Society Characterized by Financialization

Finance and Society
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Finance and Society
Introduction
Money and the financial system, in general, have become a fundamental component of human life in the contemporary era. The ever-present nature of money in society has created an impression that money, and by extension, the financial system, has always existed, without bothering its rich history, close ties with philosophy, and varied definitions. According to De Bruin et al. (2018), the credit theory and the commodity theory of money are the two main ontologies that best describe what money is and its role in society. The commodity theory holds that money is a commodity with three primary functions in society: acting as a medium of exchange, store of value, and unit of account (De Bruin et al., 2018). On the other hand, the credit theory takes a diverse view of money not as a commodity but rather as an abstraction that can be credited, transferred, and used as a means of payment in trade (De Bruin et al., 2018). Furthermore, the credit theory gives rise to the social construct of money where its existence depends on the common beliefs and attitudes shared by the community members.
Financial systems bring together the different theories that define the term money. Financial systems can be viewed as a formal intermediary that oversees the use of money and facilitates payment using money and other financial assets. The term finance can also be interpreted as a discipline or branch of financial economics charged with elaborating the monetary and financial systems (De Bruin et al., 2018). Modern financial systems have incorporated additional financial assets with a higher level of abstraction than tangible money. From a societal viewpoint, money and finance have had a tremendous impact on values and beliefs that define a society as well as introduced powerful financial tools that have rendered the society and the environment as collaterals. The role of finance in society can be comprehended based on the logic of the financial systems or rather financialization and how it has influenced the different aspects that define a society.
Society Characterized by Financialization
The modern society where financial literacy has become dominant has had almost every aspect that defines social life commodified, securitized, or turned into assets that can be managed the same way the financial systems manage the financial assets. The reduction and conceptualization of society’s major aspect in the realm of finance can be termed as financialization (Aalbers, 2019). The concept of financialization has transformed almost every aspect of society into wealth acquisition and profit-making by transforming them into financial channels. As a result, the financial systems have overstepped their financial mandate and have infiltrated into every aspect of social life that affects the members of society. “Nonfinancial firms have always been dependent on credit, but the rules and logic of Wall Street are increasingly becoming the rules and logic outside of Wall Street.” (Aalbers, 2019, p. 7). The desire to fill the gap of inadequate resourcing from the public sector and drive sustainable development has often been justified for promoting priva...