Definition
Financialized capitalism is the form capitalism has taken since roughly the 1980s, in which finance moves from a supporting role to the centre of profit-making. The share of GDP and corporate profits derived from financial services rises sharply; non-financial firms generate growing portions of their income from financial activities; households are drawn into financial markets through mortgages, pensions, and consumer credit.
It is not a wholly new system but a re-weighting. Industrial production continues, but the dominant logic shifts toward asset valuation, leverage, and the imperative of "shareholder value." Firms are increasingly managed as portfolios of assets to be bought, restructured, and sold rather than as durable productive organisations.
Why it matters
Where it shows up
Financialisation reorganises everyday life as much as corporate balance sheets. A worker's retirement security depends on pension fund returns; a homeowner's wealth tracks housing market prices; a student's adult earnings are partly mortgaged to loan servicers. Central bank decisions about interest rates ripple through these arrangements with unusual speed.
The 2008 global financial crisis is financialised capitalism's defining episode: it began in US subprime mortgages but propagated globally through securitised debt instruments, threatening to topple banks across the world economy. It exposed both the system's interconnection and its dependence on state intervention when crisis hits.