The Japanese Political Economy

ISSN: 2329-194X (Print) 2329-1958 (Online) Journal homepage: https://www.tandfonline.com/loi/mjes20

Marx’s Financial Capitalism
Makoto Nishibe
To cite this article: Makoto Nishibe (2019): Marx’s Financial Capitalism, The Japanese Political
Economy, DOI: 10.1080/2329194X.2019.1611377
To link to this article: https://doi.org/10.1080/2329194X.2019.1611377

Published online: 30 May 2019.

Submit your article to this journal

View Crossmark data

Full Terms & Conditions of access and use can be found athttps://www.tandfonline.com/action/journalInformation?journalCode=mjes20

THE JAPANESE POLITICAL ECONOMY
https://doi.org/10.1080/2329194X.2019.1611377

Marx’s Financial Capitalism
Makoto Nishibe
Department of Economics, Senshu University, Kawasaki, Japan
ABSTRACTThis study shows that “financialization,” widely accepted as atheoretical framework representing the structural change inmodern capitalist economy, is one aspect of the “free investment capitalism” that resulted from globalization anddeindustrialization as the long-term institutional and technological trends since the 1970s. Globalization is understood as
the tendency for the simultaneous expansion (more accurately, extensive expansion and intensive deepening) of market and the reduction of state and community. Its ultimate
goal is free investment capitalism, in which fictitious capital
is ubiquitous and free investment in it is totally pursued.
The study theoretically sees it as G mode (general mode)
capitalist market economy with general commodification oflabor power as seen in human capital investment and financialization of labor power.

ARTICLE HISTORY

Received 3 April 2019
Accepted 23 April 2019

Financialization and financial capitalism

In recent years, the role of financial markets and the financial industry ineconomic activities has grown more than that of industrial production, andfinancial crises have frequently occurred. The structural features of contemporary capitalism became known as financialization in the early 1990s and,in the 21st century, this term became widely shared, from Marxian to postKeynesian and regulation schools. Despite differences in meaning andemphasis, it is commonly thought that financialization is a theoreticalframework representing the structural change in modern capitalist economy. This study, although it shares this problematic setting, is an attempt
to look at financialization as one aspect of “free investment capitalism,”
which resulted from globalization and deindustrialization.
First, I will briefly introduce discussions representative of the Marxian
school. According to Lapavitsas, financialization indicates a system

CONTACT Makoto Nishibenishibe@isc.senshu-u.ac.jp
Department of Economics, Senshu University, 2-1-1
Higashi Mita, Tama-ku, Kawasaki, 215-0001 Japan.
Color versions of one or more of the figures in the article can be found online at www.tandfonline.com/mjes.
ß 2019 Taylor & Francis Group, LLC

2

M. NISHIBE

transformation
characteristics:

of

the

maturecapitalist

economy

and

has

three

1. independence of monopoly capital from banks and self-finance;
2. expanding financial market intermediaries at banks (investment banking
operations) and loans to households and workers; and3. increase in households’ financial debt and financial assets(Lapavitsas 2010).

In addition, Itoh (2010) said that the historical specialty of the subprime
crisis is attributable to the increase in workers’ assets and liabilities, particularly the “financialization of labor-power” found in the speculative
expansion of housing loans and consumer finance related to durable consumer goods, such as automobiles. Both of these authors believed that thecharacteristics of modern capitalism’s financialization lie in the increase of
the financial role in households, as well as that of corporations and banks,
which is the cause of the subprime crisis.
In note 99, Chapter 3, Volume 1 of Capital, Marx (1867), classified monetary crises into two types: the first, which occurred as one phase of everycrisis in industry and commerce, and the second, a special type of crisis
that originated from “moneyed capital,” occurred in banks and exchanges,
independently of industry and commerce, and only had reactionary effects
on industry and commerce. The first type has occurred in the late boom ofindustrial cycles in classical capitalism and has been seen before in capitalism. The second type, in modern times, appeared as a monetary and financial instability, such as the collapse of Japan’s bubble and the Asiancurrency crisis in the 1990s.
The first thing to note is that the modern financial crisis represented by
the 2008 subprime crisis is closer to the second type than to the first type.
Since the 1980s, global excess liquidity was formed by an increase in investment funds by institutional investors, accumulation of internal reserves andself-financing by large enterprises, an increase in household assets andliabilities, an expansion in asset/income disparity, a proliferation of wealthyfinancial assets, and central banks’ monetary easing policies. Large-scale
bubbles were intermittently formed by such overaccumulated moneyed capital flowing into real estate, stock, the foreign exchange market, and thefinancial derivatives market. The collapse of the bubbles caused financial
panic, with bank collapses and currency crashes, which led to a crisis
involving the collapse of the financial system. Thus, the modern financial
crisis was not due to excessive accumulation of industrial capital based on
the expansion of traditional bank credit. Fictitious capital markets—such asa derivatives market and a structured commodity market—are formed by

