Accumulation by dispossession

Last updated

Accumulation by dispossession is a concept presented by the Marxist geographer David Harvey. It defines neoliberal capitalist policies that result in a centralization of wealth and power in the hands of a few by dispossessing the public and private entities of their wealth or land. Such policies are visible in many western nations from the 1970s and to the present day. [1] Harvey argues these policies are guided mainly by four practices: privatization, financialization, management and manipulation of crises, and state redistributions.

Contents

Practices

Privatization

Privatization and commodification of public assets have been among the most criticized and disputed aspects of neoliberalism. Summed up, they could be characterized by the process of transferring property from public ownership to private ownership. According to Marxist theory, this serves the interests of the capitalist class, or bourgeoisie, as it moves power from the nation's governments to private parties. At the same time, privatization generates a means for profit for the capitalist class; after a transaction they can then sell or rent to the public what used to be commonly owned, or use it as capital through the capitalist mode of production to generate more capital.

The 2022 World Inequality Report, a four-year research project organized by the economists Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, shows that "the world is marked by a very high level of income inequality and an extreme level of wealth inequality" and that these inequalities "seem to be about as great today as they were at the peak of western imperialism in the early 20th century." According to the report, the bottom half of the population owns 2% of global wealth, while the top 10% owns 76% of it. The top 1% owns 38%. [2] [3] [4]

Mass incarceration

Several scholars have linked mass incarceration of the poor in the United States with the rise of neoliberalism. [5] [6] [7] [8] Sociologist Loïc Wacquant and Marxist economic geographer David Harvey have argued that the criminalization of poverty and mass incarceration is a neoliberal policy for dealing with social instability among economically marginalized populations. [9] [10] According to Wacquant, this situation follows the implementation of other neoliberal policies, which have allowed for the retrenchment of the social welfare state and the rise of punitive workfare, whilst increasing gentrification of urban areas, privatization of public functions, the shrinking of collective protections for the working class via economic deregulation and the rise of underpaid, precarious wage labor. [11] [12] By contrast, it is extremely lenient in dealing with those in the upper echelons of society, in particular when it comes to economic crimes of the upper class and corporations such as fraud, embezzlement, insider trading, credit and insurance fraud, money laundering and violation of commerce and labor codes. [9] [13] According to Wacquant, neoliberalism does not shrink government, but instead sets up a "centaur state" with little governmental oversight for those at the top and strict control of those at the bottom. [9] [14]

Financialization

The wave of financialization that set in the 1980s is facilitated by governmental deregulation which has made the financial system one of the main centers of redistributive activity. Stock promotions, Ponzi schemes, structured asset destruction through inflation, asset stripping through mergers and acquisitions, dispossession of assets (raiding of pension funds and their decimation by stock and corporate collapses) by credit and stock manipulations, are, according to Harvey, central features of the post-1970s capitalist financial system. [15] That aspect relies entirely on the fact that the quantity of money in circulation and therefore demand levels and price levels are controlled by the boards of directors of privately owned banks.

Those boards of directors are also on boards of corporations and any number of other legal vehicles who are also profiting from asset price swings. At the heart of accumulation by dispossession is the private control of the quantity of money supply that can be manipulated for private gain, which includes creating unemployment or restive conditions in the population. This process is well documented in English history as far back as prior to the founding of the Bank of England and before that in the Netherlands. The process works well with or without a central bank and with or without gold backing. The details are also manipulated from time to time as needed to satisfy popular rage or apathy. [16]

Management and manipulation of crises

By creating and manipulating crises, such as by suddenly raising interest rates, poorer nations can be forced into bankruptcy, and agreeing to such deals like that of the structural adjustment programs can yield more damages to those nations. Harvey reasoned that this is authorized by parties such as the U.S. Treasury, World Bank and the International Monetary Fund.

State redistributions

The neoliberal nation-state is one of the most important agents of redistributive policies. Even when privatization or commodification appear to be profitable to the lower class, in the long run it can affect the economy negatively. The state seeks redistributions through a variety of things, like changing the tax code to profit returns on investment rather than incomes and wages (of the lower classes).

Examples

Margaret Thatcher's program for the privatization of social housing in Britain was initially seen as beneficial for the lower classes which could now move from rental to ownership at a relatively low cost, gain control over assets and increase their wealth. However, housing speculation took over following the transfers (particularly in the prime central locations), and low-income populations were forced out to the periphery. [17] Ultimately, the new homeowners were also borrowers and paid portions of their yearly income as interest on long-term mortgages, effectively transferring a portion of their wealth to the owners of banks with licenses to create debt money from fractional reserves. Thatcher's council privatization scheme increased the potential number of borrowers in the UK by up to 20% of UK residents who lived in council housing at the end of the 1970s. [18] Contemporary examples include attempts to deprive people of land in places like Nandigram in India and eMacambini in South Africa.

