Finance capitalism or financial capitalism is the

subordination of processes of production to the

accumulation of money profits in a financial system.[1]

Financial capitalism is thus a form of capitalism where

the intermediation of saving to investment becomes a
dominant function in the economy, with wider
implications for the political process and social
evolution:[2] since the late 20th century it has become
the predominant force in the global economy,[3]
whether in neoliberal or other form.

Characteristics[edit]
Finance capitalism is characterized by a predominance
of the pursuit of profit from the purchase and sale of, or
investment in, currencies and financial products such
as bonds, stocks, futures and other derivatives. It also
includes the lending of money at interest; and is seen
by Marxist analysts (from whom the term finance
capitalism originally derived) as being exploitative by
supplying income to non-laborers.[5] Academic
defenders of the economic concept of capitalism, such
as Eugen von Bhm-Bawerk, see such profits as part of
the roundabout process by which it grows and hedges
against inevitable risks.[6]

In financial capitalism, financial intermediaries become

large concerns, ranging from banks to investment
firms. Where deposit banks attract savings and lend out
money, while investment banks obtain funds on the
interbank market to re-lend for investment purposes,
investment firms, by comparison, act on behalf of other
concerns, by selling their equities or securities to
investors, for investment purposes.[7]

Social implications[edit]
The meaning of the term financial capitalism goes
beyond the importance of financial intermediation in
the modern capitalist economy. It also encompasses the
significant influence of the wealth holders on the
political process and the aims of economic policy.[8]

Thomas Palley has argued that the 21st century

predominance of finance capital has led to a preference
for speculation Casino Capitalism over investment
for entrepreneurial growth in the global economy.[9]

Historical developments[edit]
Rudolf Hilferding is credited with first bringing the term
finance capitalism into prominence, with his (1910)
study of the links between German trusts, banks, and
monopolies before World War I a study subsumed by
Lenin into his wartime analysis of the imperialist
relations of the great world powers.[10] Lenin
concluded of the banks at that time that they were the
chief nerve centres of the whole capitalist system of
national economy:[11] for the Comintern, the phrase
"dictatorship of finance capitalism"[12] became a
regular one.
In such a traditional Marxist perspective, finance
capitalism is seen as a dialectical outgrowth of
industrial capitalism, and part of the process by which
the whole capitalist phase of history comes to an end.
In a fashion similar to the views of Thorstein Veblen,
finance capitalism is contrasted with industrial
capitalism, where profit is made from the manufacture
of goods.

Braudel would later point to two earlier periods when

finance capitalism had emerged in human history with
the Genoese in the 16th century and the Dutch in the
17th and 18th centuries although at those points it
was from commercial capitalism that it developed.[13]
Giovanni Arrighi extended Braudel's analysis to suggest
that a predominance of finance capitalism is a
recurring, long-term phenomenon, whenever a previous
phase of commercial/industrial capitalist expansion
reaches a plateau.[14]

Whereas by mid-century the industrial corporation had

displaced the banking system as the prime economic
symbol of success,[15] the late twentieth-century
growth of derivatives and of a novel banking model[16]
ushered in a new (and historically fourth) period of
finance capitalism.[17]

Fredric Jameson has seen the globalised abstractions of

this current phase of financial capitalism as
underpinning the cultural manifestations of
postmodernism.[18]
Opponents[edit]
Fascists were vocal in their opposition to finance
capitalism.[19]

C. H. Sisson saw the underlying theme of The Cantos of

Ezra Pound as the depredations of finance capital: the
monstrous aberration of a world in which reality is
distorted, down to a detail never so comprehensively
implicated before, by the pull of a fictitious money.[20]

Gottfried Feder opposed financial capitalism and the

concentration of capital by bankers in Germany.