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Financial Crisis, Inequality, and Capitalist Diversity: A Critique of the Capital as Power Model of the Stock Market

Baines, J. and Hager, S. B. ORCID: 0000-0002-1205-3623 (2020). Financial Crisis, Inequality, and Capitalist Diversity: A Critique of the Capital as Power Model of the Stock Market. New Political Economy, 25(1), pp. 122-139. doi: 10.1080/13563467.2018.1562434


The relationship between inequality and financial instability has become a thriving topic of research in heterodox political economy. This article offers the first critical engagement with one framework within this wider literature: the Capital as Power (CasP) model of the stock market developed by Shimshon Bichler and Jonathan Nitzan. Specifically, we extend the CasP model to other advanced capitalist countries, including Germany, France, the United Kingdom, and Japan. Our findings affirm the core prediction of the CasP model, showing that unequal power relations reliably predict future stock market performance. Yet when it comes to the CasP model’s explanation of why power relations predict stock market returns, our findings are more ambiguous. We find little empirical support for the claims that capitalist power is dialectically intertwined with systemic fear, and that systemic fear and capitalised power are mediated through strategic sabotage. The main lesson of our analysis is that any model of the stock market must be attentive to the geographical unevenness and continued national diversity in capitalist development.

Publication Type: Article
Additional Information: This is an Accepted Manuscript of an article published by Taylor & Francis in New Political Economy on 9 Jan 2019, available online:
Publisher Keywords: Financial crisis, inequality, stock market, capital as power, comparative capitalisms
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
Departments: School of Arts & Social Sciences > International Politics
Date available in CRO: 04 Feb 2019 13:41
Date deposited: 4 February 2019
Date of acceptance: 10 December 2018
Date of first online publication: 19 January 2019
Text - Accepted Version
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