Privatization is the process of transferring public assets from the state to the private companies. Productive assets include natural resources, such as earth, forest, water, and air. Such are assets that states have used to hold in trust for the people it represents. To privatize them away and sell them as stock to private companies is what Harvey calls accumulation by dispossession.

State redistributions can be in the form of contracts given to power groups: for large infrastructures, services paid by the state and carried out by private enterprise, defense developments, research projects. One would have to find out if those contracts serve public good in a fair way or if they sustain a power structure. Also, the granting of licenses for all sorts of state sanctioned activities can turn out as unfair wealth distribution. Another important redistribution channel is by State supported financing of private enterprise activities.

Relation to Marxism

Harvey links these practices to what Karl Marx called original or primitive accumulation, and ties these to examples from the real world. He therefore draws on the theory of ongoing primitive accumulation by Rosa Luxemburg as laid out in The Accumulation of Capital. The neoliberal modernity is, according to Harvey, a modernity in which dispossession plays a large role and in which the capital class is gaining power at the expense of the labour class.


Contemporary movements against accumulation by dispossession

See also

Related Research Articles

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price systems, private property, property rights recognition, voluntary exchange, and wage labor. In a market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.

<span class="mw-page-title-main">Corporatocracy</span> Society controlled by business corporations

Corporatocracy is an economic, political and judicial system controlled by business corporations or corporate interests.

<span class="mw-page-title-main">Anti-capitalism</span> Political ideology and movement opposed to capitalism

Anti-capitalism is a political ideology and movement encompassing a variety of attitudes and ideas that oppose capitalism. In this sense, anti-capitalists are those who wish to replace capitalism with another type of economic system, such as socialism or communism.

Neoliberalism, also neo-liberalism, is a term used to signify the late-20th century political reappearance of 19th-century ideas associated with free-market capitalism, which had fallen into decline following the Second World War. The term has multiple, competing definitions, and is often used pejoratively. In scholarly use, the term is frequently undefined or used to characterize a vast variety of phenomena.

<span class="mw-page-title-main">Economic inequality</span> Distribution of income or wealth between different groups

Economic inequality is an umbrella term for a) income inequality or distribution of income, b) wealth inequality or distribution of wealth, and c) consumption inequality. Each of these can be measured between two or more nations, within a single nation, or between and within sub-populations.

Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of profit, rent, interest, royalties or capital gains. The aim of capital accumulation is to create new fixed and working capitals, broaden and modernize the existing ones, grow the material basis of social-cultural activities, as well as constituting the necessary resource for reserve and insurance. The process of capital accumulation forms the basis of capitalism, and is one of the defining characteristics of a capitalist economic system.

In Marxian economics, economic reproduction refers to recurrent processes. Michel Aglietta views economic reproduction as the process whereby the initial conditions necessary for economic activity to occur are constantly re-created. Marx viewed reproduction as the process by which society re-created itself, both materially and socially.

In economics, a cycle of poverty or poverty trap is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention. It can persist across generations, and when applied to developing countries, is also known as a development trap.

Workfare is a governmental plan under which welfare recipients are required to accept public-service jobs or to participate in job training. Many countries around the world have adopted workfare to reduce poverty among able-bodied adults; however, their approaches to execution vary. The United States and United Kingdom are two countries utilizing workfare, albeit with different backgrounds.

In Marxian economics and preceding theories, the problem of primitive accumulation of capital concerns the origin of capital and therefore how class distinctions between possessors and non-possessors came to be.

The history of capitalism is diverse and the concept of capitalism has many debated roots. The history of the past 500 years is concerned with the development of capitalism in its various forms. Capital accumulated by a variety of methods, at a variety of scales, became associated with much variation in the concentration of wealth and economic power. Capitalism gradually became the dominant economic system throughout the world.

<span class="mw-page-title-main">Criticism of capitalism</span> Arguments against the economic system of capitalism

Criticism of capitalism is a critique of political economy that involves the rejection of, or dissatisfaction with the economic system of capitalism and its outcomes. Criticisms typically range from expressing disagreement with particular aspects or outcomes of capitalism to rejecting the principles of the capitalist system in its entirety.

<span class="mw-page-title-main">Income inequality in the United States</span> National income inequality

Income inequality has fluctuated considerably in the United States since measurements began around 1915, moving in an arc between peaks in the 1920s and 2000s, with a 30-year period of relatively lower inequality between 1950 and 1980.

