The Financial Turn of Corporate America

This chapter examines financialization in the supposedly “nonfinancial” sector and how it results in greater inequality. The last 40 years have seen a turn in which many nonfinancial firms have increased their participation in financial markets. The chapter describes why nonfinancial firms took a financial turn in the late 1960s and early 1970s. It focuses on two aspects of financialization: the advent of nonfinancial firms actively lending and trading in financial markets and the rise of the shareholder-value model in corporate governance. It concludes by identifying the “winners and losers” created by these developments and how financialization has devastated most working Americans.