Marx’s Financial Capitalism

Abstract

This study shows that “financialization,” widely accepted as a theoretical framework representing the structural change in modern capitalist economy, is one aspect of the “free investment capitalism” that resulted from globalization and deindustrialization as the long-term institutional and technological trends since the 1970s. Globalization is understood as the tendency for the simultaneous expansion (more accurately, extensive expansion and intensive deepening) of market and the reduction of state and community. Its ultimate goal is free investment capitalism, in which fictitious capital is ubiquitous and free investment in it is totally pursued. The study theoretically sees it as G mode (general mode) capitalist market economy with general commodification of labor power as seen in human capital investment and financialization of labor power.

Notes

Notes

1 In Germany and Japan, finance capital was actually dominant and, although Hilferding never called it so, it can be named as such.

2 See Nishibe (1996) regarding the contents of the socialist economic calculation debate—in particular, the parallelism in Hayek’s criticism of socialist planning and his criticism of the general equilibrium theory and its related knowledge problems.

3 Investment also implies self-directed involvement in choosing clothes and acquiring them by themselves, and freedom of investment can also be directed toward “positive freedom.” This may suggest one to consider beyond capitalism and globalization.

4 Although “state” does not appear in the related text by Marx, I added it in the sense according to the views of K. Polanyi.

5 Kozo Uno (1980, 2016) focused on this discussion. He argued, in the beginning of the principle of political economy, the theory of circulation—that is, that various forms of circulation (the market formers) of commodities, money, and capital emerge successively outside social reproduction and penetrate the community. He could, thus, explain the “extrinsic” character of forms of circulation such as commodities, money, and capital, without addressing labor value and the reproduction of the real economy.

6 Here, I present no model analysis for these problems, so I will introduce only the results. Readers interested in the analysis should refer to Nishibe (2015).

7 Here, when the mode of commodification of labor power advances as E→I→G and shifts to G mode representing the labor power’s fictitious capitalization, it can be described as fully developed investment capitalism, but it is just a simplification. In investment capitalism, it is extremely emphasized that workers with special skills and licenses—such as lawyers and doctors, as well as college students and craftsmen—can be said to be owners of fictitious capital if university education and skill training are regarded as an accumulation of human capital. In reality, it should be seen that the G mode and previous modes are mixed. For example, although the creative class with professional skills reaches the G mode, workers doing simple labor that does not require as much skill and expertise remain in the E mode, forming the group of nonregular workers and industrial reserve army. In this case, class differentiation occurs (Nishibe 2015).