Large Industrial Firms and the Rise of Finance in Late Twentieth-Century America

Abstract

This article examines the financialization of the U.S. economy in the late twentieth century, with a focus on the role of industrial firms in the transition. This article explores how American industrial leaders’ reactions to the economic shocks of the 1970s influenced the rise of finance in the United States. Specifically, this article analyzes how the restrictive postwar financial regime gave way to a new liberal one, often represented by two vital shifts in the 1970s: the resurgence of global finance and the turn to austerity. It also demonstrates how leading industrialists’ preferences toward particular financial policies gave rise to different coalitions that affected policy orientation. It contributes to the financialization literature by clarifying the distinctive role of industrialists in American financialization. Furthermore, by situating financialization in the broader socioeconomic context, this article highlights the intersections of two important changes in the history of U.S. capitalism: financialization and the disintegration of the New Deal regime.