The equalization of capital profitability through financial investments and the historical development of capitalism: Does Blackrock have the solution to the transformation problem?

The ‘equalization of firms' and sectoral profitability is considered a key feature of capitalist economy by most economic schools. For Marx, it is the basis of the laws of movement of bourgeois society. In this work we consider the related theoretical and empirical literature spanning for more than a century. We suggest that Marx exposed two different meanings of the process: the equalization in the productive sphere is a heritage of the classical school, in line with the Ricardian outlook of a capitalism with no endogenous crisis and no structural changes; the second is the equalization of capitals’ profitability as financial investment, that represents the historical development of capitalism and highlights the coming of age of finance capital and is the backbone of financialization, the dominant trend in contemporary capitalism. We conclude that this dimension of the equalization does not obliterate the laws of movement of capitalism and puts the discussion of the transformation problem on totally different terms.