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Tourism and the Global Expansion of Capital: Contradictions, Fixes, and More Contradictions

According to Karl Marx (as cited in Harvey 2001), accumulation is the engine which powers growth under the capitalist mode of production. The development of capitalist production makes it constantly necessary to continue increasing the amount of capital laid out in a given industrial undertaking. Furthermore, each individual in the capitalist system is compelled by competition to continue extending his capital through progressive accumulation in order to preserve it. This section aims to discuss the tourism industry as a manifestation of such drive for accumulation.

Harvey (2001) states that the progress of accumulation depends upon and presupposes the existence of three things: surplus of labour, means of production, and a market to absorb the increasing quantities of commodities produced.

In each of these respects, the progress of accumulation may encounter a barrier that would precipitate a crisis, and since these pre-conditions are produced under the capitalist mode of production, it is then concluded that “capitalism tends to actively produce some of the barriers to its own development;” crises are endemic to the capitalist accumulation process. At the heart of the capitalist economy then stands several contradictions. One central contradiction is the competing motives of production and consumption. The aim to extract maximum profit from the production process precipitates a crisis of overaccumulation or overproduction.

Because of the drive to accumulate, there is a necessary tendency to overcome spatial barriers and annihilate space with time; Harvey (2001) asserts that accumulation must expand and intensify geographically. That is what drove imperialism, for example, as it is a manner in which capitalism creates fresh room for accumulation. Foreign trade is highlighted by Marx (as cited in Harvey 2001) as a pre-condition for capitalist accumulation and a consequence of the expansion of the market. Strong interdependencies are developed between the core and periphery countries as non-capitalist societies in the periphery are tapped not only as a source of cheap labour and raw materials, but as a market for capitalist accumulation as well.

The development of tourism in the periphery also serves as such; its natural landscapes and cultural sites are tapped as a means to develop a new market that seeks exotic experiences and escape from everyday life, showing how capitalist accumulation creates new social wants and needs according to the consumer class. Besides the already established fact that capital accumulation requires the act of expanding geographically into new territory, it also causes transformation in spaces; cultural sites and natural landscapes are thus commodified and adjusted to fit the tourists’ needs. It also entails the transformation of non-capitalist activities into capitalist  ones, such as in the commodification of cultural practices that include local dances and rituals to provide entertainment for tourists.

The development of the transportation and communications industry was inevitably brought about by the geographic expansion of capital to overcome the spatial and temporal barrier, thus reducing circulation costs and turnover times (Harvey 2001).The tourism industry, which requires transfer from one point to another, is highly dependent on such. For instance, the presence of numerous budget airlines and the development of mobile applications and systems to make booking and coordination easier. To transcend crises in the short term, excess accumulated capital must be reinvested in profitable production. Tourism is seen to offer many potential “fixes.”

Harvey (2001) coined the term “fix” as a general term referring to different forms of spatial reorganization and geographical expansion that serve to temporarily manage crisis-tendencies inherent in accumulation. Excess capital is reinvested through a “spatial fix,” geographic expansion, through a “temporal fix,” reduction of turnover time, through a “time-space fix,” or through a combination of both which involve international money lending. The world capitalist system’s struggle to overcome inherent contradictions that threaten its long-term survival through these various fixes has led to the dramatic growth of the tourism industry as a function of capitalist expansion. The tourism industry is an important means by which the capitalist world economy has sought to sustain itself through geographic and temporal expansion in the post-war era.

Focusing on the spatial fix, Harvey (2001) argues that the production of space is in itself a strategy to solve capital overaccumulation crises. The spatial fix has a double meaning regarding the stationary or circular movements of capital. On one hand, capital crises are fixed through geographical expansion, on the other, capital is literally fixed inside a physical building. The production of tourist spaces encompasses both meanings of the spatial fix, as it includes both the geographical expansion of capital and the fixation of capital in physical buildings such as hotels.

The idea of capital fixing is based on Marx’s thoughts of “capital switching” from the primary circuit of accumulation (the production of values and surplus values) towards the second circuit (immovable fixed capital). This implies that in order to generate surplus value, there must be investment not only in the production process but also in the built environment. Such is the case in the tourism industry. Furthermore, as the development of new tourism destinations delivers a spatial fix, the investment in new ventures provides a temporal fix. Tourism offers a temporal fix through reducing turnover time. What tourism sells is a transient event which is instantly consumed, and as such it offers a temporal fix that reduces turnover time for the recovery of invested capital to a minimum. International lending for tourism development, as provided by the institutions and organizations such as the World Bank, also provides a time-space fix.

