Accounting for the fictitious: A Marxist contribution to understanding accounting's roles in the financial crisis

Abstract

This paper presents a contribution to the debates surrounding the culpability of accounting in the recent financial crisis. It adopts a Marxist theoretical perspective concentrating mainly on Marx's work on fictitious capital. Fictitious capital is any form of investment (for example bonds, stocks, derivatives, and collateralized debt obligations) which is based upon the expectation of future returns. According to Marx while fictitious capital is useful to capitalism, it cannot create valueonly human labour can do that. The recent crisis was exacerbated by the significant amounts of investment which were made in extreme forms of fictitious capital. The paper argues that the accounting profession's adoption of financial economic rationalities meant that it helped to animate the form of financialised neo-liberalism which dominated at the time of the crisis. The accounting profession and accounting academia have implemented and propagated technologies and rationalities which enabled, legitimised, and drove the activities of business in general and financial institutions in particular in the run up to and since the crisis. While, accounting could be seen as being complicit in the crisis, it is important to remember that it was a capitalist crisis. The intuitional structures of accounting mean that it is susceptible of being captured by the most powerful in society.

On the Role of Faith in Sustainability Management: A Conceptual Model and Research Agenda

“…Several commentators have referred to the influence of individual faith as part of their studies of the structural flaws that caused the financial crisis of the late 2000s 5 (e.g., Cooper 2015;Crotty 2009). The premises of an argument about how faith relates to events of the corporate world, and drives the activities of financial institutions and business in general, started to emerge.…”

“…These events, and the literature that covered them, have thrown light on one particularly strong type of faith placed by business agents in the stability characteristics of free markets. The doctrine of the sanctity of the free market (or 'neo-liberal dogma') has been a dominant feature of business agents' faiths for the past 30 years, partly articulated with the key institutions of capitalism through the models of financial economics developed in Universities' accounting and finance departments 6 (Cooper 2015). One fundamental pillar of the neoliberal dogma is the idea that representative individuals for households and firms are able to optimise by modelling the economy.…”

Embedding financialization: a policy review of the EnglishAffordable Homes Programme

“…Instead, inancialization is an expression of the broader processes towards the neoliberalization of society (Harvey, 2005). It operates in conjunction with other concepts such as accumulation by dispossession (see below), privatization/re-commodiication (Ashman & Callinicos, 2006) and globalization of the inancial markets (Cooper, 2015). herefore, this study's use of inancialization is located at the conluence of an analysis that identiies the over-accumulation of capital in the global capitalist system (Roberts, 2016), seeking new arenas to make proitable returns from the opening up of previously publicly provided (de-commodiied) services (such as social housing) to exploitation by private capital (Cooper, 2015;Harvey, 2005).…”

“…To achieve these aims, the paper is structured as follows: the next section sets up the theoretical framing by exploring the debate about the nature of housing policy (Madden & Marcuse, 2016) and ideas related to inancialization (Aalbers, 2016;Cooper, 2015;Harvey, 2012). his is followed by a section outlining the research design.…”

“…Financialization is a multifaceted process that seeks to explain the increased role and power of the inancial markets in society (Aalbers, 2016(Aalbers, , 2017Cooper, 2015;Fine, 2010;Lapavitsas, 2009). Speciically, the paper shows that the AHP not only leads to increased debt levels in the social housing sector but is also predicated on short-termism (Cooper, 2015). Harvey's (2003) concept of accumulation by dispossession is also utilized to show how the AHP is being subsidized by a transfer of public land at a discount or for free to aid new developments.…”