On Aug 2, 2010, at 5:51 PM, Doug Henwood wrote:
> On Aug 2, 2010, at 5:29 PM, Max Sawicky wrote:
>> Innocent question directed at nobody in particular, from one not
>> deeply
>> versed in Marx. Isn't the fundamental process of using money (in
>> all its
>> forms) to make money basic to the instability, inefficiency (waste of
>> misdirected real investment), and injustice of the system, so that
>> financiers et al as the tribunes of this process become themselves
>> central
>> to the whole mess?
> Well that's been kind of the point of my critique of the
> valorization of industry over finance, which I've repeated to the
> point of exhaustion. The point of the whole system is maximizing M'
> - it's all about the accumulation of money. The notion that finance
> is somehow a diversion from production seems badly misplaced.
This is a crying fallacy (of composition). The individual capitalists comprised in the system may well all be trying to maximize M' (their cash surplus over a period of time). But that is totally false for the system as a whole, even on the crudest level, as is seen from the fact that the higher the rate of inflation the higher the M' for every capitalist and for all of them added together, yet the higher the rate of inflation the more disastrous for the system. The point of the capitalist system is not the "accumulation of money"--it is the accumulation of *Capital*. And specifically of *productive* capital. The entire financial structure (beyond what is needed to supply the productive capitalists' transactional demand for money) is entirely parasitic. It constitutes a massive diversion from production by maximizing pharaonic construction (look at Dubai, or the office towers of every financial center), unproductive labor, and luxury consumption. Max's "innocent" question puts the finger to the sorest point--that financialization is "basic to the instability, inefficiency (waste of misdirected real investment), and injustice of the system."
Shane Mage
"All things are an equal exchange for fire and fire for all things, as goods are for gold and gold for goods."
Herakleitos of Ephesos, fr, 90