In the run up to the announcement of the Government's spending review on Wednesday I thought I'd share these youtube clips. Click on this link for the first of five parts, then select the remaining four parts from the 'suggestions'.
http://www.youtube.com/watch?v=tSDGDerFst4
They are from a lecture by Prof David Harvey from City University New York which summarises his new book 'The Enigma of Capital'. The book and lecture seek to explain the structural causes of the recent financial crisis and as such they are the clearest and most eloquent attempt I've come across. Prof Harvey applies a distinctly Marxian analysis to this topic and unlocks a lot of really serious structural questions that I think need to be confronted if we are serious about reimaging the economy in the image of God.
Check it out. Measure it against the plumb-line. I'll post about a couple of specifics shortly and will try to refrain from shouting viva la Revolution since I'm in the library!
Nathan
Hello all,
ReplyDeletejust wanted to say hi. The blog is looking really good and the name is great! I'm getting really fired up about this stuff. Look forward to speaking to you about it soon.
Ok, that was quite heavy going! I look forward to your comments Nathan, hopefully you'll be able to distill it into layman's terms.
ReplyDeleteThe main thing I picked up on was the fact that crises are often linked to property markets. However, I wasn't sure if he actually went any further on that point to explain why this is so or what we should be doing about it. I'd be interested to hear your take on this Nathan.
I think that Harvey is essentially talking about asset bubbles. This is where people invest in property when prices and interest rates are low, with the expectation that prices will rise. Of course, when people do this on mass this causes the prices to rise (a self-fulfilling prophecy if you like), more people jump on the bandwagon and the bubble begins to inflate. Eventually, you end up with surplus property (an abundance of modern flats and offices that nobody can afford to buy or rent, or that are financed with unsustainable mortgages) and the bubble bursts. Some people come out of this situation having made a lot of money by buying at the bottom of the market and selling at the top of the market, but the actual value of their investment is significantly less than their personal return (because it was initially over-valued). Others end up with vast sums wiped from their savings and pensions (unless the government steps in to rescue them). I think the moral of the story is that investment is good (as this is what builds an economy and improves living standards) but speculative and short-term investment is bad.
ReplyDeleteHarvey also suggests that the rapid urbanisation that takes place during these property booms has a negative social impact, which can often be overlooked when you only focus on the economics.