The Good of Finance and the Critique of Financialization
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Abstract
This chapter considers the valuable social purposes that finance can in principle serve and how the processes referred to as financialization may undermine the good functioning of finance. When that happens, the practices internal to finance develop according to the logic of internal profit-seeking rather than supporting what the activities in the rest of the economy and society more widely are intended to achieve. The financial system operating globally today can be criticized in three major respects: it hampers economic productivity, undermines distributive justice, and drives ecological irresponsibility. Yet although economic productivity may be compromised by financialization, financialization itself might be seen as an adaptation to problems within the economic system. Hence it may be that the problems associated with financialization cannot satisfactorily be tackled (through steps to improve governance of the monetary system) without addressing the problematic tendencies in the productive economy itself.