Financialization theory rejects bank dominance in favor of integrated finance-industrial capital

Evidence

Indeed,one of the virtues of the financialization perspective is precisely that it attempts to transcend a purely sectoral understanding of the firm. In this sense, the position articulated here harkens back to the early 20th-century literature on finance capital (Hobson, 1971; Hilferding, 1981; Lenin, 1988). Rather than asserting bank dominance over industrial firms—as in much of the contemporary bank control literature—these early theorists of financialization emphasized the ‘union’of industrial and financial capital in a ‘new social type’. As Zeitlin (1976, p. 900; emphasis added) observed, ‘Neither “financiers” extracting interest at the expense of industrial profits nor “bankers” controlling corporations, but finance capitalists on the boards of the largest banks and [non-financial] corporations preside over … investments, organizing production, sales, and financing, and appropriating the profits of their integrated activities.’ — Greta R. Krippner, The Financialization of the American…, 133

Categorization

• DEFINE: Distinguishes the financialization perspective from the bank-control literature, defining the core concept as a fusion of industrial and financial capital.
• XREF: Connects to Hilferding, Hobson, and Lenin’s finance capital theory, and to the broader financialization literature this paper grounds. — connects to: Financial capital both depends on and disciplines industrial production for returns — Clara E. Mattei, Escape from Capitalism, 419; Financialization is integral to capitalism, not a product of deregulatory excess — Max Haiven, Cultures of Financialization, 34; Financialization means accumulation through financial channels rather than production — Greta R. Krippner, The Financialization of the American…, 11 (+1 more)

Related

• Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing. (similarity 0.86)
• Financial capital both depends on and disciplines industrial production for returns (similarity 0.84)
• Financialization marks a decisive shift from production-based to finance-driven accumulation. (similarity 0.84)
• Financialization ultimately represents markets displacing social institutions as society’s organizing principle. (similarity 0.83)
• Financialization shifts capital intermediation from institutions to markets. (similarity 0.83)
• Financialization is integral to capitalism, not a product of deregulatory excess (similarity 0.83)
• Finance and industry form interdependent but distinct fractions of capital (similarity 0.83)
• Financialization is a pattern of accumulation dominated by financial channels over trade and production (similarity 0.82)
• Financialization both derives profits from finance and drains capital from productive investment (similarity 0.82)
• Financialization shifted corporate power from manufacturing and marketing executives toward financial executives. (similarity 0.82)
• Financialization does not measurably raise firm profits or financial-asset productivity. (similarity 0.81)
• Financialization must be measured by profit generation, not employment or output (similarity 0.81)
• Financialization scholarship spans three approaches with distinct analytic foci. (similarity 0.81)
• The US economy became increasingly financialized in the post-1970s period. (similarity 0.81)
• Finance has come to dominate American economic life. (similarity 0.80)

Broader Connections

• Finance and industry form interdependent but distinct fractions of capital #qualifies (0.85)
• Financialization means accumulation through financial channels rather than production #qualifies (0.80) — Greta R. Krippner, The Financialization of the American…, 11