1.

Working Title

Critic of Traditional Marxian Class Research Frame in Financialization era.

; Comparison research between traditional class frame and accounting base class frame.

2. Context

2.a Critical analyzing about Marxian class theories

According to Marx, increase, and development of capitalism production line, middle class (petit
bourgeois) would transform to labor class, because of increase inequality. Furthermore, Marx
mentioned that capitalism tend to change its form continually for maintain the system. However,
last over three decade it is questionable that Marxian class research frame could satisfied to
answer class transformation trend from neo liberalism era.

Before Neo liberalism era, so called 30 years golden era, there were many criticisms about
Marxian class measurement, because of existence of significant middle class, which cause by
increase volume of and diversified character of consumption pattern of middle class, influenced
by Fordism economy system.

Last half century, there were two different path of social class research. The one is class research
executed by Analytical Marxian Economist, such as John Roemer, Adam Ptzeworski, Jon Elster,
and Eric Olin Wright. They were assuming that all social members show radical choice, similar
with mainstream economic assumption. Eric classified social class was base on ownership of
Asset. It was changed to accept exploitation concept, and extend the area of exploitation. Such as
not only means of production but also technology might be a some sort of assets and it can be
exploited (Wright and Martin 1987, Wright, 2005) .

On the other hand, there were a trend to classified social class based on their cultural taste, and
consumption pattern. In Pierre Bourdieu’s (1987) work, Pierre added new class classification in
French society in his work, which divided three main classes and separated more based on
consumption pattern. He suggested term called ‘abitus’, which means pattern that learn during
their long life time. Because of the long time period, Pierre states that it is decisive element that
would decide class.

Both Eric’s work and Pierre’s work have a controversial point that standard that classified class
based on ownership of assets in accounting perspective but it dose not share same kind of
Marxian definition of assets, which caused questioning about ideological identity of the works.

It is a time that asking about the class studies have a accuracy even in Finacialsation era, which
significant increase of the role of financial instruments. The reason why this research asks the
question is debt obligations of financial instruments are (Liability in accounting sense) not
properly disclosed in the Eric’s and Pierre’s class study. Another reason why Liability concern is
important in class study is that it is possible that with debt, still individual is able to have a
certain life style, which concern by former research’s theories.

For example, purchasing house does not need cash payment at one time in Financialsation era,
because resident has a possibility to live house without full payment and ownership, If they can
access Mortgage program in Financialisation era. And we know what happen when resident fail
to payment. One of significant case might be 2008 US Asset market collapse. Financilsation has
capacities that manipulate certain class’s living style. In many case, who can not force to house
can live in bank own house in market principle.

Significant different compare with public house system in golden era and mortgage programs in
financilsation era is individual’s financial responsibility of the payment. As a result, Public house
does not effect to individual’s financial condition, but Mortgage effect to individual’s personal
account as a mortgage loan payable (Liability in accounting standard).

This is key point of this research. Many consumption activities were changed to base on loan
program in Financilisation era. Many life necessary, such as House, car, and many social service
such as education, and health are providing as a some sort of debt to individual. From the point, it
is necessary to concern the Liability to determine class even if Marxian classes study.

2.b Academic contribution

This research will classified social class base on accounting contents. It is not traditional Marxian
view, but there are reasonable facts that social class is able to define base on each individual’s
personal financial situation, which is commonly accepted in accounting standard. It means one
social member’s condition of Assets in member’s book should not be a measurement point of
class, because accounting to standard defines Equity is neither capital nor Assets (IFRS. 2014).
From below the formula:

Assets-Liability=Equity

This research is more reasonable, because of existence of present economic trend that debt
influenced social class structure. Guy Standing lies that working class that well educated or
qualified but struggle with uncertainty in their employment has been appeared. Guy used term
Prevaricate class (Standing, 2018). It is not easily detecting by traditional Maxian class frame, if
researcher focus only Assets side of the individual’s book.

For example, in traditional class research, middle class man who had a higher education and
having a good job did not classified as a proletarian class. Main reason might be in Karl Marx era,
there was no such a wide debt base social structure, however, Neo Liberal society structured by
social debt, such as student loan, mortgage, and credit card usage. It reorganized social class base
on some body who has financial capital and some body who does not. And furthermore, from the
logic, it is reasonable to guess that number of individual who owned capital would be shrinking,
for example, under the assumption that house is only assets the owner’s accounting book, house
owner who has not paid back all mortgage.

2.c Issue

One of the issue that rise in this research might be that there are not enough understanding about
accounting character of new Financial instruments in Marxian study, Because Marxist economist
focused more case of capital accumulation failure, for instance, Depression. It is important
because the accounting concept can be a tool for understanding new trend of capital
accumulation.

