Here’s a recent example of a
Here's a recent example of a misinterpretation of "fictitious capital" by a group in the Marxist tradition leading to a theory of the financial meltdown of capitalism similar to that embraced by many currency cranks. It's from a new manifesto by Internationalist Perspectives who emerged from the ICC some years ago now and some of whose stuff isn't that bad. Unlike this:
Quote:
Capitalism has, especially in the last 60 years, increasingly sought refuge in money creation, either to stimulate production and consumption, or to stimulate the growth of the hoard, propping up its “value” despite a declining rate of value creation in the real economy. In other words, a massive creation of fictitious capital, not resulting from new value but created out of thin air, has been mixed into the pot. Money has grown at an increasingly faster pace than “the real economy”, that is, than the value of the commodities that are actually produced and sold. Therefore, it must devalue. But that only happens when production and consumption are stimulated despite the lack of profitability. The result is high inflation, endangering the value of money as such and thus of the entire hoard.A second approach has been more efficient: by forking over newly-created money directly to capital (meanwhile demanding austerity from the rest of society), the hoard has been successfully defended. Most of that new money never enters into circulation except within the hoard itself. It therefore causes no inflation (again, except in the hoard). While propping up the demand for financial assets, the money is sterilized in the coffers of central and private banks in the fortunes of the super-rich. There, it does no good (only a small fraction of it re-enters the productive sphere) but also no harm. Precisely by not re-entering the circulation of commodities, the hoard hides the fictitious nature of the money that is created without a corresponding creation of value. The program of the capitalist left would accomplish the opposite and reveal the fiction. And it is on this fiction that capitalism rests. The belief that money is value and that value is real wealth. If that belief falters, capitalism breaks down.