Wednesday, July 02, 2008

The capital role of finance in history - Money Matters -

Finance and history have been linked for centuries. Here is an interesting look at some long run trends and later in the article what the history says may happen if the US loses its preeminent position.

The capital role of finance in history - Money Matters -
"Almost a hundred years ago in 1910, Austria-born economist Rudolf Hilferding wrote a book called Finance Capital....In his book, Hilferding described the emergence of a new type of capitalism dominated by the banks. He believed that the power of the old manufacturing interests had waned, pushed aside by a whole new breed of powerful bankers who controlled the pursestrings of the economy....“Through this relationship,” he argued, “capital assumes the form of finance capital, its supreme and most abstract expression.”"

1 comment:

Fred Thompson said...

"Par ma foi, il y a plus de quarante ans que je dis de la prose, sans que j'en susse rien." Or, where you stand depends upon where you sit. In England, the financial revolution preceded the industrial revolution (in Holland, the financial revolution came even earlier, but then nothing more). In Germany and Austria, it was the other way around, at least arguably. Since Hilferding was a good dialectical materialist, history had to mean something. it just happens that his history (situation) was not Marx's.

Actually, aside from order, Hilferding had it right. Financial asset markets are central to capitalism. Odd, really that Marx & Engels saw them as a sideshow. But, then, financial assets are socially constructed realities and Marx really was a materialist, Hilferding only thought he was.