Bridging the critical divide: global finance, financialisation and contemporary capitalism

Abstract

This article is about two distinct frameworks that evaluate why finance matters in contemporary capitalism. The International Political Economy (IPE) literature on global finance analyses the geopolitical dynamics of financial markets where finance matters because it is an integral element of power in the global political economy. The newer literature on financialisation offers an account of present day capitalist dynamics where individuals, firms and the macro-economy are increasingly mediated by new relationships with financial markets. These two frameworks share a common ground: both reject the mainstream orthodoxy of neo-classical economics and positivist methodology. Essentially, the global finance and financialisation frameworks are different sides of the same critical coin. This article offers a sympathetic critique of both the global finance and financialisation bodies of literature. I argue that greater engagement between the literatures would provide new fruitful avenues of research.

Keywords:

• financialisation
• global finance
• contemporary capitalism
• political economy
• cultural economy

Additional information

Notes on contributors

Johnna Montgomerie

Johnna Montgomerie received her DPhil from the University of Sussex and is currently a research fellow at the Centre for Research on Socio-Cultural Change (CRESC) at the University of Manchester. Her recent articles include “Financialization of the American Credit Card Industry” in Competition and Change 10 (3), 301–319 and “Giving Credit Where It's Due: public policy and household indebtedness in the United States, the United Kingdom and Canada.” Policy and Society 25 (3), 109–142 and an upcoming article in New Political Economy. She is currently working on a book about financial inequality in America.