In terms of mainstream financial economics, fictitious capital is the net present value of expected future cash flows.
The book argues government intervention allows fictitious capital to "assume proportions incompatible with the real production potential of economies," leading inevitably to crises such as the Great Recession.
In the first instance they are governed by the "present and anticipated future incomes to which ownership entitles the holder, capitalised at the going rate of interest".
The market value of such assets can be driven up and artificially inflated, purely as a result of supply and demand factors which can themselves be manipulated for profit.
There were supposed to be several great sharks of this kind who could significantly intensify a difficult situation by selling one or two million pounds worth of Consols and in this way taking an equivalent sum of banknotes (and thereby available loan capital) out of the market.
"[14] Marx added that: "The biggest capital power in London is of course the Bank of England, but its position as a semi-state institution makes it impossible for it to assert its domination in so brutal a fashion.
"Unless this depreciation reflected an actual stoppage of production and of traffic on canals and railways, or a suspension of already initiated enterprises, or squandering capital in positively worthless ventures, the nation did not grow one cent poorer by the bursting of this soap bubble of nominal money-capital.
Housing, unlike typical commodities, is tethered to land—a finite resource that resists the traditional dynamics of supply and demand economics.
In Marxist terms, the exchange value of housing, which derives from the socially necessary labor time required for its production, should theoretically dictate its price under normal market conditions.
The strategic withholding of properties, a practice aligned with Marx's theory of absolute rent, creates artificial scarcity that drives up rental costs irrespective of actual demand.
This manipulation underscores the failure of orthodox economic frameworks, which assume that increasing supply will naturally stabilize or reduce prices.
Unlike other commodities, housing's market price often appreciates over time, incentivizing capital accumulation without the risk of overproduction crises that typically afflict other goods.