Finance and the Financialization of Capitalism

This chapter provides an overview of recent debates about the financialization of capitalism and examines the implications of financialization for critical social theory, broadly understood. Financialization refers to the increasing importance of financial products, actors, and markets in contemporary society. The chapter begins with a discussion of the financialization of capitalism. It then turns to explore how the predominance of finance within capitalism alters social and political relationships throughout society. The chapter first discusses the financialization of the household and the rise of an asset-based welfare system, which reveal the disparate gendered implications of financialization, and then the historical role of race in structuring the development of finance and the racialized implications of financialization, especially in the context of the United States. The chapter then examines financialization from the perspective of theories of culture and subjectivity. The last portions of the chapter turn to the political consequences of finance: for democracy and the state, and then for ecological politics and the possibilities of averting catastrophic climate change. In both cases, the financialization of capitalism accelerates the forces hollowing out contemporary democracy and generating ecological crises. The chapter concludes with a brief discussion of political alternatives to the current organization of financialized capitalism as well as directions for future research.