domingo, novembro 16, 2014

Finance thriving in XXI century

Financialization was argued in a variety of ways in this weeks readings, the shift from industrial to finance capitalism is the main connector in all approaches, also the shift from real investment to financial investment. Krippner define financialization as the growing weight of finance in the American Economy; A pattern of accumulation in which profits accrue primarily through financial channels rather then through trade and commodity production. According to her since the 1970's the US have derived more profits from financial activities and she illustrate this theory with table 3- how the financial industry outpaced the productive investment in industry share of corporate profits. A decline in manufacturing and a rise in both service and finance shows how finance grew more then 5 times in the last 50 years even tough it didn't really impact employment. Financialzation can also be seen as the freedom from banks and consequently a decline in the cost of loans. Instead of getting money from a bank the entrepreneur that wanted to start an industry went to some rich family and asked for a long term money loan – bond. It was like a ownership right on a firm, a right to future earnings.
Globalization have a central role in the process of financialization. Free market was pushed by IMF and world bank, which obliged countries to fit into the world market. Imperialism of world trade due to competition among states, in competitive markets prices go down due to number of sellers, so the more the better. Entrance cost reduction due to information technology also contributed for the global market. It was desired that capital could be invested outside borders, the capitalist claimed that this expansion was to help 3rd world countries since capital was going to flow into them and therefore could ameliorate the conditions of life and stimulate growth for the country, what was sold to 3rd world countries was the promise of growth with financialization and capital flow from developed to not developed. Also, idle capital that wasn't productive and wasn't generating surplus could now start to expand itself in a new market that generated more surplus then investment in developed sectors. But speculation became the world economy, financialization caused an integration of global production, taking advantage of floating exchange rates. Many aspects of the economy are affected by fluctuation of exchange rate, and trade when it encompass different money values. Exports were affected due to value of the currency fluctuation, the US wanted to keep the dollar high and therefore lost exports, since it is much easier for other countries to import if the value of the money that they buy from is depreciated. Finance changed the meaning of surplus extraction, not interested or usury but instead in commission made from the exchange of one currency over the other. The key to make profit in finance was not the size of the firm, but diversification, specially of currency. Decentralization was the key to profits in the financial-sector.
As argued in the essays, the question of investment of surplus and of surplus generation is central to the financialization process. As noted, productivity gains have not been reinvested in the corporation, but rather been distributed to shareholders or used for the purchase of financial products. The victory of the rentiers has

come at the expense of wage-earners and households, who have faced stagnating real wages and increased debt. Since the 1970s American corporations have increasingly derived profits from financial activities. Not only has the financial industry increased its share of GDP, but profits from interest, dividends and capital gains for non-financial corporations have outpaced those from productive investment. And this was extended to the workers life, or the financialization of the civil society. Corporations started selling bonds to regular people to bring in more cash to the capitalist; when relating financial availability to the labour class the financial concept of Securization is key, since it means to take one form of a note and sell it again, so make money in two ways with the same note. All financial concepts and modifications were based on models rather then in practice, which gives more room to error and therefore to crisis or inequality of information. The lack of information of electronic trading filled with mistiming in opened financial websites such as yahoo, also went against the labor class. Even tough finance opened the market for civilians to act upon it, and to make profits, it wasn't a fair openness, and therefore didn't help the labor class.

On Lapavistas theory she introduces the concept of financialization as a form of capital accumulation; in a Marxist view this pattern can be identified as the characteristics of mature capitalism 'absorption of surplus' monopolies generate an ever expanding surplus that results in stagnation and in declining production while finance thrive. Seek profit in some way other then attempting to profitability in production; The comodification and expansion of an area that didn't exist before as profit generating. The development of Marx 'fictious capital' seen as financial prices, stock market. While Orhangazi show us a different perspective of financialisation having a negative effect on capital accumulation, since accumulation can be understood as simply the re-investment within the production process, which doesn't happen as illustrated by both Orhangazi and Davis, since what they show is that the surplus doesn't go into real investment but rather flow from financial investment to financial investment and therefore isn't accumulation. I disagree. The fact that the concept of accumulation mean a re-investment into production don't leave out the fact that financial investment expands capital and therefore produce surplus that isn't distributed in the economy but instead is appropriated by the capitalist. The graph on Krippner's theory seem to illustrate that even tough cash flow and profit rose, employment wasn't generated and therefore centralization of capital and accumulation happened as a result of financialization.

Nenhum comentário: