Mello sabadini (eds ) financial speculation and fictitious profits; a marxist analysis (2019)

MARX, ENGELS, AND MARXISMS Financial Speculation and Fictitious Profits A Marxist Analysis Edited by Gustavo Moura de Cavalcanti Mello Mauricio de Souza Sabadini Marx, Engels, and Marxisms Series Editors Marcello Musto York University Toronto, ON, Canada Terrell Carver University of Bristol Bristol, UK The Marx renaissance is underway on a global scale Wherever the critique of capitalism re-emerges, there is an intellectual and political demand for new, critical engagements with Marxism The peer-reviewed series Marx, Engels and Marxisms (edited by Marcello Musto & Terrell Carver, with Babak Amini and Kohei Saito as Assistant Editors) publishes monographs, edited volumes, critical editions, reprints of old texts, as well as ­translations of books already published in other languages Our volumes come from a wide range of political perspectives, subject matters, academic disciplines and geographical areas, producing an eclectic and informative ­collection that appeals to a diverse and international audience Our main areas of focus include: the oeuvre of Marx and Engels, Marxist authors and ­traditions of the 19th and 20th centuries, labour and social movements, Marxist analyses of contemporary issues, and reception of Marxism in the world More information about this series at http://www.palgrave.com/gp/series/14812 Gustavo Moura de Cavalcanti Mello Mauricio de Souza Sabadini Editors Financial Speculation and Fictitious Profits A Marxist Analysis Editors Gustavo Moura de Cavalcanti Mello Department of Economics and Post-Graduate Programme in Social Policy Federal University of Espírito Santo (UFES) Vitória, Espírito Santo, Brazil Mauricio de Souza Sabadini Department of Economics and Post-Graduate Programme in Social Policy Federal University of Espírito Santo (UFES) Vitória, Espírito Santo, Brazil ISSN 2524-7123     ISSN 2524-7131 (electronic) Marx, Engels, and Marxisms ISBN 978-3-030-23359-4    ISBN 978-3-030-23360-0 (eBook) https://doi.org/10.1007/978-3-030-23360-0 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2019 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the ­publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and ­institutional affiliations Cover illustration: Craig Stennett / Alamy Stock Photo This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Acknowledgement This study was written by some members of CAPES-PRINT Inter-­ nationalization Project from UFES and was financed in part by the Coordenaỗóo de Aperfeiỗoamento de Pessoal de Nível Superior—Brazil (CAPES)—Finance Code 001 v Series Foreword The Marx Revival The Marx renaissance is underway on a global scale Whether the puzzle is the economic boom in China or the economic bust in “the West”, there is no doubt that Marx appears regularly in the media nowadays as a guru, and not a threat, as he used to be The literature dealing with Marxism, which all but dried up 25 years ago, is reviving in the global context Academic and popular journals and even newspapers and online journalism are increasingly open to contributions on Marxism, just as there are now many international conferences, university courses and seminars on related themes In all parts of the world, leading daily and weekly papers are featuring the contemporary relevance of Marx’s thought From Latin America to Europe, and wherever the critique to capitalism is remerging, there is an intellectual and political demand for a new critical encounter with Marxism Types of Publications This series bring together reflections on Marx, Engels and Marxisms from perspectives that are varied in terms of political outlook, geographical base, academic methodologies and subject matter, thus challenging many preconceptions as to what “Marxist” thought can be like, as opposed to what it has been The series will appeal internationally to intellectual communities that are increasingly interested in rediscovering the most powerful critical analysis of capitalism: Marxism The series editors will ensure vii viii  SERIES FOREWORD that authors and editors in the series are producing overall an eclectic and stimulating yet synoptic and informative vision that will draw a very wide and diverse audience This series will embrace a much wider range of scholarly interests and academic approaches than any previous “family” of books in the area This innovative series will present monographs, edited volumes and critical editions, including translations, to Anglophone readers The books in this series will work through three main categories Studies on Marx and Engels The series will include titles focusing on the oeuvre of Marx and Engels which utilize the scholarly achievements of the ongoing Marx-Engels Gesamtausgabe, a project that has strongly revivified the research on these two authors in the past decade Critical Studies on Marxisms Volumes will awaken readers to the overarching issues and world-­changing encounters that shelter within the broad categorization, “Marxist” Particular attention will be given to authors such as Gramsci and Benjamin, who are very popular and widely translated nowadays all over the world, but also to authors who are less known in