Financialised capitalism

[alanjjohnstone]

http://truth-out.org/news/item/21383-costas-lapavitsas-discusses-the-financialization-of-capitalism

The SPGB rarely has seen a requirement to qualify hyphenate either socialism or capitalism. We recognise different emphasis and characteristics of capitalist mode of production but feel no need to qualify them.

Monopoly capitalism has always been a popular description on the left, followed by neo-liberal capitalism. But now we seem to have another , even if it does has its roots in Finance Capital of Hilferding. It is financialised capitalism.

http://truth-out.org/news/item/21383-costas-lapavitsas-discusses-the-financialization-of-capitalism

I'm not really sure if the history being presented is correct…, just different figures,  for sure , but didn't big banks always have a major parasitical role in capitalism at the turn of the 20century,with the trusts and robber barons of railroads etc..etc.. 

Personally i found the conclusion to be utterly confusing, regulation doesn't work so lets have regulation that capitalism can not implement which will be a step towards socialism. An academics restatement of old Labour gradualism that socialism will arrive during the night and one fine morning we wake up and find we have it. 

One of the comments hits the marx as i see it 

 

"Unfortunately, the author cannot call for proletarian revolution (if that is indeed what he is driving at) because truthout is a reformist site and committed to fixing zombie capitalism. 
Socialism will only be established by directly challenging the ruling class and their "right" to own and accumulate private wealth. And step number one: an international working class consciousness to replace the current nationalist consciousness. Only then can proletarian solidarity – our most powerful weapon – be used to take down this rotten toxic system and replace it with one that puts human needs first."

[ALB]

I think you are right. He is merely elaborating a theoretical defence of a reformist practice.His defence of the obvious criticism that he is saying "finance capital, bad; industrial capital good" is pretty weak, i.e that non-financial capitalist enterprises engage in financial speculations too. Of course they do. If they've accumulated a cash mountain of non-reinvested profits they're not going to leave them in a current account but are going to try to get what income they can from them. But their main activity remains production and it is only there that surplus value, that later takes the form of profit, interest and rent, originates.Actually, he admits that the profits from finance are not created there but must come out of the surplus value produced in productive industry. Thus he describes financial transactions as a "zero-sum game":

Quote:

The remarkable thing about finance, however, is that it is not simply inefficient but also exploitative in ways that industrial capital cannot be. It is a primordial capitalist activity that long predates the establishment of industrial capitalism and has retained its ancient predatory outlook. Finance can extract profits from any money income and stock of money – its profits are not limited to the fresh flows of value produced annually. During the past four decades, it has become expert at making zero-sum profits that involve transfers from one economic agent to another.

Exactly and what we've always said, that all that happens on the stock exchange, etc is that profits already extracted from the working class are shuffled around. What one speculator gains someone else loses. No new profits are created.HIs proposal to end the "predatory" activity of finance on productive industry is state capitalism:

Quote:

If interest and exchange rates were controlled, a body blow would be delivered to financial markets, particularly derivatives markets. It is apparent, however, that this kind of intervention would be impossible without also expanding public ownership in the economy, including among financial institutions.

Given the worldwide nature of the capitalist economic system, this would be a return to the "siege economy" of war-time and immediate post-war times and, worse, of the old USSR. That's not the way to go. We've seen the past and it doesn't work. Nor has it anything to do with socialism as he imagines. People like him have nothing to offer.

[Author]

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