A short article in a major paper I saw a few days ago brought to mind the interrelationship of finance to the rest of capitalism. Is it the tail which wags the dog or just a tail under the dog’s control?
The particular story presented an interconnection between finance and racial inequality of wealth. American stock markets grew in value by some $2 trillion in the third quarter. Now, households composed of those with European ancestry own almost 90% of corporate equities and mutual funds. Their wealth rose to $98.6 trillion or 84.6% of total wealth, the highest percentage in three years. These families comprise 76.4% of the total population.
The portion of overall wealth held by African American families fell to 3.8%, down from 4.4% two years earlier. African Americans are 13.4% of the total population.
Families with Hispanic ancestry held 2.1% of the wealth.
Now, presumably, access to stock market assets is not random. Investing is a choice and the marginal cost of investing varies with disposable income and the amount of accumulated financial assets.
When you focus on differential access to investable liquidity, as Marx did, you rather quickly become less enamored with the outcomes of capitalism. As Marx insisted in his Theses on Feuerbach, “Philosophers have hitherto only interpreted the world in various ways; the point is to change it.”
The starting point for change is common sense discovery of causes creating the status quo.