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Financialisation as the development of fictitious capital in developing and developed economies

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  • Maria de Lourdes Rollemberg Mollo
  • Fernando Fellows Dourado
  • Edemilson Paraná

Abstract

In this paper, we discuss financialisation as the development of fictitious capital in more developed and less developed countries. The controversies surrounding the meaning of fictitious capital require a preliminary discussion on its conceptual definition, which is done by means of an analysis of the relationship between real and fictitious capital within the labour theory of value. Once theoretically explained why the relative autonomy of circulation from production supports financialisation as the development of fictitious capital, we focus on the limits of this relative autonomy, which is something objectified in economic crises. Relevant data were gathered to determine how the concentration of financial investments in fictitious capital in a few markets was able to underpin its enormous and lasting development, even though this fictitious capital, by definition, does not generate surplus or new (labour) value. Furthermore, the analysis of net capital flows between developed and developing countries also demonstrates that the latter are net donors of capital. Therefore, it is possible to verify the relationship between the development of fictitious capital and the increase of inequality between countries.

Suggested Citation

  • Maria de Lourdes Rollemberg Mollo & Fernando Fellows Dourado & Edemilson Paraná, 2022. "Financialisation as the development of fictitious capital in developing and developed economies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(5), pages 955-976.
    • Handle: RePEc:oup:cambje:v:46:y:2022:i:5:p:955-976.
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    File URL: http://hdl.handle.net/10.1093/cje/beac041
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    Cited by:

    1. Ann E. Davis, 2023. "Ukraine War: Policy Miscalculations or Contradictions of Capitalism?," Review of Radical Political Economics, Union for Radical Political Economics, vol. 55(4), pages 557-567, December.

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