Obviously cet par capital prefers higher rates of profit. But capitalists, both individually and collectively, presumably are at least somewhat risk averse. (So expected profits =! expected utility given uncertainty, even if utility is a monotonic function of the profit rate.) If greater "individual" (firm) debt and economy-wide financialization are associated with increased systemic risk, which they obviously are, they may be rational to pursue when profit rates appear to be trending dangerously low but not otherwise.
I haven't read the whole thread - has Arrighi's thesis on cyclic financialization been mentioned yet?
^^^^^ CB: I appreciate this; u pulls some concepts together for me.
My intuitive response is that capitalism has for a long time been tending to monopoly, centralization or concentration of wealth. (See here: Historical Tendency of Capitalist Accumulation http://www.marxists.org/archive/marx/works/1867-c1/ch32.htm)
Marx puts it succinctly that "one capitalist kills many". The most efficient form of monopoly is financial monopoly , because M-M2 is more efficient than M-C-M2 ( in Marx's symbols) for accumulating wealth. The one capitalist who is killing many , obviously , does not care about increased risk for the "many". In fact, the monopolist wants that. I'd even say the monopolist wants systemic crises as the periods when they can make the most killings, or gather the most corpses of other corps. (ha ha). The monopolist wants systemic risks and monopoly or cutthroat competition So, in that way too, the ruling sector of the ruling class wants financialization. If the ruling sector wants it, it is a tendency of the system as a whole.
On financialization in early capitalism:
"The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter’s wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury. The state creditors actually give nothing away, for the sum lent is transformed into public bonds, easily negotiable, which go on functioning in their hands just as so much hard cash would. But further, apart from the class of lazy annuitants thus created, and from the improvised wealth of the financiers, middlemen between the government and the nation – as also apart from the tax-farmers, merchants, private manufacturers, to whom a good part of every national loan renders the service of a capital fallen from heaven – the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy. "
http://www.marxists.org/archive/marx/works/1867-c1/ch31.htm
Agiotage is currency exchange. " Lazy annuitants"sound like coupon clippers.