Dillow on financialization

"Financialization is the result of a shift away from low-profit activities in the real economy."

- Chris Dillow in The trouble with capitalism

I think so, too. These days, or "since the 1980s" maybe, financialization is a shift away from the low-profit activity of the nonfinancial economy.

But I also think the activity in the nonfinancial economy became low-profit activity because of the growth of finance in the years before 1980. When you add this afterthought to Dillow's statement, things start to make sense.

Outside the financial sector, finance is a cost.

Dillow's topic is the decline of profits:

Many of the faults Martin [Wolf] discusses have their origin in a declining rate of profit – a decline which became acute in the 1970s but which was never wholly reversed.

The causes of this decline, causes that Dillow touches on, go back to the 1960s.

So do the causes that he doesn't touch on -- the growth of finance, the growth of financial cost, and the fact that finance is At Least Largely (ALL) nonproductive.

(That's my idea of funny, that "(ALL)" there at the end.)