Although my focus is on the financialization of the past four decades, there have been earlier periods of financialization. The processes involved in financialization during the past 40 years have taken many forms, and although these waves of financialization, as in earlier financializations, have taken shape in the western industrialized countries, they have subsequently spread to most countries around the globe. For western industrialized countries, the quarter of a century ending in 1973 has often been portrayed as the “golden age of capitalism” (Marglin & Schor 1992), with relatively high rates of economic growth and low unemployment, and a Keynesian welfare state policy framework. The period since circa 1980 has generally been one of intense financialization and of globalization. It is also often described as a neoliberal era in social, political and economic terms.

There is a great deal of debate about the scope and definition of each of the three terms – financialization, globalization and neoliberalism. They were by no means new phenomena and each has a long history. There have been intensifications of financialization and globalization in the decades after 1980, although as considered below, with some slowing down or even reversal since the GFCs. Agendas of deregulation, privatization and marketization, which are closely associated with doctrines of neoliberalism, have been replacing the social democratic Keynesian agendas of the earlier postwar years. Epstein (2005: 3), for example, argued that, since circa 1980, “the economies of the world have undergone profound transformations. Some of the dimensions of this altered reality are clear: the role of government has diminished while that of markets has increased: economic transactions between countries have substantially risen; domestic and international financial transactions have grown by leaps and bounds. … In short, this changing landscape has been characterized by the rise of neoliberalism, globalization and financialization”.

Financialization has been a near-global phenomenon over the past four decades or so. Its dimensions in the industrialized economies of western Europe and North America are elaborated on in Chapter 4, and the features of financialization in emerging markets and developing economies are outlined in Chapter 5. The purpose there is to indicate the trends of financialization and how they compare with those of the industrialized countries.