Wages, Bonuses and Appropriation of Profit in the Financial Industry
- Day 60 Occupy Wall Street November 15 2011 by David Shankbone
Olivier Godechot is codirector of MaxPo, Sociology Professor at Sciences Po and Research Professor at CNRS publishes Wages, Bonuses and Appropriation of Profit in the Financial Industry (Routledge) in which he provides an in-depth inquiry into the bonus system.
Drawing on examples from France, the City and Wall Street, it explains how and why workers in the financial industry can receive such large bonuses. The book examines issues around incentives, morality and wealth-sharing among employees, including the rise of "the working rich" – those who have benefited the most from the high wages and large bonuses on offer to some employees. These people have achieved wealth through their work thanks to new forms of exploitation in our ever-more dematerialised economy. This book shows how the most mobile employees holding the most mobile assets can exploit the most immobile stakeholders. In a world where inequalities are rising sharply, this book is therefore an important study of one of the key contemporary issues.
What do you mean by “financialization” and why is it important?
Olivier Godechot: The concept of financialization is multi-dimensional. It can refer to the growth of the financial sector as a whole, or of financial market activities only, or go beyond the finance sector to the financialization of non-financial institutions, firms or households. I show that when measured through its impact on inequality, financialization is primarily a phenomenon of marketization, which I propose to define as the increase in social activity devoted to trade in securities on financial markets. Contrary to previous scholarship inspired by Marxist or heterodox economics, which generally focused on macro-social mechanisms in terms of financial regimes, power resources, and global bargaining power, I try to go further by pinning down the precise mechanisms at stake within the financial labor market.