THE JAPANESE POLITICAL ECONOMY

3

the securitization of finance, and a large amount of moneyed capital flowing there forms self-fulfilling bubbles. It creates a systemic risk of a totalcollapse of the financial system. Therefore, beyond the central bank, public
relief by the state or the state coalition (in the case of the European Union)
was requested. In this respect, there is a characteristic of monetary crisis inmodern financial capitalism.
The next point to remember is that modern finance-led capitalism is different from “finance capital-controlled capitalism”1 that was dominated by“finance capital” (Hilferding 1910) at the end of the 19th century. In
Lenin’s (1916) imperialism, it is stated that capital accumulation and concentration has advanced, and when the market shifts from free competition
to monopoly, finance capital, as an integrated form of monopoly capitaland bank capital, becomes dominant. In contemporary financial capitalism,
contrary to the case of finance capital, corporations leave banks, aiming for
direct finance and self-finance. On the other hand, banks turn to financial
market mediation and household loans. Why did these differences emerge?
Lenin believed that, because the economy of scale works more effectively
as heavy chemical industrialization proceeds, the monopoly and oligopolyof industrial capital progresses so that production is socialized. Hence, if“bookkeeping and control” were extended to all areas of production anddistribution, it would be possible to abolish commerce and money and tooperate the economy of a country like a large factory, through quantity
planning. He conceived a centralized planned economy based on the “onecountry as one factory” theory and led the Russian Revolution. Whether
the Soviet-type socialist economy is viable was discussed in the socialist
economic calculation debate. Hayek (1948) criticized the centralized planning of a socialist economy because there are fundamental defects that only
the market can overcome, such as the difficulty in collection, discovery,
and creation of knowledge.2 Nevertheless, until the first half of the 20th
century, production technology remained heavy and large, and industrial
structure was monopolized, so the defect of Lenin’s vision was not revealed
and the Soviet-type socialism managed to survive.
However, as deindustrialization rapidly proceeded in developed countries in the 1970s, production technology transformed into light andsmall, and industrial structure became more oligopolistic or monopolistically competitive. Nonprice competition, such as product differentiation
among oligopolistic suppliers, intensified. Consumers placed more importance on quality than on quantity, on service or information than onmaterial goods, and on design rather than on function. Then, as bothprocess and product innovations in information and communication technology (ICT) industries rapidly progressed, the problem of centralizedplanning—as a difficulty in gathering, discovering, and creating

4

M. NISHIBE

knowledge—gradually became more serious. Lenin’s vision, thus, gradually
lost its validity, and this ultimately resulted in the collapse of Soviet-typesocialism. Although the Keynesian welfare state, which maintained macroeconomic financial and fiscal policies after the 1970s, also deepened theconfusion, financial capitalism emerged.
Rearranging the history of the 20th century as above, we can now understand that the objective grounds for the expansion of neoliberalism and thecollapse of the socialist countries lay in a shift toward deindustrialization in
production technology and industrial structure. The combination of thefinancial big bang that globalization caused in the financial world and thefinancial innovation that advanced on the basis of the ICT revolution
resulted in the financialization of the economy, industry, households, andmotivation. Under the long-term tendency for a change toward globalization, shifts in production technology and industrial structure through deindustrialization resulted in financialization.
Globalization in the depths of financialization and free investment
capitalism as its ultimate goal

