Financialization emerges when the rentier class seeks alternative accumulation amid industrial capitalism’s stagnation.
Evidence
Marxist theorists argued that advanced industrial capitalism has a natural tendency toward stagnation because the absence of a wealth redistribution mechanism prevents market demands from keeping up with the increased production capacity of oligopolistic corporations. As the dwindling income of the general population could not afford the growing supply of industrial production, the rentier class increasingly turned to financial activities to maintain the existing rate of wealth accumulation. — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 30
Categorization
- DEFINE: Clarifies the Marxist account of why financialization arises: underconsumption drives the rentier class into finance.
Related
- Financialization marks a decisive shift from production-based to finance-driven accumulation. (similarity 0.82)
- Finance is necessary but not sufficient to capitalist accumulation (similarity 0.80)
- Financialization both derives profits from finance and drains capital from productive investment (similarity 0.79)
- Financialization is a pattern of accumulation dominated by financial channels over trade and production (similarity 0.79)
- Reading finance as a Keynesian aberration is a shared liberal and Marxist error (similarity 0.79)
- Financialization ultimately represents markets displacing social institutions as society’s organizing principle. (similarity 0.78)
- Financialization means accumulation through financial channels rather than production (similarity 0.78)