Abstract
In this chapter, Nakatani and Carcanholo analyze the early forms of fictitious capital and apprehend the dual aspects of fictitious wealth which gives rise to significantly distinct forms of speculation. Through this investigation, the authors expose the categories speculative capital and parasitic speculative capital as an unfolding of the fictitious capital. Furthermore, Nakatani and Carcanholo defend the heterodox thesis that contemporary capitalism is distinguished by the process of conversion of industrial capital into speculative capital, and its logic is totally subordinated to speculation and dominated by parasitism. In this way, it is the speculative logic of the capital on its circulation and reproduction in the international space that defines this new stage.
This chapter was originally published in Portuguese with Ensaios FEE, 20(1), in 1999, and was translated into English by Kenton James Keys.
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Notes
- 1.
See, for example, “When discussing the dynamics of the contemporary international economy – including discussions on economic growth – globalisation is often mentioned as being a central factor. The trans-nationalisation of production that has been taking place for more than 100 years – particularly, post-war, under the command of American transnational corporations, with the corresponding oligopolistic reaction of large European and Asian companies – is confused with a more recent scenario caused by the policies of financial globalisation” (Tavares and Melin 1997, p. 73). Or “Two basic, though tentative, conclusions follow. Firstly, if we are to look for something truly peculiar (as opposed to ‘ever-present capitalism’) in the present situation we should focus our attention on the financial aspects of capitalist organisation and the role of credit” (Harvey 1992, p. 184). See also Chesnais (1996), Braga (1993), Coutinho (1996), Harvey (1990).
- 2.
Such as the change of industrial production patterns and/or the globalization of production.
- 3.
Text in quotation marks is not consistent with the original version of this text. This version contains some refinements that attempt to overcome difficulties that appeared in the original.
- 4.
The original version read “it even contaminates the productive functions, autonomic or not, and so”.
- 5.
“at a global scale”, does not appear in the original version.
- 6.
The original version reads “productive capital is contaminated by speculation”. It should be noted, “Financial dominance – financialisation – is a general expression of the contemporary means of defining, managing and realising wealth in capitalism. Dominance is understood, conceptually, because all corporations – even those typically industrial, such as those in the steel production sector – have in their financial investments, retained earnings or cash, a central element in the process of global accumulation of wealth”, (Braga 1993, p. 26) and “finally, it is understood that in the face of all-pervasive financialisation , and the corresponding internationalised macrostructure, the core of capitalism is no longer ‘industrial capitalism’ in which, in the absence of crisis , the innovative entrepreneur, with a view to production, raises credit, advances productive expenditures, buys labour, sells production, makes profits and then starts the process again … but, on the contrary, in current capitalism, particularly since the end of the 1960s, different realities, corporate groups – true capitalist corporations – act simultaneously, through financial wealth and production, intermittently engendering the instabilities arising from the contradiction between income (product) and money capitalisation and, in addition, leave the system permanently in crisis , or rather, on the brink of crisis” (Braga 1993, p. 47). See other parts of this chapter.
- 7.
For us, speculative logic and the exorbitant remuneration of speculative capital are what lead to the exacerbation of competition and to technological change, until they reach the current standards of flexible technology. “I am, therefore, tempted to see the flexibility achieved in production, labour markets and past consumption as the results of the search for financial solutions to the tendency for crises of capitalism rather than the reverse. This implies that the financial system has achieved a degree of autonomy, in the face of real production, unprecedented in the history of capitalism, leading capital into an era of equally unprecedented financial risk” (Harvey 1990, p. 181).
- 8.
For Marx, it is capital that produces wealth and, therefore, surplus (surplus value). It does so through work, the consumption of the workforce, which is one of its aspects. This idea is sustained by the logical structure of its theory regardless of how technology develops or how much the organic composition of capital is extended (a process that is very prominent and the starting point for understanding the trend to decreasing rates of profit).
- 9.
We insist once again that this is not a definition. On these ideas regarding capital, see Marx (1990, chapter 4).
- 10.
Chapters 1 to 4 of Volume II of Capital portray, in a profound way, the complexity of capitalist circulation. Unfortunately, little attention is paid to them.
- 11.
The most significant sections in Capital on this theme appear in Volume III, chapters XXIX and XXX (the first six paragraphs).
- 12.
“What establishes the price of property titles are generally the presumed present and future revenues, to which the owner of the title is entitled, updated through the current interest rate … (thus) prices can vary in a totally independently from the variations in forecasted revenue. There are other considerations that further change the price, such as ease of sale in the market, security, maturity, taxes etc. It is not necessary to worry about these details here, since what interests us is the relationship between prices in general and the real values that should finally be represented. This relationship gives us something important to try to explain, how and why the fictitious values (prices) achieved through the credit system can be so far removed from the values expressed by the ‘monetary base’” (Harvey 1990, pp. 280–281).
- 13.
