Accumulation by dispossesion (financialization)

[RGacky3]

Its really just a fancy way of saying the financialization of an economy, where wealth creation IS'NT growing, its extracted, from already existing wealth or already existing wealth creation.

We all know this is happening, but we can see this especially in the United States.

http://67.19.64.18/news/MillenniumWaveAdvisors/2010/4-17mw/2.jpg

Now we see here the collapse, where financial profits actually drop BELOW productive profits, only to shoot right back up.

Marxists have always knew that capitalism would eventually come to this. David Harvey points out that its kind of like a circle, capitalism started by accumulation by dispossession by removing peasents from their land and profiting from that, by racking up their debt, turning them into wage slaves, and its comming back to that today.

Its not only personal debt, its also corporate debt, companies nowerdays are heavily leveraged, giving financial firms extra ordinary power, you cut off a company from credit, they are done for.

http://market-ticker.org/akcs-www?get_gallerynr=801

This is what Marxists called the final stage of capitalism. Where Financial capitalists take over growth, growth of the "real economy" is no longer possible, the contradictions of capital accumulation have caused it to finish, now the only growth available is dispossesion, in other words, exploitation of labor does'nt work anymore, it can't create the type of growth necessary to hold up capitalism, now the growth has to come from extraction of allready existing wealth and already existing profits.

But its not only with debt, you also have securitization, where you can multiply the accumulaiton of production by simply inventing what Marx calls "ficticious capital," and putting that on the market.

If a farmer grows $100 worth of apples, and a banker then creates $100 worth of financial products baesd on the price of those apples and sells them, $200 has been added to the GDP even though only $100 worth of consumer goods have been made, making the whole system more unstable because many things in the economy have much larger effects (without the mass securitization of the housing market you would'nt have had nearly the crash we did have).

We are already at the point where Capitalism has outgrown itself, it can't grow anymore, recular commodity production just is'nt cutting it anymore, We saw the crash and the crisis, and look at the profits, they shot stright up again, huge profits from simple primative accumulation.

The financial industry extracts and extracts and that mixed with the regular contradictions in capitalism drive an economy too the ground, then the financial industry grabs everything up. Its not for northing that private equity is one of the most profitable industries now, its because these are the vultures cleaning up the carcass of capitalism.

So what happens next we don't know, but capitalism, as we know it, CANNOT go on. The nature of capitalism requires exponential growth, when natural growth is'nt possible anymore it turns to imeprialism, then financialization, we've come to a point where financialization is comming to a breaking point, there is'nt much more to extract.

[RGacky3]

http://www.bis.org/publ/qtrpdf/r_qa0812.pdf

The derivatives market is worth $791 TRILLION .... Thats over 11 times the size of the world economy, this is not just something that happened, it happened necessarily, capitalism MUST grow continually, but it can't keep growing naturally (goods and services), how much more financialization can happen?

[ckaihatsu]

Since currency values aren't directly linked / indexed to national productive output anymore, *all* economic valuations float on top of ongoing financial transactions.

This is where we need to emphasize the *political* aspect, since -- as outlandish as financialized values get -- people will just accept this process as 'normal' for capitalism, and it will continue. It really *takes* a revolution to put a definitive end to the norm of 'casino capitalism'.

[RGacky3]

It does'nt matter if people accept it or not, the point is not whether casino capitalism is desirable or not, the point is it makes capitalist extremely unstable and prone to collapse, and when it does collapse it goes down hard.

Extreme financialization is what happens when capitalism stops working.

[ckaihatsu]

Extreme financialization is what happens when capitalism stops working.


Yes.





the point is not whether casino capitalism is desirable or not,


No, it isn't, of course.





It does'nt matter if people accept it or not,


Well, this is the *political* aspect I was referring to earlier. We can't treat capitalist economics simply as an independent objective force, like the weather -- it *should* matter if people accept it or not, hence the 'Occupy' movement, etc.





the point is it makes capitalist extremely unstable and prone to collapse, and when it does collapse it goes down hard.


Yes and no. I'll counterpose an argument here that, on the whole, this economic system of the ruling class continues to vacuum up surplus labor value every minute of every day, everywhere, from the world's working class. If we, politically partisan to the working class, get too caught up in the machinations of capital -- as historic as they may be -- then our attentions will tend to be more like those of celebrity culture followers, or perhaps of those who prefer the drama of the politics of court.

Rest assured that at a *political* level the ownership class *will* find a way to work things out among its members, with some kind of additional scheme or internal understanding.








In a January, 2012, review, it was reported that AIG still owed around $50 billion, GM about $25 billion and Ally about $12 billion.

