Financial capitalism
Description
This project aims to investigate and clarify from various angles the impact of the financial sector on the real economy, with a focus on new forms of collective investment, especially private equity and hedge funds. There are different practices behind "alternative investments", good ones, bad ones, dangerous ones; a first task will be to clarify the balance between these effects. To what extent are the practices of such funds already changing the behaviour of management merely due to the implicit threat of take-over? A key issue is the unregulated nature of the investment funds and the lack of concrete information on their mode of functioning and thus also the potential risks and dangers. Venture capital (e.g.) has a vital role in innovation, private equity funds and to some extent hedge funds can also have a useful function in capital allocation, while real estate investment trusts (REIT) pose a challenge to the tourism catering industry.
A basic question to answer is what is the fundamental problem with their current functioning? Is it only due to anomalies, dysfunctional practices (due to extreme short-termism and debt-financing /high leverage), or are more fundamental issues at stake? Is the case reparable through proper regulation and how is the fundamental problem of the 'vanishing employer' - the institutional mismatch to existing structures of industrial relations - to be tackled? Particularly with regard to this aspect, there is a close link to the GOODCORP bis project.
This project will clarify and discuss these issues with support from both academic and trade union experts across Europe. The findings will be disseminated to policymaking and trade union audiences.
Researchers
Andrew Watt
Senior researcher, ETUI-REHSphone: +32 (0) 2 224 05 12
Béla Galgóczi
Senior researcher, ETUI-REHSphone: +32 (0) 2 224 04 92
