A Note on the Interpretation of Financialization as the ‘Sixth Countertendency’ to Marx’s Law of the Tendency of the Rate of Profit to Fall

Marxian economics has been dealing extensively with the phenomenon of financialization. Among the wide variety of approaches, there are those putting at the center of the stage the issue of faltering profitability. Besides the analytical arguments, one finds in this line of research contributions linking financialization and the list of counter-elements to the Law of the Tendency of the Rate of Profit to Fall. Financialization is thus interpreted as the 'sixth' countertendency to that law (the ‘increase of stock capital’), referring to the list in Chapter XIV of Capital, Vol. III. We aim to provide an alternative interpretation of that last counter-factor. The proposal is based on three elements. First, the role of joint-stock companies issuance of long-term financing instruments yielding low remuneration. Second, how the average rate of profit is calculated. Third, the role of the organic composition of capital in determining differences in sectoral profitability. We eventually claim that the sixth element should be read as referring to the convergence of the rate of profit towards a uniform value and not as a prediction of the emergence of financialization