The Power of Financial Markets — What Does that Mean and How Does it Work for Different Categories of Companies?

In business today, referring to financial markets to justify economic (and non-economic) actions has become exceptionally significant, thus marking a change that proves to be the most momentous transformation within capitalism since the 1990s. Arguing from the perspective of regulation theory, Robert Boyer (1999) identified the core development of economies in the fact that the monetary and financial system as an organizational centre has replaced the ‘productionist’ compromise of capital and labour that used to form the basis of the Fordist accumulation regime. The ‘maid of production’ in times of Fordism — the financial market — now seems to have become the lord of the process, dictating the direction and aims of the real economy.1 Like recent references to ‘globalization’, the blanket reference to the power and demands of financial markets and financial-market players now provides sufficient justification for the basic reorientation of corporate strategies, almost without alternative. Following the example of authors such as Boyer (1999, 2000) and Cutler (2001), Froud et al. (Froud, Haslam, Johal and Williams 1999, 2000; Froud, Sukhdev, Leaver and Williams 2006) and Orléan (1999), we are speaking here of ‘financialization’.