6 - Politics of Financialisation and Inequality: Transforming Global Relations for Inclusive Development
Corresponding Author(s) : Samuel Oloruntoba
Africa Development,
Vol. 40 No. 3 (2015): Africa Development: Special Issue on Transforming Global Relations for a Just World
Abstract
Inequality remains one of the most fundamental challenges of the contemporary world. It has become a global phenomenon which affects the underclass, the deprived and the poor both in the global north and south. Despite the advancement in technology which has fueled economic growth and fostered cross-national mobility of factors of production, inequality and its twin, poverty, remain major issues of inquiry among scholars, consideration for policy makers and concern for the poor. Most studies on inequality have been preoccupied with the economic forces. This article locates the growing degrees of inequality in the world within the global politics of financialisation in which the transnational capitalist class (TCC) adopts a reactionary ideology of neoliberalism to further their interest through the creation of massive fictitious wealth, maintenance of stranglehold on domestic and international policy institutions and spreading of the illogic of the sanctity of the market. I argue that capitalism in its current form is unsustainable for the human society. Consequently, the structure of power that informs and maintains the current order must be transformed to foster inclusive development. Despite the resistance to such transformations by the members of the TCC at the core, the process is inevitable due to the internal contradictions within the system itself, the emergence of new loci of power from different regions of the world and increased revolutionary pressures from below. Overall, the article concludes that there is an inextricable link between financialisation and global inequality.
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- Arrighi, G., 2004, The Long Twentieth Century, London/New York: Verso.
- Braudel, F., 1992, Civilization and Capitalism, 15th -18th Century. Vol. 3. The Perspective of the World, Berkely: University of California Press
- Bresser-Pereira, L., 2010, ‘The Global financial crisis and a new capitalism?’Journal of Post Keynesian Economics, Summer, Vol. 32, No. 4, pp. 499-534.
- Desai, M. and Vreeland, J., 2014, ‘What the New Bank of BRICS is all About? Washington Post, July 17.
- Dore, R., 2008, ‘Financialization of the global economy’, Industrial and Corporate Change, Volume 17, Number 6,pp. 1092-1112.
- Epstein, G., 2005, Financialization and the World Economy (ed.) Edward Elgar: Aldershot.
- Fine, B., 2009, ‘Development as Zombieconomics in the Age of Neo-liberalism’, Third World Quarterly, Vol. 30, No. 5, pp .885-904.
- Fioramonti, L., 2014, ‘Africa Rising: Who benefits from the Continent?’, Perspectives, Vol, 1, February, Heinrich Boll Stiftung.
- Gallagher, K., 2014, Ruling Capital: Emerging Markets and the Reregulation of Cross-Border Finance, New York: Cornell University Press.
- Guillen, A., 2014, ‘Financialization and financial profit’, Brazilian Journal of Political Economy, vol. 34, no. 3 (136), pp. 451-470.
- Harvey, D., 2007, A Brief History of Neoliberalism, Oxford: Oxford University Press.
- Montgomerie, J., 2008, ‘Bridging the critical divide: global finance, financialisation and contemporary capitalism’, Contemporary Politics, Vol. 14, No. 3, pp.233-252.
- International Monetary Fund, 2011, World Economic Outlook, Washington, DC: IMF.
- Marshall, A., 1961, Principles of economics, London and New York: Macmillan for the Royal Economic Society.
- Minsky, P., 1990a, ‘Schumpeter: Finance and Evolution’, in Evolving Technology and Market Structure: Studies in Schumpeterian Economics,Heertje, A. and Perlman, eds, Ann Arbor, MI: St Martin’s Press, pp. 51-73.
- Motsohi, T., 2015, ‘Labour intensive growth strategies key to reduce unemployment’, Mail and Guardian, April 15.
- Nolke, A., Heires, M. and Bieling, H., 2013, ‘Editorial: The Politics of Financialization’, Competition and Change, Vol. 17, No 3, pp.209-18.
- Oloruntoba, S.O., 2015 (forthcoming), ‘Democratization, Disempowerment and Poverty in Nigeria: Exploring the Link between Politics and Poverty in Middle Income Countries in J. May, G. Wright, and E. Breathen, eds, Poverty & Inequality in Middle Income Countries: Policy Achievements, Political Obstacles, London and New York: Zed Books/CROP, University of Bergen, Norway.
