It is today all but taken for granted by political figures from Hillary Clinton to Bernie Sanders that the rise of finance in recent decades has come at the expense of industry. Such views are similarly widespread among critical political economists, perhaps most prominently Robert Brenner and Cédric Durand. Its rise, says Durand, is “rooted in the exhaustion of the productive dynamic in the advanced economies, and the reorientation of capital away from domestic productive investment.” According to this view, “real” industrial capital has been overtaken by the “fictitious” activities of finance. The rise of the latter is a symptom of a “late” stage of capitalism, a harbinger of the system’s dysfunction and decline.

For Brenner and Durand, the rise of this corrosive financial sector has crucially depended on its ability to capture the state — leading to the formation of what Brenner and Dylan Riley have gone so far as to call a new form of capitalism, “political capitalism.” According to these theorists, this has perhaps above all been evident in the Federal Reserve’s decades-long quantitative easing (QE) policy: “uninterrupted monetary infusions from central banks,” which Durand sees as the result of “blackmail” by a corrosive financial sector.

In a widely read and cited recent essay, Durand has speculated that we are now witnessing the “end of financial hegemony.” This is because the return of inflation has created an irresolvable contradiction: while continuing quantitative tightening (QT) to control inflation would terminate the state support that has been essential for propping up financial power, allowing inflation to continue would also undermine finance by eroding asset values and reducing real interest payments.