Finance is not the Economy: Reviving the Conceptual Distinction

Dirk Bezemer, Michael Hudson

Research output: Contribution to journalArticleAcademicpeer-review

24 Citations (Scopus)
333 Downloads (Pure)


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.
Original languageEnglish
Pages (from-to)745-768
Number of pages24
JournalJournal of Economic Issues
Issue number3
Publication statusPublished - 2016


  • capital
  • credit
  • crisis
  • rent

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