Nick Bernards, "Fictions of Financialization: Rethinking Speculation, Exploitation and Twenty-First Century Capitalism" (Pluto Press, 2024)

Nov 18, 2024

Nick Bernards, an Associate Professor of Global Sustainable Development at the University of Warwick, delves into the intricate relationship between financialization and capitalism. He challenges the notion that speculation has replaced production as the main economic driver, emphasizing the critical role of labor in understanding this shift. Bernards also critiques the commodification of natural resources, especially water, and highlights the ethical implications of financial practices in the Global South, pushing for a reevaluation of finance's role in societal development.

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INSIGHT

Challenging the Financialization Narrative

Nick Bernards challenges the dominant financialization narrative, arguing that finance hasn't replaced production.
He emphasizes the need to re-center labor and recognize that speculation and nature's subsumption are inherent to capitalism.

INSIGHT

Finance and Production Dualism

The finance-production dualism overlooks how deeply intertwined they are, especially regarding asset ownership and debt.
Mortgages, for example, tie asset ownership to labor, as repayment relies on continuous wage labor.

INSIGHT

Process View of Finance

A process view of finance emphasizes its integral but contradictory role in capital accumulation, not as a monolithic power block.
Finance is a lever for restructuring capital, with credit relations accentuating the speculative gamble inherent in capital circulation.

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Since the global financial crisis that began in 2008, the role of the financial sector in contemporary capitalism has come under increasing scrutiny. In the global North, the expansion of the financial sector over the last 40 years has paralleled a decline in manufacturing employment and an increase in personal indebtedness, giving rise to the perception that speculation and usury have come to replace production as the engine of economic growth. In the global South, financial liberalization has exacerbated long-standing patterns of boom-and-bust cycles, and the growth of the financial sector has caused anxieties that speculative investments in natural resource extraction, urban real estate, and rural farm land are dispossessing and displacing people rather than improving human development. Overall, the growth of the financial sector has created the perception that we’re entering a new phase in capitalism’s history in which speculation and rent-seeking have displaced production as the engines of economic growth.

My guest today, the political economist Nick Bernards, challenges this narrative. In his new book, Fictions of Financialization: Rethinking Speculation, Exploitation and Twenty-First Century Capitalism (Pluto Press, 2024), Bernards argues that we need to re-center labor in narratives about the expansion of finance, that speculation and the subsumption of nature are always central to capitalism, and that major private-sector financial institutions have actually been reluctant to invest in major development projects in the global south. The main problem with the growth of finance is that it makes more exploitation, displacement, and environmental damage – in short, more capitalism – possible.

Nick Bernards is Associate Professor of Global Sustainable Development at the University of Warwick. He is the author of A Critical History of Poverty Finance (Pluto, 2022) and The Global Governance of Precarity (Routledge, 2018).

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