Credit, Indebtedness, and Speculation in the Marxian Paradigm: A Critical Analysis
This paper contends that, in Chapters XVII, XXIX, XXX, and XXXI of Volume III of Capital, Marx develops an incisive conceptual framework in which excessive credit creation, indebtedness, and speculation play a critical and growing role in the reproduction of social capital on an extended basis; however, given the decentralized and anarchic nature of capitalist production, the credit system does so in a highly erratic and contradictory manner which only postpones the inevitable day of reckoning. The paper also highlights Marx’s relatively neglected but highly important analysis of the separation of ownership from management in the advanced capitalism of his day, England, and its modern-day implications for excessive risk-taking and debt-fueled speculation up until the eve of the crash. More importantly, the paper argues that in Vols. II and III Marx implicitly connected the expanding role of credit [which he associated with the development of capitalism] to a significant reduction in the turnover period of capital, thereby boosting the rate of surplus-value, and countering in a highly erratic and contradictory manner, the fall in the rate of profit. The growing role of credit has been relatively ignored in the Marxian literature as an important counteracting factor to the law of the declining rate of profit. It is not mentioned at all by Marx in his famous Chp. XIV, Vol. III of Capital where he discusses other important counteracting forces, nor by Engels [in this particular context] who edited both Vols. II and III.
|Date of creation:||Jul 2015|
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- Weisskopf, Thomas E, 1979. "Marxian Crisis Theory and the Rate of Profit in the Postwar U.S. Economy," Cambridge Journal of Economics, Oxford University Press, vol. 3(4), pages 341-378, December.
- Brewer,Anthony, 1984. "A Guide to Marx's 'Capital'," Cambridge Books, Cambridge University Press, number 9780521276764.
- repec:oup:copoec:v:31:y::i:1:p:91-102 is not listed on IDEAS
- Aldo Barba & Giancarlo de Vivo, 2012. "An 'unproductive labour' view of finance," Cambridge Journal of Economics, Oxford University Press, vol. 36(6), pages 1479-1496.
- Miguel D. Ramírez, 2014.
"Credit, The Turnover of Capital, and the Law of the Falling Rate of Profit: A Critical Note,"
Contributions to Political Economy,
Oxford University Press, vol. 33(1), pages 61-68.
- Miguel Ramirez, 2013. "Credit, the Turnover of Capital, and the Law of the Falling Rate of Profit: A Critical Note," Working Papers 1319, Trinity College, Department of Economics, revised Jan 2014.
- Miguel D. Ramirez, 2007. "Marx, Wages, and Cyclical Crises: A Critical Interpretation," Contributions to Political Economy, Oxford University Press, vol. 26(1), pages 27-41.
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