Re: [OPE-L] The Financialization of Capitalism

[Rakesh Bhandari <bhandari@xxxxxxxxxxxx>]

was it attached this time? please include within body of the message.
Aside from the question of how we are to explain oligopolization, I am
wondering whether the dearth of investment opportunities may have resulted
from the shortage of labor in the actually viable investment spaces as a
result of restrictive immigration laws. Prem Shankar Jha offers this as
explanation for both rampant financial speculation and the export of
capital that has led to an impetuous industrialization in a select few
zones of  post colonial nation states.
Rakesh

> whoops the attachment was missing
> Paul Cockshott
>
> www.dcs.gla.ac.uk/~wpc
>
>
>
> -----Original Message-----
> From: OPE-L on behalf of Paul Cockshott
> Sent: Tue 5/15/2007 10:45 PM
> To: OPE-L@xxxxxxxxxxxxxxxx
> Subject: Re: [OPE-L] The Financialization of Capitalism
>
> Here is my take on it, written for an encyclopedia
>
> Paul Cockshott
>
> www.dcs.gla.ac.uk/~wpc
>
>
>
> -----Original Message-----
> From: OPE-L on behalf of Rakesh Bhandari
> Sent: Tue 5/15/2007 6:43 PM
> To: OPE-L@xxxxxxxxxxxxxxxx
> Subject: [OPE-L] The Financialization of Capitalism
>
>  From John Bellamy Foster.
>
>   I am wondering whether there is an alternative explanation for the
> mounting stock of surplus in the form of liquid money capital...
>
> http://www.monthlyreview.org/0407jbf.htm
>
> The monopoly capitalist economy, Baran and Sweezy suggested, is a
> vastly productive system that generates huge surpluses for the tiny
> minority of monopolists/oligopolists who are the primary owners and
> chief beneficiaries of the system. As capitalists they naturally seek
> to invest this surplus in a drive to ever greater accumulation. But
> the same conditions that give rise to these surpluses also introduce
> barriers that limit their profitable investment. Corporations can
> just barely sell the current level of goods to consumers at prices
> calibrated to yield the going rate of oligopolistic profit. The
> weakness in the growth of consumption results in cutbacks in the
> utilization of productive capacity as corporations attempt to avoid
> overproduction and price reductions that threaten their profit
> margins. The consequent build-up of excess productive capacity is a
> warning sign for business, indicating that there is little room for
> investment in new capacity.
> For the owners of capital the dilemma is what to do with the immense
> surpluses at their disposal in the face of a dearth of investment
> opportunities. Their main solution from the 1970s on was to expand
> their demand for financial products as a means of maintaining and
> expanding their money capital. On the supply side of this process,
> financial institutions stepped forward with a vast array of new
> financial instruments: futures, options, derivatives, hedge funds,
> etc. The result was skyrocketing financial speculation that has
> persisted now for decades.
>