is credited with first bringing the term finance capitalism into prominence.
Rudolf Hilferding is credited with first bringing the term finance capitalism into prominence, with his (1910) study of the links between
German trusts, banks, and monopolies before
World War I. Hilferding's
Finance Capital (
Das Finanzkapital, Vienna: 1910) was "the seminal Marxist analysis of the transformation of competitive and pluralistic 'liberal capitalism' into monopolistic 'finance capital'", and anticipated
Lenin's and
Bukharin's "largely derivative" writings on the subject. Writing in the context of the highly
cartelized economy of late
Austria-Hungary, Hilferding contrasted
monopolistic finance capitalism to the earlier, "competitive" and "buccaneering" capitalism of the earlier
liberal era. The unification of industrial, mercantile and banking interests had defused the earlier liberal capitalist demands for the reduction of the economic role of a
mercantilist state; instead, finance capital sought a "centralized and privilege-dispensing state". Hilferding saw this as part of the inevitable concentration of capital called for by Marxian economics, rather than a deviation from the free market. Whereas, until the 1860s, the demands of capital and of the
bourgeoisie had been, in Hilferding's view,
constitutional demands that had "affected all citizens alike", finance capital increasingly sought state intervention on behalf of the wealth-owning classes; capitalists, rather than the
nobility, now dominated the state. In this, Hilferding saw an opportunity for a path to socialism that was distinct from the one foreseen by Marx: "The socializing function of finance capital facilitates enormously the task of overcoming capitalism. Once finance capital has brought the most importance (
sic) branches of production under its control, it is enough for society, through its conscious executive organ – the state conquered by the working class – to seize finance capital in order to gain immediate control of these branches of production." This would make it unnecessary to expropriate "peasant farms and small businesses" because they would be indirectly socialized, through the socialization of institutions upon which finance capital had already made them dependent. Thus, because a narrow class dominated the economy, socialist revolution could gain wider support by directly expropriating only from that narrow class. In particular, according to Hilferding, societies that had not reached the level of economic maturity anticipated by Marx as making them "ripe" for
socialism could be opened to socialist possibilities. Furthermore, "the policy of finance capital is bound to lead towards war, and hence to the unleashing of revolutionary storms."
John A Hobson, a British economist, contributed to the understanding of finance capitalism in
Imperialism (1902). His work influenced
Lenin’s Imperialism: The highest stage of capitalism (1916). Hilferding's study was subsumed by
Lenin into his wartime analysis of the imperialist relations of the great world powers. Lenin concluded of the banks at that time that they were “the chief nerve centres of the whole capitalist system of national economy”: for the
Comintern, the phrase "dictatorship of finance capitalism" became a regular one. In such a traditional Marxist perspective, finance capitalism is seen as a dialectical outgrowth of
industrial capitalism, and part of the process by which the whole capitalist phase of history comes to an end. In a fashion similar to the views of
Thorstein Veblen, finance capitalism is contrasted with industrial capitalism, where profit is made from the manufacture of goods.
Fernand Braudel would later point to two earlier periods when finance capitalism had emerged in human history—with the Genoese in the 16th century and the Dutch in the 17th and 18th centuries—although at those points it was from commercial capitalism that it developed.
Giovanni Arrighi extended Braudel's analysis to suggest that a predominance of finance capitalism is a recurring, long-term phenomenon, whenever a previous phase of commercial/industrial capitalist expansion reaches a plateau. Whereas by mid-century the industrial corporation had displaced the banking system as the prime economic symbol of success, the late twentieth-century growth of derivatives and of a novel banking model ushered in a new (and historically fourth) period of finance capitalism.
Fredric Jameson has seen the
globalised abstractions of this current phase of financial capitalism as underpinning the cultural manifestations of
postmodernism. ==See also==