The Ritual of Capitalization

Blair Fix

EconStor Open Access Articles and Book Chapters, 2021, issue 97, 78-95

Abstract: For more than a century, political economists have sought to understand the nature of capital. The prevailing wisdom is that there must be something ‘real’ – some productive capacity – that underpins capitalized values. This thinking, I argue, is a mistake. Building on Jonathan Nitzan and Shimshon Bichler’s theory of capital as power, I argue that capitalization is an ideology. It is a quantitative ritual for converting earnings into present value. Although the ritual is arbitrary, it gives rise to astonishing empirical regularities, reviewed here.

Keywords: capitalization; discounting; power; stock market (search for similar items in EconPapers)
JEL-codes: E44 G G1 P P16 P26 P48 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:242970

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