Harvey argued that in times of economic crisis, one escape strategy has been to invest in the built environment, as a way to create opportunities for capital and to get potentially rebellious workers back into jobs. He pointed to the rebuilding of Paris after 1848, associated with Haussmann. Then, faced with the need to transition the economy after 1945, the USA built the suburbs, thereby extending the scale of the urban project from city to city region. Now, after the financial crash of 2008, China has embarked on an urban development programme that is nation-wide, with Chinese banks pouring investment into empty cities in the west of the country, and plans for a megalopolis of 130M based on Beijing.
However, such programmes eventually run out of money. In Paris this came in 1867; in the USA New York went technically bankrupt in the early 1970s. Turkey attempted a similar strategy after a crash in 2001, building new airports, bridges and planning a growth of Istanbul to 45M, but the projects are now stalled, after international creditors got nervous.
China is now extending the scale of construction further to sustain jobs at home and build global access to natural resources. It is constructing a new "Silk Road" across central Asia, connecting eastern China to Istanbul and beyond, and boosting urban growth along the line. It is integrating the transport networks of east Africa, and has been providing major investment in Ecuador in return for access to that country's oil. In effect, China is "re-engineering the world", while protecting its banks and bankrupt local governments by being able to pay in its own currency, unlike countries like Greece and Spain whose over-investment in construction projects had to be paid for in Euros.
The city development that is going on globally today is chasing investment, creating spectacular places but not meeting residents' needs, argued Harvey. Buildings are empty, because they are a means to park money and let it accumulate, rather than social investment. Meanwhile in the global cities, ordinary people struggle to afford basic accommodation. Are these really the kind of places we want?
Harvey described how capital always seeks compound rates of return on investment, shifting from place to place to achieve that. However, the options are being reduced and the impacts on resources, environments and people are not sustainable. Capital makes money by solving problems, he said, when what we need is a different process that prevents problems from developing.
The lecture (with simultaneous translation into Spanish) can be viewed here.