mbs: Quite so. It is *financed.*
DH: Not at all. It's not a Marxoid abstraction to point out that the financial markets are the institutions by which real ownership claims are developed, exercised, and traded; that the capitalist industry generates profits in money form that need to be redeployed, either through reinvestment, dividend or interest payments, or the purchase of financial assets; and that capitalist production often involves borrowing, a financial relation. It is absolutely impossible to separate production from finance in any serious way. As Henry Ford put it, he wasn't in business to make cars, but to make money."
mbs: Your connotation of "separate" is murky to me. Clearly production can take place without finance, or with drastically reformed finance, but finance without production is meaningless.
Seems to me the dominance of the money form underlines the centrality of finance as a different thing than production. "Finance" means institutions and the persons who direct them. Within non-financial firms, there are of course financial components. To some extent, we would expect a non-financial firm's financial decisions to reflect external financial conditions, though obviously the orthodox types exaggerate this to satisfy their nostrums about competition.
Max, the critique of finance as parasitic has very often been associated with anti-Semitic politics. Why is that? Pure accident, or is there some psychopolitical connection?
mbs: I would acknowledge the latter, but this is still unfair to the critique. Socialism, for instance, could be accused of giving rise to degenerate, alternative life forms like fascism.
DH: Are CEOs and other senior execs, who are employed by industry and earn their very considerable wages from the uncompensated labor of others, members of industry or parasitic finance?
mbs: industry. Just because finance is parasitic does not let "industry" off the hook.
DH: So if "parasitic finance" is the "decision-making mechanism of capitalism" - which I agree with - does that mean it's not capitalism but the decision-making mechanism that's the problem? How do you separate production from decision-making? Are execs who do discounted cash flow analysis to decide whether to open or close a plant engaging in industrial or financial logic? Doug
mbs: We could agree that parasitic finance = the decision-making mechanism of capitalism = capitalism itself. My point is that it is constructive rhetoric because it is informative and because it points to potentially constructive reforms, short of junking the whole system. Equating the critique of finance with bigotry is inaccurate and unfair; claiming that it is uninformative or without use is just wrong. It seems to me that "financial logic," whatever its locus in industry or finance, is precisely the right target, both on political and policy grounds.
mbs