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The Ritual of Capitalization

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  • Fix, Blair

Abstract

For more than a century, political economists have sought to understand the nature of capital. The prevailing wisdom is that there must be something ‘real’ – some productive capacity – that underpins capitalized values. This thinking, I argue, is a mistake. Building on Jonathan Nitzan and Shimshon Bichler’s theory of capital as power, I argue that capitalization is an ideology. It is a quantitative ritual for converting earnings into present value. Although the ritual is arbitrary, it gives rise to astonishing empirical regularities, reviewed here.

Suggested Citation

  • Fix, Blair, 2021. "The Ritual of Capitalization," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 97, pages 78-95.
    • Handle: RePEc:zbw:espost:242970
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    File URL: https://www.econstor.eu/bitstream/10419/242970/1/20210900_fix_ritual_of_capitalization_rwer.pdf
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    References listed on IDEAS

    as
    1. Nitzan, Jonathan & Bichler, Shimshon, 2009. "Capital as Power. A Study of Order and Creorder," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 157973, September.
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    Cited by:

    1. Fix, Blair, 2023. "How to Make the Oil Industry Go Bust," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 103, pages 2-25.
    2. Bichler, Shimshon & Nitzan, Jonathan, 2021. "The Capitalist Degree of Immortality," EconStor Preprints 247643, ZBW - Leibniz Information Centre for Economics.

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    More about this item

    Keywords

    capitalization; discounting; power; stock market;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • G - Financial Economics
    • P - Political Economy and Comparative Economic Systems
    • G1 - Financial Economics - - General Financial Markets
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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