“The independent movement of these ownership titles’ values, not only those of government bonds, but also of shares, strengthens the illusion that they constitute real capital besides the capital or claim to which they may give title. They become commodities, their prices having a specific movement and being specifically set. Their market values receive a determination differing from their nominal values, without any change in the value of the actual capital” (Marx 1991, p. 598).
- 14.
In this case it is confused with interest-bearing capital.
- 15.
“This capital (the fictitious capital) is defined as capital that has a nominal monetary value and existence as paper, but which, at a given point in time, has no bearing on real productive activity or physical assets. Fictitious capital is converted into real capital to the extent that investments are made that lead to an appropriate increase in useful assets (e.g. facilities and equipment that may be gainfully employed) or useful goods (goods or services that can be sold for profit)” (Harvey 1992, p. 171).
- 16.
In the original version, this paragraph was entirely different: “Finally, an apparently obvious but very significant finding: not all interest-bearing capital should be considered as fictitious capital. In contrast, not all fictitious capital can be considered as interest-bearing capital as we have explained, that is, as an aspect of industrial capital. Thus, for example, the fictitious capital represented by public debt securities cannot be considered as the functional form of industrial capital”.
- 17.
In an excellent article by Alves Pinto (1997), a position appeared that was different from ours.
- 18.
It was used inappropriately in one of the translations of Capital into Portuguese and this is well explained by Klagsbrunn: “In the Editora Civilização Brasileira edition of ‘Capital’, this specific function was translated as ‘money capital’, an expression that has little to do with the original geldhandlungskapital, both in literal terms and in content and which presents the exasperation of advancing theoretical developments of another author – Hilferding –, which refer to more specific aspects. The later Brazilian edition of The Capital, by Editora Abril Cultural, was, in this matter, much more precise and correct. It seems that the origin of the error is in the French translation of Editions Sociales, Paris, 1976 (translation by M. Cohen-Solal and M. Gilbert Badia), in which the title of ch. 19 p. 301 appears as ‘Le capital financier’ (capital marchant)”. This led to innocuous undertakings, such as Brunhoff’s (1978, p. 103 et seq.), countering “the notion of money capital presented by Marx” with that of Hilferding, cf. Klagsbrunn (1992, p. 603). On the non-existence of the expression “money capital” in Marx, we thank the collaborations of Klagsbrunn, Etelberto Ortiz and Francisco P. Cipolla, through the SEP mailing list on the Internet.
- 19.
- 20.
In the original version the following did not appear: “However, his fictitious characteristic allows it to accept, within certain limits, a partly fictitious remuneration; in this measure, and only within it, does it not present itself as an immediate cost”.
- 21.
In another circumstance and on another completely different level of abstraction, Marx, referring to the cycle of money capital and its difference to the others , states: “It further expresses the fact that it is the exchange-value, not the use-value, that is the decisive inherent purpose of the movement. It is precisely because the money form of value is its independent and palpable form of appearance that the circulation form M...M’, which starts and finishes with actual money, expresses money-making, the driving motive of capitalist production, most palpably. The production process appears simply as an unavoidable middle term, a necessary evil for the purpose of money-making” (Marx 1992, p. 137).
- 22.
In the original version: “Thus, productive capital itself becomes contaminated and individual capital that fulfils the autonomic functions of productive capital is increasingly subjected to parasitic logic and begins to operate more and more with speculative logic”.
- 23.
The previous version had a substantial difference in this paragraph. It then read: “What used to be industrial capital, a synthesis of the autonomic forms of productive capital, commercial capital and interest capital and under the hegemony of the former (productive capital), becomes speculative capital, a synthesis of various forms of capital, one of which is the hegemonic, parasitic speculative capital already described. Industrial capital, whose logic is accumulation based on the production of surplus value, becomes, not in parasitic capital, but in speculative capital. In fact, while this is a synthesis, the parasitic speculative capital within it is the dimension of the parasitic remuneration; is therefore its parasitic aspect and dominates all its logic (the logic of speculative capital, as a synthesis)”.
- 24.
May the positivists forgive us! The part of this paragraph “We saw that […] real at the same time” was not in the original version.
- 25.
“Marx often claims that in the course of a crisis , capitalism is obliged to abandon financial fictions and return to the world of real money, to the eternal truths of the monetary base” (Harvey 1990, p. 296).
- 26.
State intervention , contrary to neoliberal proposals, can alter the cyclical mechanism of the crisis . Particular attention is being paid to creating new regulations on parasitic speculative capital aimed at the destructive potential of crises arising from their accelerated growth.
- 27.
According to Bensaid (1996).
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Carcanholo, R.A., Nakatani, P. (2019). Parasitic Speculative Capital: A Theoretical Precision on Financial Capital, Characteristic of Globalization. In: Mello, G., Sabadini, M. (eds) Financial Speculation and Fictitious Profits. Marx, Engels, and Marxisms. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-23360-0_6
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