capitalism doesn’t die quietly. it doesn’t collapse in a single, dramatic thud, like a tree felled in a storm. no, it mutates, sheds its skin, and emerges in a new form—sometimes uglier, sometimes shinier, always more cunning. today, we’re told the reign of finance, that towering edifice of speculative wealth and invisible hands, is teetering. inflation is back, interest rates are climbing, and the old gods of wall street are trembling—or so the story goes. but is this the end of financial hegemony, or just a wardrobe change for an empire that’s mastered the art of reinvention? let’s peel back the layers, because the truth isn’t in the headlines—it’s in the cracks beneath.
imagine your phone’s battery. it’s been draining faster lately, right? you’ve got too many apps running in the background—social media, that game you forgot to close, the weather widget you never check. the system overheats, slows down, and eventually, you’re forced to reboot. now picture the global economy: decades of financial apps—derivatives, shadow banking, debt piled on debt—running wild, draining the system’s juice. inflation’s the overheating, the warning sign that the battery’s about to die. but here’s the kicker: instead of rebooting, the powers that be just keep plugging in new chargers—central bank interventions, rate hikes, promises of “stability.” does that sound like a fix to you? or are we just delaying the inevitable crash?
this isn’t a simple tale of economic cycles. it’s a theoretical brawl, a clash of forces—capital versus labor, finance versus production, chaos versus control. and it’s messy. so grab a coffee, settle in, and let’s wrestle with the beast. we’ll start with the shockwaves, move through the power plays, and end up staring at a future that refuses to sit still.
the shocks that woke the beast
let’s rewind to 2020. the world locked down, and suddenly, the gears of global trade seized up like a car with no oil. supply chains—those sleek, just-in-time miracles of modern capitalism—turned into a pileup on the highway. factories shut down, ships sat idle, and the stuff we take for granted (toilet paper, anyone?) vanished from shelves. then governments, in a rare moment of generosity, flooded the system with cash—trillions in stimulus, a lifeline to keep us afloat. demand roared back, but supply couldn’t keep up. it’s like ordering takeout during a blackout: you’re hungry, you’ve got the cash, but the kitchen’s dark.
then came ukraine. energy prices, already twitchy from the green transition, shot up like a rocket when europe cut ties with russian gas. oil-rich nations laughed all the way to the bank while households stared at bills they couldn’t pay. these weren’t just hiccups—they were sledgehammers, smashing the illusion of a smooth-running machine. inflation hit double digits in some places, a ghost we thought we’d exorcised back in the ‘80s. but here’s the question: is this just a temporary tantrum, or the first tremor of something bigger?
think of it like a family road trip. the car’s packed, the kids are screaming, and you’re low on gas. then the gps dies, and you’re stuck in traffic with no map. that’s the pandemic and the war—external jolts that threw the economy off course. but the real story isn’t the breakdown; it’s what happens next. do we fix the car, or do we start fighting over who gets the last granola bar? the data says prices spiked—8% in the us, 11% in the eu by late 2022—but the why and the what-now are where the battle lines form.
capital’s quiet coup
here’s where it gets juicy. while we were all distracted by empty shelves and soaring gas prices, corporations saw an opening. they didn’t just pass on higher costs—they jacked up prices beyond what they needed, pocketing the difference like a kid sneaking extra cookies from the jar. energy firms, shipping giants, even your friendly neighborhood detergent brand—all raking in record profits. in the us, 2021 was the best year for corporate earnings since the ‘50s. dividends flowed like champagne at a tech bro’s yacht party. meanwhile, real wages—what you actually take home after inflation—dropped 4% or more across the atlantic.
this isn’t an accident. it’s a power grab. companies, flush with market muscle, moved faster than labor could blink. unions, weakened after decades of decline, couldn’t catch up. no wage-price spiral here—just a profit-price spiral, a one-sided heist where capital says, “thanks for playing, but we’re keeping the pot.” it’s like a board game where one player owns all the hotels and you’re stuck paying rent with monopoly money that’s losing value by the turn.
but hold on—didn’t the stimulus help? in the us, those massive cash injections softened the blow for workers, especially the poorest. employment bounced back, low-wage jobs grew, and for a minute, it felt like the little guy might win a round. across the pond, europe wasn’t so lucky. stingier policies and a brutal energy shock left workers reeling, real wages tanking, and the poorest hit hardest by a cost-of-living crisis that’s still unfolding. so what’s the lesson? capital’s winning, sure—but the game’s not uniform. some pawns get a lifeline; others get sacrificed.
the financial throne wobbles
now let’s talk about the big boss: finance. for decades, it’s ruled the roost, a king perched on a throne of debt, derivatives, and central bank handouts. since the ‘70s, when exchange rates floated free and deregulation let the savings funds run wild, finance ballooned—shadow banking, fx trading, a debt explosion that made the real economy look like a side hustle. it’s been a hell of a ride, fueled by cheap credit that propped up consumption while wages stagnated. but kings fall, don’t they? and inflation’s got a dagger aimed at this one’s heart.
