1 Financialization in the twilight of capitalism Eleutério FS Prado 1 DOI: 10.13140/RG.2.2.20055.75688 Introduction The issue of financialization has been the subject of great controversy; even the validity and appropriateness of the term has been questioned. However, there is no doubt that certain historical facts support this thesis. A growing exuberance of finance came after the end of World War II and, especially, from the 1980s onwards. But what is financialization? This is a question that still requires an innovative answer (Prado, 2018b). After 1945, there were two long cycles in the world economy: one between 1946 and 1982, when Keynesianism dominated, and another from that last date, when neoliberalism prevailed. In the first period, the world GDP growth rate averaged 5% per year. Between 1981 and 1990, the world economy grew on average 3.12% per year; between 1991 and 2010, this average rate dropped to 2.8%, to reach only 2.2% in the last decade. Because of this low growth, it is widely recognized that the world economy entered a period of stagnation after 1997, which has not yet been overcome. And this secular decline is well explained by the declining behavior of the rate of profit in the period, as shown in the graph below. But the fall in the rate of profit and the rise of organic composition of capital is not the only striking fact in the history of postwar capitalism. The irresistible process of financialization, intrinsically related to the former, has also developed over the last seventy years. Why? If its main antecedent was the expansion of the Eurodollar market, mainly in the 1970s due to the abundance of petrodollars, it effectively took off in the 1980s. As is 1 Full and Senior Professor at the Department of Economics at FEA/USP. E-mail: eleuter@usp.br. Blog on the internet: https://eleuterioprado.blog