what is financialization?
Finance is the management of money, and “financialization” refers to the increasing power of finance over the economy.
The size of the financial industry as a share of the overall economy has more than tripled since World War II. The financial sector – Wall Street – finds a way to extract profit from every facet of our lives, our housing, health, education, and even our water.
Letting finance write the rules and dominate the economy harms the rest of us. Rather than channeling investments to projects that support jobs, families, and communities, Wall Street company owners, executives and money managers are buying our elected leaders and rigging the rules in their favor in order to extract wealth from people.
Wealth extraction in a financialized economy is not color blind, but targets low-income communities, communities of color, and most acutely, women of color.
Financial executives often take a short-term “take the money and run” approach, which leads to booms and busts and makes our whole economy more unstable.
“Has Our Economy Become Too Financialized?” by Christine Emba, Washington Post, April 18, 2016.
“The Engine of American Inequality: The financial sector has become the main source of America’s wealth disparity.” by Jim Lardner, U.S. News & World Report, October 11, 2013.
“Defining Financialization,” by Roosevelt Institute, July 27, 2015.
“Why Financialization Has Run Amok”, Steve Denning, Forbes, June 3, 2014.
“The Impact of Financialization on Management and Employment Outcomes.” by Rosemary Batt and Eileen Appelbaum, Upjohn Institute for Employment Research, February 2013.
“Financialization and the World Economy”, by Gerald Epstein, ed., Northampton: Edward Elgar Press, 2005.
“Reversing Runaway Inequality: Financialization”, Citizen Action of New York, Medium, December 20, 2018.