1. Money, ﬁnance and capitalist development Philip Arestis and Malcolm Sawyer INTRODUCTION There can be little doubt that the ﬁnancial sector is much more important now than it was even 20 or 30 years ago. This is not to deny that the ﬁnancial sector has always been central to capitalism, but rather to point to its increased importance over the period. This importance may be seen in the growth of ﬁnancial services through to the rapidly increasing ﬂows across the foreign exchanges. The statistics on this account are staggering, no other good or service has witnessed similar rates of growth in the period 1980–97. The value of ﬁnancial service exports has increased almost ﬁvefold; over the same period, growth in trading manufactured goods has only tripled. Interestingly, ﬁnancial services are ahead even compared with major areas of growth in international trade, such as telecommunications/information technology (IT) and travel. (Seifert et al., 2000, p. 51) Employment in the ﬁnancial sector has also generally increased substantially. This era has also been outstanding in terms of increased ﬁnancial ﬂows across the foreign exchanges (with increases of the order of 50 per cent each three years: see Arestis and Sawyer, 1997), with the inevitable feature that a much decreased proportion of the exchange of one currency for another is linked to trade or to long-term direct investment, and a much increased proportion has been short-term ﬁnancial movements seeking out higher ﬁnancial returns or seeking to gain from movements in the exchange rates. In...
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