Financialism: A (Very) Brief History
THE EMBEDDED FIRM, Peer Zumbansen and Cynthia Williams, eds., Cambridge University Press, Forthcoming
15 Pages Posted: 9 Aug 2010
Date Written: August 9, 2010
This essay describes various financial, economic, and legal developments in the United States from 1952 until 2007 and argues that they suggest a transformation of the American economic system from capitalism to one I term "financialism." Financialism is a system in which the real economy plays a secondary role to the financial economy, in the process stripping future real economic profits for present consumption. While it bears similarities to the process often identified in the economic literature as "financialization," it differs both in historical scope and in its suggestion that financialism differs fundamentally from capitalism.
Keywords: Financial Crisis, Capitalism, Securities, Finance, Investment Banking, Commercial Banking, Banking, Executive Compensation, Shareholders, Stock, Stock Market, Proprietary Trading
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By Craig Scott