Noah Baslaw

Date of Award

2019

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Khemraj, Tarron

Area of Concentration

Social Sciences

Abstract

Financialization refers to the economic and political trend wherein the financial industry assumes greater significance throughout the economy, causing even non-financial firms to acquiesce to shareholder interests to the deficit of employment and capital investment into the production process. The Marxist interpretation of capitalism, found in the second essay, sees financialization as a process of late-stage capitalism attempting to quell ineffective demand and stagnating capital accumulation (only to make these issues worse) by channeling consistent and significant wartime inflation into financial markets. The more technical analysis in the first essay attempts to show the multilateral and dynamic evolution of the United States financial system’s fragility, aiding the second essay with context and minutia regarding these complex systems. The process of financialization is political, in as much as economic matters are political: through financialization the industry of money itself earns unparalleled political leverage—including revolving doors between corporate executives and state officials, even executive cabinets. In line with the evolution of corporate liberalism, under financialization, the state takes newer (and larger) obligations to subsidize the risk of the financial sector with its unlimited ability to pay (as a political monopoly) in its power to tax and monetize debt. Lastly, the economy is subordinated to financialized profits, putting downward pressure on employment, wages, and production, an exploding use and level of credit throughout the economy and state, and raising wealth and income inequality.

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