This is a chapter from the book:
Finance Capital (2nd revised edition)
Financial institutions do their business proving themselves as capitalist enterprises; their operations follow their own profit calculations, aiming at a continual increase in turnover and surpluses. This not only gives them impressive financial results (something like three times a nation’s total annual gross domestic product being considered normal and on the moderate side), it also gives them a special reputation. There is huge appreciation for the services the financial industry provides for the market economy to work. It is to thank for ‘the markets’ being supplied with money, and for companies in all lines of business being furnished with capital. Wherever and whenever it makes its routine, self-serving contributions to successful growth, its outstanding actors are acclaimed as representatives of the country’s success. And they return the favor by cluttering the landscape with an assortment of large buildings, financing sports facilities and putting nice big signs on them, etc. However, when losses are incurred after industry was counting on a profit, or a crisis actually breaks out in the financial center and has its repercussions, then bankers are sure to be resented by an ungrateful public. Then politicians will declare, just as people like to hear, that ‘vultures’ have victimized the ‘real economy,’ jobs, savers and small shareholders, and the state budget to boot. Suddenly, top managers of finance capital are earning too much, and are out for ‘shareholder value’ instead of jobs. And everybody knows that an elitist elite has been asserting its right to profit out of completely unjustified greed at the expense of the services it owes us all, because we all need them. Which again confirms what a fine industry it is, provided that it does its business everyone acknowledges as being indispensable for the entirety of economic life. And once again, there is so much critical respect for the power of this industry that the unique character of the business that this power is based on does not really come up.
Profitable trade in money and credit enables such traders to perform key tasks in the market economy. The way they enrich themselves is an essential condition and lever for capitalist growth, for increasing monetary wealth. It is the basis of the power that money capital has over economic performance in all branches of the market economy. And that guarantees this private business special attention from the state, long before any economic crisis develops.
That is what is to be explained.
© GegenStandpunkt 2021