Uneven Geographies of Financial Control: Financialization as the New Regime of Property Relations

Keywords: financialization, finance, US, computational methods, capitalism
Session Type: Virtual Paper
Day: Wednesday
Session Start / End Time: 4/7/2021 11:10 AM (Pacific Time (US & Canada)) - 4/7/2021 12:25 PM (Pacific Time (US & Canada))
Room: Virtual 32

Abstract

Since the 1980s, finance has been seen to have grown disproportionately in power and influence in contrast to the productive economy in the United States. One of the most significant yet not sufficiently understood characteristics of this financial hegemony has been the extent to which American capital is increasingly owned and managed by financial intermediaries—a phenomenon defined here as the financialization of capital ownership. By examining three distinct US-centric datasets provided by the Federal Reserve, Thomson Reuters, and the IRS, the paper documents how since the end of World War II, the share of US capital directly owned by the US financial sector has grown from 3 percent to approximately 60 percent. Expanding on the historical analysis of US shareholders, this paper examines the financialization of capital ownership in other countries. Relying on an extensive global corporate ownership dataset provided by the Orbis database, featuring 6.7 million ownership ties of 2.9 million firms around the world that altogether account for $114.4 trillion in owned equity, the paper illustrates the extent to which the United States exhibits unparalleled levels of financialized capital ownership. In differentiating the “finance capitalism” of the twentieth century from the “new finance capitalism” of the twenty-first century, this paper aims to explain how the influence exerted by the financier class in the United States has changed from indirect forms of control, exerted by the financial sector as a provider of credit, to direct forms of control attained through historically unseen levels of capital ownership.