In the neoliberal phase of accumulation, capitalism underwent several dynamic changes. Its operations were downsized, re-organized and technologically upgraded. This is how David McNally puts it, in his highly recommended new book, Global Slump: "It is not simply that jobs went to the South, though in some industries this clearly happened. It is more that a severe process of restructuring occurred that involved an enormous downsizing of workforces and “leaning” of production systems everywhere. Geographic reorganizations, sometimes within the bounds of a nation-state, as in the flight of plants from the northern to southern United States, were one part of this picture. While industry-specific changes may have been in play in the case of steel, we observe a common pattern combining new technologies with old-fashioned employer tactics of speed up, contracting out, and undermining of unions. Production was made more “flexible” largely by making labor so—by tiering wages, altering shifts, increasing insecurity and precarious employment (casual, part-time, and contract work), and enhancing employers’ power to hire, fire, and reorganize work. New technologies thus combined with old forms of precariousness to boost labor productivity.” (pp. 47-8)

This reorganisation of capitalism - made possibly by raw class power and imperialist aggression toward the global South - had been conceived in its essential outlines within the laboratories of the social sciences departments of universities, a long-standing redoubt of ruling class project design. The 'Chicago Boys' just happen to be the most easily recognisable brand name of this particular firm and its maitres penseurs. The pretext was that centralised planning, corporatism, collective bargaining the hierarchies of the Keynesian era, had failed. The solution was capitalist freedom, of the kind extolled by Friedrich Hayek.

Hayek's approach to 'freedom' placed great stress on information. The case for markets and competition, and against socialism and planning, was based on the problem of how producers would come by the relevant knowledge to behave in an efficient manner. This knowledge could not be accumulated and concentrated in the hands of planners, but was distributed in fragments, bits of incomplete and contradictory knowledge among a multitude of actors. Knowledge and learning are necessarily constrained by one's position relative to one's peers, so that one is dependent on the pathways linking one to those peers - those being price signals. The economy thus works as an informational flow, a network which - if allowed to operate without the distortions of monopoly and intervention - is greater than the sum of its nodes. If each node comprises a partial, insignificant piece of knowledge (your shopping list, your debts, the change in your wallet, your evolving gustatory propensities, etc.), the whole network aggregates that knowledge in a way that enables the needs of each to be met satisfactorily. This approach embraces what many have taken to be the rudiments of modern network theory.

A somewhat different, overlapping critique of the old hierarchies also had its impact on the self-understanding of capitalist enterprises, or so argue Luc Boltanski and Eve Chiapello in their monumental book on The New Spirit of Capitalism. The 'spirit' of the title, borrowed from Weber, refers to an ideology that justifies people's commitment to capitalism. This commitment is necessary to the reproduction of capitalist relations, and it must be exacted from many many more people than can expect to significantly benefit from the process. These firms, having adopted lean production and flexibility, sought through the 1970s to incorporate elements of the Sixties critique of capitalism, of counterculture, and re-organise their systems along networked lines, embracing some of the ideas of self-management: "autonomy, spontaneity, rhizomorphous capacity, multitasking (in contrast to the narrow specialisation of the old division of labour), conviviality, openness to others and novelty, sensitivity to differences, listening to lived experience and receptiveness to a whole range of experiences, being attracted to informality and the search for interpersonal contacts". (p. 97) This is not, of course, to say that corporations ceased to be hierarchies, that managers ceased to control, or that spontaneity and creativity ceased to be stifled. This is an ideology, at the centre of which is a hard kernel of reality, that being lean production, flexi-working, spatial re-organisation and technological upgrading.

In the field of academic production, things were not much different. Employees of universities undergoing proletarianisation were also encouraged to think entrepreneurially, embrace transdisciplinarity, and so on. (Students are now also being encouraged to think entrepreneurially, as a demonstration of 'corporate skills' will give them higher marks.) But these employees were not always or necessarily unwilling in their task, and the intellectual reaction that accompanied this global capitalist reformation, which was inaugurated by a particularly grotesque revival of McCarthyism on the Left Bank, tended to evince the same suspicion of planning, of centralisation, and particularly of totalitizations such as nations, classes and societies, as the Hayekians. There was only the fragmentary and the contingent. Mrs Thatcher's jibes against the idea of class and society were met with differing degrees of mortified outrage at the time. But in the academia - including the humanities departments that the Thatcherites tended to disapprove of - the idea that such metanarratives were inherently absurd and oppressive was gaining currency.

