Revisiting the Urbanization of Capital

In a recent interview, David Harvey referred to the initial stages of the ongoing global economic crisis as a "financial crisis of urbanization." This article explores and substantiates Harvey's argument by returning to the thesis of capital switching that Harvey, following Henri Lefebvre, initially expounded in the 1970s and 1980s. The nub of this argument was that as capitalist production edges toward periodic crises of overaccumulation, capital "switches" from production per se into production of the urban built environment as a means to absorb surplus capital and hence avert-if only temporarily-crisis. Although Harvey's thesis has proven extremely influential among political economists, urban theorists, and geographers of various stripes, previous attempts to buttress it with empirical evidence have failed to unearth any demonstrable switching dynamic of the kind Harvey theorizes. This article analyzes data for the years leading up to 2007 and the unfolding of the current economic crisis. Focusing primarily on the United Kingdom, it presents two separate analyses that suggest a clear pattern of capital switching into the built environment since the turn of the millennium: first, a switching of overall private-sector expenditures and, second, a switching of pension fund investment. Together, the analyses place urbanization, following Harvey, at the heart of contemporary economic crisis.