Goldman Sachs and “Fictitious Capital”
Goldman Sachs contributed mightily to the financialization of the economy and in its wake helped destroy the work of both capital and labor. Because the justice system and the government decided to save the financial sector rather than save the economy by writing down the debts of the banking system, we are now trying to pay down debt that cannot be paid. Michael Hudson has written extensively on what that means here.
Instead of promoting capital investment in an alliance with industry and government, financial planners have sponsored a travesty of free markets. Realizing that income not taxed is free to be capitalized, bought and sold on credit, and paid out as interest, bankers have formed an alliance between finance, insurance and real estate (FIRE) to free land rent and monopoly rent (as well as debt-leveraged “capital” gains) from taxation.
The result is that today’s economy is burdened with property and financial claims that Marx and other critics deemed “fictitious” – a proliferation of financial overhead in the form of interest and dividends, fees and commissions, exorbitant management salaries, bonuses and stock options, and “capital” gains (mainly debt-leveraged land-price gains). And to cap matters, new financial modes of exploiting labor have been innovated, headed by pension-fund capitalism and privatization of Social Security. As economic planning has passed from government to the financial sector, the alternative to public price regulation and progressive taxation is debt peonage. (from Michael Hudson’s article called From Marx to Goldman Sachs: The Fictions of Fictitious Capital)
Posted on March 9, 2013, in buisiness, USA and tagged Banks, Business, Finance, Financial Services, Goldman Sach, Goldman sachs, Government, Michael Hudson, Politics, United States. Bookmark the permalink. Leave a comment.