In practise, what tended to happen was that the metanarratives based on class, agency, power, social determinants, and so on, tended to be replaced by metanarratives based on informational flows, networks, autonomous processes, choice and flexibility. Sometimes this went under the heraldry of 'postmodernism', but not always. The emergence of 'globalisation' as the master-concept of the 1990s was accompanied by a blizzard of academic work on informationalism, the knowledge economy and so on. Signs and symbols, more than matter, were the determinants of life on earth. It's relevant to stress how widespread this anti-materialist turn was, and in how many fields. If in the field of economics, materialist value theory was replaced by a (circular, mundane) subjective value-theory, in the field of history, materialist accounts of class, labour, sex and oppression entered a recession, making way for the 'cultural turn', while in sociology, the courtiers of the Third Way such as Anthony Giddens and Charles Leadbeater vaunted the 'knowledge economy' and the 'weightless society'. As capitalism started to make its returns increasingly on inflated values in the stock market, its most vulgar apologists held that this bubble was nothing other than a "most of us make our money from thin air", producing nothing that can be touched, weighed or easily measured. Globalization itself was conceived of as an autonomous, self-expanding process, almost as a Weltgeist against which humanity was powerless.

So, by this point, you'll be wanting me to explain what all this has to do with the new social movements, with the multitudes, with swarms, with networks and their technophilic informationalist paradigms? What bearing could it have on the strange, hubristic notion of decentralised, networked, non-hierarchical, autonomously self-sustaining social movements? Well, I'll have to deal with that in another post.

Well, since you ask, my own talk was 'okay', though I fear David Edgar did a better job of plugging my book than I did. In fact, he plugged it about three times and quoted extensively from it, and I was very flattered. I'll post a 'version' of my speech another time. Anyway, since Harvey's talk hasn't been posted online yet, I thought I'd do a quick report.

What are the limits to capital, and how does it overcome those limits? This is a pressing issue given the global crisis. We need, at the very least, to understand the he prospects for getting any half-way decent settlement out of it for the working class. Capitalism is a perpetual expansion machine and, as Marx noted, it cannot abide limits. It has to conquer all social and spatial barriers, and "annihilate space with time". A simple way to see this is to describe the capitalist transaction: one starts the day with some value (money), purchases labour power and some means of production and - if one has a good day - generates a surplus which is realised in the market. What then happens at the other end of the transaction? A reasonable person would spend the money on a good time, but a capitalist is coerced by competition to reinvest some of the surplus in expanding and generating even more surplus. Expansion is a structural imperative of the system: capitalism requires compound growth.

Angus Maddison has provided some figures which give a sense of the scale of this. In 1820, $694bn circulated through world markets (on 1990 dollar values). In 1913, it had risen to $2.7tn dollars. By 1950, it was $5.3tn. By 1973, it was $16tn. By 2003, it was $41tn. The current World Bank report puts total world output in current dollar values at $56.2tn. The average compound growth rate has been around 2.2% per annum since 1770. The current position of Gordon Brown and Barack Obama is that they want to restore the world economy to a growth rate of roughly 3%. But while 3% growth may seem feasible when you're talking about a productive system thriving in a few industrial centres of the UK and a few places beyond in 1750, it looks like a different bargain altogether when you have a capitalist system operative in the Middle East, Asia, Latin America, Africa, North America, and all of Europe. Three per cent growth on current output means that the system needs to find profitable investment opportunities for $1.5tn. In twenty years time, the system will have to find profitable investment opportunities for $3tn. This leads to the "capital surplus absorption problem". Where will all this capital go?

In order to circumvent existing barriers and find new avenues for investment, financial innovation is necessary. The savings and investments of capitalists have to be deployed in a new way to perform specific functions, and the history of capitalism is a history of such innovations. If capital is unable to adapt in this way, a new barrier is erected, the circulatory system of capital is obstructed, and investment dries up. Another barrier might be that the inputs necessary for the means of production to produce your desired outputs are not available. This is a point discussed in Capital Volume II. Another problem that might freeze circulation could be excessively well-organised labour, so driving up wages that there is insufficient profit to be had in any major investment. There is also the question of whether capitalists will find the right organisational form and the right disciplinary structure for managing labour, both of which can provide blockages to the system of accumulation. Then there is the problem of effective demand: will there be enough need backed by purchasing power to absorbe your product? If not, yet another blockage is created. Perhaps the largest barrier is that provided by nature, and its inability to sustain the kinds of growth that capitalism requires, both in terms of the shortage of necessary raw materials and in terms of the threat of ecological collapse as the natural system reaches the limits of its tolerance for capitalist production. If these blockage points are not successfully negotiated, the system slows down and capital is de-valued. Reviewing this, we might conclude that the theory of crisis needs to be updated. Any one of these single points can produce a blockage and a crisis in the ability of capitalism to reproduce itself.

The neoliberal strategy of accumulation arose from several crises in the system in the late 1960s and early 1970s. Strong unions and social democratic parties enhanced labour's bargaining power. One way to transcend this limit was initially to encourage immigration. The French relied on Maghrebian labour, the British drew on its empire, the US threw out anti-immigrant legislation in 1965. This strategy didn't work. The other idea was to off-shore, but to achieve this it was necessary to restructure capital accumulation, so that parts production and so on could be moved offshore, which meant reshaping spatial relations with containerisation and new transport technologies. This didn't really take off until the late 1970s. Another idea was to 'invent' Reagan, Thatcher, and Pinochet, people who would really bust up organised labour, destroy its bargaining power and depress wages.

