ruling class in the USA, what I call the party of Wall Street, doesn’t want a coherent government to emerge in Washington. It likes a situation where nothing happens, because that means it can do what it likes. The only thing it wants to be sure of is that certain features around the economy, such as regulatory structures, are loosened. The Secretary of the Treasury in the US has always been from Goldman Sachs since about 1992, so Goldman Sachs essentially runs the economy inside of government, and also controls the Federal Reserve. The result of that is that Trump hasn’t really been able to do that much very seriously. I’m not sure he really wants to do anything, but if he does do anything it’ll be done by Wall Street. The economy isn’t any different from what it was under Obama; its almost identical. And I don’t see much happening economically at all in the US to change the present trajectory.
What I do see is a real global problem of how to absorb the surplus capital that exists in the world because the response to the crisis of 2007/8 is to create more and more money, so now you have a lot of surplus money sitting around. A lot of it is going into property, the art market is doing very well, but nothing productive is being done, except in places like China. The Chinese now estimate that only a 3rd of American GDP comes from actually making things, two thirds derives from finance and insurance and real estate operations and a lot comes from extractions of wealth, robbery from the rest of the world by the financial institutions.
So I don’t see any major revival in the US and I don’t see Trump being able to deliver on his promises of bringing jobs to those people who have been left behind by recent forms of development. I think the pattern of technological change is such that we’re probably going to have more problems of employment and a lack of effective demand and low wages in the future, and how that’s going to be addressed I really don’t know.
This is a very threatening situation and it seems to get swept under the carpet. But something could easily break out. Lots of people worry it will be in China, but I don’t think so, I think it is more likely to be a breakdown of monetary structures that are currently organised to try to deal with the compounding growth of a capitalist system that is spiraling out of control.
Do you also see possibilities for change in this threatening situation?
There are bad possibilities, we could move to neo-fascist style governments. I argued a long time ago in the book on neo-liberalism that this was an unstable situation and that the only way in which it could be stabilized was by increasing the authoritarianism of the neo-liberal state apparatus. So the shift to a more authoritarian mode is something that’s been in the works since the 1990s, and its now trying to create a populist base to continue the neoliberal project, which is always about the accumulation of more and more wealth and power on the part of a small, increasingly financialised oligarchy. If you look at the income distributions that have occurred since 2007/2008, there’s an increase in concentration of wealth and power. If you look in the US, the top 1% have increased their wealth by about 12% since 2007/08, whereas everyone else has either remained stable or lost: the poorer you are the more you lose. You see now that this is almost an official policy of the Republican party, this assault on the poor and this attempt to extract value from the poor by robbery and thievery and displacements and expulsions, this is the kind of global economy that we’re now constructing.
Do you think cities have changed within the crisis and if so, have urban struggles in some ways managed to determine some of this transformation?
Well I think you have to be geographically specific. Its clear to me that what saved global capitalism from total collapse in 2007/ 2008 was a massive urbanization and infrastructure project in China. For instance, China in 2007 had zero miles of high-speed rail network and it now has 15,000 miles. It consumed vast amounts of raw materials and employed a lot of people. About 50% of China’s GDP has been taken up with infrastructural investment, and 25% of GDP has been associated with housing construction alone. So global collapse was averted not because China wanted to help the world but because it was facing between 20 and 30 million unemployed people from the export industries and it needed to re-employ them and the only thing they could think of doing was to launch all of these huge infrastructural projects. And China is now exporting these infrastructural projects: for instance the One Belt One Road project, and big projects in East Africa, Latin America and the like. So Chinese urbanization was completely reconfigured around the necessity to rescue their economy, and by extension the global economy, from total collapse and chaos.
The situation in other parts of the world is rather different, but there is a pattern emerging in which the more affluent cities have seen a brief hiatus in the strength of their property markets followed by a radical revival in property speculation and construction of upscale condominiums for the very rich. So in New York they’re building huge numbers of very posh buildings in the midst of a crisis in affordable housing. We have 60,000 homeless people and nowhere to put them and we have empty apartments for the ultra rich, and property prices are rising everywhere. Almost every city that I encounter, Sao Paolo, Melbourne, Vancouver etc., you find a similar pattern. There’s also crazy forms of urbanization in the Gulf States, in Turkey, even Palestine. So I think that investment in urbanization has become almost a sink-hole for surplus capital. Other forms of productive activity aren’t very enticing, so cities are essentially being overwhelmed by this process which often involves displacement of low-income populations.