What, then, is the globalization that lies in the depths of financialization?
Globalization is often understood as institutional and policy changes, suchas liberalization and deregulation, caused by a thought or an ideology
called neoliberalism. However, it is rather the consequence of objective economic tendencies, such as deindustrialization. Globalization apparently canbe recognized as a trend toward a global single free market accompanied
by development of transportation technology as well as ICT and financial
expansion. However, a more abstract and theoretical definition is necessary.
Polanyi (1944) depicted market (money exchange, private, freedom, andblue), state (redistribution, public, equality, and white), and community(reciprocity, common, fraternity, and red) as the integrative principles enabling the reproduction of socio-economy. My interpretation here is that
blue, white, and red as tricolor of French national flag represent three political ideas of the French Revolution—freedom, equality, and fraternity—
which respectively correspond to economic adjustment principles: money
exchange in market, redistribution in state, and reciprocity in community.
By using these three integrative principles, globalization is more deeply
understood as the tendency for the expansion of market and the reductionof state and community to progress simultaneously, and the process inwhich the private and individual areas become relatively larger than the
public and common areas. In view of political thought, it represents thegrowth of freedom (blue) and the decline of equality (white) and fraternity(red; see Figure 1).

THE JAPANESE POLITICAL ECONOMY

5

Figure 1. Globalization.

Here, let me make two definitions:
1. “Extensive expansion of the market” is expanding the market size ofexisting products and extending the geographical region of the market.
2. “Intensive deepening of the market” is the conversion of public or common free goods into private paid goods as commodity (commodification), or the innovation and sale of new products (newcommodification) through a shift of the integrative principles from state(redistribution) and community (reciprocity) to market (monetary exchange).

Then, we can see that globalization is the rapidly progressing tendency
of both the extensive expansion of the market and the intensive deepeningof the market in modern capitalism.
Market, here, is a decentralized market as a chain network of bilateralmoney buying and selling, not a centralized market as an auctioneer typeof price mechanism only with numeraire, as in neoclassical economics. In
the decentralized market, two kinds of freedom are distinguished. The firstis freedom of trade—that is, consumers can use money to buy and sell various kinds of goods (use value) without any restriction. The second is freedom of investment—that is, investors can use money to buy and sellvarious capital (revenue opportunities) without any restriction. Both are“negative liberties,” but the latter is a higher-order freedom that presupposes the former. Although trade has the ultimate goal of the consumptionof use value or enjoyment of utility, investment seeks an abstract and endless purpose for profit.3

6

M. NISHIBE

Globalization is ultimately oriented toward free investment capitalism
and has the following aspects: When an individual invests in fictitious capital—called human capital—all goods and services, including labor power,
become capitalistic (produced) products for profit (universalization of capitalist products). In addition, companies employ labor power as fictitious
capital to innovate, produce, and sell not only industrial products but alsofinancial products, such as stocks and bonds, and acquire founder’s profit(universalization of fictitious capital). As a result, people, goods, and money
move globally in search of high profitability (universalization of investment), as investment is selected based on the rate of return.
In Chapter 29, Volume 3, of Capital, Marx (1894), called “real capital,”on the one hand, the capital of real entities, such as physical means of production, including machines, factories, and laborers, which usefully function in production. On the other hand, he called fictitious capital thestocks and bonds, which are “nothing but accumulated claims, or legal
titles, to future production.” In this chapter, he indicated that the price of“bonds (the state’s promissory note)” as fictitious capital can be obtainedby capitalization—that is, by calculating the sum of the streams of the discounted present value of expected future profit. In case of a consol, which
is a perpetual bond with a certain amount of coupon, say, c; its price, p; bycapitalization at a current rate of interest, i; is simply calculated as p ¼ c=i:
Hilferding (1910) claimed that as the stock and bond markets dealing insuch fictitious capital spread, the dividends received by the shareholders
would approach interest, and the capital with profit and the capital withinterest would eventually become equivalent. Therefore, the founder would
obtain the founder’s profit, calculated by capitalizing the expected profit forthe capital invested at the time of the establishment of the company. For
example, if the founding capital is K and the expected profit rate is re ; thesecurity price of all shares that capitalize the expected profit of the followe
ing term Kre with a market interest
 rate i is calculated as Kr =i; and, iferer > i; the founder’s profit R ¼ Kð i  1Þ is positive.
Fictitious capital is a bundle of various claims, not just the bonds andstocks of modern times. Futures, options, and swaps, which are derivative
instruments, are all digitized and can be traded by people or AI robots on
the internet. In the case of options, we conduct investment by buying andselling market priced packages consisting of the rights to buy (call) and therights to sell (put) on a base asset (a certain stock, bond, stock price index,etc.) by a certain time (the expiration date) for a certain price (the strikeprice). Collateralized debt obligations and credit default swaps, whichbecame famous in the subprime crisis, are also fictitious capital. The former
is a type of structured asset-backed security (ABS) issued as collateral withmortgages, loans, and bonds (both public and corporate bonds). Its

