The financialization of mass wealth, banking crises and politics over the long run

Abstract

The co-evolution of democratic politics and mass, financialized wealth has destabilized highly integrated financial systems and the socio-political underpinnings of neoliberal policy norms at domestic and global levels. Over the long run, it has increased the political pressure on governments to undertake bailouts during major banking crises and, by raising voters’ attentiveness to wealth losses and distributional inequities, has sharply raised the bar for government performance. The result has been more costly bailouts, greater political instability and the sustained politicization of wealth cleavages in crisis aftermaths. We underline the crucial importance and modernity of this phenomenon..