Facing the fiction: can the European Union regulate fictitious commodities and capital?

Abstract

The years following the financial crisis of 2008 have witnessed a revival of interest in both the Polanyian concept of ‘fictitious commodities’ and the Marxian concept of ‘fictitious capital’. The former, with its focus on the consequences of markets for the ‘fictitious commodities’ of land, labour, and money, appears as a plausible explanation for our present instability along environmental, social, and economic axes. The latter, with its focus on what sets financial capitalists apart from their industrial counterparts, sheds light on what really separates Wall Street from Main Street, and what it all means for the prospects of class struggle in the 21st century. Building on a decade and a half of discourse on the role of these phenomena in financialisation, this paper explores the kinds of limits the law can place on high finance’s most flagrant flights of fancy. Taking as case studies the post-crisis efforts by the European Union (EU) to intervene in two key financial markets – private equity and securitisation – it asks how far current regulatory frameworks go, and what more can be done to protect Europe from capitalism’s excesses.

Keywords

• financial regulation
• fictitious commodities
• fictitious capital
• securitisation
• private equity