Certain papers have a long gestation, and this is one of those. Five years ago, my then-colleague at the LSE Lauren Phillips came up with the idea of exploring together to what extent traditional political economy theories that understand the conflict over economic policies in terms of capital vs. labour still make sense in a world where many workers are significantly exposed to the financial markets via their pensions, investments, or borrowing patterns.
This question is tackled in a paper co-authored with Lauren Phillips (now at IFAD) and Kevin Young (UMass Amherst) which will be published in Socio-Economic Review. A pre-publication draft of the paper can be found here
Here is the abstract:
“Political economists have often drawn a hard line between the interests of owners of capital and the interests of labor. Yet over the past 30 years in Anglo-Saxon countries in particular, workers have become increasingly invested in capital markets activity through the privatization of pension systems and other incentives for market-based savings. In this paper we investigate whether this “financialization of everyday life” has generated a convergence of policy preferences whereby individuals support policies traditionally associated with the financial sector. Using three separate datasets on the US population, we find evidence that financial asset ownership is associated with lower support for more stringent financial regulatory policy, and higher support for financial sector bailouts. Such effects on individual preferences are modest on average, but persist even when controlling for indicators of social class and a range of other conditions, circumstances and time periods.“