one way of looking at this is to remember that finance is "relatively autonomous." To me that means that the financial system is not totally dominated by the imperatives of the production sector, by neither the short-term interests of industrial capitalists nor by those folks' collective long-term interests (even though in the end, finance must coexist with production as part of a unified system). That means that we can see gross "financialization," with the finance sector becoming hypertrophied (including trading all sorts of arcane assets) and even taking over important production sectors such as the housing market. But when it becomes disconnected from production in this way, it is a bubble, leading to crisis. For example, housing prices got far out of line with GDP.
On Sun, Jul 21, 2013 at 4:43 AM, Jurriaan Bendien <[email protected]> wrote: > Marx examined the credit system only, as he said, insofar as it impacted > directly on the capitalist mode of production, and from the point of view of > the operations of the capitalist mode of production. > > > > From the point of view of the materialist interpretation of history, > production ultimately determines circulation, but to the vulgar Marxists it > looks like the evil bankers have production by the balls. In a sense, I > suppose, the financial sector does dominate production to an extent, through > its issue of credit, and through its large shareholdings in publicly listed > companies, but as soon as output growth falters, a lot of the financial > claims staked on that growth are worth less or worthless too – and so, the > financial sector is still dependent on real production growth for its > income. > > > > The vulgar Marxist term “financialization” does not really refer to a big > qualitative structural change in the capitalist economy as a whole, but to a > big quantitative change in the role and power of the financial sector with > the capitalist economy. Most simply put, a much greater proportion of new > value produced takes the form of interest and rent, plus there is a much > larger trade in already existing assets providing income in the form of > capital gains (profit upon alienation). > > > > J. > > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Jim Devine / "Reality is that which, when you stop believing in it, doesn't go away." -- Philip K. Dick _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
