Finance driven Capitalism and financialization of the US pharmaceutical industry

Abstract

Minsky’s stages of capitalism analysis provide a useful analytical framework for understanding not only the transformation of the American economy, but also the transformation of the business enterprise. Using the concept of the business enterprise from heterodox microeconomics, this paper examines this evolution with a focus on how the enterprise became financialized under money manager capitalism. Of importance is the increased role intangible assets have played in generating returns to shareholders. This is clearly seen in the American pharmaceutical industry, which has seen its balance sheets take an increasingly intangible character. While much policy research has emphasized economic inequality, instability, and high drug prices, it is important to realize the role that the financialization of the economy has played in generating these problems.