Review: Chris Harman, Zombie Capitalism

In capitalism’s early life Marx compared capital to a vampire, that ‘only lives by sucking living labour, and lives the more, the more labour it sucks’. Chris Harman thinks a different horror staple is appropriate for the system’s later years. Far from being the sophisticated, sentient vampire count, it is better compared to the mindless, destructive zombie, ’seemingly dead when it comes to achieving human goals and responding to human feelings, but capable of sudden spurts of activity that cause chaos all round’. Harman’s book is a detailed account of the history and nature of this zombie system, framing a thorough defence of the relevance of Marx to understanding the current economic crisis.

Zombie Capitalism benefits, ironically, from having been intended as a rather different book. Harman’s intention was an update of his book Explaining the Crisis, intended to defend similar conclusions and incorporate work done in articles in International Socialism over recent years. The Credit Crunch, Lehman Brothers and the onset of recession created a need to rework much of the book. This actually helps give greater background to the account of what is going on today. Rather than being a rushed out ‘Marxist guide to the credit crunch’ it is an important document in a particular tradition of Marxism, which gives a persuasive account of the events of the past two years by rooting them in wider processes in the system. In fact, only three of the fourteen chapters are taken up with a direct discussion of recent events.

Harman assumes little prior knowledge, and a good thing too as much of the debate amongst Marxists on these issues can be anything but accessible. Marx’s account of capitalist crisis, his Labour Theory of Value and the various debates around these issues are explained with clarity. Following Marx we get a picture of a system characterised by competitive accumulation, with periodic, ever deepening crises. A system which is international, but at the same time gives rise to powerful and competing nation states. A system which transforms use values into exchange values, and in so doing mystifies and distorts them, and which transforms even basic human capacities into a commodity. 

Harman identifies two key trends in the history of capitalism: Endless, rapid, competitive accumulation and, more controversially, the tendency of profit rates to fall. Marx argued that as the proportion of investment in fixed capital compared to that in Labour increased, the rate of return on investment will decrease. This is because Labour is the only source of value. Whilst this claim has been the source of much controversy Harman is not naïve about it, and he defends it with all the vigour of someone who has been an active socialist across five decades. This tendency, argues Harman, is crucial to understanding the various ups and downs of the global system over the past century and a half, and can help us understand what economists still see as the holy grail, the depressions of the 1870s and 1930s.

Whilst these tendencies help us understand the depressions, a developed analysis can also help us see how, temporarily, they were overcome. Drawing on arguments from Michael Kidron, he suggests out that investment in unproductive labour (defined as labour that does not aid capitalist accumulation) is leakage, or waste from the system. He argues that this insight can explain the so called ‘Golden Age of Capitalism’, from 1945 until the 1970s through the levels or arms investment at the time. The global system was stable because massive amounts of surplus value were invested in armaments during the Cold War, slowing the growth of fixed capital relative to Labour. This allowed the tendency to be offset for the longest period in capitalism’s history, but still crisis returned in the 70s.

And so to today. Since the recessions of the 1970s global capitalism has been hit by regular crisis, from the long drawn out collapse of the Japanese economy to the bursting of the telecoms bubble in 2001. Profit rates never returned to those before the golden age, and throughout the 1980s and 90s the solution was to try to prop up profits through shifting the burdens onto the labour force, holding down real wages and various ‘productivity improving’ techniques. During this period a system of finance developed which, as well as being essential to the management of ever greater international transactions, seemed to offer massive profits. The US’ biggest manufacturing firm, General Electric, received 40% of its revenue from its finance wing ‘GE Capital’, and would often use its assets to ensure it reported regular and steady growth. As Harman observes ‘the vast expansion of finance had created the illusion of a new “long upturn” in productive accumulation; the crisis of finance made that illusion disappear with traumatic effects.’

 Try as it might capitalism can’t escape Marx, and:

“In some important ways the system is even more chaotic than Marx’s account. The very size of the units that make it up means that it has lost some of its old flexibility. The destruction of some capitals through periodic crises which once gave new life to those that remained now threatens to pull these down as well. Life support systems provided by the state may be able to keep the system from complete collapse but cannot restore it to long-term vigour.”

Harman ends with an important call to arms. In re-affirming Marx’s belief that those capable of transforming society and ending capitalism are those who create its wealth, he adds that ‘those who study capitalism have to become an integral part of a movement of those who suffer from it’. And, as we all know, the only way to deal with a zombie is to remove the head, or destroy the brain.

Chris Harman is Editor of International Socialism and a leading member of the Socialist Workers Party. Zombie Capitalism is published by Bookmarks and is available from their website.

Chris will be speaking at the Book Launch at Bookmarks shop, 1 Bloomsbury St, Central London, on Tuesday 29th September, 6:30pm. Call 020 76371848 or email to reserve a place.