Tourism and Dependency

The direct income for an area is the amount of tourist expenditure that remains locally after taxes, profits, and wages are paid outside the area and after imports are purchased; these subtracted amounts are called leakage (UNEP, n.d.). In poor, developing nations, it is often only multinational corporations and large foreign businesses that have the necessary capital to invest in tourist infrastructure and leakage. Export leakage arises when overseas investors take their profits back to their country of origin. Import leakage commonly occurs when tourists’ demand for equipment, food, and other products not available in the tourist destination (UNEP, n.d.). Much of the expenditures made in the location leaves the country to pay for these imports. Such capital leakage is a common characteristic of tourism in developing countries (Lepp 2004). A study of tourism ‘leakage’ in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand (via foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). Local businesses that wish to earn income from tourists then suffer from these foreign businesses, especially those that offer “all-inclusive” packages (UNEP, n.d.). It was confirmed that such packages import more and employ less people per dollar of revenue, resulting into a smaller trickle-down effect on local economies.

Tourism often prioritizes the interests of the profiting capitalist class rather than those of the local people; this is especially the case for indigenous peoples. In Boracay, Aklan, for example, the local Ati community who used to be able to exercise freedom in the whole island, has been pushed back from the shore for tourism initiatives. The uniqueness of Boracay’s landscape has also attracted many foreign investments. From the 1990s onward, many of the traditional Nipa hotels were upgraded to concrete structures and many facilities such as spas, resorts, souvenir shops, restaurants, and clubs followed. Boracay currently consists of many international hotel chains such as Shangri-La and Seabird International Resort. Foreign food establishments with international themes such as Greek or Spanish dining and multinational food establishments such as McDonald’s and Shakey’s have also dominated the market.

Despite the great increase in economic activity from tourism in this area, it is the original settlers who have been excluded in this development. The Atis’ original form of livelihood on the island – farming and fishing – is no longer enough to sustain them, as commercialization has greatly altered the land and sea, seen in the depletion of forests and the projects being built on wetlands and mountain slopes, and increased transportation via motor boats that pollute and disturb aquatic life. This supports the earlier assertion that accumulation leads to a transformation of spaces and of non-capitalist activities to capitalist; Atis had to leave behind their traditional means of self-sufficiency to earn waged labour. An interview with an Ati leader shows that of the 25% working Atis, “income is not enough.”

Some wages cited were Php260 per day for garbage collecting, Php200 for laundry service, Php260 per day minimum wage at resorts, and Php120-150 per day for construction work. This makes it a difficult struggle for families to reach the staple two meals a day (Boracay Sun 2014). This shows how greatly uneven the distribution of wealth is in Boracay. Clearly, the Ati seem to be stuck, as they cannot move forward alongside mainstream society and reap the benefits of Boracay’s development as much as the resort owners and tour operators do, and neither can they go back to the way they used to live. They are also victims of the lack of proper governance as their local government often succumbs to capitalist pressures; when one visits their community, the first thing one notices are the fences covered with posters crying out for the government to fight for their indigenous property rights.

Economic development in Boracay throughout the years has been highly dependent on foreign markets, capital, and materials for infrastructure. Much foreign assistance was given for tourism in the area to boom, and thus, a large percentage of money tourists spend in Boracay end up leaking back to the center. As profit is the main agenda of these investors, the development and welfare of the Atis themselves are sidelined to make way for foreign luxury hotels and establishments. This is an example of the many ways tourism can exacerbate social inequality.

These show that the underdeveloped conditions of the Ati community in Boracay are mainly consequences of tourism development controlled by international capitalists. Andre Gander Frank’s dependency theory (1966) holds the position that in this capitalist system, satellites – third world countries that were previously colonies of the first world countries called metropoles – are heavily exploited for their cheap raw materials and labor, which in turn contribute to the development of the metropoles.

In the context of tourism, tourist destinations located in the satellites are highly dependent on the metropole’s markets and capital, and capital leakage as stated earlier is often greater than local revenues. Such dependency subjects satellites to be highly vulnerable to the boom and bust cycles of international economics; locals would suffer if there exists a decrease in demand for tourism as well as incapability to purchase imports. Frank would go so far to suggest that satellites are thus on the losing end as long as they continue to participate in this exploitative world system. However, many assert that such inequality produced can still be solved through less radical means, such as through ecotourism.

Ecotourism as a Fix to Capitalist Contradictions

Ecotourism is seen in many ways as a more ethical form of tourism, an ideal means to fix the contradictions of the capitalist system through the capitalist market, which is a prevalent neoliberal notion. The ability for ecotourism to resolve these contradictions shall be discussed further in this section. O’Conner discusses another contradiction of the capitalist economy wherein production is ultimately predicated on a finite natural resource base. Increased production degrades the resource base, causing costs to rise and profits to fall. This contradiction can be addressed, and profit temporarily restored, through “environmental fixes” (Castree 2008) that involve the commodification of new forms of natural capital, exploiting natural resources to yield short-term profits, and transfer of such resources from state control to capitalist markets. This is where ecotourism comes in as a provider of such environmental fixes, in addition to spatial, temporal, and time-space fixes.