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#Participants

[RGacky3]

Well, this is the *political* aspect I was referring to earlier. We can't treat capitalist economics simply as an independent objective force, like the weather -- it *should* matter if people accept it or not, hence the 'Occupy' movement, etc.


Oh sure, the occupy movement is an understanding that financialization, and capitalism itself, is collapsing and its collapsing ON the poor and middle class while the rich are raiding the tombs.


Yes and no. I'll counterpose an argument here that, on the whole, this economic system of the ruling class continues to vacuum up surplus labor value every minute of every day, everywhere, from the world's working class.

Well financial capital makes its money on rent, financial capital exploits both productive capital, merchant capital AND workers, its a double whammy.

Financial capital is not exploiting surplus labor, its accumulation by dispossession. So wealth is not created by taking surplus value, its created by dispossession and creating risk.


If we, politically partisan to the working class, get too caught up in the machinations of capital -- as historic as they may be -- then our attentions will tend to be more like those of celebrity culture followers, or perhaps of those who prefer the drama of the politics of court.


I suppose, I'm approaching this from an economic standpoint, kind of uninterested positive economics.

Of coarse the correct response to this IS the occupy movement, (what better way to fight accumulation by dispossesion by occupying), the same way fighting productive/merchant capital is through strikes and industrial action.


Rest assured that at a *political* level the ownership class *will* find a way to work things out among its members, with some kind of additional scheme or internal understanding.


That may be, but it won't be the capitalism we know today, I don't agree with Marx's determanism (he was trying to hard to make social sciences into a hard science, which is impossible), when capitalism collapses anything can come next, China/singapore style state-capitalism, Russian/Borlusconi style authoritarian corporatism, german/swedish style mixed economy social-market economy, norwegian/danish style social democracy, perhaps something more extreme, and then these systems are also prone to collapse, then who knows.

But we need to fight to make sure as it is comming down we don't allow the collapse to fall on us, but instead take over the economy for ourselves.


In a January, 2012, review, it was reported that AIG still owed around $50 billion, GM about $25 billion and Ally about $12 billion.

yeah, tarp aint shit though, backdoor bailouts from the fed is where the real come came from.

[ckaihatsu]

Oh sure, the occupy movement is an understanding that financialization, and capitalism itself, is collapsing and its collapsing ON the poor and middle class while the rich are raiding the tombs.


Your tone isn't clear here -- are you saying that the Occupy movement *does* understand, or are you being sarcastic and dismissive that they would understand on an explicitly anti-capitalist basis?





Well financial capital makes its money on rent, financial capital exploits both productive capital, merchant capital AND workers, its a double whammy.


Okay, no disagreement here.





Financial capital is not exploiting surplus labor, its accumulation by dispossession. So wealth is not created by taking surplus value, its created by dispossession and creating risk.


It's not an either-or -- it's both, since capital sets up the business organizations used to exploit surplus labor value, *and* it takes a cut out of wages for workers' financial-type costs, *and* it "legitimizes" rentier-type costs to the worker, primarily rent.





I suppose, I'm approaching this from an economic standpoint, kind of uninterested positive economics.

Of coarse the correct response to this IS the occupy movement, (what better way to fight accumulation by dispossesion by occupying), the same way fighting productive/merchant capital is through strikes and industrial action.


I'll agree, but also remain open to a 'diversity of tactics' since any labor actions that affect manufacturing (industrial productivity) will immediately have a snowballing effect on all related connected finance capital as well.





I don't agree with Marx's determanism (he was trying to hard to make social sciences into a hard science, which is impossible),


I won't address this since it's an aside to the main topic of this exchange.





That may be, but it won't be the capitalism we know today,




when capitalism collapses anything can come next, China/singapore style state-capitalism, Russian/Borlusconi style authoritarian corporatism, german/swedish style mixed economy social-market economy, norwegian/danish style social democracy, perhaps something more extreme, and then these systems are also prone to collapse, then who knows.


You're really making my case for me here since your rundown of various forms of capitalism is a (historical) list of what happens when capitalism, at different points in time, collapses.

We could look for "The Big One" during our present time, and it could very well be dramatic, but it won't be the apocalypse, as you're making it out to be. It would reconfigure anew, absent the self-activity of the world's working class to definitively overthrow it.





But we need to fight to make sure as it is comming down we don't allow the collapse to fall on us, but instead take over the economy for ourselves.


Yes, to ultimately transcend all notions of *exchange*-type economics entirely, in favor of worker-controlled mass production and distribution.

