Title: Financial capitalism trapped in an 'impossible' profit rate. The infeasibility of a 'usual' profit rate, considering fictitious capital, and its redistributive, ecological, and political implications

Authors: Wolfram Elsner

Addresses: Faculty of Business Studies and Economics, Institute of Institutional and Innovation Economics, University of Bremen, WiWi 2.18, Hochschulring 4, 28359 Bremen, Germany

Abstract: This paper explores the crisis and some implications against the Marxian profit rate (PR). The PR helps explaining a number of phenomena often considered disparate. The focus is on integrating exploded fictitious capital in the PR and to estimate a corrected PR. We estimate global fictitious capital and calculate a conventional and a corrected PR for Germany. The corrected PR has reached a historical low under neo-liberalism, in spite of an increase in profit masses and profit shares in GDP, between a half and a fifth of the conventional PR (for post-WWII USA and UK, and post-1991 Germany, respectively). In contrast to the conventional PR, it also has further decreased. The financial crisis thus appears to be a crisis of dramatic over-accumulation. The consequences include reinforced redistribution and a run for transformation into real values (resources-/land-grabbing). The redistribution requirements for a 'usual' PR appear inconsistent even with formal democracy.

Keywords: financial capitalism; financial sector; financial markets; financial crisis; financialisation; Marx; profit rate; fictitious capital; private wealth; speculation industry; financial investment; Neoliberalism; redistribution; Marxist economics; Marxism.

DOI: 10.1504/IJPEE.2013.058264

International Journal of Pluralism and Economics Education, 2013 Vol.4 No.3, pp.243 - 262

Published online: 30 Apr 2014 *

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