On Friday, the writer Oren Cass published an essay in the New York Times claiming that the “financialization” of the American economy has ruined lives and businesses. His use of the term is at times vague, but he argues that financialization is the process of “making financial markets ends unto themselves,” with no positive impact on the “real economy.”

These arguments parrot those of decades of Marxist theorists, which have gained surprising heft and breadth in recent years. They emerge from a basic confusion about what finance does and how money circulates in an economy. At root, theories about financialization are another way to attack investors and businesses earning money—in other words, capitalism.

Finance has been around since the dawn of history. It just means providing or lending money that one expects to be paid back later, with some extra income for the trouble. Starting in the 1990s, however, Marxists such as Giovanni Arrighi claimed that under modern capitalism, traditional finance had been replaced by more esoteric and less fruitful types of financial engineering. In recent years, writers including David Graeber and Matt Stoller have claimed that the financial industry focuses on practices such as debt refinancing and stock buybacks that create no real wealth.

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