the English-speaking countries, such as Mariátegui Reception Studies and Marxist National Traditions Political projects have necessarily required oversimplifications in the twentieth century, and Marx and Engels have found themselves “made over” numerous times and in quite contradictory ways Taking a national perspective on “reception” will be a global revelation and the volumes of this series will enable the worldwide Anglophone community to understand the variety of intellectual and political traditions through which Marx and Engels have been received in local contexts University of Bristol Bristol, UK York University Toronto, ON, Canada Terrell Carver Marcello Musto Foreword This book, authored by Gustavo Mello and Mauricio Sabadini, is important not only because of the clarity of its explanation of a difficult subject, but also because it comes at a time when financial globalization once again threatens to provoke a large-scale economic crisis It provides the necessary elements for understanding the potential effects of an increase in speculative parasitism and fictitious profits on the economy and, therefore, on labor, from the point of view of both wages and unemployment Increases in financial activity are not naturally parasitic In general, companies operate in a macroeconomic environment over which they have little long-term control and in which they operate with incomplete information Today, the complexity of production increases uncertainty regarding the profitability of projects Covering these new risks leads to the development of complex financial products In a way, the complexity of the financial market is a consequence of the complexity of production Such financial complexity is developed through financial liberalization (de-compartmentalization, disintermediation and deregulation) This has a cost, but it makes it possible to obtain a higher profit that exceeds this On the theme of Marxism, he is the author of Sur la Valeur (Ed Maspero), in partnership with Valier J.; Une introduction l’économie politique (Ed Maspero) in partnership with Mathias G.; L’Etat surdéveloppé (Ed Maspero-La decouverte) and Nature et formes de l’Etat capitaliste, analyses marxistes contemporaines (Ed Syllepse), with A. Artous, JL Solis Gonzales and T. Hai Hac ix x  FOREWORD cost.1 Therefore, the development of finance and the growth of sophisticated financial products makes possible, in abstract, the development of capital This is because the capital cycle only develops if financial activities permit the growth in value of productive capital Currently, the growth of the industrial sector demands a more than proportional development of the financial sector However, finance, like a Janus, has two faces One is “virtuous”, as we have just mentioned; the other is “vicious”, having acquired an ­uncontrollable amplitude with financial globalization Financialization is the childhood disease of finance, its own monster Financialization is the threshold from which the financial sector, more profitable than the industrial sector, develops to the detriment of the latter That there has been a shift toward “financialization,” since its development is mainly due to the attraction exerted by these new financial products in themselves, rather than the function of reducing risk in production In this way, the financial sector seems to become autonomous from the productive sector and, in this sense, we can say that the relationship between finance and labor is both fetishized and complex It is fetishized because finance and labor seem to operate in separate watertight spaces: money seems to become autonomous, just like the miracle of bread, and to generate money from itself without there being a relationship with labor and working conditions It is complex because there are relationships between the development of finance and working conditions (total wages, employment and types of jobs), relationships that develop underground, appearing more clearly in times of crisis In the context of commercial and financial globalization, these relationships, in addition to national determinants, are difficult to decipher, especially since the virtuous and vicious aspects are the two faces of the same coin In other words, virtuous finance contains within it the tendency to financialization Therefore, there is a dialectical relationship between them Much has been written about the origins and causes of the financial crisis in developed countries and its highly negative consequences for economic activity The development of speculative bubbles and their bursting have been facilitated by: (1) techniques that are at the very least “misleading” in assessing risks, (2) the possibility of banks profitably “selling” the risks they take by designing and issuing increasingly complex derivative financial products (securitization) and deleting them from their balance sheets, and (3) the adoption of accounting rules that value assets based on their market prices (“mark to market”) Financial engineering, conceived 200  P NAKATANI AND H GOMES remittance of profits, interest and capital gains that grew rapidly after the financial crisis Figure 8.4 shows the accumulated total in the balance of current account payment balance