Review of David Harvey’s two recent books, The Enigma of Capital: And the Crises of Capitalism and A Companion to Marx’s ‘Capital.

The real originality of The Limits to Capital, however, is to add a new geographical dimension to crisis formation. Harvey goes about this via a theory of rent. One effect of the approach is to suggest why property speculation – with its value ultimately tied up in potential rental income – should be such a familiar capitalist perversion (in the psychoanalytic sense of overinvestment in one kind of object). Another is to convert an apparent embarrassment for Marxian theory into a show of strength. The would-be embarrassment lies in the evident difficulty of reconciling a labour theory of value with the price of unimproved land, given that land is obviously not a product of human labour. Harvey’s bold and ingenious solution is to propose that, under capitalism, ground rent – or the proportion of property value attributable to mere location, rather than to anything built or cultivated on the land – becomes a ‘pure financial asset’. Ground rent, in other words, is a form of fictitious capital, or value created in anticipation of future commodity production: ‘Like all such forms of fictitious capital, what is traded is a claim on future revenues, which means a claim on future profits from the use of the land or, more directly, a claim on future labour.’

From the need to realise ground rent stems capitalism’s whole geography of anxious anticipation. Capital overaccumulated in one place can flow to another which appears to boast better ultimate prospects of profit. Rising land values will shunt capital to new locations, at the same time that the resulting increase in rental costs compels a matching expansion of production, with its accompanying physical and social infrastructure. The relationship between credit and commodities is in this way translated into spatial terms as an uneasy rapport between one kind of capital, highly mobile or liquid, and another kind – ‘fixed capital embedded in the land’ – defined by its inertness. Here, in the latent conflict between migratory finance capital and helplessly stationary complexes of fixed capital, including not only factories and office buildings but roads, houses, schools and so on, Harvey has found a contradiction of capitalism overlooked by Marx and his heirs.

The contradiction may look at first like a brilliant solution to the problem of overaccumulation. Overaccumulated capital, whether originating as income from production or as the bank overdrafts that unleash fictitious values, can postpone any immediate crisis of profitability by being drawn off into long-term infrastructural projects, in an operation Harvey calls a ‘spatio-temporal fix’. Examples on a grand scale would be the British boom in railway construction of the 1820s, the Second Empire modernisation of Paris, the suburbanisation of the US after World War Two, and the recent international pullulation of commercial and residential towers. In each case, a vast quantity of capital, faced with the question of profitability, could as it were postpone the answer to a remote date, since investments in infrastructure promise such delayed returns. Meanwhile, transformed spatial arrangements swap old trades for new ones – Harvey notes that Haussmann’s Paris witnessed the extinction of the water-carrier and the advent of the electrician – or rejuvenate existing industries, like the postwar car manufacturers in the US.


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