Capitalism is a few centuries old, not much for a socio-economic system, yet due to the contradictions it has shown since its childhood, it seems to have some age problems. The contradictions are many, internal and external, large and small. David Harvey listed seventeen. Among these, the most important one I believe is the need for the system to indefinitely grow. Not a growth of any kind: a compound growth.
David Harvey explains the compound interest in simple terms:
Compounding is, in essence, very simple. I place $100 in a savings account that pays 5 per cent annual interest. at the end of the year I have $105, which at a constant rate of interest becomes $110.25 the year after (the figures are greater if the compounding occurs monthly or daily). The difference between this sum at the end of the second year and an arithmetic rate of interest without compounding is very small (just 25 cents). The difference is so small it is hardly worth bothering with. For this reason it easily escapes notice. But after thirty years of compounding at 5 per cent I have $432.19 as opposed to the $250 i would have if i was accumulating at a 5 per cent arithmetic rate. after sixty years i have $1,867 as compared to $400 and after 100 years i have $13,150 instead of $600. Notice something about these figures. The compound interest curve rises very slowly for quite a while (see Figures 1 and 2) and then starts to accelerate and by the end of the curve it becomes what mathematicians refer to as a singularity – it sails off into infinity. anyone with a mortgage experiences this in reverse. For the first twenty years of a thirty-year mortgage, the principal still owed declines very slowly. The decline then accelerates and over the last two or three years, the principal diminishes very rapidly (2014, p. 249).
According to Harvey the perpetual accumulation of capital at an exponential rate and the exponential creation of money is ‘almost certain to end in disaster unless accompanied by other adaptations.
Capitalism reacts to this contradiction by 1) commodifying and commercializing everything possible; 2) expanding in space which resulted in what we call globalization, and 3) extending in time, which accelerated our society and turned it into a high-speed society
The original commodification was that of labor, land, and money but progressively, everything is a possible target of new forms of commodification.
Among the most dangerous forms of commodification there are those related to the body (see The metamorphosis of the human body in the 21st century) and the mind (see The coming dispossession of your mind) are progressively dragged into the market.
The surveillance capitalism (see The destruction of the teleological animal) shows how digital platforms are transforming into commodities the information about users.
Knowledge is falling into the same pit (see A throwaway knowledge for a throwaway human being) and Virtual Reality, Augmented Reality, and Mixed Reality are trying to transform into a commodity the reality itself (see Reality capitalism. The biggest business in human history).
2) Space – globalization
In an attempt to resist its contradictory need to grow, capitalism expands in space, creating new markets, occupying new territories, everywhere making use of the favors of the economy of scale applied to geography.
The result is globalization as we know it. But the Earth is one and when geography opposes its limits the system goes into crisis.
3) Time – speed-up society
In the dimension of time, Capital has systematically shortened the turnover time of commodities, pushing hard towards planned obsolescence, by the rapid creation of new products (for example, as in electronics in recent times), emphasizing the value of newness and the dowdiness of the old. The acceleration of time determined what is called a high-speed society.
Consumerist strategies started to produce Tv films, concerts, exhibitions, sports events, and, tourism as a response to the need to accelerate the cycle of production and consumption. But there are still physical limits to how fast the turnover of capital can be accelerated.
Will capitalism indefinitely be capable of transforming use-value into exchange-value, extending itself infinitely in a finite space, and speeding up a finite social time perpetually?