of selected countries between 2006 and 2017 As can be seen, the countries with the largest negative balances are the United States, the United Kingdom, Spain, Australia and Turkey This balance, according to the economic, represents the inflow (negative balance) or the sending (positive balance) of the savings to or from overseas Thus, during this period the United States received US$5878 billion from the rest of the world, most of it to finance the deficit in the commodities balance Just three countries, Japan, Germany and China were responsible for US$7504 billion or 127.7% of the funds to finance this deficit.26 If we include the deficits of the other European countries the total amount reaches US$8864 billion of negative balance in the balance of payments current account These numbers indicate a huge asymmetry in the world system To further clarify the basic operating mechanism of this system we must consider that the dollar, along with some other currencies, functions as the world currency That is why the United States can maintain recurring trade deficits without any problem, provided the dollar continues to be accepted in international transactions and as a reserve currency Thus, we can say that the United States imports goods from the rest of the world and pays with fictitious money, which becomes fictitious capital in the international credit system The same can be said for the Euro and Pound Sterling, currencies which are widely traded on the world exchange market and are part of the international reserves of various countries The counterpart of the current account deficit of developed countries appears, in part, in the data in Fig.  8.5 Countries that obtain positive trade balances accumulate these balances in their reserves, in dollars, those that not have to further open up their economies and offer more benefits to international capital to attract direct foreign or portfolio investment China is the champion in accumulated reserves, US$3236 billion at the end of 2017, with about 60% of that total in dollars, followed by Japan, US$1264 billion, Switzerland, US$811 billion, and Saudi Arabia, US$509 billion This asymmetry in the world system has been building since the introduction of neoliberal policies to open up and deregulate national economies, privatize state enterprises and reduce the role of the state in regulating economic activities If before this period, countries had to maintain 2,894 4,000 -6,000 -7,000 595 Singapore 499 Kuwait 789 581 Netherlands Norway 721 Switzerland 879 Saudi Arabia Germany China Japan Romania -112 Poland -190 Portugal -140 Italy -124 -506 Turkey -5,878 -5,000 -240 Greece Spain -4,000 -590 Australia -3,000 -478 -2,000 -1,309 United Kingdom -1,000 United States 1,000 Russian Federation 2,000 771 1,694 3,000 201 2,917 8  THE NATURE AND THE CONTRADICTIONS OF THE CAPITALIST CRISIS  3,500 3,236 Fig 8.4  Balance of payments balance in current account accumulated between 2006 and 2017 (US$ trillions) (Source: World Bank: http://data.worldbank org/indicator/bn.cab.xoka.cd) 3,000 2,500 151 130 113 113 Czech Republic Indonesia Poland Israel Italy 148 151 France United Kingdom 175 156 200 Germany Mexico 285 203 Thailand 374 Brazil Singapore 413 389 India 433 Russian Federation Korea, Rep 509 Switzerland China Japan 500 451 1,000 Saudi Arabia 811 1,500 United States 1,264 2,000 Fig 8.5  International Reserves 2017—Selected countries with the largest reserves (US$ billions) (Source: World Bank: http://data.worldbank.org/indicator/fi.res.totl.cd Our own production) 202  P NAKATANI AND H GOMES reserves to secure imports, after this period countries, especially the most fragile ones, accumulate reserves when they can to confront speculative attacks Brazil, for example, has accumulated US$374 billion in international reserves This represents the value of almost 30 months of imports, based on the 2017 monthly average of US$12.5 billion In the past, reserves necessary for the payment of two or three months of imports was considered acceptable The current need to maintain a large and expensive reserve is due to the risk of speculative attacks and the need to guarantee financial speculation In March 2018, Brazil had liabilities of US$825 billion in the foreign direct investment account and US$577.8 billion of foreign capital in the portfolio investment account; these balances were US$721.4 billion and US$459.2 billion, respectively, in September 2018 (BCB 2019a) This data records liabilities in Real converted into dollars, so a part of this apparent capital outflow is due to the brutal devaluation of about 20% of the Real between the end of March and September 2018 Meanwhile, balance of payments records show significant outflows in 2018 In the first three quarters of the year, gross capital outflows in the portfolio investment account of fixed income securities in the domestic market totaled US$70.5 billion In the same period, the outflow of direct foreign investment, intercompany operations, totaled US$38.3 billion (BCB 2019b) This does not necessarily represent a capital flight as the inflow into fixed income applications was US$70.8 billion Finally, if we consider speculative movements in the portfolio investment account, total business