Accumulation by dispossession

Accumulation by dispossession is a concept presented by the Marxist geographer David Harvey, which defines the neoliberal capitalist policies in many western nations, from the 1970s and to the present day, as resulting in a centralization of wealth and power in the hands of a few by dispossessing the public and private entities of their wealth or land. These neoliberal policies are guided mainly by four practices: privatization, financialization, management and manipulation of crises, and state redistributions. Privatization and commodification of public assets have been among the most criticized and disputed aspects of neoliberalism. Summed up, they could be characterized by the process of transferring property from public ownership to private ownership. According to Marxist theory, this serves the interests of the capitalist class, or bourgeoisie, as it moves power from the nation's governments to private parties. At the same time, privatization generates a means for profit for the capitalist class; after a transaction they can then sell or rent to the public what used to be commonly owned, or use it as capital through the capitalist mode of production to generate more capital. The wave of financialization that set in the 1980s is facilitated by governmental deregulation which has made the financial system one of the main centers of redistributive activity. Stock promotions, Ponzi schemes, structured asset destruction through inflation, asset stripping through mergers and acquisitions, dispossession of assets (raiding of pension funds and their decimation by stock and corporate collapses) by credit and stock manipulations, are, according to Harvey, central features of the post-1970s capitalist financial system. That aspect relies entirely on the fact that the quantity of money in circulation and therefore demand levels and price levels are controlled by the boards of directors of privately owned banks. Those boards of directors are also on boards of corporations and any number of other legal vehicles who are also profiting from asset price swings. At the heart of accumulation by dispossession is the private control of the quantity of money supply that can be manipulated for private gain, which includes creating unemployment or restive conditions in the population. This process is well documented in English history as far back as prior to the founding of the Bank of England and before that in the Netherlands. The process works well with or without a central bank and with or without gold backing. The details are also manipulated from time to time as needed to satisfy popular rage or apathy. By creating and manipulating crises, such as by suddenly raising interest rates, poorer nations can be forced into bankruptcy, and agreeing to such deals like that of the structural adjustment programs can yield more damages to those nations. Harvey reasoned that this is authorized by parties such as the U.S. Treasury, World Bank and the International Monetary Fund. The neoliberal nation-state is one of the most important agents of redistributive policies. Even when privatization or commodification appear to be profitable to the lower class, in the long run it can affect the economy negatively. The state seeks redistributions through a variety of things, like changing the tax code to profit returns on investment rather than incomes and wages (of the lower classes). Margaret Thatcher's program for the privatization of social housing in Britain was initially seen as beneficial for the lower classes which could now move from rental to ownership at a relatively low cost, gain control over assets and increase their wealth. However, housing speculation took over following the transfers (particularly in the prime central locations), and low-income populations were forced out to the periphery. Ultimately, the new homeowners were also borrowers and paid portions of their yearly income as interest on long-term mortgages, effectively transferring a portion of their wealth to the owners of banks with licenses to create debt money from fractional reserves. Thatcher's council privatization scheme increased the potential number of borrowers in the UK by up to 20% of UK residents who lived in council housing at the end of the 1970s. Contemporary examples include attempts to deprive people of land in places like Nandigram in India and eMacambini in South Africa.