Financialization shifts firm investment from core business toward finance, weakening workers’ claims on revenue.

Evidence

We see the proximate mechanism here to be that workers’ power to make claims on organizational revenue is undermined when managerial attention and investments are allocated away from the core business to either financial service units or financial markets. More distal mechanisms might include the cultural devaluation of production, the drop in capital investment in production, and the retreat from market share as the core growth strategy of the firm. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 54

Categorization

• ADDENDUM: Directly supports the Grafting & Growth piece’s metaphor of firms redirecting resources away from their ‘roots’ (core production) toward financial channels — the diversion of managerial attention is an infrastructure-level reallocation.
• XREF: Connects to Krippner’s work on financialization and to the broader literature on shareholder-value capitalism vs. stakeholder production. — connects to: Financialization channels income toward the wealthy and depresses productive investment and wages. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 24; Portfolio logic shifts investment from long-term commitment to scattered short-term securitization. — Max Haiven, Cultures of Financialization, 449; Financialization both derives profits from finance and drains capital from productive investment — Natascha van der Zwan, Making Sense of Financialization, 29 (+4 more)

Related

• Firm financial income diverts resources from core production and shifts bargaining power upward (similarity 0.86)
• Financialization does not measurably raise firm profits or financial-asset productivity. (similarity 0.85)
• Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing. (similarity 0.83)
• Financialization channels income toward the wealthy and depresses productive investment and wages. (similarity 0.83)
• Financialization both derives profits from finance and drains capital from productive investment (similarity 0.83)
• Financialization shifted corporate power from manufacturing and marketing executives toward financial executives. (similarity 0.82)
• Financialization shifts capital intermediation from institutions to markets. (similarity 0.82)
• Financial income reallocates resources away from workers and strengthens owner bargaining power (similarity 0.82)
• Financialization marks a decisive shift from production-based to finance-driven accumulation. (similarity 0.82)
• Financialization must be measured by profit generation, not employment or output (similarity 0.81)
• Financialization may be the root cause behind deunionization, globalization, up-skilling, and falling investment. (similarity 0.81)
• Financialization ultimately represents markets displacing social institutions as society’s organizing principle. (similarity 0.81)
• Financialization theory links wage-compromise collapse and shareholder value to inequality (similarity 0.81)
• Financialization may be a root cause behind union decline and offshoring (similarity 0.81)
• Financialization means accumulation through financial channels rather than production (similarity 0.80)

Broader Connections

• Financialization both derives profits from finance and drains capital from productive investment #corroborates (0.95) — Natascha van der Zwan, Making Sense of Financialization, 29
• Financial income reallocates resources away from workers and strengthens owner bargaining power #corroborates (0.85)
• Financialization may be the root cause behind deunionization, globalization, up-skilling, and falling investment. #expands (0.82)
• Portfolio logic shifts investment from long-term commitment to scattered short-term securitization. #expands (0.80) — Max Haiven, Cultures of Financialization, 449
• Financialized valuation imposes short-termism and disconnects decisions from material production. #corroborates (0.80) — Ève Chiapello, Financialisation of Valuation, 41