volume in 2018 was US$467.9 billion, a daily average of US$1.9 billion in inflows and outflows Final Considerations The results we have seen so far demonstrate that the crisis which began in 2007 continues to develop internal contradictions in the dynamics of capital and to pressure the transfer of value and added value from the weakest countries to the strongest within the system, from workers to capitalists and between nation states and social classes The enormous asymmetry we observe in the global capitalist system does not signify a downward trend or collapse of the US economy, but rather shows the strength of the hegemonic position won and consolidated by the United States after World War II. There is, to date, no mon- 8  THE NATURE AND THE CONTRADICTIONS OF THE CAPITALIST CRISIS  203 etary system that can play the role of substitute for the dollar, nor a strong tendency toward new economic regulation that will lead to the replacement of dollar-denominated speculative and parasitic capital Some attempts to reorganize the international payment system, for example, China’s agreements with several countries to eliminate the dollar in its bilateral transactions, are still not enough to so, and this is without considering that countries that have a some trillions of dollars in their reserves, such as China and Japan, remain in effect trapped, as a sudden and abrupt devaluation of the dollar would produce brutal losses for them Moreover, the United States finds itself in a similar position to that of the early and late 1970s, when it transferred to the rest of the world the losses incurred with the end of the convertibility of the dollar in September 1971 and obtained great benefits from the policy of increasing interest rates in the early 1980s Under current conditions, a further increase in the US prime rate would produce rapid capital flight from all countries in which the stock of portfolio investment is important, in an accelerated exchange rate devaluation.27 Contrary to what might be expected, the crisis has not become a driving factor for wholesale development of the subjective conditions of the organization and pressure for anticapitalist changes, although we must acknowledge that there has been a relative rise in social struggles throughout the world during this period of crisis However, it is possible that an element of these political trends, involving some Social Movements, also reflects the difficulty in understanding these contemporaneous phenomena of fictitious capital, either due to alienation or because of the systematic campaign of bourgeois organic intellectuals through their means and instruments of production and ideological diffusion Hence the perception in recent years of the rise of right-wing political parties, groups and movements around the world that have produced electoral victories for the extreme right, for example, in the United States, in 2016, and in Brazil, in 2018 If this is correct, it is necessary to carry out a deepening, detailing and advancement by studies on fictitious capital and speculative and parasitic capital and their reflections and impacts in the political sphere and to disseminate these studies to broader levels of society Notes See also Dierckxsens (2009, pp. 13–16) 204  P NAKATANI AND H GOMES In 2016 Paul M Romer, then chief economist at the World Bank, published the article “The Trouble With Macroeconomics” for The American Economist (see Romer, 2016), with a devastating critique of orthodox economic theory that leads to the idea that adopted models of economic policy must all be abandoned Despite its importance, his criticism was largely ignored Nonetheless, he received the Nobel Prize in Economics in 2018, along with William D Nordhaus See Gontijo and Oliveira (2012) and Varela (2012) “From a modest start in 1964, at about US$11 billion, the system had grown to US$40 billion in 1969—and these are conservative numbers I say conservative numbers because there are several different estimates of the volume of Eurodollars that existed in 1969: the numbers range from US$40 billion to US$85 billion” (Wachtel 1988, p. 98) Then, with the oil crises in 1973 and 1979, this volume of money became predominantly petrodollars, which grew rapidly “From the first oil price increase in 1973 to the end of the decade price increase, OPEC surplus totalled US$357 billion” (Wachtel 1988, p. 104) “The top 1% of global wealth holders started the millennium with 47.1% of all household wealth This share changed little between 2000 and 2005, but then fell to 42.6% by 2008 Our latest estimates suggest that the share of the top percentile continued downward until 2011, but then rose sharply from 42.1% in 2011 to a peak of 47.5% in 2016, before edging back to 47.2% in mid-2018” (Credit Suisse 2018, p. 16) In December 1981, total Brazilian foreign debt, public and private, was US$61.4 billion and by December 1995, this had jumped to US$129.3 billion (Cerqueira 1997, p.  144) The accumulated balance of the trade balance between 1982 and 1995 was US$144.5 billion and total net interest paid was US$114.2 plus US$183.4 billion of amortisations (BCB 2013) Thus, almost 80% of the balance of trade was used to pay interest on foreign debt and