Fictitious Capital and Crises
AbstractThis paper is concerned with chapters 25-35 of Part V, The Division of Profit into Interest and Profit of Enterprise, of Volume 3 of Capital. These chapters may be properly grouped in an ideal Part to be possibly titled "Credit and Crises, or Money Capital and Fictitious Capital" and is referred to in this paper as 'the unidentified Part'. This Part should be strictly considered as a follow-up of Part IV, The Transformation of Commodity Capital and Money Capital into Commodity-Dealing Capital and Money-Dealing Capital (Merchant's Capital) in the sense that while the former deals with the role played by merchant's capital, and particularly by money-dealing capital, the latter deals with the obstruction or perversion inflicted on this role by money capital being turned into fictitious capital by an improper use of credit. The paper is structured in three ideal sections. The aim of the first section is to clear the debris of 'the unidentified Part' and to reconstruct Marx's own thinking about the nature and role of credit and of fictitious capital in relation to the concept of merchant's capital and to the phenomenon of crises. On the contrary, the second section, which is mostly focused on different forms versus different sets of crises, highlights some contradictions in Marx's unsystematic treatment of the relations between financial and real crises. The third section is derived from the arguments set out in the previous two sections. Its aim is to assess Marx's similarity with Keynes on the matter of 'money as money' and of financial crises. Its conclusion (which is also the conclusion of the paper) is that this similarity, however strong with regard to the role of money as a store of value, is bound to collapse if Marx's law of the falling rate of profit is believed to be true. For in this case the fictitious-capital theory of crises developed in 'the unidentified Part' acquires a secondary importance while financial crises come to be viewed as a typical effect, rather than as the cause, of real crises.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11761.
Date of creation: 1998
Date of revision: 15 Apr 2009
Publication status: Published in Bellofiore R. (ed.), Marxian Economics: A Reappraisal London: Macmillan.Vol.1(1998): pp. 189-204
Marx; fictitious capital; money capital; financial crises;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
- E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Institutional; Evolutionary
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-17 (All new papers)
- NEP-HPE-2009-01-17 (History & Philosophy of Economics)
- NEP-MAC-2009-01-17 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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