The Tendency of the Non-Bank Financial Sector to Rise: A Materialist Account of the Growth of Market-Based Finance

Bruno Höfig, Leonardo Paes Müller and Iderley Colombini

Review of Radical Political Economics, 2024, vol. 56, issue 3, 355-379

Abstract: This article introduces the distinction between money-as-money dealing capital (MMDC) and money-as-capital dealing capital (MCDC), laying the foundations for new developments in the field of Marxian political economy. First, it explains why banks, which manage the circulation of money-as-money, are able to issue instruments that perform monetary functions, and also why non-bank financial intermediaries, which manage the circulation of money-as-capital, tend to become increasingly important as the capitalist mode of production evolves. The distinction between MMDC and MCDC also allows for a more thorough understanding of the nature of Marx’s category of interest-bearing capital (IBC), explaining when and why a capital’s net income takes the form of profit and interest, unveiling the mechanisms that produce the (socially valid) illusion that every capital bears interest. JEL Classification: B14, B26, E11, E43, E44

Keywords: Marx; credit; banks; non-bank financial intermediaries; interest-bearing capital (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:56:y:2024:i:3:p:355-379

DOI: 10.1177/04866134241239694

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