> This short essay briefly describes the financial side of my interpretation
> that the crash reflected a disconnect between the underlying investment in
> the economy and its financial representation -- what Marx called fictitious
> capital. The stock market people call this realignment, "destruction of
> wealth," even though what is destroyed is the illusion of wealth. The
> illusion may have been capable of purchasing valuable things so long as
> other people accept that illusion.
>
> Long ago people accepted the illusion as an illusion and went on with their
> business. Here is what a former governor of Illinois wrote:
>
> Ford, Thomas. 1854. History of Illinois (Chicago: S. C. Griggs and Co.).
>
> 227: "Our Whig friends contended that the continual and violent opposition
> of the democrats to the banks destroyed confidence; which, by-the-bye, could
> only exist when the bulk of the people were under a delusion. According to
> their views, if the banks owed five times as much as they were able to pay
> and yet if the whole people could be persuaded to believe this incredible
> falsehood that all were able to pay, this was 'confidence'."
I agree with the basic distinction between fictitious capital and 'real' capital, but all your 19th century examples are about fractional reserve banking, which I don't think is 'fictitious capital' in Marx's sense, but 'credit money'.
Mike Beggs