Reflection on financialization

Image: Tiger Lily


The well understood idea of ​​financialization contributes a lot to the understanding of the current functioning of capitalism


For more than three decades, the notion of “financialization” (or alternative terms, such as a “financialized” or “financial-dominant” regime) has been debated, both in terms of its pertinence or not and its precise meaning and conceptualization. – inside and outside Marxism, but always in a critical way.

It was a pleasant surprise to read, on the site the earth is round, an article by renowned professor Eleutério FS Prado that returns to this debate, praising my recently published book (precisely introducing the idea of ​​financialization).[I] The title of the article is “A critique of the idea of ​​financialization”, which seems incoherent at first glance. However, it should be borne in mind that, despite a certain play on words (since the article has a critical tone in several aspects), the aforementioned “criticism” is in the academic sense, of “thorough examination” and not of “unfavorable judgment”. – note that this is a “criticism of” and not “criticism of” the idea of ​​financialization. This initiative by Eleutério Prado encouraged me to continue my reflection on the theme, commenting on points in his text.



First, I agree with the Michael Roberts quote provided that “the term [“financialization”] is used so broadly that it provides very little extra clarification; or is specified in such a way that it is theoretically and empirically wrong”. So much so that, already in the presentation of my book, I remove what I consider to be misconceptions about financialization – taken up by Eleutério Prado, so there is no need to repeat them here. Sometimes it is more important to clarify what “financialization” is not, as we can see from what follows.

Still at the beginning of his text, Eleutério Prado cites authors “such as Michael Roberts, who distrust the real meaning of this term [“financialization”]. For, it seems that he attributes the structural crisis of capitalism to a certain anomaly produced by a reactionary economic policy, promoted by the dominant classes, and not to the inherent contradictions of capitalism itself”. Immediately before that, Prado also cites a passage from my book, which may suggest that this criticism would apply to my thinking, but this is not the case.

“A reactionary economic policy, promoted by the dominant classes” even occurred, because the class struggle and between fractions of the capitalist class exists. However, it took place precisely in the context of the intensification of these “inherent contradictions of capitalism itself”: as he himself states in the previous paragraph, for me, financialization is fundamentally a product of the contradictions of capitalism, especially the crisis of overaccumulation of capital. Thus, it should be emphasized that, by stating that financialization was “associated” with the advent of neoliberalism, I am not suggesting that it was caused by the latter, but that the development of both phenomena occurred in the same wake of the overaccumulation of capital, one boosting the other. That is, financialization meant the vertiginous expansion of the financial sphere (multiplication of financial securities, that is, of fictitious capital), since capital no longer had the same conditions of profitability as before.

Next, Mavroudeas' expounded proposition, that “the financialization hypothesis considers that money capital becomes totally independent of productive capital”, is not correct. Either Mavroudeas misunderstood the “financialization hypothesis” or relied on a misguided version of it, as it does not depend on this formulation. In fact, in Marx's work, there is nothing that authorizes the idea of ​​creating new value outside the productive (“real”) sphere. Some authors, including François Chesnais, speak of “relative autonomy of the financial sphere”,[ii] where “relative” is an attempt (perhaps not so successful) to express the dialectic between the appearance of autonomy and the de facto dependence of the financial sphere on the productive one.

In this sense, regarding another statement by Mavroudeas that “the “real” economy (the producing sector) is the center of the economic circuit and the financial system is a necessary but subordinate activity”, it is necessary to define the meaning of “subordinate”. The financial sphere is “materially” subordinate, since without “real” production it cannot exist, since it does not create value. However, this does not mean that financial logic cannot stand out in the conduct of companies and that financial markets cannot increasingly condition the functioning of capitalism due to the importance they have acquired. And even this non-dialectical division between the financial and productive spheres is somewhat problematic, since the circulation of “capital in general” passes through both.

Eleutério Prado also mentions the two currents on financialization defined (and criticized) by Mavroudeas and Subasat. One of them is that of long-term cycles. Although it brings important contributions, he also disagrees that the current financialization process is just another phase of “financial expansion”[iii] like those that occurred before, because it has some specific characteristics: its persistence, its degree of technical sophistication (which allowed enormous growth and strengthening of financial markets), the profound change in the world monetary system with the abandonment of the gold standard, the difficulty in start another great cycle of expansion of capitalism.

As for the other current, the aforementioned authors state that this “option ends up assuming that capitalism has devolved into a form of pre-capitalist surplus extraction, such as in the odd hypothesis that has been called techno-feudalism”. I see no direct relationship between what this current defends[iv] and an “involutionist” view of capitalism. In any case, like Eleutério Prado, I don't believe that either; on the contrary, as previously stated, financialization is a product of the very “evolve” of capitalism, of the unfolding and intensification of its contradictions.

In this sense, the hypothesis of techno-feudalism has not yet convinced me of its theoretical consistency either – although, politically, it may have some effectiveness by appealing to “techno” and by accusing capitalism of becoming “archaic”, since feudalism It's not usually very popular. Again, therefore, it seems to me that it is either a misunderstanding, on the part of the authors, of the meaning of the characteristics pointed out by this current, or else a mistaken development based on them.



Returning to the considerations about my book, Eleutério Prado recognizes that I do not belong to any of these criticized currents, insofar as I do not endorse the idea of ​​involution/techno-feudalism nor of the predominance or autonomy of the financial sphere in the sense of replacing the productive sphere in new value generation. We are therefore in agreement so far. It is therefore appropriate to comment on the supposed “incoherence” he pointed out in Chesnais and in my book. Eleutério Prado suggests the term “jurism”, as opposed to “renting”, to refer to the currently dominant way of appropriating surplus value, in order to show his discomfort with the latter. In my view, the important thing is to know what we are talking about, defining the terms well.

