False Economy: Financialization, Crises and Socio-Economic Polarisation

Over the last few decades, a range of profound and widely recognised changes have affected the global economy and global labour markets, driven by a growing imbalance of power between financier dominated capital and labour, a scenario facilitated by the extended availability of labour due to the process of globalisation of itself and, to some degree, by labour supplanting technologies (Standing, 2011, Brynjolfsson and McAfee, 2011). However, arguably, what is less clearly understood is that the financial sector's role in this overall process and, indeed, increasing power rests to no small extent on its capacity to ‘conjure’ wealth from credit creation and, often, opaque practices that are highly abstracted and/or only tenuously connected to real economic activity (Korten, 2009). This shift, and the latter in particular, it is argued, in addition to producing a sequence of financial crises culminating (thus far) with the crash and recession of 2007/8, has fundamental implications for the future shape of the global economy, labour markets and, as a consequence, the life chances and opportunities that potentially confront succeeding generations, assuming that trends continue on their present course. This piece considers these issues with particular emphasis on their implications for the UK and its citizens.