From Finance Capitalism to Financialization

A Cultural and Narrative Perspective on 150 Years of Financial History

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

In this article I interpret 150 years of financial history with a focus on shifts in the role of finance in society. I argue that over time the role of finance has shifted twice from that of servant to that of master of society, and that this process has been driven by sense making through narratives that legitimized and shaped these changes. When finance became a master rent seeking, cultural capture and out-of control financial innovation resulted in financial and social instability. Finance as a master was the characteristic of finance capitalism from around 1900–1931 and of financialization from around 1980 to today. Finance capitalism and financialization were enabled by a dominant narrative that legitimized the power of finance. The shifts in the role of finance happened when crises undermined the meaning of the existing narrative and created for a new narrative able to make sense of the crisis and point society in a new direction. This sense-making process stabilized when a new narrative was established that could explain the crisis and legitimize and shape a new role for finance. The article is based on my presidential address presented at the Business History Conference’s annual meeting in March 2014 in Frankfurt.
Original languageEnglish
JournalEnterprise & Society
Volume15
Issue number4
Pages (from-to)605-642
ISSN1467-2227
Publication statusPublished - 2014

Bibliographical note

There has been a change in databasevendor and therefore CBS Library does no longer have access to the article

Cite this

@article{4069f7d3f5984c7c9ca6d21ee5ef9288,
title = "From Finance Capitalism to Financialization: A Cultural and Narrative Perspective on 150 Years of Financial History",
abstract = "In this article I interpret 150 years of financial history with a focus on shifts in the role of finance in society. I argue that over time the role of finance has shifted twice from that of servant to that of master of society, and that this process has been driven by sense making through narratives that legitimized and shaped these changes. When finance became a master rent seeking, cultural capture and out-of control financial innovation resulted in financial and social instability. Finance as a master was the characteristic of finance capitalism from around 1900–1931 and of financialization from around 1980 to today. Finance capitalism and financialization were enabled by a dominant narrative that legitimized the power of finance. The shifts in the role of finance happened when crises undermined the meaning of the existing narrative and created for a new narrative able to make sense of the crisis and point society in a new direction. This sense-making process stabilized when a new narrative was established that could explain the crisis and legitimize and shape a new role for finance. The article is based on my presidential address presented at the Business History Conference’s annual meeting in March 2014 in Frankfurt.",
author = "Hansen, {Per H.}",
note = "There has been a change in databasevendor and therefore CBS Library does no longer have access to the article",
year = "2014",
language = "English",
volume = "15",
pages = "605--642",
journal = "Enterprise & Society",
issn = "1467-2227",
publisher = "Cambridge University Press",
number = "4",

}

From Finance Capitalism to Financialization : A Cultural and Narrative Perspective on 150 Years of Financial History. / Hansen, Per H.

In: Enterprise & Society, Vol. 15, No. 4, 2014, p. 605-642.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - From Finance Capitalism to Financialization

T2 - A Cultural and Narrative Perspective on 150 Years of Financial History

AU - Hansen, Per H.

N1 - There has been a change in databasevendor and therefore CBS Library does no longer have access to the article

PY - 2014

Y1 - 2014

N2 - In this article I interpret 150 years of financial history with a focus on shifts in the role of finance in society. I argue that over time the role of finance has shifted twice from that of servant to that of master of society, and that this process has been driven by sense making through narratives that legitimized and shaped these changes. When finance became a master rent seeking, cultural capture and out-of control financial innovation resulted in financial and social instability. Finance as a master was the characteristic of finance capitalism from around 1900–1931 and of financialization from around 1980 to today. Finance capitalism and financialization were enabled by a dominant narrative that legitimized the power of finance. The shifts in the role of finance happened when crises undermined the meaning of the existing narrative and created for a new narrative able to make sense of the crisis and point society in a new direction. This sense-making process stabilized when a new narrative was established that could explain the crisis and legitimize and shape a new role for finance. The article is based on my presidential address presented at the Business History Conference’s annual meeting in March 2014 in Frankfurt.

AB - In this article I interpret 150 years of financial history with a focus on shifts in the role of finance in society. I argue that over time the role of finance has shifted twice from that of servant to that of master of society, and that this process has been driven by sense making through narratives that legitimized and shaped these changes. When finance became a master rent seeking, cultural capture and out-of control financial innovation resulted in financial and social instability. Finance as a master was the characteristic of finance capitalism from around 1900–1931 and of financialization from around 1980 to today. Finance capitalism and financialization were enabled by a dominant narrative that legitimized the power of finance. The shifts in the role of finance happened when crises undermined the meaning of the existing narrative and created for a new narrative able to make sense of the crisis and point society in a new direction. This sense-making process stabilized when a new narrative was established that could explain the crisis and legitimize and shape a new role for finance. The article is based on my presidential address presented at the Business History Conference’s annual meeting in March 2014 in Frankfurt.

M3 - Journal article

VL - 15

SP - 605

EP - 642

JO - Enterprise & Society

JF - Enterprise & Society

SN - 1467-2227

IS - 4

ER -