although the amortisations in the period corresponded to almost three times the initial debt balance Brazil ended the period with a debt that was two and a half times the initial amount Exports of goods and services constitute the transfer of use values abroad in exchange for value represented by dollars that, through imports, could restore internal use values The return of dollars obtained from exports as interest, amortization, profits or capital gains prevents this kind of conversion from occurring and the result is the transfer of material wealth produced domestically without any return Derivatives are denominated, high risk speculative (on currency exchange rates and interest rate futures) bonds that derive from (or are backed by) primary securities such as corporate stocks, government bonds, mortgages, and so on 8  THE NATURE AND THE CONTRADICTIONS OF THE CAPITALIST CRISIS  205 “In the last ten years the volume of resources (bonuses, euronotes, bank loans and stock issuance) has quadrupled, from US$395 billion in 1987 to US$1597 billion in 1996; and “the daily volume of transactions in the currency market increased from US$ 718 billion in 1989 to US$ 1572 billion in 1995” In the derivatives market, “while the total value of transactions increased from US$618 billion in 1986 to US$9.185 billion in 1995, the number of contracts traded increased from 315 million to 1210 million in 1995 (Gonỗalves 1997, p. 314, 316 and 318) 10 According to BIS (2007a, p. 12), the global derivatives market, according to notional amounts, reached US$297,670 billion in December 2005 and reached US$414,290 billion a year later Meanwhile, the international currency market, which traded US$880 billion a day in April 1995, rose to US$1.2 billion a day in April 2001 (BIS 2007b, p. 5) 11 See: Carcanholo and Nakatani (1999) 12 “Here we have firstly the section of profit that is not spent as revenue, being rather designed for accumulation, but which the industrial capitalists concerned not have any immediate employment for in their own ­businesses […] The part to be spent as revenue is gradually consumed, but in the meantime, it constitutes loan capital as a deposit with the banker […] With the development of the credit system and its organisation, the rise in revenue, i.e in the consumption of the industrial and commercial capitalists, is thus itself expressed as an accumulation of loan capital And this holds good of all revenues, in so far as they are only gradually consumed—i.e ground-rent, the higher forms of salary, the incomes of the unproductive classes etc.” (Marx 1991, pp. 635–636) 13 For Marx, public bonds and shares traded on the Stock Exchange represent specific forms of fictitious capital But not only that; other types of securities are also fictitious capital, “Even when the promissory note—the security—does not represent purely illusory capital, as it does in the case of national debts, the capital value of this security is still pure illusion” (Marx 1991, p.  597) Between 1980 and 1992 the stock of so-called financial assets went from US$10.7 trillion to US$35.5 trillion The composition of these assets in 1991/1992 was as follows: foreign exchange, 32%, international bonds, 4%, government bonds, 25%, corporate bonds, 10%, shares, 29% (Chesnais 1998, p. 27) According to the McKinsey Global Institute data released in October 2008, this stock of financial assets reached US$117 trillion in 2003, US$142 trillion in 2005, US$167 trillion in 2006, and US$196 trillion in 2007 (McKinsey 2008, p. 9) 14 “With the development of interest-bearing capital and the credit system, all capital seems to be duplicated, and at some points triplicated, by the various ways in which the same capital or even the same claim, appears in various hands in different guises The greater part of this ‘money capital’ is purely fictitious” (Marx 1991, p. 601) 206  P NAKATANI AND H GOMES 15 The data in  the  tables are illustrative only due  to  the variety of  sources and methods of acquisition and aggregation Therefore, they should not be considered absolutely and should not be aggregated 16 Australia, Germany, Norway, Austria, Greece, Panama, Belgium, Hong Kong SAR, Portugal, Brazil, India, Singapore, Canada, Ireland, Chile, Italy, Sweden, Taiwan, Japan, Switzerland, Denmark, Turkey, Finland, Mexico, United Kingdom, France, Netherlands, United States (BIS 2012a, p A5) 17 This data was extracted from various editions of the BIS Quarterly Review (https://www.bis.org/quarterlyreviews/) 18 “The greater part of banker’s capital is therefore purely fictitious and consists of claims (bills of exchange) and shares (drafts on future revenues) It should not be forgotten here that this capital’s money value, as represented by these papers in the banker’s safe, is completely fictitious even in so far as they are drafts on certain assured revenues (as with government securities) or ownership titles to real capital (as with shares), their money value being determined differently from the value of the actual capital that they at least partially represent; or, where they represent only a claim to revenue and not capital at all, the claim to the same revenue is expressed in a constantly changing fictitious money capital