Finanzkapital

Finanzkapital is a term in political economy describing a form of capital in which financial and industrial capital are tightly integrated, creating a dominant financial elite that controls investment decisions, credit, and ownership networks. The concept emphasizes the fusion of banking capital with industrial capital and the growing influence of financial conglomerates on production, mergers, and sometimes state policy.

Historically, the term was developed by Rudolf Hilferding in Das Finanzkapital (1909/1910) to explain the late‑19th and early‑20th‑century German and European capitalism, where banks and industrial firms formed interlocking directors’ chairs, holding companies, and credit arrangements. Hilferding argued that banks could impose discipline on industry through credit, while industry sought financing and capital gains through financial operations, leading to a cycle of monopolization and price coordination. The concept influenced Lenin in his critique of imperialism, The State and Revolution, and his Imperialism, the Highest Stage of Capitalism, which argued that finance capital underlies imperialist expansion.

In contemporary discourse, Finanzkapital is often equated with financial capitalism or financialization, describing an economy in which profits increasingly come from financial activities—lending, asset management, and speculative trading—rather than from productive investment alone. Critics argue this shifts power toward financial actors and can exacerbate economic instability, while supporters contend it reflects evolving capitalist dynamics and global capital mobility.