by Andrew Gunnoe
In the wake of the 2008-09 financial crisis, there has been a steady outpouring of social scientific research examining various aspects of what is now commonly referred to as the “financialization of the US economy.” Although debate continues on the exact definition of this concept, most analysts generally agree that it refers to the increasing importance of the financial sector in broader economy.
The concept of financialization originated during the early 1990s in the works of several political economists – most notably Giovanni Arrighi and Paul Sweezy – in order to describe and theorize the growth of financial forms of accumulation that were then taking place in the capitalist system. Despite some important differences, these theorists shared a common methodological approach that situated financialization within the context of historical capitalism.
Economic sociologists, writing during the same period, began focusing on changes taking place in corporate governance. Neil Fligstein, in particular, developed a dynamic theory of corporate control that described contemporary changes in corporate governance in terms of what he called a “shareholder value conception of control.” This shareholder value conception of control holds that the primary metric of success lie in the ability of managers to increase shareholder returns.