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Top incomes under finance-driven capitalism, 1990–2010: power resources and regulatory orders

Top incomes under finance-driven capitalism, 1990–2010: power resources and regulatory orders This article examines the impact of financialization on the income shares of the top 1% from 1990 to 2010, through a panel analysis of 14 OECD countries. Drawing together literatures stressing the dependence of income inequality on the structural bargaining power of capital relative to labour, and of the dependence of accumulation on underlying institutionalized modes of state regulation, it shows that financialization has significantly enhanced top income shares net of underlying controls. Whilst the income shares of the top 1% appear responsive to variables typical of wider studies of personal income inequality, we emphasize distinctive mechanisms of top income growth linked to the rising dominance of financial instruments and actors, facilitated by a historically specific regulatory order. These conditions were key to the emergence of a state of ‘asymmetric bargaining’ which disproportionately enhanced the fortunes of the wealthy. Results thus emphasize the importance of class-biased power resources and underlying regulatory structures, as determinants both of income concentration and of the distribution of economic rewards beyond growth capacity alone. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Socio-Economic Review Oxford University Press

Top incomes under finance-driven capitalism, 1990–2010: power resources and regulatory orders

Flaherty, Eoin
Socio-Economic Review , Volume 13 (3) – Jul 8, 2015
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References (118)

Publisher
Oxford University Press
Copyright
© The Author 2015. Published by Oxford University Press and the Society for the Advancement of Socio-Economics. All rights reserved. For Permissions, please email: [email protected]
ISSN
1475-1461
eISSN
1475-147X
DOI
10.1093/ser/mwv011
Publisher site
See Article on Publisher Site

Abstract

This article examines the impact of financialization on the income shares of the top 1% from 1990 to 2010, through a panel analysis of 14 OECD countries. Drawing together literatures stressing the dependence of income inequality on the structural bargaining power of capital relative to labour, and of the dependence of accumulation on underlying institutionalized modes of state regulation, it shows that financialization has significantly enhanced top income shares net of underlying controls. Whilst the income shares of the top 1% appear responsive to variables typical of wider studies of personal income inequality, we emphasize distinctive mechanisms of top income growth linked to the rising dominance of financial instruments and actors, facilitated by a historically specific regulatory order. These conditions were key to the emergence of a state of ‘asymmetric bargaining’ which disproportionately enhanced the fortunes of the wealthy. Results thus emphasize the importance of class-biased power resources and underlying regulatory structures, as determinants both of income concentration and of the distribution of economic rewards beyond growth capacity alone.

Journal

Socio-Economic Review – Oxford University Press

Published: Jul 8, 2015

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