Financialization as symptom — Chris Dillow

Which is where financialization comes in. The defining event on the road to financialization in the 80s was not big bang: at the time, this was seen as merely the ending of a restrictive practice rather than the start of the creation of global investment banks. Instead, it was the credit liberalization of the early 80s, which made mortgages and consumer credit much easier to get.

This did not merely increase the activity and hence profits of lenders: note the big rise in financial profits in the mid-80s. It did something even better for capitalism. In allowing workers to borrow more it raised C – W and thus boosted profits: the household savings ratio slumped in the 80s.

In this sense, financialization was a solution to a crisis in the real capitalist economy – albeit one discovered by accident.

This was the start of turning consumption into a source of rent similar to investment. It was "capitalizing" the consumer. The leaders here were the Big Banks through credit liberalization. Now Big Tech has gone further in also commodifying the consumer.

Stumbling and Mumbling
Financialization as symptom
Chris Dillow | Investors Chronicle