Ecotourism as a conservation strategy is based on a neoliberal approach to human governance which asserts that if sufficient economic value is attached to in situ resources, then local stakeholders will be incentivized to preserve rather than extract them. This indeed seems to be the case in many ecotourist sites in the Philippines. In Anilao, Batangas, a diving hotspot, the local government, resort managers, and the locals work together to enforce the conservation of marine protected areas as coral reefs are of prime value in attracting tourists (Espadero 2013). This is also the case in Masinloc Bay, Zambales, where the local government put great investment into the rehabilitation of its coral reefs in order to develop its ecotourism project. Although such perspective is popular in both academic literature and in popular press, there have been researches that show that such benefits of ecotourism are usually spread unevenly, often deepening pre-existing social inequalities (Fletcher 2012).

Ecotourism is still a capitalist endeavour. It creates new markets for natural capital by expanding into non-commodified spaces through privatization. The growing centrality of NGOs and private consultancy firms in the development process of ecotourism contributed in the further shift of the locus of revenue generation from states to non-state players. Ecotourism provides an edge over mass tourism as it harnesses resource degradation itself as an additional source of value, which Fletcher and Neeves (2012) state is resonant of the description of neoliberalism as a strategy of disaster capitalism: as resources grow scarce, they become increasingly valuable. Ecotourism destinations, such as glaciers and small island states threatened by the sea level rise, are as such marketed by emphasizing the likelihood that they will cease to exist in the future.

Ecotourism also provides a “social fix” which aims to redress the inequality and attendant social unrest created by capitalism markets. It is marketed as a strategy to enhance the well-being of poor, rural community members bypassed by conventional development (Fletcher and Neeves 2012). This can be seen in the goals of Route +63, a Philippine travel social enterprise that believes that this kind of tourism can fulfill one’s “social responsibility” to the marginalized. Ecotourism, also commonly marketed as a means to connect humans with nonhuman natures, provides a fix to the divorcing of producers and consumers from the means of production and non-human natures in which production is grounded. This can be described as a “psychological fix” for the existential crisis created by capitalist development in which ecotourism’s promise is to resolve such division and alienation. Furthermore, it also promises the delivery of an extraordinary, mysterious, and exciting experience lacking in everyday life, addressing the disenchantment of people and the establishment of a rational, ordered society by capitalist development.

Unveiling the Ecotourist Image

What has been discussed so far is the way tourism and ecotourism is able to provide a variety of fixes, be it spatial, temporal, time-space, environmental, social, or psychological fixes, to the contradictions of capitalist accumulation. It seems to be that ecotourism offers the prospect of continual accumulation without conceivable limits, and consumption without consequence as it is labelled as “ethical consumption,” resolving the contradiction between consumption and ecological or social crisis. It may seem that ecotourism proves the neoliberal claim that the capitalist market is the answer to its own ecological contradictions, but in reality it conceals a series of further contradictions inherent in the ecotourism development itself. For one, it highly depends on long haul air transport and other means of transportation, which are significant contributors to greenhouse gas emissions that exacerbate climate change. While it promotes development through conservation, it actually freezes them in a “reified, undeveloped state” that precludes the introduction of changes inconsistent with the ideal ecotourism landscape. Furthermore, while it claims to value traditional knowledge, it actually only values local knowledge that do not conflict with the interests of ecotourism.

Ecotourism indeed has a tendency to favour the creation of landscapes that conform to Western idealizations of nature. Although it may seem to support and appreciate local communities and their culture, they still encourage socioeconomic values associated with capitalistic individualism. Furthermore, they highlight a common pressure to attract ecotourists and their money, rather than prioritizing environmental conservation and respect for local communities, which they claim to do.

Another contradiction of ecotourism is that it places local stakeholders in a bind. Indigenous people’s development can only go so far before negatively influencing their environment. Fletcher and Neeves (2012) provide an example of the development of whale-watching ecotourism in Lajes do Pico Azores from 1989-1999 which was the cause of whale hunters’ loss of income and corresponding poverty. Tourists in Lajes do Pico Azores would not have been able to guess the serious tensions between the owner of the whale watching business and other local companies trying to develop alternative practices that locals believe would result to more sustainable relations with cetaceans and a more socially equitable distribution of income. This shows that while ecotourism is seen as a transparent practice that reveals the backstage infrastructure concealed within mass tourism operations, it actually creates its own bubble by obscuring negative environmental and social consequences in conflict with the image its operators wants to present.