Added to this is the fact that this fictitious capital of the banker represents to a large extent not his own capital but rather that of the public who deposit with him, whether with interest or without” (Marx 1991, p. 600) 19 Data obtained from the website of the World Bank (2019) 20 With the difficulties in collecting and compiling the information from the periodic declarations offered by each country, especially on positions in the domestic banking institutions and non-banking assets of foreign origin, BIS changed the system for calculating Locational Banking Statistics (LBS), the nationality of the reporting bank or the country of residence of its counterpart, giving preference to consolidated data collected by the Consolidated Banking Statistics (CBS) system, reporting country, as of June 2012 See: BIS (Dec BIS 2012a, b) 21 For more details on relevant methodological issues see Gruić and Wooldridge (2012) 22 This term was first used by Eleutério Prado and stems from the Brazilian debate on the Marxist theory of money in analogy with the Marxist concept of fictitious capital (Prado 2013) 23 The derivatives market registers the total amount of contracts over the future values that are the object of the bet For example, a future exchange rate contract records the buying and selling bet of billions of dollars at a certain rate expected today and what the future rate will be A buyer agrees to buy these billions at the exchange rate that he bets on in the future and the seller sells betting that the rate will be lower The buyer must pay a premium, which consists of a small percentage of the total amount of the 8  THE NATURE AND THE CONTRADICTIONS OF THE CAPITALIST CRISIS  207 contract Anyone who succeeds wins the difference between the stake rate and the effective rate at the end of the contract The record is about the total of the contract, but the effect is on the ratio between the differences in betting rates and the total contract 24 The US Treasury has put US$50 billion in stock to save General Motors, according to Folha de S. Paulo, and lost US$11 billion in five years (FSP 2013) 25 A necessary theoretical question for the grounds of this process is the transformation of the convertible dollar into the world currency both under the Bretton Woods Agreement, and its continuation after 1971, without such convertibility, as a purely forced currency, as fictitious money 26 There are, of course, innumerable mediations and this direct relationship is just a device we are using 27 This is the situation in which Brazil finds itself, as we have seen Most serious is that the BCB’s orthodox economists are trying to keep the exchange rate stable through fictitious dollar creation by increasing ­speculation in the market These are the foreign exchange swap operations, in which the capitalist buys a bond with the exchange rate plus a currency coupon (difference between the basic interest rate and the exchange devaluation rate) and pays the central bank the basic interest rate In December 2018, the notional value of the foreign exchange swaps was US$259.9 billion and the total cash flow, which the central bank had to pay, was US$15.1 billion (BCB 2019c) References Amin, S (2002) Au-delà du capitalisme sénile Paris: PUF BCB.  Banco Central Brasil (2013) Economia e Finanỗas Sộries Temporais Brasília: BCB http://www.bcb.gov.br/serietemp Accessed Dec 2013 BCB.  Banco Central Brasil (2019a) Economia e Finanỗas Sộries temporais: posiỗóo de investimento internacional Brasília: BCB https://www.bcb.gov br/estatisticas/tabelasespeciais Accessed Feb 2019 BCB. Banco Central Brasil (2019b) Economia e Finanỗas Sộries temporais: séries históricas – BPM6 Brasília: BCB https://www.bcb.gov.br/estatisticas/ tabelasespeciais Accessed Feb 2019 BCB.  Banco Central Brasil (2019c) Economia e Finanỗas Sộries temporais: operaỗừes cambiais Banco Central Brasớlia: BCB https://www.bcb.gov br/estatisticas/tabelasespeciais Accessed Feb 2019 BCE. Banco Central Europeu Monetary policy statistics Disponível em: http:// sdw.ecb.europa.eu/browse.do?node=bbn27 Accessed Feb 2019 BIS (2007a) Triennial and semiannual surveys on positions in global over-the-­ counter (OTC) derivative markets at end June 2007 Basel: BIS https://www bis.org/press/p071121.htm Accessed 30 July 2013 208  P NAKATANI AND H GOMES BIS (2007b) Triennial Central Bank survey Foreign exchange and derivatives market activity in April 2007: Preliminary global results Basel: BIS https:// www.bis.org/publ/rpfx07.pdf Accessed 30 July 2013 BIS (2012a) Quarterly review Basel: BIS https://www.bis.org/publ/qtrpdf/r_ qt1212.htm Accessed 19 Feb 2015 BIS (2012b) Quarterly review Basel: BIS. Disponível em: https://www.bis.org/ quarterlyreviews/index.htm Accessed 30 July 2013 BIS (2013) Triennial central bank survey Foreign exchange turnover in April 2013: Preliminary global results Basel: BIS. Disponível em: https://www.bis org/publ/rpfx13fx.pdf Accessed 10 Dec 2013 BIS (2016) Triennial central bank survey of foreign exchange turnover in April 2016 BIS, Sept 2016 Disponível em: https://www.bis.org/publ/rpfx16fx pdf Accessed 01 Feb 2019 BIS (2018) Summary of consolidated statistics BIS https://stats.bis.org/statx/ srs/table/b1?m=S Accessed 31 Jan 2019 BIS