>> The terrain of acquisitions and mergers - an integral
>> part of business and investment under neoliberalism has been explicitly
>> about the liquidization of fixed capital stocks. These liquid assets are
>> then reinvested in derivatives, hedge funds and beyond.
>
> Except that according to the Fed's flow of funds stats, the value of the tangible capital stock of U.S. nonfinancial firms topped out at 132% of GDP in 1982. The ratio fell from a high of 117% in 1950 to 97% in 1966 (also the peak year for profitability, using the tangible capital stock as the denominator - and the year of the first post-WW2 credit crunch). It rose through the 1970s to the 1982 peak - then fell. The 1980s wave of takeovers was about reducing the tangible capital stock - theorists like Michael Jensen were quite clear on this. But the decline reversed in 1996, as the dot.com mania was taking off and the productivity acceleration got underway. It then began to rise through 2007, the cyclical peak, hitting 140% of GDP. It's now around 116%.
How is it possible to turn some part of existing physical productive assets into "money" that can then be "reinvested in derivatives, hedge funds and beyond"? The current owners can sell it, but it still continues to exist under the new owners doesn't it? Given that they had to finance their purchase of it, where has the net increase in "money" assumed to be available for reinvestment in financial markets come from?
Ted