Financialization and employment: a Post-Keynesian Institutionalist understanding of the transnational corporation under money manager capitalism

This chapter examines the transformation of employment relations that has occurred with the development of the transnational corporation. I argue that financialized capitalism has led to an arm's-length approach to employment relations, with temporary employment and gig work becoming more prominent. This has contributed to the growing productivity-pay gap observed in the United States and the process of what William Lazonick and Jang-Sup Shin refer to as "predatory value extraction" by modern corporations. In discussing the development of the modern business enterprise in the context of Hyman Minsky's theory of capitalist development, I argue that today's flexible employment relations allow enterprises easy ways to cut costs and improve liquidity positions, enabling greater distributions to shareholders through stock repurchases. If public policy is to successfully address income inequality and economic instability, it must address these contemporary employment relations.