An ‘unproductive labour’ view of finance

17/10/2012 § Leave a comment

I confess to an uneasy Physiocratic suspicion, perhaps unbecoming in an academic, that we are throwing more and more of our resources, including the cream of our youth, into financial activities remote from the production of goods and services, into activities that generate high private rewards disproportionate to their social productivity. I fear that, as Keynes saw even in his day, the advantages of the liquidity and negotiability of financial instruments come at the cost of facilitating nth-degree speculation which is short sighted and inefficient (J.Tobin)

The present paper discusses the role of the financial sector in a capitalist economy, arguing that the huge increase in its weight (economic and otherwise) in the last decades is not justified by the importance of its contribution to economic growth. The point is developed going back to the classical concepts of productive and unproductive labour. pdf


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