Antonio wrote: In response to Fred's and Jerry's thoughts: That would be my "guess:" that the increasing level of endebtedness (which I believe took place) over the 80s and 90s (a long process indeed) would explain the transfer of funds to the financial sector (and, a whole range of other activities might be identified as relevant here) even if interest rates did not increase. The mechanism for the redistribution of surplus value [a subsumed class payment] here might have taken an institutional, rather than market, form. The best work that suggests such a change remains, to my knowledge, Henwood's Wall Street, even if his history stops in the early 90s. ___________ well there is suppose to be this comparison between Japanese and German bank led capitalism on the one hand and on the other hand the Anglo American model of capitalism that putatively subordinates productive capital to rentiers via the capital markets. That money was channeled through the capital markets, instead of banks, gave rentiers greater powers to capture surplus value. Then rentiers ensured their returns through their hidden control over Greenspan whose commitment to NAIRU ideology was the expression of his pro rentier commitments. While some celebrated the capital markets for their greater freedom to extract capital from declining industries and plow it into the businesses of the future (Michael Jenses), Henwood insisted that the primary role of the capital markets had been simply to ensure that the lifestyles of the rentier class would not be undermined even as US industry lost its competitiveness. Indeed the greed of the rentiers became a contributing factor to the decline of US capitalism. This is certainly a provocative and at times brilliant analysis. The problem was that Doug and others seemed to think that due to its financial repression the Japanese-German kind of capitalism would be superior in terms output levels, income growth, productivity, employment compared to the Anglo American model (see the intro to Wall Street). Japan and Germany were about to take over the world; then there was the American boom, coupled with on going problems in Germany and Japan. At the height of the American boom, some argued that while the Anglo American model served the US in particular just fine, it should not be expected to work as well in other countries. So the strategy was no longer one of rolling back Anglo American capitalism but containing it. So for example there was the struggle against IMF programs for financial liberalization in third world. Now with the fall out on the stock markets it seems that "insiders", not rentiers, were able to hide the costs of business in order to raise funds on the capital markets by defrauding the public. Millions of people seem to have transferred the equity in their homes and squandered their savings on overpriced equities, especially IPOs. This has allowed firms to have raised substantial sums, and insiders were able to exercise their options in very favorable markets. So it's not clear to me that insiders have lost all power to rentiers. Rakesh
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