picture finance as a high-stakes gambler at a casino. the house—central banks—kept slipping it chips, bailing it out after every bust. 2008? a crash, then a rescue. 2020? lockdowns tanked markets, but the fed and ecb swooped in with asset buys, keeping the party going. now, though, the game’s changing. inflation’s forcing the house to raise the stakes—higher interest rates, less liquidity. the gambler’s sweating. either the table flips (a sudden crisis), or the chips slowly bleed away (persistent inflation erodes asset values). either way, the jackpot’s shrinking.
data backs this up. us stock markets dropped from 200% of gdp to 150% by late 2022. europe’s followed suit. crypto, the wild west of finance, imploded spectacularly. financial profits as a share of the total? down from 27% to 15% in the us, 10% to 6% in the eurozone. liquidity—the lifeblood of financial power—is drying up. but don’t pop the champagne yet. central banks still flinch at the first sign of trouble—look at the bank of england’s u-turn in 2022, bailing out pension funds when the bond market wobbled. the king’s wounded, but it’s not abdicating.
inflation as a forked road
here’s where it gets dialectical—two paths, one beast. inflation’s a double-edged sword for finance. on one side, it demands tight policy: rate hikes, less cash sloshing around. that’s poison for a system hooked on easy money—think of it as cutting off a caffeine addict mid-binge. markets could seize up, a panic could ignite, and we’d get a 2008 redux, only uglier. on the other side, inflation quietly eats away at debt’s real value. creditors—those rentier types living off interest—lose out as borrowers repay less in real terms. it’s a slow bleed, a devaluation that could dismantle financial dominance without a bang.
so which is it? apoplexy or agony? the central banks are hedging their bets. real interest rates (nominal minus inflation) are still negative, a sign they’re not ready to go full volcker and crush inflation with a sledgehammer. yet distress signals are flashing—housing markets cooling, swiss franc wobbles, liquidity gauges hitting 2009 levels. the ecb’s even got a safety net ready, a “transmission protection instrument” to shield eurozone debt from another crisis. sounds like they’re more scared of financial chaos than price spikes. what does that tell you? stability’s still the golden calf, even if it means letting inflation simmer.
who’s next in line?
if finance is stumbling, who’s grabbing the crown? that’s the trillion-dollar question, and the answers are a theoretical free-for-all. option one: the tech overlords—google, amazon, the intellectual monopolists—turn us into serfs in a “techno-feudal” dystopia, where data’s the new gold and we’re all just clicks in their algorithm. option two: the state steps in, flexing financial repression and dirigisme to spark a productivist revival—think massive infrastructure bills, a return to making stuff instead of betting on it. option three: the left’s dream, a democratic pivot to planning, where investment bows to social need and ecological limits, not profit.
it’s like a reality show finale—who gets the rose? the tech bros with their sleek pitches? the state, promising jobs and bridges? or the scrappy underdog, waving a flag of justice? history says capital doesn’t cede power easily. the us is already pouring cash into production—cares act, chips act—but it’s not exactly a worker’s paradise. europe’s fumbling with price caps, a reluctant nod to control, yet still tethered to market dogma. and labor? still scrambling to catch up, real wages lagging, bargaining power a shadow of its old self.
lessons from the chaos
so what do we take from this mess? three threads, tangled but sharp. first, monetary tightening’s a blunt tool—hitting inflation with rate hikes is like fixing a leaky pipe with a baseball bat. price controls, targeted and strategic, could do better without tanking the economy. europe’s dipping a toe in that water with energy caps—will it swim or sink? second, this isn’t neutral ground. profits are soaring, wages are sinking, and the rentier’s getting a haircut. class lines are stark—labor’s got to fight now, or get buried. third, inflation’s not just a glitch; it’s a slow-motion reckoning, digesting the excesses of a financial boom that never matched real growth. the 2008 ghosts are still here, just wearing new masks.
think of it like a playlist on shuffle. the old hits—financial dominance, neoliberal faith—keep looping, but the beat’s off. new tracks are creeping in—state intervention, profit grabs, maybe even a protest anthem from below. the algorithm’s glitching, and we’re all dancing to a rhythm we don’t fully grasp.
the throne stays empty—for now
here’s the rub: no one’s won yet. finance is bruised, not broken. capital’s flexing its muscles, but the cracks are showing. labor’s stirring, but it’s late to the party. the state’s playing referee, but it’s got no rulebook. this isn’t a neat resolution—it’s a brawl with no bell. will inflation burn out, leaving finance to lick its wounds and rise again? will capital’s profit binge choke on its own greed? or will something new—a planned economy, a tech tyranny—sneak through the chaos?
you tell me. look at your bank account, your bills, the news ticker screaming about rates and recessions. does this feel like an ending—or a beginning? capitalism’s a shape-shifter, always has been. the throne’s wobbling, but don’t bet on it staying empty. the next act’s already warming up, and it’s got a hell of a plot twist waiting. what’s your move?
reference:
Cédric Durand, The End of Financial Hegemony?, NLR 138, November–December 2022.
