What do you think?
Rate this book
Divested: Inequality in the Age of Finance
Finance is an inescapable part of American life. From how one pursues an education, buys a home, runs a business, or saves for retirement, finance orders the lives of ordinary Americans. And as finance continues to expand, inequality soars.
In Divested, Ken-Hou Lin and Megan Tobias Neely demonstrate why widening inequality cannot be understood without examining the rise of big finance. The growth of the financial sector has dramatically transformed the American economy by redistributing resources from workers and families into the hands of owners, executives, and financial professionals. The average American is now divested from a world driven by the maximization of financial profit.
Lin and Neely provide systematic evidence to document how the ascendance of finance on Wall Street, Main Street, and among households is a fundamental cause of economic inequality. They argue that finance has reshaped the economy in three important ways. First, the financial sector extracts resources from the economy at large without providing economic benefits to those outside the financial services industry. Second, firms in other economic sectors have become increasingly involved in lending and investing, which weakens the demand for labor and the bargaining power of workers. And third, the escalating consumption of financial products by households shifts risks and uncertainties once shouldered by unions, corporations, and governments onto families.
A clear, comprehensive, and convincing account of the forces driving economic inequality in America, Divested warns us that the most damaging consequence of the expanding financial system is not simply recurrent financial crises but a widening social divide between the have and have-nots.
In Divested, Ken-Hou Lin and Megan Tobias Neely demonstrate why widening inequality cannot be understood without examining the rise of big finance. The growth of the financial sector has dramatically transformed the American economy by redistributing resources from workers and families into the hands of owners, executives, and financial professionals. The average American is now divested from a world driven by the maximization of financial profit.
Lin and Neely provide systematic evidence to document how the ascendance of finance on Wall Street, Main Street, and among households is a fundamental cause of economic inequality. They argue that finance has reshaped the economy in three important ways. First, the financial sector extracts resources from the economy at large without providing economic benefits to those outside the financial services industry. Second, firms in other economic sectors have become increasingly involved in lending and investing, which weakens the demand for labor and the bargaining power of workers. And third, the escalating consumption of financial products by households shifts risks and uncertainties once shouldered by unions, corporations, and governments onto families.
A clear, comprehensive, and convincing account of the forces driving economic inequality in America, Divested warns us that the most damaging consequence of the expanding financial system is not simply recurrent financial crises but a widening social divide between the have and have-nots.
240 pages, Hardcover
First published January 1, 2020
11 people are currently reading
121 people want to read
About the author
Ken-Hou Lin
3 books2 followersKen Hou-Lin is an Associate Professor of Sociology at the University of Texas at Austin. His research examines how the economic and demographic changes in past four decades shape the distribution of resources in the United States.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 3 of 3 reviews
October 30, 2020
Brilliant book on the increasing inequality caused by the "financialization" of the economy. While access to credit is vital to lots of people, the structure and rules of the financial industry does not assist in tackling the inequality issue. In fact, it is inherently built to cause further inequality (not necessarily by intention but by regulators overlooking the “inequality” issue and focusing on having “access to credit”).
Change in key dynamics on the relationship between capital and labor in recent decades transformed more power from the worker to the owner. This coupled with the increasing "deunionization" led to further inequality and divergence between the rich and the poor.
The book also sheds light on the ever-growing power of the "finance/banking" industry in relation to the industries, turning it from a "support" player into the "central" player in the economy where everything and all industries revolves around finance. Non-financial companies started offering financial products/services and making investments into various financial assets (as opposed to their core business).
Change in key dynamics on the relationship between capital and labor in recent decades transformed more power from the worker to the owner. This coupled with the increasing "deunionization" led to further inequality and divergence between the rich and the poor.
The book also sheds light on the ever-growing power of the "finance/banking" industry in relation to the industries, turning it from a "support" player into the "central" player in the economy where everything and all industries revolves around finance. Non-financial companies started offering financial products/services and making investments into various financial assets (as opposed to their core business).
December 28, 2020
There were issues with this book. Fortunately, there are some good counter arguments made. They were too briefly discussed; I was curious to know more, but I felt like information was obscured. The narrative is biased towards the fact that wealth inequality is unnatural, so the book made fatal generalizations. In fact, there is hardly any economics language used here. This significantly diminishes the depth of this book’s analysis. There could have been so much more to this! Making a larger distinction between commercial and investment banking, then analyzing these two contributions to wealth inequality individually would have been a good start. Breadth was more important to them than depth, which decreased the enjoyment I had reading. Furthermore, I wish they discussed the role of restructuring as a tertiary contributor to wealth inequality.
If you know next to nothing about economics but want to learn more, then this book is for you.
If you know next to nothing about economics but want to learn more, then this book is for you.
September 12, 2020
Maybe, just maybe, unions are not the answer to every problem. Book makes a lot of judgment calls backed by no arguments. Beyond that unless you're really young or were asleep last 20 years you already know the history this book is trying to present.
Displaying 1 - 3 of 3 reviews