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. These neoliberal policies are guided mainly by four practices: privatization, financialization, management and manipulation of crises, and state redistributions.
Marxist geography is a strand of critical geography that uses the theories and philosophy of Marxism to examine the spatial relations of human geography. In Marxist geography, the relations that geography has traditionally analyzed — natural environment and spatial relations — are reviewed as outcomes of the mode of material production. To understand geographical relations, on this view, the social structure must also be examined. Marxist geography attempts to change the basic structure of society.
David W. Harvey is a British-born Marxist economic geographer and Distinguished Professor of anthropology and geography at the Graduate Center of the City University of New York (CUNY). He received his PhD in geography from the University of Cambridge in 1961. Harvey has authored many books and essays that have been prominent in the development of modern geography as a discipline. He is a proponent of the idea of the right to the city.
Privatization, also spelled privatisation, can mean different things including moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when a heavily regulated private company or industry becomes less regulated. Government functions and services may also be privatized; in this case, private entities are tasked with the implementation of government programs or performance of government services that had previously been the purview of state-run agencies. Some examples include revenue collection, law enforcement, and prison management.
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.
Within a capitalist economic system, Commodification is the transformation of goods, services, ideas and people into commodities or objects of trade. A commodity at its most basic, according to Arjun Appadurai, is "anything intended for exchange," or any object of economic value.
Neoliberalism or neo-liberalism is the 20th-century resurgence of 19th-century ideas associated with laissez-faire economic liberalism and free market capitalism. While it is most often associated with such ideas, the defining features of neoliberalism in both thought and practice have been the subject of substantial scholarly discourse. These ideas include economic liberalization policies such as privatization, austerity, deregulation, free trade and reductions in government spending in order to increase the role of the private sector in the economy and society. These market-based ideas and the policies they inspired constitute a paradigm shift away from the post-war Keynesian consensus which lasted from 1945 to 1980.
Property, in the abstract, is what belongs to or with something, whether as an attribute or as a component of said thing. In the context of this article, it is one or more components, whether physical or incorporeal, of a person's estate; or so belonging to, as in being owned by, a person or jointly a group of people or a legal entity like a corporation or even a society. Depending on the nature of the property, an owner of property has the right to consume, alter, share, redefine, rent, mortgage, pawn, sell, exchange, transfer, give away or destroy it, or to exclude others from doing these things, as well as to perhaps abandon it; whereas regardless of the nature of the property, the owner thereof has the right to properly use it, or at the very least exclusively keep it.
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. 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.
A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.
In financial accounting, an asset is any resource owned by the business. Anything tangible or intangible that can be owned or controlled to produce value and that is held by a company to produce positive economic value is an asset. Simply stated, assets represent value of ownership that can be converted into cash. The balance sheet of a firm records the monetary value of the assets owned by that firm. It covers money and other valuables belonging to an individual or to a business.
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. The opposite of inflation is deflation, a sustained decrease in the general price level of goods and services. The common measure of inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time.
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.
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.
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.
The World Bank is an international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group.
The International Monetary Fund (IMF), also known as the Fund, is an international organization headquartered in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on World Bank for its resources. Formed in 1944 at the Bretton Woods Conference primarily by the ideas of Harry Dexter White and John Maynard Keynes, it came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international payment system. It now plays a central role in the management of balance of payments difficulties and international financial crises. Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money. As of 2016, the fund had XDR 477 billion.
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).
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.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. 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.
Harvey links these practices to what Karl Marx called original or primitive accumulation, and ties these to examples from the real world. The neoliberal modernity is thus, according to Harvey, a modernity in which dispossession plays a large role, and where the capital class is gaining power at the expense of the labour class.
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system and competitive markets. In a capitalist market economy, decision-making and investments are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Anti-capitalism encompasses a wide variety of movements, ideas and attitudes that oppose capitalism. Anti-capitalists, in the strict sense of the word, are those who wish to replace capitalism with another type of economic system.
In economics, capital consists of assets that can enhance one's power to perform economically useful work. For example, in a fundamental sense a stone or an arrow is capital for a caveman who can use it as a hunting instrument, while roads are capital for inhabitants of a city.
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 process of capital accumulation forms the basis of capitalism, and is one of the defining characteristics of a capitalist economic system.
A theory of capitalism describes the essential features of capitalism and how it functions. The history of various such theories is the subject of this article.
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 Marxian economics and preceding theories, the problem of primitive accumulation of capital concerns the origin of capital, and therefore of how class distinctions between possessors and non-possessors came to be.
