The Millions

Benjamin Kunkel is a founding editor of N+1 and the author of the novel Indecision. His wriiting has appeared in The New York Review of Books, The Nation, and The Believer.

There’s a Donald Barthelme story that begins (roughly), “I thought I had understood capitalism. But I had only adopted an attitude – melancholy sadness – toward it.” My understanding of capitalism improved enormously, though my sadness and alarm did not abate, when last spring I read David Harvey’s The Limits to Capital, which was first published in 1981, and was reissued by Verso a few years back. Limits is an effort to square Marx’s account of industrial capitalism with an understanding of the sort of financial capitalism that was just beginning to take off, in the UK and the US, back in 1981, and that by the time the rolling disasters of this past fall got underway had become the dominant feature of the American economy. There are many brilliant and persuasive parts of Harvey’s book, but in the current context none of them is more striking than his analysis of rent – i.e., housing and land prices – as a form of “fictitious capital.” (Which was Marx’s term for a claim on future revenue when treated as an asset.) Everyone now knows that real estate prices had gotten badly out of alignment with income, but it takes someone like Harvey to show how property market bubbles (and credit bubbles generally) aim to solve and in fact end up exacerbating deep structural problems with capitalist development per se. The book is also pretty majestically written, in a dry cool analytical way. I think even someone unsympathetic to Harvey’s ideas would have to concede the book is an outright masterpiece.

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