It is more than a subtle irony that the two great theoretical opponents of economic theory, Adam Smith and Karl Marx, agree on two fundamental facts. First, capitalism is an extremely exploitative form of economic organization. As Smith says “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices” (Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations). Obviously, Marx would concur. The second thing they both agree on is that an economic system which relies on constant and unending expansion and growth is doomed to eventually fail in a finite world.
How that inevitable failure likely occurs is described with precision by David Harvey in his book Seventeen Contradictions and the End of Capitalism (2014, Oxford University Press). Harvey exposes the major contradictions of capitalism and explains why they spell its ultimate doom. Among the major contradictions he discusses are:
- The accumulation of capital to a point at which it exceeds the ability to reinvest it in the economy;
- The drive to force down production costs and labor costs which leaves consumers unable to consume;
- The demand for endless compound growth;
- The exploitation of natural resources to a point which threatens human extinction; and,
- The tendency toward universal human alienation.
Through depressions and recessions, capitalism has created the illusion that it is both resilient and permanent. New technology, government interventions, and spatial fixes to extend markets through globalization have helped it limp through some past crises. However, it is an economic system quickly hitting the point at which some of its contradictions defy “fixes,” and are reaching a fatal climax.
Harvey’s Seventeen Contradictions and the End of Capitalism is essential reading if we are to understand poverty, inequality, the pervasive oppression of women and ethnic minorities, and the desperate foraging for profit. It is also essential to understanding war, crime, and criminal justice as violent, irrational acts of desperation to save a dying system.