Financialization and vested interests : the irrelevance of self-regulation and financial stability as a public good
International audience ; This study proposes an institutionalist analysis of financialization through the lens of Veblen, built on some peculiar characteristics of money and related financial relations in a market-based capitalist economy. Following the case of the overcapitalization of farmlands, studied by Veblen in The Vested Interests, the analysis argues that modern capitalism is a financialized society dominated by vested interests that rely on financial liberalization-led speculative overcapitalization that often leads to a perverse accumulation process and results in systemic catastrophes. Consequently, one of the major constituent institutions of liberal finance, market-dependent self-regulation, reveals to be unable to deal with society-level issues such as financial stability. This latter must be handled at a systemic level as a public good. Therefore specific public regulation and action mechanisms must be designed to maintain society (and dominant vested-interests) within some viability limits to ensure a smooth functioning of the economy.
