Profits without investment in financial capitalism. a marxist explanation of the appearances

Abstract

Heterodox economic theory asserts the existence of a positive relationship between investment and profits. In the last thirty years, however, investment has decreased despite the rising profitability of capital. The usually argued causes of this phenomenon disregard the classical approach towards competition and capitalism. To criticize these theories on this account and to give an alternative explanation, under a Marxist approach, is the purpose of this paper. The conclusions are different to the most common ones: financialization is not the result of any problem in the functioning of capitalism but an expression of its normal development. Consequently, the recovery of investment in western countries is not possible through the regulation of finance.