- Oloruntoba, S., 2014, ‘African Growth Miracle in Changing Global Order : A Myth or Reality’, in L. Asulieme, and S Francis, eds Selected Themes in African Studies: Political Conflict and Stability, New York: Springer.
- Olukoshi, A., 1998, The Elusive Prince of Denmark: Structural Adjustment Programmes and the Crisis of Governance in Africa, Uppsala: Nordik African Institute.
- Palley, T., 2007, ‘Financialization: What it is and Why it Matters’, Working Paper No. 525. Annandale-on-Hudson, NY: The Levy Economic Institute, December.
- Pareto, V., 1971, Manual of political economy, (Translated by Ann S. Schwier), A. Schwier and A. Page, eds, New York: A. M. Kelley.
- Robinson, W., 2004, A Theory of Global Capitalism: Production, Class and State in a Transnational World, Baltimore and London: Johns Hopkins University Press.
- Rodrik, D., 2001, Global Governance of Trade as if Development Matters, New York: UNDP.
- Soludo, C. and Mkandawire, T., 1999, Our Continent, Our future: African Perspectives on Structural Adjustment Programmes, Ottawa and Eritrea: IDRC an African World Press.
- Stiglitz, J., 2012, The Price of Inequality. How Today’s divided societies endanger our future, New York: W.W. Norton.
- Stiglitz, J., 2010, Free Fall: America, Free Market and the Sinking of the World Economy, New York: W.W Norton.
- Stiglitz, J., 2002, Globalization and Its Discontents, New York: W.W Norton.
- Totten, J., 2014, ‘BRICS New Development Bank threatens the Hegemony of US dollar’, Forbes, 22 December.
- United Nations, 2009, ‘Report of the Commission of Experts on Reform of the International Financial and Monetary System’, available: www.un.org/econcrisis/docs/finalReport_COE, accessed 17 April 2015.
- Wade, R., 2013, ‘The Art of Power Maintenance: How Western States Keep the Lead in Global Institutions’, Challenge, Vol. 56, No. 1, pp. 5-39.
- Wallerstein, I., 1979, The Capitalist World Economy, Cambridge: Cambridge University Press.
- Williamson, J., 1990, ‘The Washington Consensus as Policy Prescriptions for Development’, available: www.iie.com accessed, 18 April.
- Zalewski, D. and Whalen, C.. 2010. ‘Financialization and income Inequality: A Post-Keynesian Institutionalist Analysis’, Journal of Economic Issues, Vol. XLIV, No. 3, September.
- Zwan, N., 2014, ‘State of the Art – Making sense of financialization’, Socio-Economic Review, 12, pp. 99-129.
References
Arrighi, G., 2004, The Long Twentieth Century, London/New York: Verso.
Braudel, F., 1992, Civilization and Capitalism, 15th -18th Century. Vol. 3. The Perspective of the World, Berkely: University of California Press
Bresser-Pereira, L., 2010, ‘The Global financial crisis and a new capitalism?’Journal of Post Keynesian Economics, Summer, Vol. 32, No. 4, pp. 499-534.
Desai, M. and Vreeland, J., 2014, ‘What the New Bank of BRICS is all About? Washington Post, July 17.
Dore, R., 2008, ‘Financialization of the global economy’, Industrial and Corporate Change, Volume 17, Number 6,pp. 1092-1112.
Epstein, G., 2005, Financialization and the World Economy (ed.) Edward Elgar: Aldershot.
Fine, B., 2009, ‘Development as Zombieconomics in the Age of Neo-liberalism’, Third World Quarterly, Vol. 30, No. 5, pp .885-904.
Fioramonti, L., 2014, ‘Africa Rising: Who benefits from the Continent?’, Perspectives, Vol, 1, February, Heinrich Boll Stiftung.
Gallagher, K., 2014, Ruling Capital: Emerging Markets and the Reregulation of Cross-Border Finance, New York: Cornell University Press.
