 The fatal capture of money. Chapter 4 in How Capitalism Destroyed Itself, 2017, pp 95-129 from Edward Elgar Publishing Abstract: Much the most important aspect of the capture of property laws by interests was in relation to money. Banking had always been recognized as different from other kinds of business, and so when these kinds were allowed to invest without having their whole fortunes at stake, this was denied to those who dealt in money. However, they did eventually get this privilege, which allowed them to ‘create money from nothing’ to such an extent as to cause the 1929 crash and subsequent recession. They were then put under legal discipline, but exerted their influence on politicians to have this removed, and repeated the expansion of credit that resulted in the crash of 2008. In the process, innovation in technology was so largely replaced by innovations in finance that the power of Western economies to generate real wealth was seriously harmed. Combined with the extent to which nominal wealth was concentrated in the financial sector, economic inequality of a high order was inevitable. In attempts to prevent this turning into active revolution, governments increased intervention in their economies to a degree that proved Schumpeter right in his forecast that capitalism would destroy itself and be replaced by socialism. Keywords: Economics and Finance; Innovations and Technology (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:17132_4 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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