[RGacky3]

Your tone isn't clear here -- are you saying that the Occupy movement *does* understand, or are you being sarcastic and dismissive that they would understand on an explicitly anti-capitalist basis?


They may not or may understand, but they ARE fighting it at the core, economically, against plutocracy.


It's not an either-or -- it's both, since capital sets up the business organizations used to exploit surplus labor value, *and* it takes a cut out of wages for workers' financial-type costs, *and* it "legitimizes" rentier-type costs to the worker, primarily rent.


Well, indirectly you could say that, but directly its income source is rent, where that rent comes from is another thing, your dispossesing capitalist and workers. (This is all from the marxian tradition).


I'll agree, but also remain open to a 'diversity of tactics' since any labor actions that affect manufacturing (industrial productivity) will immediately have a snowballing effect on all related connected finance capital as well.


Well .... most of the time yeah. There are exceptions, like private equity and so on, but you right we have to think about all of these things.


You're really making my case for me here since your rundown of various forms of capitalism is a (historical) list of what happens when capitalism, at different points in time, collapses.


I don't think we dissagree.


We could look for "The Big One" during our present time, and it could very well be dramatic, but it won't be the apocalypse, as you're making it out to be. It would reconfigure anew, absent the self-activity of the world's working class to definitively overthrow it.


Well, I think this is a little bit different from the great depression, out of the great depression came keynsianism, then neoliberalism, keynsianism is'nt gonna work this time around.

[ckaihatsu]

I'll agree, but also remain open to a 'diversity of tactics' since any labor actions that affect manufacturing (industrial productivity) will immediately have a snowballing effect on all related connected finance capital as well.





Well .... most of the time yeah. There are exceptions, like private equity and so on, but you right we have to think about all of these things.


I'll go even further -- just for the sake of argument -- and say that *all* pools of capital and debt would become questionable in a period of prolonged economic contraction, since "the game would be up". Without a continuing non-stagnant growth-based flow of valuations from the past to the future no one would know how to bridge that temporal gap, in economic terms.

Already we're seeing the knock-on *political* effects from current stagnant-to-sputtering GDP figures for all major economies -- schisms, and possibly factions, are breaking out into the open within the ruling class over formalities / publicity of their dictatorship of capital:








The proposal caused outrage in Greece. It was accompanied by proposals from the EU and the IMF demanding the elimination of an additional 150,000 government jobs, cuts and closures across the public sector, and a reduction in the paltry 750-euro monthly minimum wage.

The proposal was shelved at the last moment because it was too politically revealing. It would have confirmed for all to see that European governments now operate directly at the behest of the financial elite, and that democracy no longer operates in any meaningful sense.

Germany’s EU partners urged Berlin to think again. Italian Prime Minister Mario Monti called them “far-fetched and unpleasant.” French President Nicolas Sarkozy said direct EU control “would not be reasonable, not be democratic, nor would it be effective.”




The fact remains that the untrammeled dictatorship of the banks and corporations already exists, whether or not Berlin’s measure making this crystal clear is allowed to pass.

http://wsws.org/articles/2012/feb2012/pers-f03.shtml

[RGacky3]

I'll go even further -- just for the sake of argument -- and say that *all* pools of capital and debt would become questionable in a period of prolonged economic contraction, since "the game would be up". Without a continuing non-stagnant growth-based flow of valuations from the past to the future no one would know how to bridge that temporal gap, in economic terms.


Well we don't know that, there are always ways to either force growth or create virtual growth. But it just ends up making the problem worse for everyone else, until we don't have capitalism any more but an authoritarian state-capitalist system.


The proposal caused outrage in Greece. It was accompanied by proposals from the EU and the IMF demanding the elimination of an additional 150,000 government jobs, cuts and closures across the public sector, and a reduction in the paltry 750-euro monthly minimum wage.

The proposal was shelved at the last moment because it was too politically revealing. It would have confirmed for all to see that European governments now operate directly at the behest of the financial elite, and that democracy no longer operates in any meaningful sense.

Germany’s EU partners urged Berlin to think again. Italian Prime Minister Mario Monti called them “far-fetched and unpleasant.” French President Nicolas Sarkozy said direct EU control “would not be reasonable, not be democratic, nor would it be effective.”
Quote:

The fact remains that the untrammeled dictatorship of the banks and corporations already exists, whether or not Berlin’s measure making this crystal clear is allowed to pass.

This is a classic case example of the ruling class just racing to the bottom to try and fix capitalism with MORE capitalism, squeezing more and more out, even though there is barely any left.
Greece is a small country with a militant working class, so its gonna be punished.