THE JAPANESE POLITICAL ECONOMY

7

composition is flexible, as there are diverse assets for its structure, from“low risk and low return” to “high risk and high return.” With the development of ICT, such ABSs for liquidating and off-balancing can be easily andmassively produced and sold to investors around the world. The ultimate
goal of globalization is idealized as free investment capitalism—that is, aworld in which such fictitious capital is ubiquitous.
In free investment capitalism, labor power is also converted into fictitious capital, called human capital. Here, let us examine fictitious capital in
education and training. As Becker’s (1964) human capital theory explained,
fictitious capital in education is realized if students invest monetary
expenses (such as tuition and interest on education loans) and opportunity
costs (such as time of education and training) to acquire professional
knowledge and skills to increase the expected earnings they can see in the
future. Acquisition of qualifications and skills through a professional education and vocational training of workers is also considered to be humancapital formation. The present value of human capital is the sum of a
stream of present value obtained by discounting the expected increase ofincome at a constant interest rate. For example, suppose you expect towork for 40 years after you graduate from university. The expected returns(the difference in salary between university graduates and high school graduates) are 1 million yen each year, and the discount rate is 1 percent.
Then, the present value (discounted present value; DPV) of human capitalthrough university education can be calculated as follows:
X40
100
DPV ¼
¼32; 830; 000 yen:i¼1 ð1 þ 0:01Þi
Human capital investment is feasible if current education costs fall below
this amount. Once the method of capitalization is applied to education andtraining, human beings are regarded as a stock of human capital that produces future income flows, so fictitious capital in education and training isestablished. If we extend this investors’ logic to marriage choices andhousehold chores, childcare, and nursing care of family members, fictitious
capital can be found everywhere in one’s personal life. Financialization ofworkers through households’ increased financial assets and liabilities represents a situation in which workers or their agents (institutional investors
who operate funds and insurance) have been investing, based on projected
future returns (income and capital gains), rather than saving money indeposits with a given interest. Their investment is in larger quantities ofmany types of fictitious capital, such as volatile and risky real estate, stocks
and bonds, derivatives (including FX and futures), and even human capital.
This omnipresence of the replicator called fictitious capital is, thus, the8

