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Financialization and vested interests : the irrelevance of self-regulation and financial stability as a public good

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  • Faruk Ülgen

    (CREG - Centre de recherche en économie de Grenoble - UGA [2016-2019] - Université Grenoble Alpes [2016-2019])

Abstract

This study proposes an institutionalist analysis of financialization through the lens of Veblen, built on some peculiar characteristics of money and related financial relations in a market-based capitalist economy. Following the case of the overcapitalization of farmlands, studied by Veblen in The Vested Interests, the analysis argues that modern capitalism is a financialized society dominated by vested interests that rely on financial liberalization-led speculative overcapitalization that often leads to a perverse accumulation process and results in systemic catastrophes. Consequently, one of the major constituent institutions of liberal finance, market-dependent self-regulation, reveals to be unable to deal with society-level issues such as financial stability. This latter must be handled at a systemic level as a public good. Therefore specific public regulation and action mechanisms must be designed to maintain society (and dominant vested-interests) within some viability limits to ensure a smooth functioning of the economy.

Suggested Citation

  • Faruk Ülgen, 2017. "Financialization and vested interests : the irrelevance of self-regulation and financial stability as a public good," Post-Print halshs-02002415, HAL.
    • Handle: RePEc:hal:journl:halshs-02002415
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02002415
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