the process whereby the financial industry becomes more prominent
Financialization, as we now call this process, was the critical by-product of maintaining and enhancing US dominance on the back of increasing trade imbalances and in the interest of financing America's ever-expanding twin deficits.
In general, financialization describes the increasing role of financial motives, financial markets, financial actors, and financial institutions in the operation of domestic and international economies. Second, from a more technical or specific perspective, financialization is a pattern of capitalist accumulation that relies increasingly on profit-making through financial channels, even for capitalists that are not themselves financial firms.
[...] concentrate on profits in the financial sector. Today we speak of such "financialization" as though it were an invention of the 1970s
As of the 1980s, deregulation of U.S. financial markets had abolished the restrictions on the private production and marketization of money devised after the Great Depression. ‘Financialization’, as the process came to be known, seemed the last remaining way to restore growth and profitability to the economy of the overextended hegemon of global capitalism.
It is then that the systemic cycle of accumulation enters into its ‘financial’ phase. This phase corresponds to what we above called ‘financialization’ – that is, capital’s tendency as a result of the fall in profit rates to take refuge in the financial sphere and speculation.
Neo-Keynesian success brought its own downfall in over-accumulation, over-production, and sundry other dislocations: OPEC price hikes in oil, stagflation, the beginnings of financialization, the transfer of production to low-wage areas, the end of social compromise and the appearance of the disastrous, neoliberal solution of market fundamentalism that would reach its peak in the 1980s and 90s.