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Financial capital: A class analysis of credit
Abstract
This thesis investigates credit in the Marxist tradition. Our premise is that credit has been inadequately theorized because of the Marxist dichotomy, a separation of real and monetary factors. It is a consequence of the well-known Classical dichotomy and an essentialist interpretation of Marx's dialectic, contributing to economic determinism and marginalizing the role of finance in Marxist analysis. Based on our reading of Capital, we oppose this interpretation of credit as inconsistent with Marx's methodological and conceptual break with Classical economics, arguing an overdetermined dialectic integrates credit into the class analysis of capitalism. We show that literature in this area either ignores or overemphasizes credit, consistent with the dichotomy. Two schools of thought, finance capital and monopoly capital, reach fundamentally incompatible conclusions about the development of advanced capitalism. Finance capital is predicated on the domination of corporations by banks due to the primacy of credit. Monopoly capital stresses the ascendancy of monopoly corporations, implying a secondary status for finance. We reject the terms of this debate for retaining a deterministic methodology and jettisoning class analysis for an institutional framework. The thesis then offers an alternative theory based on an overdetermined dialectic. The model integrates bank loans and other forms of credit into the Volume 1 world of Capital as a link to the Volume 3 world. This framework is used to investigate some class and nonclass effects of credit, without essentializing either capital accumulation or bank credit like monopoly and finance capital schools. Finally, this alternative framework is applied to a case study of Texas Air Corporation, analyzing how finance helped transform a small regional airline into the largest carrier in the non-communist world. Through each phase of Texas Air's growth, we elaborate on the relationship between financial, industrial and nonindustrial capitals. This provides a new perspective on the relationship between productive and unproductive capital; competition and the centralization of capital; and the resulting class alliances and struggles. We conclude that this framework elucidates the mutual determination of productive and financial relations in contemporary capitalism, whereas the prevailing approaches cannot.
Subject Area
Finance|Business costs|Banking
Recommended Citation
Kuh, Edwin Thomas, "Financial capital: A class analysis of credit" (1988). Doctoral Dissertations Available from Proquest. AAI8906301.
https://scholarworks.umass.edu/dissertations/AAI8906301