Finance capitalism

A 400-year evolution of modern financial capitalism

Courtyard of the Amsterdam Stock Exchange (or Beurs van Hendrick de Keyser in Dutch), a powerhouse of Dutch capitalism in the 1600s. The birth of the world's first formally listed public company (the Dutch East India Company) and first formal stock exchange (the Amsterdam Stock Exchange), in the 17th-century Dutch Republic, helped usher in a new era of finance capitalism.^[1]^[2]^[3]^[4]^[5]

The trading floor of the New York Stock Exchange (NYSE), a foremost symbol of American finance capitalism, in the early 21st century.

Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system.^[6]

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.^[7] The process of developing this kind of economy is called financialization.

^ Neal, Larry: The Rise of Financial Capitalism: International Capital Markets in the Age of Reason (Studies in Monetary and Financial History). (Cambridge University Press, 1993, ISBN 9780521457385)
^ Goetzmann, William N.; Rouwenhorst, K. Geert: The Origins of Value: The Financial Innovations that Created Modern Capital Markets. (Oxford University Press, 2005, ISBN 978-0195175714))
^ Rothbard, Murray: Making Economic Sense, 2nd edition. (Ludwig von Mises Institute, 2006, ISBN 9781610165907), p. 426. In own words of the Austrian School economist Ludwig von Mises, "A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist."
^ Dore, Ronald: Stock Market Capitalism, Welfare Capitalism: Japan and Germany versus the Anglo-Saxons. (Oxford University Press, 2000, pp. 280, ISBN 978-0199240616)
^ Preda, Alex: Framing Finance: The Boundaries of Markets and Modern Capitalism. (University of Chicago Press, 2009, pp. 328, ISBN 978-0-226-67932-7)
^ "Capitalism" by John Scott and Gordon Marshall in A Dictionary of Sociology Oxford University Press 2005. Oxford Reference Online. Oxford University Press
^ Simon Johnson, "The Quiet Coup", May 2009, The Atlantic.

[1] Neal, Larry: The Rise of Financial Capitalism: International Capital Markets in the Age of Reason (Studies in Monetary and Financial History). (Cambridge University Press, 1993, ISBN 9780521457385)

[2] Goetzmann, William N.; Rouwenhorst, K. Geert: The Origins of Value: The Financial Innovations that Created Modern Capital Markets. (Oxford University Press, 2005, ISBN 978-0195175714))

[3] Rothbard, Murray: Making Economic Sense, 2nd edition. (Ludwig von Mises Institute, 2006, ISBN 9781610165907), p. 426. In own words of the Austrian School economist Ludwig von Mises, "A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist."

[4] Dore, Ronald: Stock Market Capitalism, Welfare Capitalism: Japan and Germany versus the Anglo-Saxons. (Oxford University Press, 2000, pp. 280, ISBN 978-0199240616)

[5] Preda, Alex: Framing Finance: The Boundaries of Markets and Modern Capitalism. (University of Chicago Press, 2009, pp. 328, ISBN 978-0-226-67932-7)

[6] "Capitalism" by John Scott and Gordon Marshall in A Dictionary of Sociology Oxford University Press 2005. Oxford Reference Online. Oxford University Press

[7] Simon Johnson, "The Quiet Coup", May 2009, The Atlantic.

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