In accounting sense, it is simply Liability, the character of all financial instrument that appeared
in Financial market. Accounting standard lies there are three requirements that satisfied
recognized Liability, which is

A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to
result in an outflow from the enterprise of resources embodying economic benefits (IASB Framework) 1

Without arguing that Financialsation is capital accumulation trend that extend to time limitation,
a present obligation of the enterprise arising from past events. Financial capitalist occupied working class
of, even whole social class’s future expected value throughout providing the financial
instruments, which is Liability is accounting sense.
However, This research would only stay in difference research of two class research frames for
finding reasonable class research frame in Financialisation era.

Second issue might be that financilisation effect in class structure in advanced capitalist society.
especially, it influence about the middle class argument. There are not many Marxist researches
about class transformation, causing by financialisation. Even resent research has been analyzed
base on asset concern. It tend to focus more about size of income group so called inequality
arguing.

However, income concern view has a certain limitation. It tend to miss income group, which does
not have a real consumption power. There was a issue about lower consumption trend after 1998
Japanese Asset market collapses. Nomura research institution chip economist, Richard Koo
explained so called ‘balance sheet recession’, which cause by Asset exchange value decrease, and
relatively increase Liability side, which effect to get extra loan. So Japanese corporation used cash
flow to payback the Liability. As a result, society lost high consumption trend.

In class respective, there are middle class group that shows lower consumption power, causing by
many different type of their Bank loan payment. It called working poor. In this case, traditional
asset concern class frame cannot detect it. Especially, a relationship between loan provider and
debtor cannot classify. Even it is obvious class conflict between financial capitalist and some sort
working class in financial capital perspective.

3. Research Questions or Aims

Research question that rise in this project might be which class frame is more accurate as a class
research frame in Financialisation style capital accumulation?

In Karl Marx era, there was not enough interest bearing capital base capitalism. Character of
currency was not fiat currency. It was currency that supported by material items, normally Gold
or silver.

However, modern matured capitalism is maintaining base on credit currency system or Interest
Bearing Capital (IBC) system, and the size of the financial industry has been increased three-time
compare with before. One of fact that researcher should concern is the Financialsation influenced
whole capitalist society, which means IBC or credit is new type of negative wage that all social
member used. In that point, wage base class frame would have a weakness. Even in golden era,
many economists ignored there were many welfare system programs in advanced capitalist
societies, for example free education. Even in traditional Marxian class frame perspective, which
concern about wage also cannot detect the real wage in social class. Because the extra, welfare
could not show in individuals book. It is limitation of wage concerned class frame. It means
during the Goldn era, wage base frame tend to underestimate, and in Financialisation era, it
would be tend to overestimate consumption power of the classes.

Aims for this research might be updating social science analytical tool more accurately. Or find
new social science analytical tool that can provide better result.

4a. Empirical Research Methods

For confirm this research, empirical research method should required, because without
quantitative method, there are high proportion that this research would be fail.

However, nowadays, statistical technology would be enough to collet empirical information for
different social science research purpose. It is common that there are departments for such a
research in every countries for example Bureau of Labor Statistics in the US or even international
organization has a department about statistic research. This research would ask a corporation to
them.

First, there must be basic information list that should be collected from the research design

 Each household’s assets (total market price value of Asset; ownership form of resident
house, and Car+ total amount of saving+ total amount of financial products owned)

 Each household’s Liability (total loan amount; student loan+ mortgage+ personal loan…).

 Adding two information for finding information of Equity, which represent real wealth
that individual own. This is method to classified social class based on individual’s equity
not Asset.

It is not necessary to collect with social identity, such as name, occupation, and other private
information, if input right financial information in the formula, identity of the information is not
important. required final result is proportion of the each financial group’s number. Each
individual’s information would add for analyzing proportion of each social class number one
country level.

 Finally, compare with two data that only represent household’s Asset and household’s
equity. Before researching the data, number of the each family should multiplied for each
household’s data

Secondly, One of the suggested ways might be using national censuses system. Because the
information that required is not complicated and it is commonly ask for creating national
censuses. It is expected that depend on jurisdiction, there might be a difficulty, like privacy
protection law, lack of fund for research this huge social research or less developed information
system. However, it does not mean this research method is technically impossible or meaningless.

It will take a time but research project itself is simple but efficient social science method. And the
result would be a good fundamental for build a new argument about class theory. The new
argument would be update version of Marxian theory, which would be covered financial capital
study.

4b. Theoretical Research

Theoretical argument has been made on the financial position of the middle class people in the
society.First main theoretical research might be middle class argument. According to Fine
(2016), wages is the parameter that can be used to measure the social class of the people Ben
fine lies that wage would be a measurement of class (Fine, 2016). However, there are certain
problems with this measurement parameter like, missing figures, debt of the middle class people
and many others. Moreover, if the 1970’s societies of the advanced economies are identified, then
it can be seen that there many middle-class people, who were concerned about the asset side of
their book. However, the view has a certain weakness, which is it would be missing figures, many
working class or middle class have a debt. And the situation would create that after 1970’s there
were tick middle class in advanced capitalism society, because it concerned only asset side of
their book.

