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.So here too, the means to this end of our economic problems is an abuse of credit. I think my definitions are better, for they enlighten as one reads through other's analysis.
The damage is done by interest in any case, and credit when ex nihilo.
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