And of course social movements have risen against a lot of this, and in some parts of the world they’ve managed to resist to some degree, or managed to develop some relationship with city governments. For instance in Barcelona right now there’s a radical mayor and a strong anti-tourist social movement which is trying to develop other forms of democracy. And in the US we now have quite a lot of cities that have left leaning councils and mayors, for instance Seattle and LA. In these places we’re getting to see progressive forms of action unfolding at the local level, in antagonism to the state government and to the federal government. We’re seeing it in Madrid and Barcelona as well, and in some places in Britain. So there are social movements, but there is an overwhelming force that is very hard to control and getting to the source of that is a real problem.
In Europe, and across the world, we are subject to new legal instruments aimed at displacing and distancing certain groups from the city - whether it be homeless people or political militants. This is often done in the name of 'security' and linked to a constant state of emergency justified by discourses of 'anti-terrorism'. Do you think we are seeing a new political economy of security?
In general there is an assault against the poor and the marginalized, and therefore there is an attempt to expel them from urban places. In the US a lot of it is done by incarceration, so we have millions of people in jail, and its generally speaking a heavily black population, a population of the marginalized districts of the city, and so you depopulate the city and decant many elements of the population into jails into rural areas of upstate New York. You pacify New York by this kind of process.
Cities are now increasingly pushed by the speculative value of property, and property prices are very sensitive to externality effects – people sleeping on the streets or garbage lying around are very negative features for property values. You might say that if you want to make affordable housing in New York you should bring back the drugs trade of the 1970s and have every corner populated by drug addicts and then all the property prices would come down and we could afford to live in the central city again!
What’s happened of course with local governments being under the mandate of austerity is that no money is put into the proper housing of low income populations and then you get the situation you saw in London with that dreadful fire in which poor people died effectively because the austerity of the council said they had to find the cheapest material possible to insulate the building. But the cynics say that now they’ve cleared the property they can build a high rise condominium for the ultra rich. This is where social policy and the political policy of the state driven by the influence of financiers, developers and affluent populations is creating a certain kind of city which is intolerable.
I think what to do about the 60,000 homeless people in New York city is a compelling question. We have a mayor now who would like to do something about it but cant because the property developers and banks and Wall Street are far too powerful. So he in fact does something that makes things worse, by allowing the developers to put in high-rise high value housing on condition that they put in 20% for low income people. But the definition of low income is so high that it’s really for middle class people not the ultra poor. This story is told in similar ways in other places, and depends on a movement that is going to argue for the poor.
Do you think this kind of movement is possible?
Since Trump’s election there has been a lot of mass grassroots spontaneous organizing, but it doesn’t have anything in the way of financial power. It used to be that the trade unions were very important, but trade union power has been destroyed. When I went to Baltimore in 1969, about 37,000 people were employed in the steelworks. If you wanted to get anything done you talked to the steelworkers union and once you got the steelworkers union on your side you soon had a couple of other unions with you, and you had all the power you wanted. By the time you get to 1990 there are only 5000 steelworkers left producing the same amount of steel. And now there’s no steelworkers… So who organizes?
Since the 1990s onwards, the only people who have organized have been an association of interdenominational churches in defence of the poor. They’re good in lots of ways, they’re terrible on some kind of social issues, like abortion, they’re homophobic and so on. But this alliance of the black churches, the white Catholics and Jewish groups has been the core of political organizing in the cities in the US. And they’re the ones that you have to rely on to try and get anything done.
You don’t think there is a potential for a movement with ‘financial power’ arising, for instance, in the logistics sector?
If the logistics sector could get organized that would be fantastic but it’s difficult now employment is scattered. If all the truck drivers in New York city just sat down and refused to drive for three days the city would be completely paralysed, so there is a latent power there, but getting it organized is another question.
It was very impressive when Trump put in the immigration ban first, the taxi drivers in New York went on strike for about two hours and refused to pick up anybody from Kennedy airport. I happened to arrive in Kennedy when this was happening and it was total chaos, because almost every lawyer that had a conscience was in the airport getting people through immigration and cabs were not arriving and then they tried to stop people using the air train which was taking people out. So it was chaos. But Uber carried on operating. That got around and lots of people would not use Uber after that, their business crashed and they had to apologise that they effectively broke the strike. So there is a reaction, there is a lot of gut reaction. The question is how is it going to organized and into what configurations.