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The role of commodity speculation and household debt accumulation during financialization: a Classical-Keynesian analysis

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  • Stefano Di Bucchianico

Abstract

In this paper, we present a Classical-Keynesian viewpoint on financialisation grounded on the ‘integrated wage-commodity sector’ model. We focus on two aspects. First, with reference to the case of commodities, we argue that financial speculation in these markets did not affect normal prices but only caused market price short-run deviations. In addition, such speculation is unnecessary and even detrimental to the direct and indirect production of the wage-basket. Thus, financial regulation can restrain it without impairing the capability of the economic system to reproduce itself. Second, we show that the accumulation of household debt can enhance absolute and relative surplus value extraction from workers. This, in turn, positively impacts profitability. But, while absolute surplus value extraction boosts the amount of profit, only relative surplus value extraction increases the normal rate of profit.

Suggested Citation

  • Stefano Di Bucchianico, 2022. "The role of commodity speculation and household debt accumulation during financialization: a Classical-Keynesian analysis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(2), pages 317-340.
    • Handle: RePEc:oup:cambje:v:46:y:2022:i:2:p:317-340.
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    File URL: http://hdl.handle.net/10.1093/cje/beac005
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    Cited by:

    1. Cesaratto, Sergio, 2023. "Surplus Approach and Institutions: Where Sraffa Meets Polanyi," Centro Sraffa Working Papers CSWP61, Centro di Ricerche e Documentazione "Piero Sraffa", revised 02 May 2023.

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