Finance and industry form interdependent but distinct fractions of capital
Evidence
All capitalists are in essence financiers, faced with the choice of investing in one thing or another and pursuing the most profitable opportunities. Nonetheless, capital is divided into fractions: Finance plays a specific role in the overall structure of accumulation, competitively circulating investment across the various branches of production. Finance depends on industrial profits to receive interest, while industry engages with the financial system to raise investment and circulate capital. (19) In this compelling reading, greater financialization only boosts the exploitative tendencies of capitalism as a socioeconomic system; it has enhanced competitive discipline on industrial firms and has provided managers with the tools to pursue new profit maximizing strategies. — Clara E. Mattei, Escape from Capitalism, 419
Categorization
Category: Definitional Content
- XREF: A classic Marxian fraction-of-capital framework; connects to the reader’s understanding of austerity as serving finance against industry — the internal capital antagonism that Thatcher/Reagan policies exploited.
Related
- Financial capital both depends on and disciplines industrial production for returns (similarity 0.89)
- Financialization theory rejects bank dominance in favor of integrated finance-industrial capital (similarity 0.83)
- Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing. (similarity 0.81)
- Finance is necessary but not sufficient to capitalist accumulation (similarity 0.80)
- Financialization both derives profits from finance and drains capital from productive investment (similarity 0.79)
- Financialization theory links wage-compromise collapse and shareholder value to inequality (similarity 0.78)