Marx's theory of crisis in the context of financialization. analytical insights on the current crisis
AbstractIn the context of the current crisis a vigorous debate is taking place with regard to its’ cause . A debate which has important policy implications in the sense that it justifies or condemns the main reaction policy to the evolution of the crisis i.e. the persistent securitization of financial capital on a global scale through trillions of government and central bank money resting in private bank vaults until proven insufficient, triggering a new round of bank refinance and / or recapitalization. The main question to be answered, in order to understand the present crisis, is whether the explosion of interest rates and the lack of credit is the cause or the trigger of a depression and why. If financial turmoil is the cause of depressions then each crisis is unique, the result of a «black swan» game and securitization will prove efficient since no risk arises from capitalist production and the reproduction of capital. Of course, history has taught us that capitalist economies experience periods of prosperity followed by depressions with almost periodical recurrence. However, the present crisis poses additional questions for Marxist and heterodox economics, since it prevailed following a period of stable (not declining) profit rates associated with weak corporate growth side by side with an explosion of financial sector growth a phenomenon referred to as financialization of capital. Contributing to the response to these questions is the main scope of this paper.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39458.
Date of creation: 14 Jun 2012
Date of revision:
Marx's Theory of Crisis; Financialization; Rate of Profit; Profit of Enterprise;
Other versions of this item:
- Nikos STRAVELAKIS, 2012. "Marx'S Theory Of Crisis In The Context Of Financialization. Analytical Insights On The Current Crisis," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 0(2), pages 171-191, January.
- B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
- NEP-HME-2012-06-25 (Heterodox Microeconomics)
- NEP-HPE-2012-06-25 (History & Philosophy of Economics)
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- Stravelakis, Nikos, 2014. "Financial Crisis and Economic Depression: 'Post Hoc Ego Propter Hoc'? Implications for Financial Asset Valuation and Financial Regulation," MPRA Paper 55944, University Library of Munich, Germany.
- Stravelakis, Nikos, 2013. "Hilferding over Marx: A Political Economy Viewpoint of Struggles in the Left 1900-1933 and the Modern Revival," MPRA Paper 50064, University Library of Munich, Germany.
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