David Harvey’s objective was to understand urbanization through the lens of capitalism. Two main themes being accumulation and class struggle, which he states are “two sides of the same coin”. The capitalists goal is to accumulate more capital. Harvey explains laws of accumulation whereby one form of capital is reinvested into another form of capital, and thus allowing capitalists to accumulate more capital. Increasing capital first depends on creating a surplus during production process. Increasing surplus can be done in one of two ways; either increasing the hours of the workday to get more done, or by reorganizing the process (typically in the form of machinery) which makes workers more productive. When the capitalists creates too much surplus, contradictions arise. Too much surplus, or overaccumulation, make profits fall. This is contradictory to the goal of capitalists to gain more capital.
Harvey describes three phases in of the circulatory process of capital. The first, primary circuit of capital, relates to the production process. This capital is created by increasing output and using machine and workers to make product. Excessive competition forces capitalists to make as much as they can which leads to the exploitation of workers. However, when too much is produced, capitalists need to do something with excess capital so as not make profits fall when supply and demand become unequalized. So they simply reinvest into the secondary circuit of capital, or the built environment. The secondary circuit of capital relates to consumption, where overaccumulated capital not used up in the production process, is invested into fixed assets, such as houses, durables, and machinery, hence the term the built environment.
There are barriers in moving capital into fixed assets, primarily because not all capital is in the form of money. Capitalists first need to transform overaccumulated capital into money capital. This is where fictional capital comes in the form of the credit systems implemented by banks. These crediting institutions serve as mediators between the primary and secondary circuits, providing the structure for capitalists to reinvest and gain more capital.
A third tertiary circuit of capital-includes investment in science and technology, where the primary goal is to improve production process, as well as investment in various social expenditures, that relate to reproduction of labor power, as well as cooptation and repression, to prevent the laborers form organizing and acquiring class consciousness. The capitalist is never truly interested in the wellbeing of the worker, rather they are only interested in the well being of workers as far as it relates to their production and bottom line.