ABSTRACT
Scholars of diverse theoretical proclivities contrast the increasingly hegemonic influence of contemporary finance with the relatively subservant role of finance during the era of Keynesian welfare state capitalism. Vigorous debates examine how this “financialization” (a term coined-although not defined-to suggest the pervasive influence of finance) creates objectionable economic consequences while inhibiting-and even foreclosing-the pursuit of economic alternatives.1 Much research is emerging to document the many ways in which the finance’s ascendancy creates objectionable economic consequences while inhibiting-and even foreclosing-economic alternatives.1 In contrast to the ubiquity of finance’s influence in contemporary neoliberal globalization, Keynesian welfare state capitalism has been characterized as an era in which finance was comparatively subdued. In this earlier epoch, finance is depicted as the “‘servant’ rather than the ‘master’ in economic and political matters” (Helleiner 1994, 5). While the pursuit of economic alternatives is not synonymous with the embrace of Keynesian welfare state capitalism, heterodox political economy has generally looked favorably on the “golden age” of welfare state capitalism for its vigorous economic growth, relative stability and reduced domestic inequality relative to contemporary norms (see Baker, Epstein and Pollin 1998, 18-19).2 To the extent that the supportive role played by finance created space for the Keynesian economic reform agenda, the formulation of responses to financialization can benefit from a backward glance at the role of finance in Keynesian welfare state capitalism.
