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Seventeen Contradictions and the End of Capitalism

The dangers of capitalism

By David Harvey
  • Read in 18 minutes
  • Contains 11 key ideas
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Seventeen Contradictions and the End of Capitalism by David Harvey

Seventeen Contradictions and the End of Capitalism (2014) reveals the inherent and sometimes dangerous contradictions of capital. Through explaining the inner workings of capital, the book explores why the economic engine of capitalism might stutter, and why it sometimes appears on the verge of collapse.

Key idea 1 of 11

The value of something is always a matter of perspective.

When you go to the supermarket, you exchange some of your money for some food. This is because food is useful to you in ways that money isn’t: you can’t eat money, but you can eat food.

In fact, everything we buy, just like food, has both a use and an exchange value. Take housing, for example. Its use value is the shelter it provides; it’s a place where you can build a life, and it can also function as a symbol of status or architectural significance.

But if you were to exchange your house for something else, how would you measure its worth? One way would be to calculate the cost of the raw materials, the workers’ wages and payments for any services required to build it. In other words, the cost would be fixed based on what was paid to produce the house.

In much of the capitalist world, however, exchange value also depends on speculation. All sorts of things can influence a house’s value to a prospective buyer, like location, prestige, past owners and so on – each of these factors can affect its exchange value.

Buyers and producers, both trying to profit in some way from any exchange, are mostly interested in exchange values, that is, the actual costs of producing something plus the profit that can be made from selling it.  

The discrepancy between use value and exchange value can give rise to full-blown crises in the market. Take the US housing market crisis from 2007 to 2009. Before the crisis, housing speculation soared. More and more people hoped to profit from these rising exchange values, and thus borrowed more in order to buy into “safe” housing.

Eventually, the pursuit of exchange value destroyed access to housing as a use value. All of the speculation drove property values higher than large segments of the society could afford to pay.

This contradiction between properties’ use and exchange value caused about 4 million people lose their homes due to foreclosure, as decreasing access to housing caused exchange values to crash.

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