The last solution was to turn to technological innovation, producing technologically induced unemployment. This could only come about effectively if the monopoly capital that characterised the fifties and sixties was broken down to some extent and exposed to competition. Monopoly capital - big auto companies, for example - had been able to meet labour demands and offset it somewhat by raising prices. That was part of the social compromise between capital and labour. This had to be broken for capitalism to repair itself. But to introduce competition, one could no more rely on start-up firms than one could expect a small internet venture capitalist to destroy the Bill Gates oligopoly. It meant opening up the US to foreign competition from rising German and Japanese firms. Detroit has experienced several crises, each worse than the last, as a result of this. But because American capital has preferential access to the American state, each crisis has resulted in a bail-out for US firms, but not their overseas competitors. Heightened competition had another interesting effect - it reduced the profitability of investment in productive industry. It also reduced prices, so that price growth stabilised in the 1980s. Overall, then, low wages, low prices and technological dynamism looked like a satisfactory way for the system to survive. But then, at the other end of the capital cycle, a new problem arose. The US economy and culture was dependent on conspicuous consumption. Consumption accounted for 70% of the dynamism of the US economy (I don't know how Harvey measured this), but where would consumerism come from if wages stagnated? The society became dependent on speculation and debt. A new set of financial innovations had to be developed to resolve not only the problem of allocating capital efficiently, but also ensuring that at the other end, the problem of effective demand was dealt with. Thus, financial institutions would lend money to developers at the same time as they lent money to house-buyers, therefore controlling both the demand for and the supply of housing. But even if buyers' credit-ratings were poor, the financial institutions still had to lend to them in order to realise the investment they'd made in the developers. This partially accounts for the drive toward deregulation and the subsequent 'subprime crisis'.

There is also the question of upper class income. Wages are depressed, but this means that more wealth is accumulated by the rich. Not only that, but successive governments from Reagan to Bush II engaged in a sort of ruling class Keynesianism, slashing taxes for the rich and financing it through debt. The question, then, is what do the rich do with their money. They invest it, of course, but increasingly not in productive industry which, as mentioned before, yields poorer profits these days. Instead they invest it in 'asset values', which are ponzi-like in the sense that any investment automatically raises the value of of the asset being invested in, and thus they have a propensity to produce stock market bubbles. These investment strategies require yet more financial innovation. This has naturally produced several financial crises, variously annotated as 'Black Monday', 'Oh Shit Tuesday' and 'Dead Bankers Wednesday'. It has led to the collapse of major financial institutions long before 2008, notably the Savings and Loans crisis in the 1980s. Between 1987 and 2002, over 1000 banks went under in the US, and the total bailout cost $2bn. Noticeably the worst crises over the last few decades have been property-led, as capitalists have preferred to invest in property rather than productive capital as such, and this has certainly been true of the latest crash and recession. The one thing that is different this time is that the crisis started in the US and went global this time.

This leaves the question of what the ruling class can do now to save its position. One option is to hang in there, defend their assets, and hope to restore something like their previous condition of profitability with the same basic structures of accumulation. Those who have preserved themselves and kept enough money are now in a position to buy up assets very cheap, and this new, narrower class is in formation, a 'bankocracy' based on a set of boutique investment banks which will take the place of Lehman Brothers et al. The assets being given to the banks by various states are not by and large being used to restore lending, but to shore up the existing banks, enable them to buy up others, and consolidate existing class power. They will try to come out of the current crisis with a slicker and more careful mode of control, and are increasingly centralising credit, integrated into the state, but under the control of central bankers. Politically, this class will have tremendous power. They can, if they want, push for the clobbering of labour and the evisceration of remaining social democratic protections, especially if this is necessary to restore the position of financial institutions. There is one serious difficulty for this solution. If there is going to be high unemployment - currently 10% in the US, probably 15% by the year end - then where will effective demand come from? The credit system can no longer back it up. This leads to other forces coming to the fore, arguing for a real Keynesian programme of deficit-financing that is not the same as bailing out the banks, a stimulus programme intended to create full employment and redistribute wealth and incomes. But if this is the only way out of the problem, the US has a problem - they have an enormous debt problem before they start, and politically it is very difficult to defend the redistribution of wealth, even the modest kind that Obama supports. Moreover, for the new phase of accumulation to be viable, it has to involve a total re-design of urban structures so that city life is commensurate with ecological survival. But neither capital nor its political leadership has the foresight and imagination to engage in such a plan. Instead, politicians look for technological fixes to the environmental problem. Interestingly, those who can afford the Keynesian solution are states like China and nearby south-east Asian economies. So, China could potentially lead the system out of the mess.

There are thus two prospects facing the working class. If there is to be a neo-neoliberal solution, then it will so immiserate most workers that some sort of popular uprising is surely indicated. Such a concentration and centralisation of wealth and power is full of peril for us. If there is to be a Keynesian solution, then we have to intervene to see what we can get out of it, and how far it can be radicalised. Keynes supported full employment, a shortening of the working day, the redistribution of income, and it may well be that the adoption of a Keynesian solution will open up opportunities for us to demand these things. There don't appear to be any other options for capital at the moment.