The Response of Capital
In late capitalist societies, goods are produced by firms to be sold at a profit, and financial institutions lend money and invest in order to secure high and safe returns. A useful distinction can be drawn for present purposes between an industrial capital which is concerned with the production of commodities and finance capital which is concerned with the lending of money and investment. The two are obviously interlinked. Industrialists often seek funds to build a new factory, pay off debts and buy raw materials before the cycle of production is completed, so that for industrial capital credit from the finance institutions bridges the gap between the production and realisation of commodities. The two forms of capital are represented by different institutional forms: industrial capital is represented by (in particular) the Confederation of British Industry (CBI) while finance capital has a less direct but nonetheless real representation in the power of the City, the Bank of England and the Treasury. Their twin interests do not always coincide of course; thus the CBI wants a cheap pound in order to make exports more competitive and access to easy credit in order to restructure the labour process, while sections of finance capital concerned with attracting overseas money may want high interest rates and a strong pound.
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