In the 21st century, the world of finance has taken on a dramatically increased significance in economic growth, politics, and social and emotional life. As the 2007-2009 global financial crisis plainly showed, over the past 35 years or so, market liberalization has made financial actors, instruments and rationalities increasingly central to the workings of global capitalism. Economic growth is now heavily based on financial, rather than industrial production, a process historical sociologist Greta Krippner (among others, such as Ozgur Orhangazi) has demonstrated in pioneering empirical work (2005) and deep analysis of the political formation of the financial sector’s decades-long expansion in the U.S. economy (2011). Drawing on Giovanni Arrighi’s (1994, 2010) understanding of financialization as a recurring response to diminishing economic hegemony, Krippner roots the rise of finance in the county’s waning postwar prosperity. This puts financialization into conversation with efforts to theorize post-1970s urban transformations, in which the state has made urban space increasingly “flexible and responsive” to the needs of investment capital in order to redevelop the built environment (Weber 2002). Thus the urban has become a crucial source of the new, unexploited assets financialization must search out and capitalize, in order to create financial instruments subject to further innovations on capital markets (Leyshon and Thrift 2007; Newman 2009). For example mortgage securitization offers a crucial—and previously elusive—means of transforming the spatially fixed value of real estate into liquid, global cash flows (Gotham 2009).
In the process of searching out new assets, finance has come to play a greater role in the social domain. As we saw in the U.S. foreclosure crisis, the demand for mortgage-backed securities on financial markets shaped high-risk lending practices in ways that ultimately had dire consequences for urban households, neighborhoods and localities (Crump et al. 2008). Because the inequalities and market exclusion forged under industrial capitalism constitute today’s ‘underserved markets’ (Wyly et al. 2009; Ashton 2009), financialization is deeply implicated in the reproduction of urban inequality along lines of race, class and gender (Dymski 2011; Roberts 2013). Thus complex, historically forged, racialized social and spatial inequalities are inseparable from the origins of the crisis.
There is now an outpouring of social science research on the foreclosure crisis and its relation to this urban problematic. For example, Kathe Newman and Elvin Wyly’s 2004 piece on mortgage market segmentation identifies the shift from exclusionary redlining to exploitative greenlining (predatory inclusion in mortgage markets) as central to the geography of mortgage default. In another vein, journalist Laura Gottesdeiner’s book “ A Dream Foreclosed” charts the human toll of the foreclosure crisis on Black America in terms of a long struggle for economic equality. The research Susan Saegert and colleagues (2009) carried out on low-income homeowners under threat of foreclosure shows how the risk shed by financial institutions comes to permeate the home, straining kin relations and owners’ identities as caretakers, providers and members of the middle class. This new interface of the economic and the social points to the terrain of feminist geography, particularly perspectives on social reproduction, as crucial to exploring financial geographies of everyday life, and the household is a key site for such endeavors (Pollard 2012; