Competition and Cooperation between Financial Capital and Functional Capital in the Era of Financialization: A Theoretical and Empirical Analysis of US Financialization

Abstract

The in-depth analysis of the relationship between financial capital and functional capital together with its changes is not only helpful for us to understand the inherent contradictions of the current capitalist economy, but it is also the key to clarify the inner logic of capitalist financialization. This article analyzes the logic and consequences of changes in the mutual relationship between financial capital and functional capital in capitalist reproduction and accumulation in a unified framework by researching on the contradictory relationship between financial capital and functional capital from the two traditional Marxist approaches, namely the Capital Circuit Approach and the Class Approach. The article holds that the cyclical relationship between interest rates and corporate profitability reflects the cooperation of financial capital and functional capital in capital circulation, and reveals the power confrontation of the two in the distribution of surplus value, which provides important clues to understanding the financialization of contemporary capitalism.