<span class="mw-page-title-main">Social inequality</span> Uneven distribution of resources in a society

Social inequality occurs when resources within a society are distributed unevenly, often as a result of inequitable allocation practices that create distinct unequal patterns based on socially defined categories of people. Differences in accessing social goods within society are influenced by factors like power, religion, kinship, prestige, race, ethnicity, gender, age, sexual orientation, and class. Social inequality usually implies the lack of equality of outcome, but may alternatively be conceptualized as a lack of equality in access to opportunity.

Redistribution of income and wealth is the transfer of income and wealth from some individuals to others through a social mechanism such as taxation, welfare, public services, land reform, monetary policies, confiscation, divorce or tort law. The term typically refers to redistribution on an economy-wide basis rather than between selected individuals.

<span class="mw-page-title-main">Causes of poverty</span>

The causes of poverty may vary with respect to nation, region, and in comparison with other countries at the global level. Yet, there is a commonality amongst these causes. Philosophical perspectives, and especially historical perspectives, including some factors at a micro and macro level can be considered in understanding these causes.

The commodification of nature is an area of research within critical environmental studies that is concerned with the ways in which natural entities and processes are made exchangeable through the market, and the implications thereof.

<span class="mw-page-title-main">Commodification of water</span> Process of turning water into a tradable commodity

The commodification of water refers to the process of transforming water, especially freshwater, from a public good into a tradable commodity also known as an economic good. This transformation introduces water to previously unencumbered market forces in the hope of being managed more efficiently as a resource. The commodification of water has increased significantly during the 20th century in parallel with fears over water scarcity and environmental degradation.

In sociology and economics, the precariat is a neologism for a social class formed by people suffering from precarity, which means existing without predictability or security, affecting material or psychological welfare. The term is a portmanteau merging precarious with proletariat.

Economic democracy is a socioeconomic philosophy that proposes to shift ownership and decision-making power from corporate shareholders and corporate managers to a larger group of public stakeholders that includes workers, consumers, suppliers, communities and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap.

References

  1. Harvey, D. (2004). "The 'new' imperialism: accumulation by dispossession". Socialist Register. 40: 63–87.
  2. Kaplan, Juliana; Kiersz, Andy (December 7, 2021). "A huge study of 20 years of global wealth demolishes the myth of 'trickle-down' and shows the rich are taking most of the gains for themselves". Business Insider . Retrieved December 8, 2021.
  3. Elliott, Larry (December 7, 2021). "Global inequality 'as marked as it was at peak of western imperialism'". The Guardian . Retrieved December 8, 2021.
  4. "World Inequality Report 2022" . Retrieved December 8, 2021.
  5. Haymes, Vidal de Haymes & Miller (2015), pp. 3, 346.
  6. Aviram, Hadar (September 7, 2014). "Are Private Prisons to Blame for Mass Incarceration and its Evils? Prison Conditions, Neoliberalism, and Public Choice". Fordham Urban Law Journal . Fordham University School of Law. SSRN   2492782 . Retrieved December 27, 2014.
  7. Gerstle (2022), pp. 130–132.
  8. Gottschalk, Marie (2014). Caught: The Prison State and the Lockdown of American Politics. Princeton University Press. p.  10. ISBN   978-0691164052.
  9. 1 2 3 Wacquant (2009), pp. 125–126, 312.
  10. Harvey (2005).
  11. Wacquant (2009), pp. 53–54.
  12. Shaw, Devin Z. (September 29, 2010). "Loïc Wacquant: "Prisons of Poverty"". The Notes Taken.
  13. Wacquant, Loïc (August 1, 2011). "The punitive regulation of poverty in the neoliberal age". openDemocracy . Archived from the original on September 25, 2018. Retrieved July 17, 2018.
  14. Mora, Richard; Christianakis, Mary. "Feeding the School-to-Prison Pipeline: The Convergence of Neoliberalism, Conservativism, and Penal Populism". Journal of Educational Controversy . Woodring College of Education, Western Washington University . Retrieved February 23, 2014.
  15. David Harvey (2003). The New Imperialism. Oxford University Press. ISBN   0-19-926431-7.
  16. Hollis, Christopher (1935). Two Nations: A Financial Analysis of English History. London: George Routledge and Sons.
  17. Harvey, David (2003). The New Imperialism . Oxford: Oxford University Press. p.  158. ISBN   978-0-19-926431-5.
  18. Jones, Owen (2011). Chavs: The Demonization of the Working Class . London New York: Verso. p. 34.

Works cited

Further reading