Global OTC derivatives market Disponível em: https://stats.bis.org/statx/ srs/table/d5.1?p=20152&c= Accessed Feb 2019 Carcanholo, R. A., & Nakatani, P (1999) O capital especulativo parasitário: uma precisóo teúrica sobre o capital financeiro, caracterớstico da globalizaỗóo Ensaios FEE, 20(1), 284–304 Cerqueira, C. A (1997) Dívida Externa Brasileira: processo negocial 19831996 Brasớlia: BCB Chesnais, F (Ed.) (1998) A mundializaỗóo financeira São Paulo: Xamã Credit Suisse (2018) Global wealth report 2018 Zurich: Research Institute https://www.credit-suisse.com/corporate/en/research/research-institute/ global-wealth-report.html Accessed 31 Jan 2019 Dierckxsens, W (2009) La gran depresión del siglo XXI: causas, caráter, perspectivas San José: DEI FED  – Federal Reserve (2018) Selected interest rates https://www.federalreserve.gov/releases/h15/ Accessed Feb 2019 FED – Federal Reserve Board of Governors of the Federal Reserve System http:// www.federalreserve.gov/releases/H3/default.htm Accessed 30 July 2013 Gambina, J (2012) Aspectos estruturales y coyunturales de la crisis In J. Estay et al (Eds.), El neoliberalismo y su crisis: causas, escenários y posibles desenvolvimientos Santiago de Chile: Redem GDP MKTP.CD Accessed 31 Jan 2019 GDP Total reserves: Includes gold http://data.worldbank.org/indicator/fi.res totl.cd Accessed Feb 2019 GDP Current account balance http://data.worldbank.org/indicator/bn.cab xoka.cd Accessed Feb 2019 GDP Market capitalization of listed domestic companies Disponível em: https:// data.worldbank.org/indicator/cm.mkt.lcap.cd Accessed 31 Jan 2019 8  THE NATURE AND THE CONTRADICTIONS OFTHECAPITALIST CRISIS 209 Gonỗalves, R (1997) A volatilidade sistema financeiro internacional e a vulnerabilidade das economias nacionais II Encontro Nacional de Economia Política Anais, 2, 310–325 Gontijo, C., & de Oliveira, F. A (2012) A crise da União Europeia (why pigs can’t fly) Belo Horizonte: Corecon/Assemg Gruić, B., & Wooldridge, P (2012) Enhancements to the BIS debt securities statistics BIS Quarterly Review https://www.bis.org/publ/qtrpdf/r_ qt1212h.htm Accessed 31 Jan 2019 Marques, R. M., & Nakatani, P (2009) O que é o capital fictício e sua crise São Paulo: Brasiliense Marques, R. M., & Nakatani, P (2013) El capital ficticio y su crisis In C. S Flores & C. L Cortés (Eds.), La crisis global y el capital ficticio (pp. 15–70) Santiago: Editorial Arcis e Clacso Marx, K (1991) Capital A critique of political economy (Vol 3, 2nd ed.) London: Penguin Books McKinsey Global Institute (2008) Mapping global capital markets: Fifth annual report https://www.mckinsey.com/industries/private-equity-and-principalinvestors/our-insights/mapping-global-capital-markets-fifth-annual-report Accessed Dec 2008 Folha de São Paulo (2013) EUA perdem US$ 11 bi com aporte na GM http:// www1.folha.uol.com.br/fsp/mercado/142964-eua-perdem-us-11-bi-comaporte-na-gm.shtml Accessed 10 Dec 2013 Prado, E. F S (2013) Da controvérsia brasileira sobre o dinheiro mundial inconversível Revista da Sociedade Brasileira de Economia Política, 35, 129–152 Romer, P (2016) The trouble with macroeconomics The American Economist ODE https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble pdf Accessed Feb 2019 The World Bank GDP https://data.worldbank.org/indicator/NY Accessed Feb 2019 Varela, R (Ed.) (2012) Quem paga o Estado social em Portugal? Lisboa: Bertand Editora Wachtel, H. M (1988) Os mandarins dinheiro Rio de Janeiro: Nova Fronteira  Final Words It is not intended to revisit the main conclusions and discussions made throughout this book Any effort to synthesize the chapters at this point could compromise a necessary understanding of the theoretical foundations and the contradictory process of the building of the categories that support the decisive transformations of contemporary capitalism, especially those linked to the recent capitalist crises that manifest themselves more intensely in the form of a plethora of fictitious capitals and financial crises The book sought to demonstrate that capitalism remains a mode of production in the continuous process of transformation, always shot through by Sisyphus’ work on accumulating abstract wealth This dynamic, presided over by a blind, automatic, unbridled, and insatiable subject, which, at the same time, tends to become autonomous in relation to its substance, abstract work, only increases the imperative of the real subsumption of work to the capital on a larger—and world—scale This fetishist tendency to autonomize capital, which comes to prominence in its fictitious forms and in its search for fictitious profits, magnifies the turbulent, oppressive, and potentially genocidal character of accumulation Moving from this fundamental contradiction and repeatedly rebounding in a more universal and explosive way, in recent decades the predatory and voracious character of capital has been revealed in all its rawness, in the form of a intense concentration of income and property; mass impoverishment; rapine wars; the militarization of societies and the development © The Author(s) 2019 G M de C Mello, M de S Sabadini (eds.), Financial Speculation and Fictitious Profits, Marx, Engels, and Marxisms, https://doi.org/10.1007/978-3-030-23360-0 211 212  