Fictitious forms of capital? (fwd)

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Mon Aug 17 11:45:41 PDT 1998


Doug, I have a few more questions on this rentier-luxury consumption driven economy.

In the WSJ today, economists voice the concern again that a stock market correction or bust would undermine consumer spending and therefore the real economy putatively driven by it because 'people will have to boost savings to preserve wealth for the future' (A6).

This seems to suggest that the US economy is being fueled by luxury goods/service expenditures financed out of fictitious profits made from the sales of stock at a profit to other speculators in the open US equity markets or out of loans based on hopes that there will be such a profit. But no one seems openly disturbed. But my hero William J Blake would have simply asked: how long can paper profits, which seem not to originate in real production or even distribution, or in compensation for services but rather seem to originate literally out of thin air be exchanged for real goods and services? What are the limits to this temporary source of demand (which seems to have a quasi multiplier effect in that middle classes use credit madly to keep up with the consumption standards set by rentiers, a dynamic which Bourdieu doesn't really analyze)? Will this kind of "consumer" spending, though at present sustaining demand, contribute eventually to the sharpening of crisis (perhaps by its effect of extinguishing in unproductive luxury consumption surplus value required for future accumulation???)

And what is fictitious capital?

best, rakesh



More information about the lbo-talk mailing list