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Financialisation, or the search for profits in the sphere of circulation

Author

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  • Costas Lapavitsas

    (School of Oriental and African Studies (SOAS, Universidad de Londres)

Abstract

Financialisation of advanced capitalist economies during the last three decades represents expansion of the sphere of circulation, while the sphere of production has continued to face difficulties of profitability and productivity growth. In the course of financialisation, relations between industrial/commercial capital, banks and workers have been put on a different footing. The financial sector has become capable of extracting profit directly out of wages and salaries, a process called financial expropriation. Financial institutions have also become adept at profit-making through mediating transactions in open financial markets, that is, investment banking. The combination of financial expropriation and investment banking catalysed the crisis that began in 2007.

Suggested Citation

  • Costas Lapavitsas, 2009. "Financialisation, or the search for profits in the sphere of circulation," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 72(03), pages 98-119.
    • Handle: RePEc:ekz:ekonoz:2009310
    as

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    References listed on IDEAS

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    1. Engelbert Stockhammer, 2004. "Financialisation and the slowdown of accumulation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 719-741, September.
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    Cited by:

    1. Louis Moreno, 2014. "The urban process under financialised capitalism," City, Taylor & Francis Journals, vol. 18(3), pages 244-268, June.
    2. Gary Robinson, 2017. "Pragmatic financialisation: the role of the Japanese Post Office," New Political Economy, Taylor & Francis Journals, vol. 22(1), pages 61-75, January.
    3. Isil Tellalbasi & Ferudun Kaya, 2013. "Financialization of Turkey Industry Sector," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 4(3), pages 127-143, July.
    4. Pablo G. Bortz & Annina Kaltenbrunner, 2018. "The International Dimension of Financialization in Developing and Emerging Economies," Development and Change, International Institute of Social Studies, vol. 49(2), pages 375-393, March.
    5. Jorge Garcia-Arias & Alan Cibils & Agostina Costantino & Vitor B. Fernandes & Eduardo Fernández-Huerga, 2021. "When Land Meets Finance in Latin America: Some Intersections between Financialization and Land Grabbing in Argentina and Brazil," Sustainability, MDPI, vol. 13(14), pages 1-37, July.
    6. Cibils, Alan & Allami, Cecilia, 2013. "Financialisation vs. Development Finance: the Case of the Post-Crisis Argentine Banking System," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 13.
    7. Halima Jibril & Annina Kaltenbrunner & Effi Kesidou, 2018. "Financialisation and innovation in emerging economics," FMM Working Paper 27-2018, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    8. Margarita Carvalho & João Cerejeira, 2019. "Financialization, Corporate Governance and Employee Pay: A Firm Level Analysis," NIPE Working Papers 08/2019, NIPE - Universidade do Minho.
    9. D Aparicio & G Rivera & M Meireles, 2023. "Latin America post-pandemic: debt, financial instability, and uneven economic recovery," Economic Issues Journal Articles, Economic Issues, vol. 28(1), pages 5-19, March.
    10. Iancu, Aurel, 2013. "Financialisation: Structure, Extent, Consequences," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 172-192, June.

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    More about this item

    Keywords

    financialisation; bank; industry; salary; expropriation;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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