Interest-bearing capital vs industrial capital

This chapter deals with the structural relationship between interest-bearing capital and industrial capital on the basis of Marxian analysis, showing how certain current trends are inherent in the evolution of the credit system, regardless of the forms of regulation applied to it. In accordance with Marx’s circuit of capital, which has always to start from money capital – i.e. financial capital in its own right and by its very nature – financialisation is proven to be the result of a natural propensity of the capitalist mode of production. However, money capital has to pass through the production process, in the form of productive capital, due to the fact that its apparent self-valorising ability is founded on the appropriation of the surplus value that results from this process. Self-valorising of money capital always needs the circuit of productive capital to be implemented somewhere in the world. Marx’s concept of fictitious capital and Hilferding’s concept of the promoter’s profit are also dealt with. The final part of this chapter analyses the reshaping of the basic tendencies of interest-bearing capital in the context of the shadow banking system that has been developed as a result of the financial deregulation processes of the last 30 years.