The political economy of financialization: possible implications for labor

Abstract

Financialization involves the predominance of markets and other financial institutions as the form of definition, management and realization of wealth in contemporary capitalism. The process of financialization of the economy was made possible by an underlying process of flexibility, which manifested itself in a new form of regulation as well as in the advent of new financial instruments, notably securitization and derivatives. This led to an unprecedented increase in the degree of freedom, volume and complexity of the capital movement, bringing competition to another level. This has led to changes in both the firm’s governance and labor relations. This article aims to identify and explore possible causal relationships between changes in finances and changes in living and working conditions. Flexibility in the financial and credit markets, although it should not be considered as a single cause, played a significant part in the advent of flexibility at work. The different considerations discussed here, albeit under different perspectives, point to a deterioration in the conditions of sale of the commodity “labor force” due to the intensified competitiveness to the valorization of capital in the financial sphere.