Guillen, A., 2014, ‘Financialization and financial profit’, Brazilian Journal of Political Economy, vol. 34, no. 3 (136), pp. 451-470.
Harvey, D., 2007, A Brief History of Neoliberalism, Oxford: Oxford University Press.
Montgomerie, J., 2008, ‘Bridging the critical divide: global finance, financialisation and contemporary capitalism’, Contemporary Politics, Vol. 14, No. 3, pp.233-252.
International Monetary Fund, 2011, World Economic Outlook, Washington, DC: IMF.
Marshall, A., 1961, Principles of economics, London and New York: Macmillan for the Royal Economic Society.
Minsky, P., 1990a, ‘Schumpeter: Finance and Evolution’, in Evolving Technology and Market Structure: Studies in Schumpeterian Economics,Heertje, A. and Perlman, eds, Ann Arbor, MI: St Martin’s Press, pp. 51-73.
Motsohi, T., 2015, ‘Labour intensive growth strategies key to reduce unemployment’, Mail and Guardian, April 15.
Nolke, A., Heires, M. and Bieling, H., 2013, ‘Editorial: The Politics of Financialization’, Competition and Change, Vol. 17, No 3, pp.209-18.
Oloruntoba, S.O., 2015 (forthcoming), ‘Democratization, Disempowerment and Poverty in Nigeria: Exploring the Link between Politics and Poverty in Middle Income Countries in J. May, G. Wright, and E. Breathen, eds, Poverty & Inequality in Middle Income Countries: Policy Achievements, Political Obstacles, London and New York: Zed Books/CROP, University of Bergen, Norway.
Oloruntoba, S., 2014, ‘African Growth Miracle in Changing Global Order : A Myth or Reality’, in L. Asulieme, and S Francis, eds Selected Themes in African Studies: Political Conflict and Stability, New York: Springer.
Olukoshi, A., 1998, The Elusive Prince of Denmark: Structural Adjustment Programmes and the Crisis of Governance in Africa, Uppsala: Nordik African Institute.
Palley, T., 2007, ‘Financialization: What it is and Why it Matters’, Working Paper No. 525. Annandale-on-Hudson, NY: The Levy Economic Institute, December.
Pareto, V., 1971, Manual of political economy, (Translated by Ann S. Schwier), A. Schwier and A. Page, eds, New York: A. M. Kelley.
Robinson, W., 2004, A Theory of Global Capitalism: Production, Class and State in a Transnational World, Baltimore and London: Johns Hopkins University Press.
Rodrik, D., 2001, Global Governance of Trade as if Development Matters, New York: UNDP.
Soludo, C. and Mkandawire, T., 1999, Our Continent, Our future: African Perspectives on Structural Adjustment Programmes, Ottawa and Eritrea: IDRC an African World Press.
Stiglitz, J., 2012, The Price of Inequality. How Today’s divided societies endanger our future, New York: W.W. Norton.
Stiglitz, J., 2010, Free Fall: America, Free Market and the Sinking of the World Economy, New York: W.W Norton.
Stiglitz, J., 2002, Globalization and Its Discontents, New York: W.W Norton.
Totten, J., 2014, ‘BRICS New Development Bank threatens the Hegemony of US dollar’, Forbes, 22 December.
United Nations, 2009, ‘Report of the Commission of Experts on Reform of the International Financial and Monetary System’, available: www.un.org/econcrisis/docs/finalReport_COE, accessed 17 April 2015.
Wade, R., 2013, ‘The Art of Power Maintenance: How Western States Keep the Lead in Global Institutions’, Challenge, Vol. 56, No. 1, pp. 5-39.
Wallerstein, I., 1979, The Capitalist World Economy, Cambridge: Cambridge University Press.
Williamson, J., 1990, ‘The Washington Consensus as Policy Prescriptions for Development’, available: www.iie.com accessed, 18 April.
Zalewski, D. and Whalen, C.. 2010. ‘Financialization and income Inequality: A Post-Keynesian Institutionalist Analysis’, Journal of Economic Issues, Vol. XLIV, No. 3, September.
Zwan, N., 2014, ‘State of the Art – Making sense of financialization’, Socio-Economic Review, 12, pp. 99-129.