Financialization and the Erosion of the Common Good

Abstract

The phenomenon of financialization is multifaceted and can be considered from different points of view. The main purpose of the article is to show how financialization affects the erosion of the common good. To achieve this, various negative sides of financialization are described, referring to the eight principles of the common good: effective use of limited resources, freedom, prosperity, justice, responsibility, solidarity, primacy of interpersonal relations and institutional principle. Further considerations concern the presentation of possible solutions to the problem of financialization. Two perspectives are selected. First, the answer of Catholic social teaching to the phenomenon of financialization, as presented in the form of the Vatican document Oeconomicae et pecuniariae quaestiones from May 2018. Next, one of the main causes of financialization is shown: economic and financial theories, which has become the theoretical foundation for the phenomenon. On this basis, the need for new theoretical solutions based on the institutional approach in the science of economics and finance is discussed. Possible new alternative approaches, including the concept of financial personalism, are also recognized.