However, after the introduction of the term financialisation it has been identified that middle
class people are a special class in the society, who deal with their specilised job and who have
high skill in that specified area of knowledge. However, due to expropriation of financialsation,
which increase of transaction of financial products that characterized Liability in accounting
standard, this research will argued that the so called middle class is really existed as a proper
social class or it is a different type of modern working class that specialized for their job,
normally require qualifications or high skill training.
Secondly, result of this research would bewas a fundamentalthe fundamental of drawing the class
map of financialsation era’s class mapera. if we adopt the accounting class frame that means, I
personallywe assume, there are no such a thing called middle class. If this is the situation, then
the question that rises is ‘is Financialisation the is last stage of capitalism accumulation form?
and how the financialisation looks like the financialised capitalist society in class perspective?’‘
“Is it similar with midlevel class structure, small ruling class and majority of serf class?’ or does
the iIndustrial revolution era that createdcreate huge wage labor class?

It is might be a the way to prove the arguments of the alternative economist’s arguing,
socialeconomises regarding polariszation. More obviously, theobviously, the result of the
accounting standard class frame would created be athe tool for research that has influenced of
the Financial capital in Neoin Neo Liberalism era. It is, because we would have a data that is able
to compare with the period, which is golden age of capitalism that is the, Fordism era. It is the
bBest research sample might be ain US class map between the two different periods.

5. Reflections

There, a reflection has made on the would be reflections for this research. One of expected A
rreflections might be a arguingis based on the argument about relationship between Asset
ownership and their financial situation. For instance, traditional bourgeoisie class man, who has
an overwhelmingly debt, but own some production line. It is obvious that the man is bourgeoisie
in traditional manufacturing capital Marxism. However, if his Liability is higher thaen total among
amount of Assets, which that means he is running the business base on credit, in accounting class
frame perspective ,perspective, he is not able to be a bourgeoisie class.

But arguably, he own has the (?) production line, which has satisfied traditional Marxian class
concern. But in Financial Capital perspective, in the best case, he would be a putty bourgeoisie
manager ofr some type of agency in the financial capital perspective

Another expected argument would beis about the character of the debt. In some sense, the
traditional classification might is not wrong, if economy always growththere is economic growth
and due to that, debt can be an asset. This happens, if debtor can comfortably pay back. But we do
not live in such a an economicmy growth era anymore. As a result, unless, financial industry
collapse, like depression, those kind ofthe optimistic judgment does not have a place to stay.

It would be cruelis really pathetic that many people who are educated and haveing a good job,
would beare classified as a new type of proletarian class, because of their school loan and
mortgage. However, that is thethe dictionary definition of proletarian is -, ‘who own nothing but
children’. And iIt is important to research such basic information for study financial capital.

Finally, reflection that expected isin the worst case may be that the researcher could not find a
statistical supporting. However, I am quite comfortablethis is not a problem for this research
because the information that has to collect, and formula that needs to be used in this research is
are not complicated. For instance, Australian National census asks 60 questions about
citizenscitizens’ detail (2016 Census. 2017). The 60 questions are basic data for analyszing and
researching Australian economy. In a same way, each country’s reserve bank has a the capacity to
collect and publish such a basic data. If researcher of this project can be able to access the
statistic research tool, collecting data would not be a issue.
6. Conclusions

Iit is assumed that may be Financialisation trendthe trend of financialisation may has
manipulated Marxian class frame tool. Because traditional Marxian class frame is concerned only
about the assets side of balance sheet. However, it is commonly accepted that the increased size
of financial sector, supplying social debt programs for maintain capital accumulation system, in
Financialisation era, consumption pattern, life style or simple ownership of assets would are not
be athe measurement tools of for social class. If we defined that financialisation means as the
increase of financial products transaction, then in individual’s personal accounting book, defined
as athe liability would will be a important variable in the personal accounting book of an
individual. As a result, this research would be an opportunity to discover new type of social class
research tool , which is expected to give a class consciousness.

This research would has dialectically discovered the relation ship between Marxian class frame
and class frame based on accounting standard for finding reasonable social class frame with
empirical method.

7. Research Timetable

Under the assumption that there would be no period that of attending the class at SOAS London,
it might bethe research has taken three years, but there are several variables are existed.

First significant variable that will decidehas decided it might be the period that collected source
of data, each or certain county’s information about equity per each individual. I am assumingThe
research has assumed less than 6 mounts will be spent for the first step.

Once it has beenit is collected, there would be analysis period for comparison between another
class theories or discussion for theoretical issues. But obviously, it is enough maximum three
years are enough to finish the whole research.