> What did you think of that stuff from Marx I quoted on finance
> representing the ownership function of capital? I don't think that
> many Marxists have paid much attention to this, but maybe I'm wrong;
> I'm no Marxologist.
In Marx there are barbaric and civilized forms of the love of money as a possession. The most civilized form uses surplus extraction from the labour process to convert M into M'. In conditions of panic, however, there is a psychological reversion to the barbaric form. This is what Marx means by the claim that aspects of the "monetary" and "mercantilist" systems of political economy remain valid in mature industrial capitalism, a fact ignored, he claims, by the classical political economy of e.g. Ricardo which is, therefore, unable to understand "monetary crises."
Keynes's very similar assumptions (drawn from psychoanalysis) about the role of the irrational love of money and of money-making in capitalist psychology also allow for varying degrees of irratonality in its forms of expression (Keynes using this, as does Marx, to make historical and cross-cultural distinctions in the forms of capitalism and to explain "monetary crises"). Keynes, however, also uses it to distinguish the psychology characteristic of the "rentier" from that characteristic of the "entrepreneur," the former on average embodying a more irrational form than the latter. This can be seen, for instance, in his account of the "investment system" in the Tract on Monetary Reform. The distinction underpins his understanding of financial markets.
It's for this reason that he wanted to minimize the influence of these markets on production. It's also why he thought the separation of corporate ownership from control was a good thing. He completely failed, however, to anticipate the future evolution of this relation.
"But more interesting than these is the trend of joint stock institutions, when they have reached a certain age and size, to approximate to the status of public corporations rather than that of individualistic private enterprise. One of the most interesting and unnoticed developments of recent decades has been the tendency of big enterprise to socialise itself. A point arrives in the growth of a big institution - particularly a big railway or big public utility enterprise, but also a big bank or a big insurance company - at which the owners of the capital, i.e. its shareholders, are almost entirely dissociated from the management, with the result that the direct personal interest of the latter in the making of great profit becomes quite secondary. When this stage is reached, the general stability and reputation of the institution are the more considered by the management than the maximum of profit for the shareholders. The shareholders must be satisfied by conventionally adequate dividends; but once this is secured, the direct interest of the management often consists in avoiding criticism from the public and from the customers of the concern. This is particularly the case if their great size or semi-monopolistic position renders them conspicuous in the public eye and vulnerable to public attack. The extreme instance, perhaps, of this tendency in the case of an institution, theoretically the unrestricted property of private persons, is the Bank of England. It is almost true to say that there is no class of persons in the kingdom of whom the Governor of the Bank of England thinks less when he decides on his policy than of his shareholders. Their rights, in excess of their conventional dividend, have already sunk to the neighbourhood of zero. But the same thing is partly true of many other big institutions. They are, as time goes on, socialising themselves." <http://www.panarchy.org/keynes/laissezfaire.1926.html>
The psychology underpinning his analysis of financial markets can be used, however, to explain the consequences of the actual relation between these markets and the control of corporations having developed very differently from what he had himself anticipated. This would include an explanation for the effect on real investment in the expansion and improvement of productive facilities. "Speculation" (in Keynes's sense of "the activity of forecasting the psychology of the market") has become a more attractive management strategy than "enterprise" ("the activity of forecasting the prospective yield of assets over their whole life"). <http:// www.marxists.org/reference/subject/economics/keynes/general-theory/ ch12.htm>
Ted