M. NISHIBE

most important characteristic of free investment capitalism, which is theultimate goal of globalization.
Free investment capitalism differs from the “self-regulating market”
referred to by Polanyi (1944) in The Great Transformation. In the end of
the 18th century, labor, land, and money became fictitious commodities
that were objects for money exchange, and the self-regulating market wasestablished in the industrial capitalism of the 19th century (“external commodification of labor power”). After the 1970s, when labor power, next toland and money, had become a “capitalist product”—that is, a general commodity sold for profit purposes (hereafter, “general commodification oflabor power”)—fictitious capital was extended to include labor power.
Therefore, the leading characteristic of modern free investment capitalism
is Marx’s fictitious capital instead of Polanyi’s “fictitious commodities.” In
free investment capitalism, all services and rights—including labor power,
which used to be regarded as a simple commodity—are sold as “revenue
opportunities” or fictitious capital. Globalization has serious negative
impacts not only on the economy but also on society, culture, and ethics.
The contemporary problems of globalization have spread into economic
ones, such as the financial instability found in the repetition of bubble
expansion and collapse, increase in unemployment and nonregular employment, economic inequality, and expansion of poverty. However, they havealso spread into social and cultural ones, such as the weakening of people’sconnections; the collapse of communities such as families, schools, andneighborhoods; loss of diversity; and moral decay. The root cause can befound in the fact that the transformation from fictitious commodities into
fictitious capital was caused by extensive expansion and intensive deepening of the market, which severely damaged community (reciprocity) andstate (redistribution).
Three modes of ‘internalization of the market’ and evolution of thecapitalist economy“Internalization of the market” is the logic for the establishment and evolution of capitalism. Marx explained this in A Contribution to the Critique of
Political Economy (1859) and in Chapter 2, in Capital (1867), as follows:
In fact, the exchange of commodities evolves originally not within primitive
communities, but on their margins, on their borders, the few points where theycome into contact with other communities. This is where barter begins and moves
thence into the interior of the community, exerting a disintegrating influence uponit. (Marx 1859: S.35–36)
The exchange of commodities begins where communities have their boundaries, attheir points of contact with other communities, or with members of the latter.

THE JAPANESE POLITICAL ECONOMY

9Table 1. Three modes of commodification in internalization of the market.

I
II
III

Modes ofcommodification

Place ofcommodification

Externalcommodification
Internalcommodification
Generalcommodification

Outside of community and state
Inside communityand state
Disappearance ofcommunity
and state

Purposeof production

Frequency ofmonetaryexchange

Degree of
economic
integrationby Market

Consumption

CasualLow

IncomeFrequent

MediumProfitConstant

High

However, as soon as products have become commodities in the external relations ofa community, they also, by reaction, become commodities in the internal life of thecommunities. (Marx 1867: S.102–103)

Markets formed as a chain of commodity exchanges emerged andexpanded outside communities and states (on their borders), penetrated totheir interior, disassembled redistribution and reciprocity as the internalsocioeconomic principles, and replaced them with money exchanges in themarket. As a result, goods become commodities, even inside communities
and states.4 Although I include state, which was not mentioned in Marx’s
quotes, such a theory of internalization of the market should become an
important “leading thread” for economics.5
The pattern that markets arising between communities and states prevent
reproduction of the substantive economy and reorganize it based on theexchange relationship forms the evolutionary process through which thecapitalist economy emerged through the generation and development of
the market economy. To clarify the logic of this intensive deepening ofmarkets, I call the process “internalization of the market,” in which capital,
as a circular form of the market derived from the commodity relationship,
permeates and dissolves the nonmarket society and self-organizes the economy again.
There are three modes of internalization of the market: external commodification, internal commodification, and general commodification(Table 1). As commodification progresses asI!II!III, the degree of integration in which the market dominates the real economy increases. This ismerely a typical pattern, and in actual history, a sequence involving bypassing modes and retrograding may occur. The capitalist market economy is amarket economy in which general goods other than labor power and land
are all produced and sold for the purpose of profit, on the premise of thelabor market’s existence. It is a special market economy, derived by combining two commodifications related to general goods and labor power(Table 2). Accordingly, “economy includes market economy, which, inturn, includes capitalist (market) economy” holds.

10

M. NISHIBE

Table 2. Evolution of capitalist economy through shifts in the modes of commodification oflabor power.
I.
II.
III.
IV.

External commodification of general goods
Internal commodification of general goods
General commodification of general goods
General commodification of general goods þ External commodification of labor power ¼ Establishment of
capitalist market economy
1. Capitalist market economy with external commodification of labor power（E Mode）

V.
VI.

Capitalist market economy with internal commodification of labor power （I Mode）
Capitalist market economy with general commodification of labor power （G Mode）

