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The financialization of capitalism: 'Profiting without producing'

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  • Costas Lapavitsas

Abstract

Financialization is a systemic transformation of capitalism that has occurred during the last four decades. This paper shows that the concept of financialization originates in Marxist theory, though its meaning remains unclear. It then proposes a theory of financialization as rooted in the altered behaviour of the fundamental agents of capitalist accumulation, including non-financial corporations, banks and workers. Finance has reshaped the activities of all three, also resulting in new forms of profit. It follows that opposing financialization is a complex process that involves creating public financial institutions but also re-establishing public provision for workers across a broad range of activities. Financialization cannot be reversed without re-establishing the command of the social and collective over the private and individual for the modern era.

Suggested Citation

  • Costas Lapavitsas, 2013. "The financialization of capitalism: 'Profiting without producing'," City, Taylor & Francis Journals, vol. 17(6), pages 792-805, December.
  • Handle: RePEc:taf:cityxx:v:17:y:2013:i:6:p:792-805
    DOI: 10.1080/13604813.2013.853865
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    Cited by:

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    3. Shigeyuki Hattori, 2020. "Financialization in Japan," Evolutionary and Institutional Economics Review, Springer, vol. 17(2), pages 295-311, July.
    4. Carles Manera & Ferran Navinés & Javier Franconneti, 2017. "United States of America, European economy and inequality: A perspective from the economic history, 1910-2010," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 14(1), pages 59-87, June.
    5. Veneziani, Roberto & Yoshihara, Naoki, 2014. "One Million Miles to Go: Taking the Axiomatic Road to Defining Exploitation," Discussion Paper Series 615, Institute of Economic Research, Hitotsubashi University.
    6. Kohler, Karsten & Guschanski, Alexander & Stockhammer, Engelbert, 2018. "Verteilungseffekte von Finanzialisierung," Greenwich Papers in Political Economy 23471, University of Greenwich, Greenwich Political Economy Research Centre.
    7. Martin Sokol & Leonardo Pataccini, 2020. "Winners And Losers In Coronavirus Times: Financialisation, Financial Chains and Emerging Economic Geographies of The Covid‐19 Pandemic," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(3), pages 401-415, July.
    8. Shenjing He & Mengzhu Zhang & Zongcai Wei, 2020. "The state project of crisis management: China’s Shantytown Redevelopment Schemes under state-led financialization," Environment and Planning A, , vol. 52(3), pages 632-653, May.
    9. Jan Toporowski, 2020. "Credit, Debt and Distribution in the Monetary Theories of Augusto Graziani And Michal Kalecki," Annals of the Fondazione Luigi Einaudi. An Interdisciplinary Journal of Economics, History and Political Science, Fondazione Luigi Einaudi, Torino (Italy), vol. 54(2), pages 311-326, December.
    10. Tanadej Vechsuruck, 2017. "A Global Analysis of Income Distribution and Capacity Utilization Interactions: The Structuralist View JEL Classification: C23, D3, O11, O47," Working Paper Series, Department of Economics, University of Utah 2017_08, University of Utah, Department of Economics.
    11. Alvaro Luis Dos Santos Pereira, 2017. "Financialization of Housing in Brazil: New Frontiers," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 41(4), pages 604-622, July.
    12. Víctor Ramiro Fernández & Matthias Ebenau & Alcides Bazza, 2018. "Rethinking Varieties of Capitalism from the Latin American Periphery," Review of Radical Political Economics, Union for Radical Political Economics, vol. 50(2), pages 392-408, June.
    13. Svartzman, Romain & Dron, Dominique & Espagne, Etienne, 2019. "From ecological macroeconomics to a theory of endogenous money for a finite planet," Ecological Economics, Elsevier, vol. 162(C), pages 108-120.
    14. Ann E. Davis, 2018. "The New Triffin Dilemma," Review of Radical Political Economics, Union for Radical Political Economics, vol. 50(4), pages 691-698, December.
    15. Juan Barredo-Zuriarrain & Ricardo Molero-Simarro & Alejandro Quesada-Solana, 2017. "Euro-Dependence—A Peripheral Look beyond the Monetary Union: A Proposal of Reform of the TARGET2," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(3), pages 375-393, September.
    16. Antonio Carneiro de Almeida Júnior, 2023. "Currency Crisis or Overproduction? A Marxian Analysis of the Exchange Rate Peg Collapse in Brazil," Review of Radical Political Economics, Union for Radical Political Economics, vol. 55(3), pages 466-489, September.
    17. María Barrero-Rescalvo & Ibán Díaz-Parra, 2024. "Short-term rentals’ supply-side structure and the struggle for rent appropriation: Insights from Andalusia, Spain," Environment and Planning A, , vol. 56(2), pages 508-524, March.
    18. Labrinidis, George, 2018. "The roots of the Euro," MPRA Paper 86560, University Library of Munich, Germany.
    19. repec:liu:liucej:v:14:y:2017:i:1:p:57-85 is not listed on IDEAS
    20. Hanying Qi, 2019. "A New Literature Review on Financialization," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 7(2), pages 40-50.
    21. Mirjam Büdenbender & Manuel B. Aalbers, 2019. "How Subordinate Financialization Shapes Urban Development: The Rise and Fall of Warsaw's Służewiec Business District," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 43(4), pages 666-684, July.
    22. Di Bucchianico, Stefano, 2019. "The Impact of Financialization on the Rate of Profit: A Discussion," Centro Sraffa Working Papers CSWP36, Centro di Ricerche e Documentazione "Piero Sraffa".
    23. Lorenzo Vidal, 2018. "The politics of creditor–debtor relations and mortgage payment strikes: The case of the Uruguayan Federation of Mutual-Aid Housing Cooperatives," Environment and Planning A, , vol. 50(6), pages 1189-1208, September.
    24. Nora Müller & Ivan Murray & Macià Blázquez-Salom, 2021. "Short-term rentals and the rentier growth coalition in Pollença (Majorca)," Environment and Planning A, , vol. 53(7), pages 1609-1629, October.
    25. Melissa Heil, 2022. "Debtor spaces: Austerity, space, and dispossession in Michigan’s emergency management system," Environment and Planning A, , vol. 54(5), pages 966-983, August.

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