What is the Crisis About? Fictitious Capital or the 
Destruction of Wealth?
michael perelman 
This short essay briefly describes the financial side 
of my interpretation that the crash reflected a disconnect 
between the underlying investment in the economy 
and its financial representation -- what Marx called 
fictitious capital. The stock market people call this 
realignment, "destruction of wealth," even though what
 is destroyed is the illusion of wealth. The illusion may 
have been capable of purchasing valuable things so 
long as other people accept that illusion. 
Long ago people accepted the illusion as an illusion 
and went on with their business. Here is what a former
 governor of Illinois wrote: 
Ford, Thomas. 1854. History of Illinois (Chicago: S. C. Griggs and Co.). 
227: "Our Whig friends contended that the continual 
and violent opposition of the democrats to the banks
 destroyed confidence; which, by-the-bye, could only 
exist when the bulk of the people were under a delusion.
 According to their views, if the banks owed five times
 as much as they were able to pay and yet if the whole
 people could be persuaded to believe this incredible 
falsehood that all were able to pay, this was 'confidence'." 
Ordinary people understood what was happening. Here
 is an incident from Chicago about the same time. 
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