Just spent a highly stimulating day in a workshop on housing, real estate and the crisis, and was particularly interested to meet one of the other guest speakers Christian Zeller, a young prof in Wirstchaftsgeographie Salzburg whose analysis was very strong. I’ve tried to summarise it below. The workshop was organised by Ingo Bader and Sabine Horlitz, both working on PhDs in the Center (sic) for Metropolitan Studies at the TU Berlin. They had spent Friday in a German-language session about what is happening there (and where Sebastian Müller had spoken). Then Saturday was more international with me having over 2 hours in the morning, Christian after lunch and then Lydia Krüger in the early evening. Just 3 discussions in a whole day led to great depth and was a brilliant way to organise it. [ workshoppolitischeokonomie ]
I gave a talk first, starting with an account of the crisis in terms of (i) falling real wages for most workers in richer countries, (ii) strong profitability in recent decades (iii) in Europe and North America a switching of investment into the pursuit of asset values / fictitious capital, and the fragility of all that. (iv) Debt growth (following [the other – USA] Richard Wolff – link on right) serving (alongside cheap imports from Asia) both to sustain consumption and to be a source of profit in its own right. Then I went on to talk about UK housing and especially London. Ending with illustrative stories (Middlesex Hospital site and Woodberry Down Estate). It was a broad sweep and necessarily rather superficial. But it seemed to generate a good discussion. Very good small audience of PhD students, some others including Inura friends…. [ slides here edwardsberlinlondon ]
Then on came Christian Zeller who spoke on The rise of financial capital, dispossession and rent extraction. It was very polished and well-researched. The following notes may capture the essence of it, I hope. massive decline in wage share of GDP in advanced economies – with graph based on data credited to http://hussonet.free.fr/toxicap.xls rates of profit increasing across OECD countries.
We should thus see increasing investment. However, investment rate decreased from ’79 onwards, the balance of the growing mass of profit going to financial forms which he referred to as ‘placement’ as distinct fom investment.
Consumption held up – partly from cheap commodities, partly from cheap Chinese production;
crisis now for export based companies – what will happen when demand falls – esp in china? (He had Germany in mind. There was some laughter when the UK was mentioned since no-one thought of the UK as doing exports. I think I mentioned military hardware, whisky, pharmaceuticals, costume drama.)
will china have to export lots of capital – but then they would be in competition with western powers?
No direct challenge to neo-liberal project yet but there is a crisis of legitimation / credibility
In France privatisation was very significant; elsewhere compulsory pension savings contributed strongly to the growth of the flood of money capital needing invetsment or ‘placement’.
Importance of liquidity-increases in markets to enable capital to withdraw quickly from them: securitisation etc.
USA has been financing wars and consumption – a kind of imperialism which imports capital, in contrast to earlier – classic – imperialism which exported capital.
Finance capital does not sit on top of a healthy ‘real economy’ but is an integral part of it. ‘Placement capital’ has been voracious, because it wants more of society’s social surplus than society can provide. (All of this was illustrated with some brilliant animated diagrams of circuits of capital, basically elaborating on Harvey’s circuits diagram. Some of them were credited to “quelle” and I’ll ask what this means. I’ll suggest to him that he puts his presentation online.)
Rosa Luxembourg -“metabolism of capital with non-capitalist milieux” which led into a great discussion on universities and creative miliuex which Ingo enjoyed as helpful in study of the music industry and I wished that Aron Mo were there.
Enclosure of the commons – carbon credits… etc >> converting non-commodity and political matters into tradeable commodities. Good anti-carbon-credits arguments. patents as the enclosure of socially-produced knowledge.
It ended with some strong stuff on strategies and what can now be done.
Strategies – increase wages would reduce s.v. (if productivity is constant)
who decides what is needed? Important that bail-outs by the state are used as an opportunity to demand conditions. E.g. in the case of Opel, it would have been possible for the left to demand a shift to different kinds of cars, or even non-car products….
an English-laguage version of his paper will be published, though less action-oriented – in ‘Progress in new geography’.
Finally we had a talk from Lydia Krüger, Attac Germany, and who also works for the Links group in the Europarl
Ownership and control of banks.
evolution /rescue packages / german system cf others.
evolution: housing had been central source…
Bernanke predicted 2.25 m forecosures
and so on……
The discussion was interesting, with some agreement that Attac and the left generally had rather failed to mount serious crtiques or pose alternatives – perhaps because the left PARTY was so concerned not to loose short-term electoral support by, for example, failing to support bail-outs.