One advantage of modern capitalist accumulation is that bonds, stocks and derivatives can be bought and sold instantaneously. But as Norfield says, fictitious capital does not break the link between the production of value from labour power or the value of "real" assets like commodities, plant, equipment etc, it just "stretches it". The expansion of fictitious capital enables capitalism to expand faster but also to crash further.

Indeed, the development of modern finance and the expansion of fictitious capital in all its new forms from the 1980s onward was really a response to the fall in the profitability of productive capital in all the major capitalist economies from the mid-1960s to the early 1980s.

Norfield holds that Marx's law of the tendency of the rate of profit to fall is the key underlying factor behind economic crises under capitalism. But he is sceptical of the ability to measure the profitability of capital with official statistics and he reckons that measures of national rates of profit can tell us little in this imperialist world.

Nevertheless, he attempts to measure U.S. profitability and concludes that there has been a rise from the 1980s and notes that U.S. profits were "relatively high" at the time of the global financial crash. This appears to contradict Marx's law, so Norfield explains the rise in the U.S. rate of profit up to the Great Recession as indicative of a "credit-fuelled" burst. However, it is possible to measure the trend in the profitability of capital for the major economies, and the world as a whole. And such measures show that the rate of profit peaked in the late 1990s and early 2000s. So Marx's law holds even without the explanation of credit-fuelled profits.

Norfield's book illuminates the nature of the modern British economy. Britain has become the world's largest "rentier" economy. That's an old-fashioned French word for an economy based on sucking up "rents" through the monopoly ownership of capital (or land) that is actually squeezed from the profits of the productive sectors. Both the sectors exploit labor but the rentier economy relies on its financial and legal monopoly to take a share of the surplus value appropriated from labor. This gives British capital its important role in modern imperialism, but will also be its Achilles heel in any future global financial crash.

Britain's rentier interests generate its ambiguous relationship with Franco-German capital and the European Union (EU). British strategists look to the U.S. for partnership in financial power but to Europe for trade and investment. This contradiction will come to a head in the referendum on British membership of the EU on June 23.

Norfield's book shows why the City of London is overwhelmingly in favor of the U.K. staying in the EU and opposing British exit or "Brexit." The City depends on the free flows of capital in and out of Europe; and between the "capital surplus" of oil and resource producing countries and North America's multi-nationals. That nexus will be seriously impaired if the U.K. is outside the EU - especially if the EU were itself to disintegrate in the future.

Michael Roberts is a London based Marxist economist and who works in London's financial services industry. He published the "The Great Recession" in 2008 and "Essays on Inequality" in 2014.

Heiko Khoo is a columnist with China.org.cn. For more information please visit:

http://www.h5a3.com/opinion/heikokhoo.htm

Opinion article reflected the views of their authors, not necessarily those of China.org.cn.