© Koninklijke Brill NV, Leiden, 2009 DOI: 10.1163/156920609X436153 Historical Materialism 17 (2009) 114–148 brill.nl/hima Financialised Capitalism: Crisis and Financial Expropriation Costas Lapavitsas School of Oriental and African Studies, London cl5@soas.ac.uk Abstract* Te current crisis is one outcome of the financialisation of contemporary capitalism. It arose in the USA because of the enormous expansion of mortgage-lending, including to the poorest layers of the working class. It became general because of the trading of debt by financial institutions. Tese phenomena are integral to financialisation. During the last three decades, large enterprises have turned to open markets to obtain finance, forcing banks to seek alternative sources of profit. One avenue has been provision of financial services to individual workers. Tis trend has been facilitated by the retreat of public provision from housing, pensions, education, and so on. A further avenue has been to adopt investment-banking practices in open financial markets. Te extraction of financial profits directly out of personal income constitutes financial expropriation. Combined with investment-banking, it has catalysed the current gigantic crisis. More broadly, financialisation has sustained the emergence of new layers of rentiers, defined primarily through their relation to the financial system rather than ownership of loanable capital. Finally, financialisation has posed important questions regarding finance-capital and imperialism. Keywords financialisation, crisis, rentier, bank, financial expropriation 1. Introduction: several dimensions of financialisation Te storm that has gradually engulfed the world-economy since August 2007 is a fully-fledged crisis of financialised capitalism. Te crisis did not spring directly out of a malaise of production, though it has already caused major disruption of accumulation. It was precipitated by housing debts among the poorest US workers, an unprecedented occurrence in the history of capitalism. * Earlier drafts of this paper were presented at a workshop at Kadir Has University, March 2008, as well as at a conference at SOAS, in May 2008. Tanks for comments are due primarily to members of Research in Money and Finance at SOAS. I am also grateful to several others, but far too many to mention individually.