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Home› Part II – Political economy propositions›Chapter 10 - Interest

Chapter 10 - Interest

Calling interest the price of providing credit has long been systematic. No longer calling the return on savings in capital this way is more recent and not yet systematic in economic theory. However, the clear distinction between credit and interest on the one hand, and capital and profit on the other, leads to the possibility of a general adjustment of interest rates which is most favorable to employment.

By prioritizing rates of profit on capital over interest rates as directors, this approach curbs the excessive financialization that breeds enrichment through surplus values. Consequently, it provides the market economy with a degree of systemic stability and clarity that is currently lacking — a fact evidenced by the recurrence of major financial crises.

Propositions

  • 10.1 Interest is the price paid for the provision of credit.
  • 10.2 Let us assume that the collective will for a high national average capitalization rate (NCCT) has been established.
  • 10.3 Let us suppose that the periodical publication of the national average rate of profit (NMRT) has been introduced.
  • 10.4 Public borrowing by means of a passbook alone with interest at a rate lower than the TMNP encourages a high rate of interest.
  • 10.5 Interest paid to savers at rates below the MNPT encourages a high CNRT.
  • 10.6 Interest charged by enterprises at rates above the TMNP promotes a high TMNC.
  • 10.7 The centralization of banking management implies a strengthening of financial regulations.

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