“Marxist theory, financial system and crisis of 2008”: S. Lapatsioras, D.P. Sotiropoulos, J. Milios
Abstract: Returning to Marx’s analysis in the third volume of Capital we shall endeavour to outline a Marxist interpretation of contemporary capitalism, contemporary financialization and the crisis of 2008. Crucial in this connection are the concept of fictitious capital and the associated with it process of capitalization. Financialization should be conceived as a type of organization and a mode of exercising capitalist power, which consists of a whole set of instruments, techniques, levels of application and targets. In this way, financialization as a generalization of these processes into a complex system comprises a decisive link for the enforcement of the capital domination. This means that our study does not concentrate merely on the ‘productive’ or ‘unproductive’ effects that financialization might have on ‘development’ or ‘consumption’, but on a whole series of other possible and crucial effects which seem marginal at first sight. As a consequence, we regard finance as a complex social function that cannot be isolated from ‘real’ economy.
Accordingly, such argumentation, based, of course, on Marxian concepts, provides the terms to rethink contemporary neoliberal form of capitalism and modern crisis as expressions of the contradictions inherent in this organization of capital hegemony, and contemporary form of imperialism, as well. Our analysis also comes up with some conclusions concerning the discussions within Marxism on whether derivatives are commodities or money (or even some other representation of capitalist wealth) and how should we comprehend the global crisis of 2008 in the light Marxian argumentation.
- Heterodox approaches to neoliberalism and the recent financial crisis
A crucial aspect of many heterodox approaches to crisis is the idea that the domination of neoliberalism and of the globalized financial sector of the economy produces a predatory version of capitalism, a capitalism that inherently tends towards crisis.
The current financial crisis is without precedent in the post-war period. However, financial instability and income redistribution are crucial aspects of modern capitalism but they do not capture its essence.
Recent heterodox literature is dominated by a single and persistent argument. The argument is that contemporary financial liberalization should be approached as a process in which the financial elites and financial intermediaries, i.e. contemporary rentiers in the Keynesian terminology, have a leading role in working out the details of the neoliberal form of capitalism. Writing in the mid 1930s, Keynes (1973: 377) predicted the eventual extinction (“euthanasia”) of the rentiers “within one or two generations”. Many present-day Keynesians portray the developments of the last decades as the return of the rentiers three generations later to take over the economy. Neoliberalism thus amounts to the “revenge of the rentiers” (Smithin 1996: 84, coins this phrase), who are said to have shaped the contemporary political
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