As far as I am concerned, I do not use “rentism” in the negative moral sense or in a restricted way to “land rent”, but because it is the consecrated way of referring to fractions of surplus value distributed on a regular basis to different “external” agents. to the productive process itself: in the works of Marx, it is understood that, in addition to the profit (which remains with the industrial capitalist), the land rent is paid to the landowner and the interest (and now also the dividend) is destined to it. to the money capitalist for the loan of his capital (or for the ownership of the share of the enterprise).

In this sense, I understand Eleutério Prado's concern not to give rise to the aforementioned "involutionist" theses, but I do not equate land rent (a perhaps "archaic" form of appropriation based on land monopoly) to interest (whose origin is ancient, plays a central role in this “evolution” of capitalism).

On the other hand, it must be recognized that Eleutério Prado is consistent with the statements he makes at the end of his text. If what we see today is the growing collectivization of capital ownership via joint stock companies, it would make no sense to think of agents “external” to production in this case, as these capitalists increasingly become shareholders. Now, the very idea of ​​financialization contemplates this phenomenon of “internalization” of what is external, as François Chesnais says, represented by the figure of the shareholder.

This is different from the lender, who lends his capital at a stipulated interest rate and has to wait for the reproduction cycle to get it back; he is the owner of the company himself (although he is not the administrator) and is able to demand the highest possible dividend payment in the shortest possible time, in addition to being able to easily disengage from the stock if the results are not to his liking. In principle, therefore, I would not be averse to the term “jurism”, but it would have to be a “dividendism-jurism”, to be exact. Furthermore, if we replace the figure of the “rentier” with that of the “jurist”, we will create a quarrel with the law associations…

In short, the well-understood idea of ​​financialization goes a long way toward understanding how capitalism works today. The danger lies in adopting wrong propositions or developments, as Eleutério Prado demonstrates and for which he warns, as well as fetishizing the phenomenon, conceiving it as something given and immutable.

*Ilan Lapyda is a doctor in sociology from USP and author of Introduction to financialization: David Harvey, François Chesnais and contemporary capitalism (CEFA Editorial).


[I] LAPYDA, Ilan. Introduction to financialization: David Harvey, François Chesnais and contemporary capitalism. São Paulo: CEFA Editorial, 2023 (

[ii] CHESNAIS, François. (ed.). Globalized finance: social and political roots, configuration, consequences. Sao Paulo: Boitempo. 2005, p. 45 (

[iii] ARRIGHI, Giovanni. The long twentieth century. Rio de Janeiro: Counterpoint. São Paulo: Ed. UNESP. 1996 (

[iv] According to Eleutério Prado, it “emphasizes that four characteristics would demarcate the transformation of industrial capitalism into a capitalism dominated by finance: (i) the financial sector increased and became preponderant in the GDP; (ii) a financialization of non-financial corporations came about, which began to serve the interests of absent investors – and no longer to expand production and economic growth; (iii) as never before, there has been a great diffusion of new financial instruments, such as derivatives, parallel banks, multiple funds, etc. which fostered speculation and volatility and (iv) economic growth came to depend on indebtedness by families of all social classes.”

the earth is round exists thanks to our readers and supporters.
Help us keep this idea going.

See this link for all articles


  • About artificial ignoranceEugenio Bucci 15/06/2024 By EUGÊNIO BUCCI: Today, ignorance is not an uninhabited house, devoid of ideas, but a building full of disjointed nonsense, a goo of heavy density that occupies every space
  • Franz Kafka, libertarian spiritFranz Kafka, libertarian spirit 13/06/2024 By MICHAEL LÖWY: Notes on the occasion of the centenary of the death of the Czech writer
  • The society of dead historyclassroom similar to the one in usp history 16/06/2024 By ANTONIO SIMPLICIO DE ALMEIDA NETO: The subject of history was inserted into a generic area called Applied Human and Social Sciences and, finally, disappeared into the curricular drain
  • Strengthen PROIFESclassroom 54mf 15/06/2024 By GIL VICENTE REIS DE FIGUEIREDO: The attempt to cancel PROIFES and, at the same time, turn a blind eye to the errors of ANDES management is a disservice to the construction of a new representation scenario
  • Letter to the presidentSquid 59mk,g 18/06/2024 By FRANCISCO ALVES, JOÃO DOS REIS SILVA JÚNIOR & VALDEMAR SGUISSARDI: “We completely agree with Your Excellency. when he states and reaffirms that 'Education is an investment, not an expense'”
  • A look at the 2024 federal strikelula haddad 20/06/2024 By IAEL DE SOUZA: A few months into government, Lula's electoral fraud was proven, accompanied by his “faithful henchman”, the Minister of Finance, Fernando Haddad
  • Volodymyr Zelensky's trapstar wars 15/06/2024 By HUGO DIONÍSIO: Whether Zelensky gets his glass full – the US entry into the war – or his glass half full – Europe’s entry into the war – either solution is devastating for our lives
  • PEC-65: independence or patrimonialism in the Central Bank?Campos Neto Trojan Horse 17/06/2024 By PEDRO PAULO ZAHLUTH BASTOS: What Roberto Campos Neto proposes is the constitutional amendment of free lunch for the future elite of the Central Bank
  • Hélio Pellegrino, 100 years oldHelio Pellegrino 14/06/2024 By FERNANDA CANAVÊZ & FERNANDA PACHECO-FERREIRA: In the vast elaboration of the psychoanalyst and writer, there is still an aspect little explored: the class struggle in psychoanalysis
  • Introduction to “Capital” by Karl Marxred triangular culture 02/06/2024 By ELEUTÉRIO FS PRADO: Commentary on the book by Michael Heinrich