Financialization and Class Politics in the Long Downturn

Finance plays a central role in the organization of the global economy. Not only has the FIRE (Finance, Insurance, and Real Estate) sector become increasingly important in the circulation of capital over the past 40 years, but non-financial companies also increasingly deal in open financial markets. While finance has recorded massive profits over this period, overall rates of economic, productivity and wage growth have stagnated since the 1970s as part of a “long downturn” in the capitalist core. In addition, the lives of households and individuals are increasingly mediated by financial markets, especially in the realms of housing, savings for retirement, and healthcare. While prior research has explored the possible causes of “financialization” and its effects on certain outcomes, including inequality, economic growth, debt expansion, and economic crises, the effects of financialization on class politics have been understudied. I use survey data from the United States and United Kingdom to explore how different kinds of exposure to financial markets, in particular employment in the FIRE sector and homeownership, affects individual political attitudes and how such effects differ across employment-based classes. This work sheds light on the changing possibilities for class conflict and class formation in the developed West over the last several decades.