FUSION · The effects of financial capital accumulation on employment and wealth distribution
Horizon 2020 — Marie Skłodowska-Curie Actions
- Duration
- 2017-07-03 → 2018-07-02
- EU contribution
- €97,727
- Participants
- 1
- Scheme
- MSCA-IF
Lines connect the coordinator with its partners.
Results in brief
The effects of financial capital accumulation on employment and wealth distribution
What is the problem/issue being addressed? The FUSION project analyses the relationship between the logic of monetary accumulation stemming from the financial sphere and declining working conditions and widening social inequality, which is affecting large segments of the European population. I have focused specifically in the relationship between non-financial corporations and the financial system. I have hypothesized that financialisation is manifested in a change in the behaviour of non-financial corporations who now shift their business model from a strategy of ‘retain and reinvest’ to one based on ‘downsize and distribute’, a shift that has been proven for the US case. I have tested this hypothesis for the UK and Spanish cases, with the aim of identifying different models of financialisation in productive firms and its consequences on employment and income inequality. Why is it important for society? Financialisation is the term used in the scholarly literature to name the contemporary nature of capitalism. Despite financialisation not being a new phenomena, the current expansion of the financial sector is intensifying the instability of the whole economy system and its outcomes. Importantly, the financialised orientation of non-financial corporations is affecting their capacity to create employment as they are now diverting monetary resources from investment in gross fixed capital formation to the acquisition of financial assets. Likewise, financialisation is associated with the growth of labour income inequality, seen through a negative relationship between the growth of distributed dividends and the decrease of salary expenses. What are the overall objectives? The objective of the FUSION project is to analyse how the growing importance of the financial sector as a source of profit is influencing the demand for employment and the working conditions in the cases of the UK and Spain. This has allowed the FUSION team to analyse financialisation models in Europe, comparing the ‘Anglo-American’ (UK) and ‘Southern European’ (Spain) ‘varieties of capitalism’, thereby making an innovative contribution to the fields of Economic Sociology and Socio-Economics. This project also aims to examine the role played by the contested nature of money in the process of capital accumulation and wealth distribution in order to evaluate the potential of new monetary forms to prevent dual stratification processes caused by the expansion of the financial sector and its consequences on the productive firms.
Data: CORDIS, © European Union
Project objective
This project will analyse the relationship between the logic of financial accumulation and declining working conditions as well as the widening breach in social inequality affecting large segments of the European population. Studies carried out to date have failed to provide a systematic explanation for the relationship between financialisation, employment and wealth distribution. This project will contribute to filling this knowledge gap in the comparative cases of Spain and the UK, two different poles in terms of Eurozone economies.In the case of Spain, the ER’s (Dr Matilde Massó) current research on financialisation shows a widespread trend whereby financial capital gains of non-financial corporations increase not only when net incomes do, but also when the latter fall within a context of a major economic crisis and high unemployment rates. The PI (Dr Mark Davis) has worked for the Council of Europe, contributing expertise to the Charter of Shared Social Responsibilities. His recent research on democratic finance shows the importance of money as a public resource that allows for equivalences to be drawn between goods and services of varying types, and the distribution of wealth in contemporary capitalist societies. This project, hosted by one of the foremost centres of Economic Sociology in Europe (The Bauman Institute of the University of Leeds), brings together both approaches in order to conduct innovative research into the analysis of the effects that financial accumulation has on the field of employment. The project will boost the ER’s academic career progression as she aims to become a leading world expert in Economic Sociology. The innovative approach of this project lies in the interdisciplinary viewpoint adopted in the analysis of the causes of unemployment and inequality. The exploration of new money-currency systems allowing for more balanced wealth distribution may have the potential for significant long-term socioeconomic impact.
Original text from CORDIS.
Participants
- UNIVERSITY OF LEEDS · LeedsCoordinatorUnited Kingdom
Links
Data: CORDIS, © European Union