Here is a brief snippet from my Marx's Crises Theories
Moreover, the corporate form of business, wherein ownership and management
are separated, allows those who control firms to use their position to their
own advantage (Marx 1967; 3, pp. 441, 466, and 407; also see Marx and Engels
1859, pp. 490-91). When a crises appears, such peculations come to light.
Commenting on this phenomenon, Marx wrote:
The English railway system rolls on the same incline plane as the European
Public Debt system. The ruling magnates amongst the different
railway-nets directors contract not only -- progressively -- new loans in
order to enlarge their network, i.e., the "territory," where they rule as
absolute monarchs, but they enlarge their respective networks in order to
have new pretexts for engaging in new loans which enable them to pay the
interest due to the holders of obligations, preferential shares, etc., and
also from time to time to throw a sop to the much ill-used common
share-holders in the shape of somewhat increased dividends. This pleasant
method must one day or another terminate in an ugly catastrophe. [Marx to
Danielson, 19 February 1881; in Marx and Engels 1975, pp. 316-17]
[
"Devine, James" wrote:
> Where is it, in volume III of CAPITAL, that Marx talks about how financial
> fraud becomes common in a financial bubble and is revealed when the bubble
> pops (or something like that)?
>
> BTW, thinking about the current melt-down of Arthur Anderson accounting, it
> seems a symptom of market failure: auditors compete for the dollars of those
> who pay them (companies like Enron). There is thus a bias (also seen with
> economic forecasters) toward telling the client what he or she wants to hear
> rather than "rocking the boat." Auditors seem to fail all the time, as in
> Orange County (CA) back in 1994.
>
> Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
