engleski

Financialization and Structural Imbalances in the Global Economy

. In the world economy, the rate of profit stayed more or less steady all through the late 1940s, the 1950s and the 1960s. But from the late 1960s until 1982, profit rates fell continuously, and global economy witnessed real decline in the rate of global GDP increase. A major reason why national economic growth slows in today's economies is that more and more income must be paid to carry the debt burden that mounts up. This can be labelled as a financialization which is defined as ‘the increasing role of financial motives, financial markets, financial actors and financial institutions in the operations of the domestic and international economies. Financialization makes doing business more expensive along with raising the cost of living. Creditors in most countries have been able to turn their economic power into political power with the aim of shifting the tax burden off themselves and onto the labor and industry. No economy's productivity can keep pace with exponentially compounding debt. So there is always a gap in monetary terms between the value of what is manufactured and the purchasing power needed to consume it. Unlike industrial capitalism, which employs labor and invests in capital equipment to produce commodities, today's post-industrial financialized system only offers the virtual wealth of asset bubbles. Financialized wealth is extractive, not productive. That is because loans, stocks and bond securities are claims on wealth, not real wealth itself. History shows how economies that had been taken over by creditors were pushed into a series of financial crises as predatory lending sucks in the surplus, leaving nothing remaining for subsistence.

FINACIALIZATION; PONZI SCHEME; ASSET BUBBLES; STRUCTURAL IMBALANCE; PROFIT

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