VALUE AND CRISIS THEORY IN THE "GREAT RECESSION"

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.