Financialization, Class Interests, and Karl Polanyi's Protective Response

Financialization, Class Interests, and Karl Polanyi's Protective Response

Many observers expected a stronger countermovement against neoliberalism following the Great Recession. This article argues that such a protective response failed to materialize because the financialization process has aligned the preferences of labor and rentier classes. The result has been weaker...

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Bibliographic Details
Published in:Journal of economic issues Vol. 53; no. 2; pp. 463 - 470
Main Author: Zalewski, David A.
Format: Journal Article
Language:English
Published: Routledge 03-04-2019
Subjects:
double movement
financial crises
financialization
Karl Polanyi
macroeconomic policy
Online Access:Get full text
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Summary:Many observers expected a stronger countermovement against neoliberalism following the Great Recession. This article argues that such a protective response failed to materialize because the financialization process has aligned the preferences of labor and rentier classes. The result has been weaker support in democracies for expansionary monetary and fiscal policies during the early stages of recessions, which further lowers aggregate spending by increasing uncertainty. Thus, reversing the culture of financialization may be a necessary condition for preventing and responding to financial crises.
ISSN:0021-3624
1946-326X
DOI:10.1080/00213624.2019.1594537