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      VALUE AND CRISIS THEORY IN THE "GREAT RECESSION"

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      World Review of Political Economy
      Pluto Journals
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            Abstract

            This article throws light on the current disarray among Marxist analyses of the present crisis. Focusing on recent discussions of "financialization," in particular a recent paper by Costas Lapavitsas, this article highlights a number of difficulties in these discussions and traces them to the absence of any theory of value. Marx's distinction between productive and unproductive capital—which includes finance capital—provides a coherent framework to analyze such phenomena and obviates the need for the false polarization between the falling rate of profit and financialization as factors in the crisis. In value terms, financialization is a withdrawal from the sphere of production into the sphere of circulation provoked by falling profit rates. A financial asset is a capitalized claim on a stream of income whether or not it produces value. It is itself an unproductive asset which generates no additional value and serves only to equalize the general rate of profit as a parasitic deduction from value generated elsewhere. This deepens and exacerbates the long-run tendency of profits to fall. Financialization is thus an aspect, anda particular form, of this long-run historical tendency, not an independent phenomenon running counter to it.

            Content

            Author and article information

            Journal
            worlrevipoliecon
            10.2307/j50005553
            World Review of Political Economy
            Pluto Journals
            2042891X
            1 April 2011
            : 2
            : 1
            : 35-47
            Article
            10.2307/41931916
            7df928aa-7d64-41b2-a143-b5a686fc1bb6
            © WORLD ASSOCIATION FOR POLITICAL ECONOMY 2011

            All content is freely available without charge to users or their institutions. Users are allowed to read, download, copy, distribute, print, search, or link to the full texts of the articles in this journal without asking prior permission of the publisher or the author. Articles published in the journal are distributed under a http://creativecommons.org/licenses/by/4.0/.

            History

            Political economics

            Notes

            1. Freeman 2009a

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