Capital switching, economic crisis, and land rent : Examining discontinuation of Swedish municipal site leasehold in the 1980s
(2025) In Human Geography- Abstract
- Harvey's capital switching thesis is one of the most influential contributions of Marxist geographers, providing a framework for understanding structural determinants of capital flows into urban land and built environments. Harvey's thesis has drawn criticism in subsequent debates for its lack of direct empirical support. Even decades later, several gaps remain. The most comprehensive intervention (by Christophers) provided no tangible causal mechanism (i.e. the crisis triggering capital switching), overlooked crucial inter-sectoral dynamics, and excluded the mediating role of land rent. To address these gaps, I propose an alternative interpretation of Harvey's capital switching thesis, applying Shaikh's theory of real competition to... (More)
- Harvey's capital switching thesis is one of the most influential contributions of Marxist geographers, providing a framework for understanding structural determinants of capital flows into urban land and built environments. Harvey's thesis has drawn criticism in subsequent debates for its lack of direct empirical support. Even decades later, several gaps remain. The most comprehensive intervention (by Christophers) provided no tangible causal mechanism (i.e. the crisis triggering capital switching), overlooked crucial inter-sectoral dynamics, and excluded the mediating role of land rent. To address these gaps, I propose an alternative interpretation of Harvey's capital switching thesis, applying Shaikh's theory of real competition to analyze the discontinuation of Sweden's municipal site leasehold in the mid-to-late 1980s. Three central claims are advanced: (a) the cause of capital switching should extend to other forms of crisis (profitability and productivity), (b) inter-sectoral competition over higher expected profit rates drives switching, and (c) capital switching is mediated by aggregate land rent rates (excess profit rates in the land sector), and the fluctuations of land rent rates determine the historical contingency of switching. In this case, lower aggregate land rent rates and higher relative profit rates in the financial sector led to a shift to the financial sector, rather than built environments. This had implications in terms of disinvestment by private actors (developers and constructors) and intensifying institutional tension between them and municipalities over leasehold costs and landownership. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/79cb21df-634a-4941-8fda-7dca4925fcaf
- author
- Farahani, Ilia LU
- organization
- publishing date
- 2025-04-30
- type
- Contribution to journal
- publication status
- epub
- subject
- keywords
- capital switching, Economic crisis, land rent, Swedish municipal site leasehold, Inter-sectoral competition
- in
- Human Geography
- pages
- 20 pages
- publisher
- SAGE Publications
- ISSN
- 1942-7786
- DOI
- 10.1177/19427786251332583
- project
- From economic structures to local dynamics: low-income communities and the post-pandemic volatility of housing markets
- language
- English
- LU publication?
- yes
- id
- 79cb21df-634a-4941-8fda-7dca4925fcaf
- date added to LUP
- 2025-04-30 17:48:52
- date last changed
- 2025-05-02 08:08:00
@article{79cb21df-634a-4941-8fda-7dca4925fcaf,
abstract = {{Harvey's capital switching thesis is one of the most influential contributions of Marxist geographers, providing a framework for understanding structural determinants of capital flows into urban land and built environments. Harvey's thesis has drawn criticism in subsequent debates for its lack of direct empirical support. Even decades later, several gaps remain. The most comprehensive intervention (by Christophers) provided no tangible causal mechanism (i.e. the crisis triggering capital switching), overlooked crucial inter-sectoral dynamics, and excluded the mediating role of land rent. To address these gaps, I propose an alternative interpretation of Harvey's capital switching thesis, applying Shaikh's theory of real competition to analyze the discontinuation of Sweden's municipal site leasehold in the mid-to-late 1980s. Three central claims are advanced: (a) the cause of capital switching should extend to other forms of crisis (profitability and productivity), (b) inter-sectoral competition over higher expected profit rates drives switching, and (c) capital switching is mediated by aggregate land rent rates (excess profit rates in the land sector), and the fluctuations of land rent rates determine the historical contingency of switching. In this case, lower aggregate land rent rates and higher relative profit rates in the financial sector led to a shift to the financial sector, rather than built environments. This had implications in terms of disinvestment by private actors (developers and constructors) and intensifying institutional tension between them and municipalities over leasehold costs and landownership.}},
author = {{Farahani, Ilia}},
issn = {{1942-7786}},
keywords = {{capital switching; Economic crisis; land rent; Swedish municipal site leasehold; Inter-sectoral competition}},
language = {{eng}},
month = {{04}},
publisher = {{SAGE Publications}},
series = {{Human Geography}},
title = {{Capital switching, economic crisis, and land rent : Examining discontinuation of Swedish municipal site leasehold in the 1980s}},
url = {{http://dx.doi.org/10.1177/19427786251332583}},
doi = {{10.1177/19427786251332583}},
year = {{2025}},
}