Financialism

doi:10.1017/CBO9780511794537.003

3 - Financialism

a (very) brief history

from Part I - Historical trajectories of business and regulation

Published online by Cambridge University Press: 07 September 2011

Lawrence E. Mitchell

Edited by

Cynthia A. Williams and

Peer Zumbansen

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Cynthia A. Williams: Affiliation:
University of Illinois, Chicago
Peer Zumbansen: Affiliation:
Osgoode Hall Law School, York University, Toronto

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Summary

The United States no longer is a capitalist country. It has created a new economic system that appears to be capitalist but no longer performs the functions of capitalism. Capitalism is a system in which wealth is created and sustained by the production of goods and services determined through market supply and demand. A variety of related structures support capitalism, including the institutions of finance, which provide the funds necessary for the production and trade of goods and services.

While capitalism still characterizes a portion of the US economy, it has become subordinated to a new economic order. This economic system is one in which the financial markets exist primarily to serve themselves. In this system, capital is raised for the purpose of creating, selling and trading securities and derivative securities that do not finance industry but rather trade within markets that exist as an economy unto themselves. At the same time, those markets have profound and adverse effects on the real economy. This new economic system is Financialism.

Type: Chapter
Information: The Embedded Firm
Corporate Governance, Labor, and Finance Capitalism
, pp. 42 - 59

DOI: https://doi.org/10.1017/CBO9780511794537.003 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2011

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