A Political Economy of Contemporary Capitalism and its Crisis

7Fictitious capital and finance

An introduction to Marx’s analysis (in the third volume of Capital)

1 Introduction

In a recent special report on financial risk in The Economist, it was argued that “the idea that markets can be left to police themselves turned out to be the world’s most expensive mistake.”¹ This statement reflects the stalemate of mainstream theory in the wake of the 2008 financial meltdown. At the same time, it suggests the limits of the critical character of all heterodox approaches. In plain terms, if mainstream thinking points to the instability and uneven distribution of income, which are associated with the workings of modern finance, then what is left for economic heterodoxy?

Of course, as we have already mentioned in ...