What does Chomsky mean, "financialize the economy?"

raccoon

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Wed Apr-14-10 09:14 AM
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What does Chomsky mean, "financialize the economy?"

"�For over 30 years, real incomes have stagnated or declined. This is in large part the consequence of the decision in the 1970s to financialize the economy.�"

http://readersupportednews.org/off-site-opinion-section/72-politics/1489-chomsky-warns-of-risk-of-fascism-in-america

If anybody can point me to a link, article, book, whatever, I'd appreciate it.

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Eric J in MN

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Wed Apr-14-10 09:20 AM
Response to Original message

1. It means less manufacturing in the US and bigger banks.

Edited on Wed Apr-14-10 09:22 AM by Eric J in MN

Though I associate the change more with Reagan and the 1980s.

"Financialize" refers to the percentage of the US economy based on financial services as opposed to manufacturing, farming, etc.

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dmallind

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Wed Apr-14-10 09:53 AM
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2. I suspect it is the closing of the gold window under Nixon

Edited on Wed Apr-14-10 09:54 AM by dmallind

Where monetary policy was allowed to be freely adjusted. If so it's a silly notion.

Oh and BTW we manufacture more in the US than we did then. US manufacturing output has risen consistently since the 70s and 60s.

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Brickbat

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Wed Apr-14-10 09:55 AM
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3. Guessing without seeing the context, I'm assuming it's the staking of the country's economy on the

house of cards known as Wall Street -- the betting for and against different kinds of sales and results -- instead of manufacturing, innovation, education and a strong middle class.

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lurky

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Wed Apr-14-10 10:49 AM
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4. Here:

http://en.wikipedia.org/wiki/Financialization

If I understand it, everything is turned into a financial instrument and speculation dominates the economy rather than industry.

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