IDEAS home Printed from https://ideas.repec.org/a/mes/jeciss/v50y2016i3p745-768.html
   My bibliography  Save this article

Finance Is Not the Economy: Reviving the Conceptual Distinction

Author

Listed:
  • Dirk Bezemer
  • Michael Hudson

Abstract

Conflation of real capital with finance capital is at the heart of current misunderstandings of economic crisis and recession. We ground this distinction in the classical analysis of rent and the difference between productive and unproductive credit. We then apply it to current conditions, in which household credit — especially mortgage credit — is the premier form of unproductive credit.This is supported by an institutional analysis of postwar U.S. development and a review of quantitative empirical research across many countries. Finally, we discuss contemporary consequences of the financial sector’s malformation and overdevelopment.

Suggested Citation

  • Dirk Bezemer & Michael Hudson, 2016. "Finance Is Not the Economy: Reviving the Conceptual Distinction," Journal of Economic Issues, Taylor & Francis Journals, vol. 50(3), pages 745-768, July.
    • Handle: RePEc:mes:jeciss:v:50:y:2016:i:3:p:745-768
    DOI: 10.1080/00213624.2016.1210384
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00213624.2016.1210384
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00213624.2016.1210384?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rohwer, Götz & Behr*, Andreas, 2020. "Revenues from Financial Capital. A Formal Framework," MPRA Paper 99306, University Library of Munich, Germany.
    2. Francisco Serranito & Philipp RODERWEIS & Jamel Saadaoui, 2023. "Is Quantitative Easing Productive? The Role of Bank Lending in the Monetary Transmission Process," EconomiX Working Papers 2023-17, University of Paris Nanterre, EconomiX.
    3. Aguiari, Sabrina & Nkwake, Apollo & Mentz, Melody, 2017. "Beyond the double gender gap in science and agriculture: Is there space for feminist-inspired transformation within AWARD?," Journal of Gender, Agriculture and Food Security (Agri-Gender), Africa Centre for Gender, Social Research and Impact Assessment, vol. 2(1), April.
    4. van Egmond, N.D. & de Vries, B.J.M., 2024. "Reforming the Eurozone financial system: A system-dynamics approach," International Review of Financial Analysis, Elsevier, vol. 93(C).
    5. Yashin, Pete, 2020. "Закон Сохранения Реального Богатства И Рост Неравенства [Law of conservation of real wealth and rising inequality]," MPRA Paper 99274, University Library of Munich, Germany.
    6. Reuben Soto, Sergio, 2021. "Capitalist racionality and economic principle," Revista de Ciencias Económicas, Instituto de Investigaciones en Ciencias Económicas, Universidad de Costa Rica, vol. 39(1), January.
    7. Yashin, Pete, 2020. "Финансиалиация Усиливает Неравенство И Заводит Экономику В Тупик [Financialization increases inequality and leads economy to a dead end]," MPRA Paper 101063, University Library of Munich, Germany.
    8. Muhammad A Ingratubun & Akhmad Fauzi, 2021. "Opening the Black Box: Disbursement Delays Impacts on Growth in Asian Development Bank Loan Projects in Indonesia," ConScienS Conference Proceedings 029mi, Research Association for Interdisciplinary Studies.
    9. Clavero, Borja, 2017. "A contribution to the Quantity Theory of Disaggregated Credit," MPRA Paper 76657, University Library of Munich, Germany.
    10. Avner Offer, 2017. "The market turn: from social democracy to market liberalism," Economic History Review, Economic History Society, vol. 70(4), pages 1051-1071, November.
    11. Manuel BELO MOREIRA, 2018. "Understanding financialization and its impacts on Social Economy," CIRIEC Studies Series, in: Philippe BANCE & CIRIEC (ed.), Providing public goods and commons. Towards coproduction and new forms of governance for a revival of public action, volume 1, chapter 6, pages 113-133, CIRIEC - Université de Liège.
    12. Yashin, Pete, 2020. "Law of conservation of real wealth and rising inequality," MPRA Paper 99308, University Library of Munich, Germany.
    13. Yashin, Pete, 2020. "Виртуальное Богатство Растет [Virtual wealth is growing]," MPRA Paper 99611, University Library of Munich, Germany.
    14. Fatouh, Mahmoud & Markose, Sheri & Giansante, Simone, 2021. "The impact of quantitative easing on UK bank lending: Why banks do not lend to businesses?," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 928-953.
    15. Røpke, Inge, 2020. "Econ 101—In need of a sustainability transition," Ecological Economics, Elsevier, vol. 169(C).
    16. Ken Webster, 2021. "A Circular Economy Is About the Economy," Circular Economy and Sustainability, Springer, vol. 1(1), pages 115-126, June.
    17. Yashin, Pete, 2020. "Financialization increases inequality and leads economy to a dead end," MPRA Paper 101061, University Library of Munich, Germany.
    18. Spielberger, Lukas & Voss, Dustin, 2022. "Financial adjustment as a driver of growth model change: a balance-sheet approach to comparative political economy," LSE Research Online Documents on Economics 116034, London School of Economics and Political Science, LSE Library.
    19. Yashin, Pete, 2020. "Virtual wealth is growing," MPRA Paper 99610, University Library of Munich, Germany.
    20. Andréa Castelo Branco Brasileiro-Assing & Jini Kades & Paulo Antônio de Almeida Sinisgalli & Joshua Farley & Abdon Schmitt-Filho, 2022. "Performance Analysis of Dairy Farms Transitioning to Environmentally Friendly Grazing Practices: The Case Study of Santa Catarina, Brazil," Land, MDPI, vol. 11(2), pages 1-18, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:jeciss:v:50:y:2016:i:3:p:745-768. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MJEI20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.