Current Scholarship
Introduction: The Structural Power of Finance Meets Financialization

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Florence Dafe, Sandy Brian Hager, Natalya Naqvi, and Leon Wansleben

This special issue of Politics & Society titled “The Structural Power of Finance Meets Financialization” features an introduction by Florence Dafe, Sandy Brian Hager, Natalya Naqvi, and Leon Wansleben and five articles that were presented as part of the workshop series held at and funded by the Department of International Relations, London School of Economics, November 2019, organized by Natalya Naqvi and Florence Dafe, and at the Max Planck Institute, Cologne, June 2021, organized by Florence Dafe, Sandy Brian Hager, Natalya Naqvi, and Leon Wansleben.

How do we theorize and analyze the structural power of finance when global capitalism itself undergoes constant and profound structural transformation? The literature continues to assume that the source of financial structural power is its unique ability to provide credit to the real economy, playing a crucial role in meeting the investment imperative. But recent research documents that most financial market activities no longer facilitate productive investment and can even be a drag on economic development. If the financial sector’s primary role is not to support productive investments, then on what basis does it continue to hold structural power? The contributions to this special issue engage with how decades of financialization have transformed the basis of structural power toward alternative functions that have gone unnoticed in the existing literature. These include household and real estate lending that fuels consumption-led growth, concentration and expansion of financial institutions as tools of geo-economic strategy, financing current account deficits that facilitate global imbalances, and wealth preservation that bolsters inequality.

Florence Dafe et. al., “Introduction: The Structural Power of Finance Meets Financialization,” special issue, Politics & Society 50, no. 4 (December 2022):523–542, (article), (special issue).