A capitalist economy will evolve as the intensive deepening of market
progresses and the mode of commodification of labor power shifts to external commodification, internal commodification, and general commodification. In the past, labor power was produced in-house in the community asa family and was a “simple commodity” that did not produce profit (Emode). When housework and childcare were indispensable for reproducing
the labor power in the family community, they were naturally regarded as
free-of-charge activities, “shadow work,” which did not involve money(Illich 1981). However, domestic labor has gradually been recognized as
representing the opportunity costs associated with the loss of income
opportunities in the market, and it became explicitly added as the cost oflabor reproduction (I mode). Furthermore, as seen in human capital investment and financialization of labor power, labor power also became a capitalist commodity or fictitious capital pursuing profit (G mode). As a resultof this type of globalization, the reciprocity and redistribution principles
were replaced with a monetary market relationship and, seemingly, familyas the last community has been transformed into an industrial sector that
supplies labor power commodity capitalistically.
In the evolution process of capitalism through a mode change of thecommodification of labor power, what is the average profit rate for capitalists and the real wage rate for workers—that is, how does the distribution
relation changes between labor and management, and what does innovation
mean in general commodification of labor power?6
In E mode, labor power is disadvantageously evaluated compared to general commodities because domestic labor costs and profits are not included
in labor power, but domestic labor costs are incurred in I mode.
Furthermore, in G mode, in which labor power demands the same profit
rate as that of general commodities, labor power is evaluated as equal togeneral commodities, so that the status of workers and living standards
both increase. The mode of commodification of labor power changes in E,
I, and G and, as a result of the inequality between general commodities
and labor power in price determination disappearing, the real wage rate

THE JAPANESE POLITICAL ECONOMY

11

rises and the profit rate decreases. This can be called the law of tendency
for a decline in the rate of profit with internalization of the market. In G
mode, income distribution is advantageous to the labor side, but as it isdetermined endogenously at the same time as the relative price, therequirement for a rise in the money wage rate by the trade union will only
result in a price increase that is proportional to it.7
In E mode and I mode, innovation only benefits capitalists. However, inG mode, technological innovation that reduces the cost of general commodities raises the real wage rate and profit rate, and technological innovation that lowers labor cost decreases the real wage rate and raises the
profit rate. Innovation that incentivizes both laborers and capitalists now
progresses at an accelerated pace, and superprofits continue to be dynamically created. Thus, the capitalist economy itself finds solutions to the problem of the profit rate decrease by changing the mode of laborcommodification, and it evolves to create further potentiality.
If capitalism seeks profits for its growth not from exploitation of surplus
labor in production but from temporary quasi-rents through innovation,
the information and service industries, in which it is relatively easy to create a “difference” through innovation, must largely grow. As a result, deindustrialization accelerates, and fictitious capitalization progresses further. In
capitalism, financialization of labor power represents a dilution of the classrelationship between capital and labor. Although workers remain wage
earners and consumers, they are also approaching capitalists or investors asowners of tangible and intangible assets (real estate, financial products, andhuman capital), including moneyed capital (fictitious capital). In such aworld, the profits earned through trading commodities are created morefrom innovation activities of services and information involving financethan from production activities of physical goods. Even automobile production activities can be regarded only as activities replicating design information on technique, function, and lifestyle in materials.
Globalization is a process that expands its potential by introducing mutations in parts of capitalist replicators so that capitalism can evolve autonomously to free investment capitalism. Marx said in Capital that“individuals (capitalists and land owners) are dealt with here only in so far
as they are the personifications of economic categories, the bearers of particular class-relations and interests” (1867), and he virtually admitted that
capital was a social “replicator” (meme) and human beings were only a“vehicle” operated by it. The globalization of modern capitalism attempts
to build up all subjects as investors. “All people should become free investors” is its slogan. Its limit is pure capitalism, in which fictitious capital isubiquitous—that is, free investment capitalism, in which financialization oflabor power is expanding. However, there is an increasing disparity

12

M. NISHIBE

between these trends of contemporary capitalism and the conditions inwhich human beings live their daily lives.
Notes
1.
2.

3.

4.
5.

6.
7.