In Marxism, proletarianization is the social process whereby people move from being either an employer, unemployed or self-employed, to being employed as wage labor by an employer. Proletarianization is often seen as the most important form of downward social mobility.
Productive and unproductive labour are concepts that were used in classical political economy mainly in the 18th and 19th centuries, which survive today to some extent in modern management discussions, economic sociology and Marxist or Marxian economic analysis. The concepts strongly influenced the construction of national accounts in the Soviet Union and other Soviet-type societies.
Fictitious capital is a concept used by Karl Marx in his critique of political economy. It is introduced in chapter 25 of the third volume of Capital. Fictitious capital contrasts with what Marx calls "real capital", which is capital actually invested in physical means of production and workers, and "money capital", which is actual funds being held. The market value of fictitious capital assets varies according to the expected return or yield of those assets in the future, which Marx felt was only indirectly related to the growth of real production. Effectively, fictitious capital represents "accumulated claims, legal titles, to future production" and more specifically claims to the income generated by that production.
Criticism of capitalism ranges from expressing disagreement with the principles of capitalism in its entirety to expressing disagreement with particular outcomes of capitalism.
The tendency of the rate of profit to fall (TRPF) is a hypothesis in economics and political economy, most famously expounded by Karl Marx in chapter 13 of Capital, Volume III. Economists as diverse as Adam Smith, John Stuart Mill, David Ricardo and Stanley Jevons referred explicitly to the TRPF as an empirical phenomenon that demanded further theoretical explanation, yet they each differed as to the reasons why the TRPF should necessarily occur.
Redistribution of income and redistribution of wealth are respectively the transfer of income and of wealth from some individuals to others by means of a social mechanism such as taxation, charity, 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.
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.
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. Central to its emergence was the view that public provision of water and government regulation of environmentally damaging behavior was ineffective. Commodification has its theoretical roots in neoclassical discourse whereby a good or service is assigned an economic value which prevents misuse. The commodification of water, although not a new phenomenon, is considered part of a more recent market-based approach to water governance which provokes both approval and disapproval from a range of stakeholders. Through the establishment of private property rights and market mechanisms it is argued that water will be allocated more efficiently. Karen Bakker describes this market-based approach proposed by neoliberals as "market environmentalism": a method of resource regulation that promises economic and environmental objectives can be met in tandem. To this extent the commodification of water can be viewed as an extension of capitalist and market tendencies into new spaces and social relations. Karl Marx termed this phenomenon, "primitive accumulation". For this reason there remains serious doubt as to whether commodification of water can help improve access to freshwater supplies and conserve water as a resource.
Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbours 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.
In Karl Marx's critique of political economy and subsequent Marxian analyses, the capitalist mode of production refers to the systems of organizing production and distribution within capitalist societies. Private money-making in various forms preceded the development of the capitalist mode of production as such. The capitalist mode of production proper, based on wage-labour and private ownership of the means of production and on industrial technology, began to grow rapidly in Western Europe from the Industrial Revolution, later extending to most of the world.
Surplus value is a central concept in Karl Marx's critique of political economy. "Surplus value" is a translation of the German word "Mehrwert", which simply means value added, and is cognate to English "more worth". Surplus-value is the difference between the amount raised through a sale of a product and the amount it cost to the owner of that product to manufacture it: i.e. the amount raised through sale of the product minus the cost of the materials, plant and labour power. Conventionally, value-added is equal to the sum of gross wage income and gross profit income. However, Marx uses the term Mehrwert to describe the yield, profit or return on production capital invested, i.e. the amount of the increase in the value of capital. Hence, Marx's use of Mehrwert has always been translated as "surplus value", distinguishing it from "value-added". According to Marx's theory, surplus value is equal to the new value created by workers in excess of their own labor-cost, which is appropriated by the capitalist as profit when products are sold.
Das Kapital, also called Capital. A Critique of Political Economy by Karl Marx is a foundational theoretical text in materialist philosophy, economics and politics. Marx aimed to reveal the economic patterns underpinning the capitalist mode of production in contrast to classical political economists such as Adam Smith, Jean-Baptiste Say, David Ricardo and John Stuart Mill. While Marx did not live to publish the planned second and third parts, they were both completed from his notes and published after his death by his colleague Friedrich Engels. Das Kapital is the most cited book in the social sciences published before 1950.
Crisis theory, concerning the causes and consequences of the tendency for the rate of profit to fall in a capitalist system, is now generally associated with Marxist economics.