Financialization theory links wage-compromise collapse and shareholder value to inequality

Evidence

Whether conceptualized as a new regime of accumulation, a guiding principle of corporate behaviour or a central feature of everyday life, studies of financialization have made several important contributions to the scholarship on contemporary capitalism. Scholars of financialization have questioned some of the fundamental assumptions prevailing in neoclassical economics (the efficient market hypothesis) and Keynesian growth theory (positive relation investment and growth). Instead, they have linked the collapse of the post-war wage compromise and the ascendency of the shareholder value orientation to rising levels of income inequality and financial volatility. — Natascha van der Zwan, Making Sense of Financialization, 109

Categorization

• ADDENDUM: Could support a piece on finance as institutional infrastructure comparable to the trees-as-infrastructure framing, or the political economy angle.
• corroborated: 2 independent passages support this claim — Natascha van der Zwan, Making Sense of Financialization, 109
• XREF: 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; Inequality dimensions reflect one institutional shift toward financialization — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 25; Financial income reallocates resources away from workers and strengthens owner bargaining power (+19 more)

Related

• Inequality dimensions reflect one institutional shift toward financialization (similarity 0.89)
• Prior research linked financialization to inequality mostly indirectly, not causally. (similarity 0.87)
• Financialization channels income toward the wealthy and depresses productive investment and wages. (similarity 0.85)
• Financialization scholarship spans three approaches with distinct analytic foci. (similarity 0.85)
• Financialization may erode the postwar capital-labor social pact (similarity 0.84)
• Deunionization still leaves much wage inequality unexplained, pointing to financialization (similarity 0.83)
• Financialization both derives profits from finance and drains capital from productive investment (similarity 0.83)
• Financialization drives earnings inequality nearly as much as declining unionization (similarity 0.82)
• Financialization caused most of the decline in labor’s income share since 1970 (similarity 0.82)
• Financial income reallocates resources away from workers and strengthens owner bargaining power (similarity 0.82)
• Financialization raises earnings inequality across most US industries (similarity 0.81)
• Financialization shifts firm investment from core business toward finance, weakening workers’ claims on revenue. (similarity 0.81)
• Financialization independently explains over half of labor’s falling income share since 1970. (similarity 0.81)
• Financialization is a pattern of accumulation dominated by financial channels over trade and production (similarity 0.81)
• Financialization is how society gets liquidated into marketable commodities (similarity 0.80)

Broader Connections

• Financialization fragments corporate, state, and individual horizons into short-termism #expands (0.80) — Max Haiven, Cultures of Financialization, 138