Re: [OPE] Specially for Patrick Bond: David Harvey on equilibrium

From: Patrick Bond <>
Date: Fri Sep 18 2009 - 05:22:59 EDT

Jurriaan Bendien wrote:
> "Marx frequently makes use of equilibrium in his work. (...) The
> equilibrium between supply and demand is achieved only through a
> reaction against the constant upsetting of the equilibrium. (...) What
> differentiates Marx from bourgeois political economy (both before and
> since) is the emphasis he puts on the necessity for departures from
> equilibrium and the crucial role of crises in restoring that
> equilibrium." (David Harvey, The Linits to Capital, Verso edition
> 2006, p. 82-83).
> In this way, Harvey joins in the chorus of the equilibrium Marxists.

Comrade Jurriaan, I've been way busy, sorry, so didn't get back to you
right away. But I think you're reading this out of context.

I studied under David and my gut feel is you're engaged in semantic
quibbling because you're not giving him credit for demolishing the way
crisis tendencies generate systemic disequilibrium. I think he's trying
here both to illustrate dialectic method, and make a political point
about how markets don't 'clear' properly using intrinsic,
self-correcting 'equilibrating' methods (supply-demand corrections and
moves up and down the curves or through shifts of the curves), but on
the contrary, through destruction of overaccumulated capital in a manner
completely foreign to bourgeois economics.

What David is doing (I think - it was 1985 when I read Das K with him)
is identifying why 'equilibrium' is 'restored' by way of crisis, with
the emphasis on *crisis*. As you may know, David's take on the
transformation problem is to identify how prices become delinked from
values. The rising organic composition of capital, the tendency to real
(value-'productive') sector overaccumulation as a result, the tendency
for the proft rate to fall in the real sector, the turn to
financialisation (along with spatial displacements and
accumulation-by-dispossession in the Luxemburgist sense), and then
finally the bursting of financial bubbles and devalorisation of real
sector overaccumulated capital - this is the core process in the
accumulation cycle, right?

So now add some 'supply and demand' as a series of minor incremental
changes and movements around this process, which do not really disturb
the underlying story of crisis formation. For bourgeois economic,
supply-demand corrections gives market clearing and equilibrium is
restored. But in this quote -

> Prof. Harvey makes his methodological error quite explicit by quoting
> Marx to the effect that "if supply and demand balance one another they
> cease to explain anything" (p. 82). Harvey infers from this, that "The
> equilibrium between supply and demand is achieved only through a
> reaction against the constant upsetting of the equilibrium."

- again I suspect that in context the broader tendency to crisis is
what's crucial here. And if there's a 'reaction' - like a massive
depression such as we're in - that has the effect of suddenly wiping out
half the world's stock market values (9/08-3/09), yeah, a certain
'equilibrium' and self-correction is occurring, if one wants to be banal
about it. But the whole point is that these vast market distortions
build up *in spite of* all the little supply-demand movements occurring
in the prior period, demonstrating that this process is really not at
all important to broader accumulation cycle.

I'm away from my Limits to Capital so can't check this right now, sorry.
So much of Harvey's reading of Marx ends up considering these sorts of
crisis tendencies, especially in his solution to the transformation
problem, that I think you've exaggerated somehow to consider him a
theorist of market equilibrium.

I'm dealing with too many mundane matters (crises!) myself to check this
out properly, but would what I've noted above do as a start?

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Received on Fri Sep 18 05:27:12 2009

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