Financialization may erode the postwar capital-labor social pact

Evidence

But, at the same time, it is not hard to envisage how processes associated with financialization might have eroded the ‘social pact’between capital and labour that provided crucial support for the welfare state during much of the post-war period-even, perhaps, more effectively than capital mobility per se (Silver, 2003; Silver and Arrighi,2001). — Greta R. Krippner, The Financialization of the American…, 142

Categorization

• QUESTION: The author flags this as an untested thesis — worth chasing whether empirical work has since borne it out.
• ADDENDUM: Relates to the sacrifice article’s theme of social contracts and their erosion, though the connection is more economic than ritual.
• XREF: connects to: Financial income reallocates resources away from workers and strengthens owner bargaining power; Labor’s share of income declined in the nonfinancial economy from 1970 to 2008 — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 74; Financialization caused roughly three-quarters of the labor share decline by 1997. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 158 (+9 more)

Related

• Financialization caused roughly three-quarters of the labor share decline by 1997. (similarity 0.84)
• Financialization theory links wage-compromise collapse and shareholder value to inequality (similarity 0.84)
• Financialization caused most of the decline in labor’s income share since 1970 (similarity 0.82)
• US profit and labor shares moved in exact symmetric opposition over forty years (similarity 0.80)
• Inequality dimensions reflect one institutional shift toward financialization (similarity 0.80)
• Financial income reallocates resources away from workers and strengthens owner bargaining power (similarity 0.80)
• Financialization drives the rise of precarious labor and dissolves social bonds (similarity 0.79)
• The Welfare State functions as capital’s flexible adjustment mechanism, not labor’s victory (similarity 0.79)
• Labor’s share of income declined in the nonfinancial economy from 1970 to 2008 (similarity 0.79)
• Financialization may be the root cause behind deunionization, globalization, up-skilling, and falling investment. (similarity 0.79)
• The US economy became increasingly financialized in the post-1970s period. (similarity 0.79)
• Scholars asserted financialization’s existence without providing direct evidence (similarity 0.79)
• Wage-earners are both workers and capital owners under financialization (similarity 0.79)
• Prior research linked financialization to inequality mostly indirectly, not causally. (similarity 0.78)
• Financialization independently explains over half of labor’s falling income share since 1970. (similarity 0.78)

Broader Connections

• Financialization theory links wage-compromise collapse and shareholder value to inequality #expands (0.85) — Natascha van der Zwan, Making Sense of Financialization, 109