In Germany and Japan, finance capital was actually dominant and, although
Hilferding never called it so, it can be named as such.
See Nishibe (1996) regarding the contents of the socialist economic calculation
debate—in particular, the parallelism in Hayek’s criticism of socialist planning and his
criticism of the general equilibrium theory and its related knowledge problems.
Investment also implies self-directed involvement in choosing clothes and acquiringthem by themselves, and freedom of investment can also be directed toward “positive
freedom.” This may suggest one to consider beyond capitalism and globalization.
Although “state” does not appear in the related text by Marx, I added it in the sense
according to the views of K. Polanyi.
Kozo Uno (1980, 2016) focused on this discussion. He argued, in the beginning of theprinciple of political economy, the theory of circulation—that is, that various forms ofcirculation (the market formers) of commodities, money, and capital emerge
successively outside social reproduction and penetrate the community. He could, thus,
explain the “extrinsic” character of forms of circulation such as commodities, money,
and capital, without addressing labor value and the reproduction of the real economy.
Here, I present no model analysis for these problems, so I will introduce only the
results. Readers interested in the analysis should refer to Nishibe (2015).
Here, when the mode of commodification of labor power advances as E!I!G andshifts to G mode representing the labor power’s fictitious capitalization, it can be
described as fully developed investment capitalism, but it is just a simplification. In
investment capitalism, it is extremely emphasized that workers with special skills andlicenses—such as lawyers and doctors, as well as college students and craftsmen—canbe said to be owners of fictitious capital if university education and skill training are
regarded as an accumulation of human capital. In reality, it should be seen that the G
mode and previous modes are mixed. For example, although the creative class withprofessional skills reaches the G mode, workers doing simple labor that does not
require as much skill and expertise remain in the E mode, forming the group of
nonregular workers and industrial reserve army. In this case, class differentiation
occurs (Nishibe 2015).

References
Becker, Gary. 1964. Human Capital: A Theoretical and Empirical Analysis, with Special
Reference to Education. Chicago: University of Chicago Press.
Hayek, Friedrich. 1948. Individualism and Economic Order. London: Routledge.
€
Hilferding, Rudolf. 1910. Das Finanzkapital. Eine Studie Uber
Die J€
ungste Entwicklung Des
Kapitalismus. Vienna, Austria: Wiener Volksbuchhandlung.
Illich, Ivan. 1981. Shadow Work. Salem, New Hampshire and London: Marion Boyars.
Itoh, Makoto. 2010. “From Subprime to the Great Depression.” Political Economy Quarterly(Kikan Keizai Riron) 47(1):4–14.
Lapavitsas, Costas. 2010. “Financialization and Capitalist Accumulation: Structural
Accounts of the Crisis of 2007–9.” Political Economy Quarterly (Kikan Keizai Riron)47(1):42-55 (Translated by Masao Yokouchi).

THE JAPANESE POLITICAL ECONOMY

13

Lenin, Vladimir. 1916. Imperialism, the Highest Stage of Capitalism. Collected Works. Vol.
22, Moscow, Russia: Progress Publishers.
Marx, Karl. 1859. A Contribution to the Critique of Political Economy. Moscow, Russia:
Progress Publishers.
Marx, Karl. 1867. 1894. Capital. Vol. I, III. Moscow: Progress Publishers.
Nishibe, Makoto. 1996. Genealogy of Market Images: Visions over Economic Calculation
Debate as Shijyozo no Keifugaku: Keizai Keisan Ronso wo meguru Vijyon. Tokyo: Toyo
Keizai Shinpo Sha.
Nishibe, Makoto. 2015. “Globalization: Evolution of Capitalist Market Economy through‘Internalization of the Market.” Evolutionary and Institutional Economics Review 12(1):31–60. Springer. doi: 10.1007/s40844-015-0005-2.
Polanyi, Karl. 1944. The Great Transformation: The Economic and Political Origin of Our
Time. New York: Farrar & Rinehart.
Uno, Kozo. 1980. Principles of Political Economy. Theory of a Purely Capitalist Society.
Translated from Japanese by Thomas T. Sekine. Brighton, NJ: Atlantic Highlands.
Uno, Kozo. 2016. The Types of Economic Policies under Capitalism. Translated fromJapanese by Thomas T. Sekine and edited by John R. Bell. Leiden, Netherlands: Brill.