- October 6, 2022
- Posted by: Stratford Team
- Category: Economy
Prior to 1980, the financial industry’s role was to fund business and enable investment. But over the years, a new financial strategy has emerged: financialization. It is defined by University of Iowa history professor Colin Gordon as the “growing scale and profitability of the finance sector relative to the rest of the economy, and the shrinking regulation of its rules and returns.”
It began with deregulation and slowly grew to create changes in tax, trade, regulatory and corporate governance law and policy. Financialization is about shareholder value and short-term profits and is based on speculation, risk and debt to enrich investors. This article will show how financialization and the quest for short-term profits has permeated all American corporations.
The following chart shows that the finance industry grew from 10% of GDP in 1950 to 22% by 2020. The disproportionate growth of finance diverted income from labor…
