Sure the C-M-C' exploitation process yields more absolute profits (as for relative profits, no, the ratio amongst US capitalists turned several years ago to higher proportions from financial activities than productive).
But Doug, the trade you mention is a declining proportion of economic activity, in relation to fictitious capital formation. In 1979 there were daily global financial transactions of $79 billion, against $1.5 trillion in annual global trade; by 2003 the same figures were $1.8 trillion of financial transactions and $7.3 trillion of annual global trade. Financial capital flows are premised on M-M' regardless of C or C' or LP or MP or anything else. The assets in global capital markets were measured a couple of years ago at $124 trillion, invested in stock markets ($31 trillion), public bonds ($20 trillion), corporate securities ($31 trillion), and banks ($41 trillion), as well as foreign exchange reserves ($3 trillion). (International Monetary Fund, Global Financial Stability Report, 2004, Appendix, Table 3.)
Some further stats:
* The total value of residential property in developed economies rose by more than $30 trillion from 2001-05, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. (Economist (2005), 'The Global Housing Boom: In Come the Waves', 16 June.)
* In absolute terms, Third World debt rose from $580 billion in 1980 to $2.4 trillion in 2002; but 'since 1980, over 50 Marshall Plans (over $4.6 trillion) have been sent by the peoples of the Periphery to their creditors in the Centre' (according to Toussaint, E. (2004), 'Transfers from the Periphery to the Centre, from Labour to Capital', Unpublished paper, Committee for the Abolition of the Third World Debt, Brussels, p.3. )
* Across the world, eight million 'high net-worth individuals' have insulated $11.5 trillion in assets in offshore-financial centres (see Baker, R. (2005), Capitalism's Achilles Heel , London, Wiley).
* According to Samir Amin and Gernot Köhler, surplus transfers in the form of 'unequal exchange' approached $1.8 trillion per year by the late 1990s (Köhler, G. (1998), 'Unequal Exchange 1965-1995: World Trends and World Tables', World-Systems Archive, Working Papers, http://csf.colorado.edu/wsystems/archive/papers/kohlertoc.htm.)
* According to John Christensen of the Tax Justice Network, nearly one third of the value of the annual production in sub- Saharan Africa was taken offshore during the late 1990s. Once one accounts for the depletion of non-renewable natural resources that are ripped from African soil, most primary product dependent countries actually lose per capita income, according to even the World Bank, including Gabon's citizens who lost $2,241 each in 2000 (the year of a major Bank study), as oil companies rapidly deplete the country's tangible wealth, along with the Republic of the Congo (-$727), Nigeria (-$210), Cameroon (-$152), Mauritania (-$147) and Cote d'Ivoire (-$100), not to mention Angola and the DRC (details in my book Looting Africa).
Yes, quite significant ways of deriving profits are occurring away from the point of production, where $36 trillion in GDP is produced each year (of course only a small amount of which is technically surplus value).
Cheers, Patrick
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