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Financialised Capitalism: Crisis and Financial Expropriation

Financialised Capitalism: Crisis and Financial Expropriation <jats:sec><jats:title>Abstract</jats:title><jats:p>The current crisis is one outcome of the financialisation of contemporary capitalism. It arose in the USA because of the enormous expansion of mortgage-lending, including to the poorest layers of the working class. It became general because of the trading of debt by financial institutions. These phenomena are integral to financialisation. During the last three decades, large enterprises have turned to open markets to obtain finance, forcing banks to seek alternative sources of profit. One avenue has been provision of financial services to individual workers. This trend has been facilitated by the retreat of public provision from housing, pensions, education, and so on. A further avenue has been to adopt investment-banking practices in open financial markets. The extraction of financial profits directly out of personal income constitutes financial expropriation. Combined with investment-banking, it has catalysed the current gigantic crisis. More broadly, financialisation has sustained the emergence of new layers of rentiers, defined primarily through their relation to the financial system rather than ownership of loanable capital. Finally, financialisation has posed important questions regarding finance-capital and imperialism.</jats:p> </jats:sec> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Historical Materialism Brill

Financialised Capitalism: Crisis and Financial Expropriation

Lapavitsas, Costas
Historical Materialism , Volume 17 (2): 114 – Jan 1, 2009
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Publisher
Brill
Copyright
© 2009 Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1465-4466
eISSN
1569-206X
DOI
10.1163/156920609X436153
Publisher site
See Article on Publisher Site

Abstract

<jats:sec><jats:title>Abstract</jats:title><jats:p>The current crisis is one outcome of the financialisation of contemporary capitalism. It arose in the USA because of the enormous expansion of mortgage-lending, including to the poorest layers of the working class. It became general because of the trading of debt by financial institutions. These phenomena are integral to financialisation. During the last three decades, large enterprises have turned to open markets to obtain finance, forcing banks to seek alternative sources of profit. One avenue has been provision of financial services to individual workers. This trend has been facilitated by the retreat of public provision from housing, pensions, education, and so on. A further avenue has been to adopt investment-banking practices in open financial markets. The extraction of financial profits directly out of personal income constitutes financial expropriation. Combined with investment-banking, it has catalysed the current gigantic crisis. More broadly, financialisation has sustained the emergence of new layers of rentiers, defined primarily through their relation to the financial system rather than ownership of loanable capital. Finally, financialisation has posed important questions regarding finance-capital and imperialism.</jats:p> </jats:sec>

Journal

Historical Materialism – Brill

Published: Jan 1, 2009

Keywords: FINANCIALISATION; CRISIS; RENTIER; BANK; FINANCIAL EXPROPRIATION

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