FINAL WORDS of “Wellesian” mechanisms of surveillance and social control; environmental destruction; the exploitation and degradation of the working population; the most diverse forms of intolerance and authoritarianism, holding hands with individualism and generalized competition, feeding a real war of all against all This is to mention just some of the manifestations of capitalist barbarity The old motto of capital—Aprés moi, le deluge [after me, the deluge]— is more topical than ever: the deluge—the crisis—has become the rule, accompanying the destructive march of capital The clouds in the sky of history seem ever more charged and threatening It is to be hoped that the discussions here, in their inextricably linked theoretical and empirical dimensions, have contributed to the updating and development of the critique of political economy, demonstrating its potential for the criticism of a society that is moving at a rapid pace toward the production of unprecedented catastrophes The authors Vitória, Brazil Index1 C Capital accumulation, 2, 36, 90, 106, 107, 125, 140–142, 150, 152, 153, 166, 171n12, 175n38, 175n39 circulation, 73, 75, 82n22 reproduction, 2, 3, 72, 99, 119, 142, 156, 163, 175n38, 187 Capitalist crisis, 3, 6, 60n22 Commodity-capital, 50, 82n21, 122, 123, 144 Contemporary capitalism, 2, 5, 6, 46, 65, 77, 78, 89, 91, 102, 103, 109, 110n7, 111n17, 117, 140, 141, 152, 157, 164, 168–170, 177n50, 211 Credit money, 48–52, 56, 57, 58n5, 59n8, 60n17, 60n18, 65, 66, 70–73, 80n7, 90, 99, 112n18, 130, 149 Crisis, x–xii, 9, 30, 56, 76, 88, 91, 132, 133n6, 136n25, 136n26, 139–166, 183–203, 212 2007–2008 crisis, 1, 2, 154, 159, 174n29, 188–199 Crypto-currencies, 5, 63–78 D Dematerialisation of money, 43–57 Derivatives, x, 4, 6, 49, 50, 74, 150, 151, 159, 160, 171n14, 177n48, 187, 188, 192, 194, 195, 197, 204n8, 205n9, 205n10 E Economic crisis, ix, xi, 1–4, 12, 15, 87, 154, 159, 162, 184  Note: Page numbers followed by ‘n’ refer to notes © The Author(s) 2019 G M de C Mello, M de S Sabadini (eds.), Financial Speculation and Fictitious Profits, Marx, Engels, and Marxisms, https://doi.org/10.1007/978-3-030-23360-0 213 214  INDEX F Fetishism, 5, 11, 23, 35, 63–78, 141, 151, 169 Fictitious capital, 2–4, 6, 21, 36, 44–47, 58n1, 65, 73, 79n7, 104, 105, 107, 118–132, 140–170, 184–195, 199, 200, 203, 205n13, 206n18, 206n22, 211 Fictitious money, 65, 70, 150, 174n30, 194, 200, 206n18, 207n25 Fictitious profit, ix, 2, 6, 140, 141, 153–157, 162, 167, 211 Fictitious wealth, 2–4, 6, 72, 131, 184, 185 Financialization, 9, 87–109, 117, 133n6, 139–170, 172n17 Functional forms, 5, 6, 36, 45, 58n2, 89, 94–96, 107, 108, 110n7, 110n9, 118, 123, 184 autonomization of, 36, 45, 93, 101, 106, 107, 109n5, 110n7, 118, 171n6 I Industrial capital, 6, 44, 45, 58n2, 58n4, 89, 93–96, 98, 99, 101, 106, 107, 109n5, 110n9, 110n10, 118–132, 144, 169, 174n31, 187 Interest, viii, xi, 2, 3, 6, 9, 12, 15, 31, 64, 65, 72–74, 76, 80n7, 82n19, 83n23, 83n27, 88, 92, 101, 103–106, 112n18, 118–132, 139–170, 185–203 Interest-bearing capital, 6, 21, 36, 64, 71, 72, 89, 91, 99–101, 104–106, 113n29, 118, 119, 123–129, 131, 134n14, 135n16, 140, 145, 147–149, 151–153, 157, 167, 169, 171n9, 171n10, 199, 205n14 M Marx, Karl, vii–viii, 1–7, 9–36, 43–57, 63–78, 87–109, 117–132, 139–170, 188, 190, 192, 205n12, 205n13, 205n14, 206n18 Marxists, xi, 2, 3, 5, 7, 35, 37n6, 43, 46–49, 57, 58n1, 58n5, 101, 108, 118–131, 140, 141, 152, 154, 164, 165, 206n22 Money, x, 5, 7, 9–36, 63–78, 87–109, 117–130, 143–170, 186–200 Money-capital, 3, 5, 43–57, 66, 71, 73, 77, 128, 144 O Overaccumulation of capital, 5, 47, 58n4, 65, 154, 157, 185–195 P Parasitic speculative capital, 6, 44–48, 51, 57, 58n4, 118–119, 130–132, 185–202 Productive-capital, x, 36, 44, 45, 47, 58n2, 58n4, 72, 119–131, 144, 187, 195 Profit, ix, xi, xii, 6, 22, 44, 47, 60n20, 70, 79n4, 88, 90, 105, 108, 123, 127, 130, 132, 133n6, 134n8, 134n15, 139–170, 190, 200, 204n7, 205n12 R Reification, 7, 88 Rent, 6, 88, 141, 145–147, 159–161, 163, 167, 171n7, 171n8, 174n27, 177n51, 187  INDEX  S State, 4, 7, 10, 11, 29, 39n24, 45, 50, 52, 59n8, 65, 70, 73, 75, 76, 79n2, 79n6, 81n14, 89, 90, 94, 98, 102–107, 109n3, 111n11, 125, 126, 135n21, 136n26, 139, 140, 149–151, 154, 157, 159, 170n3, 171n8, 173n24, 176n44, 184, 185, 200, 202 Surplus value, xiin1, 1, 19–21, 31, 33, 34, 39n24, 44, 66, 72, 93, 98, 99, 101, 102, 106, 110n10, 120, 122–124, 127, 130, 131, 134n8, 215 136n23, 141, 142, 144–146, 148, 149, 152, 153, 155–163, 166–169, 173n27, 177n48 V Value, x, xi, xiin1, 3, 4, 14–36, 43–57, 64–78, 90–109, 119–131, 139–170, 183–203 W World market, 20, 73, 79n2, 88, 112n25, 143–144, 157, 158, 163 ... Mello Mauricio de Souza Sabadini Editors Financial Speculation and Fictitious Profits A Marxist Analysis Editors Gustavo Moura de Cavalcanti Mello Department of Economics and Post-Graduate Programme... Real and Financial Dimensions of Capital Accumulation 87 Paulo Nakatani, Adriano Lopes Almeida Teixeira, and Helder Gomes 6 Parasitic Speculative Capital: A Theoretical Precision on Financial. .. following chapter, “Parasitic Speculative Capital: A Theoretical Precision on Financial Capital, Characteristic of Globalization,” written in 1999, Reinaldo A.  Carcanholo and Paulo Nakatani analyze