Final answer:
David Harvey's third circuit of capital is an aspect of Marxist economic theory that pertains to the investment of surplus capital in real estate, natural resources, and similar markets beyond production, often leading to speculative bubbles and displacement.
Step-by-step explanation:
David Harvey's theory of the third circuit of capital involves the ways capital investment moves into areas such as real estate, natural resources, and other forms of investment beyond the immediate production of goods and services. It's a component of Harvey's broader critique of the dynamics of capital accumulation within the sphere of Marxist economic theory. The third circuit goes beyond the first circuit, which pertains to the production and exchange of commodities, and the second circuit, which relates to the investment in capital such as machinery and technology for production. These investments in the third circuit are seen as ways for surplus capital to find new markets and to generate further profits, potentially leading to speculative bubbles.
Examples of the third circuit at work include the development and gentrification of neighborhoods where capital is reinvested into urban spaces that previously received little investment. This can escalate property values and displace long-term residents. The work of Harvey resonates with later analyses such as those presented in Naomi Klein's The Shock Doctrine, which discusses the commodification of public services and dispossession through disaster capitalism, and complements historical examinations, like that in 'Histories of Racial Capitalism', which provides an insight into how racial dynamics intersect with economic structures and strategies.