Financialization and Economic Development: A Debate on the Social Efficiency of Modern Finance
By Servaas Storm. 2018
125 citations recorded by the source corpus.
The shift in financial intermediation from banks to financial markets, and the introduction of financial market logic into areas and domains where it was previously absent, have not just led to negative developmental impacts, but also changed the ‘rules of the game’ and facilitated rent†seeking practices of a self†serving global elite. Establishment (financial) economics has helped to depoliticize and legitimize this financialized mode of social regulation by invoking Hayek's epistemological claim that (financial) markets are the only legitimate, reliably welfare†enhancing foundation for a stable social order and economic progress. This article forms the Introduction to a set of 10 articles which assess the logic and consequences of ‘financialization’ across a range of geographic, economic and social scales, and confront Hayek's grotesque claim — deep down, at the level of ‘ideas’, but also by providing ‘knock†out evidence’ on the social inefficiency of a capitalism ‘without compulsions’ for finance. The authors in the Debate challenge the ‘ruling ideas’ and expose how establishment economics has been hiding its reactionary political agenda behind the pretence of scientific neutrality. The financial emperor wears no clothes.
Subfields: Economics and Econometrics, Finance, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/aeda081f4819835f24038bed16ac19afde33adff
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
In Finance
In Sociology and Political Science
Citations in the corpus
- Industrial Policy in the 21st Century (2020, background): “…financialization process has also affected a number of developing countries, as revealed by declining and increasingly volatile trends in investment/GDP ratios (even among fast catching-up economies, like China), wages contraction, and the growing share of finance in GDP (Storm, 2018; UNCTAD, 2016).”