Fletcher and Neeves (2012) continue to discuss that while whale watching tourists are expected to act as co-enforcers of whale-watching rules and regulations, they are too preoccupied with securing a good picture, onboard safety, and staving off motion sickness. Many of them only seek to take a good picture of a fluking whale, and in such frustration of not being able to do so (because whale behavior can be unpredictable), may lead whale watchers to frighten whales in order to accelerate the process.

Although ecotourism provides a number of fixes to the contradictions of capitalism development, there are also many other contradictions inherent in ecotourist development that are often concealed to attract necessary clients and funders for its survival. Even Weaver (as cited in Chen Ng, n.d.) argues that ecotourism is “inherently misrepresentative and dishonest.” Despite it being marketed as producing positive social and environmental impact, it is founded on the commodification of the environment, the people, and their culture. One obvious criticism about this is that the environment, people, and culture have inherent values independent of their economic value. (Ng, n.d.)

There is no denying that under particular circumstances, ecotourism can produce positive results for social justice through conservation, community well-being and empowerment. This analysis however, only questions the extent to which ecotourism can fulfill its promise to facilitate sustainable development in a global scale, reconciling economic growth, environmental protection, and poverty alleviation within a capitalist framework.

When it comes to ecotourism, one must ask, who are the developers? Who are the tourists? Capital leakage can easily take place here, thereby furthering social inequality between the core and periphery. Britton (as cited in Fletcher 2012) argues that “developing countries suffer from structural distortions to their economies as the indigenous economy is undermined and redirected to serve the interests of the external market.” The role and agency of government officials to reinforce this is also not to be overlooked. The Philippine law itself gives special incentives such as a six-year tax holiday to non-Filipinos who invest at least US$50,000 in a tourist related project. Moreover, under the Foreign Investments Act of 1991, foreign nationals are allowed to invest up to 100% equity participation in new or existing companies. Many other incentives for foreign investments are provided (Philippine Department of Tourism, n.d.).

Looking Forward

Capitalist development driven by a maximisation of profit for the owners and shareholders makes it prone to practices that are environmentally unsustainable, that promote a kind of individualism that disregards the fortunes and efforts of others, and that disrupts social mores. They often obstruct flows that meet basic needs, endanger livelihoods of those dependent on natural capital, and accelerate inequality and disrupt social cohesion within the community.

Although the international expansion of capitalism has been seen as the automatic option if growth is wished to be achieved for the eradication of rural poverty, Gibson et al. (2010) shows how in the face of the devastating impacts of pricing fluctuations and boom-bust trade and investment cycles, a local economy is likely to be more resilient if it contains a diverse range of economic activities that support well-being. Gibson et al. (2010) draws upon the study of Jane Jacobs as an alternative development strategy to industrialization. This study presents the manner of which community-based social enterprises can expand enterprise diversity and strengthen the resilience of the economy. Such enterprises are not driven by the need to maximise profit for shareholders and owners, but primarily to address social objectives for the community. They also provide a more secure business structure that can harness local practices of mutual support deeply valued by the community.

Community-based travel social enterprises may then be a better alternative to tourism operated by the metropoles. After all, capital leakage is best reduced through local ownership. This is supported by Lepp (2004) who states that linking tourism to local supply channels reduces the need for imports. In Lepp’s (2004) study of tourism in Bigodi, he found that nearly all products and services purchased by tourists were locally produced. Thus profits directly benefit the community through money and improved agricultural markets. He concludes that community based tourism can indeed make a significant economic impact in rural parts of the developing world, as opposed to tourism directed by foreign entities. Khan (1997) however states that the success of such is dependent on the community. Tourism development will more likely be associated with self-reliance in communities characterized by an internal locus of control, rather than an external one. Nonetheless, this does not address the reliance of tourism on international markets. Further research needs to be made on the impacts of community-based travel social enterprises, and whether these are truly effective in promoting human welfare.


In this piece, I discussed the development of tourism as a manifestation of the global expansion of capital and a “fix” to the contradictions of capitalism. This piece aimed to present the manner in which tourism reinforces inequality and creates dependency between the core and periphery. Whereas ecotourism is perceived as more ethical than mass tourism, particularly because it provides an environmental and social fix to the contradictions of capitalism, further analysis shows that there are still contradictions inherent in ecotourist development, often concealed out of the necessity to attract clients and funders.  Ecotourism is still nonetheless a capitalist endeavour that transforms natural landscapes to promote the commodification of people, culture, and the environment. Like mass tourism, it can create and exacerbate social inequality. Whereas community-based travel social enterprises seem to be a better alternative for rural development, much research needs to be conducted to conclude its effectiveness in promoting human welfare.

Featured image from this site.


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