1 Finance

The finance sector is dancing to any music that makes money for the moment.

Finance is not production, but it seems to be involved in every aspect of it.

Indeed, under conditions of financial capital abundance, finance operates not so much as “a system for the allocation of resources” than as “a weapon by which the claims of wealth holders are asserted against the rest of society”.

Piketty himself gets into some murky waters because his “Marshallian apparatus” sees capital “more as a stock of accumulated savings rather than a claim on future output”.

Finance is a way to separate foolish retail investors from their hard-earned savings.

Finance is useful. Financialisation, on the other hand, describes a situation in which ordinarily non- financial activity is seconded into service for finance. When finance escapes its marketplace, it is because it has been allowed, or even solicited, to do so. (Part 2 of this paper has detailed the reasons for, and effects of, financialisation.) Definancialisation, then, refers to the process of restoring ordinary non-financial activity so that it can operate normally, and removing dysfunctional social dependencies on finance. Percy (2021) Universal Basic Prosperity: Sustainable prosperity for the 21st century

Finance is both dumb and dangerous. It is dumb because it can only read numbers, unable to understand, much less assess, difficult social problems or complex business or engineering strategies. And it is dangerous because the people at the helm of financial institutions think they are smarter than they are, which leads them to assume that they should steer the ship…. Financialization has become so deeply rooted that we seem to have unlearned politics. By blindly relying on price tags, we have deprived ourselves of the skills for building consensus and developing effective strategies that avoid imposing the greatest costs on people whose lives are not “priced in.” No one benefits more from this calamity than finance. But those returns cannot last indefinitely. (Katharina Pistor)