Madness and Civilization: Global Financial Capitalism and the Antipoverty Discourse
The late twentieth century saw the emergence of a new kind of society. A capitalism dominated by huge corporations producing commodities and services was replaced by a capitalism dominated by huge corporations controlling access to investment capital. In the new “global finance capitalism”: finance is the leading fraction of capital; governments and global governance institutions are integral parts of the financial apparatus, rescuing finance and even merging with it at times of crisis; financial capitalism normally operates on a global scale; and thus finance capitalism takes the total form of a political-economic-ethical-cultural and spatial system. The term “finance capital” was coined originally by the Austrian Marxist Rudolf Hilferding (1981). He meant by the term an increasing concentration and centralization of capital, in the institutional form of corporations, cartels, trusts and banks, that organized the export of surplus capital from the industrial countries, especially Britain, in search of higher rates of profit elsewhere. More recently, David Harvey (2005) argued that, in capitalist enterprises, ownership (share holders) and management (CEOs) have fused together, as upper management is paid with stock options. Increasing the price of the stock becomes the objective of operating the corporation. And productive corporations, diversifying into credit, insurance and real estate, becoming increasingly financial in orientation. This is connected to a burst of activity in an increasingly unregulated, and rapidly globalizing, financial sector in “the financialization of everything”, meaning the control by finance of all other areas of the global economy. Nation states, individually (as with the US), and collectively (as with the G7/8), have to support financial institutions, and the integrity of the financial order, for that is what keeps economies going (witness the massive intervention of the central banks in the financial crisis of 2007-8). Within this re-arranged capitalist system, Harvey finds the power of shareholders declining, while that of CEOs, key members of corporate boards, and financiers increases. The tremendous economic power of this new entrepreneurial-financial class enables vast influence over the political process (Harvey 2005: 31-8).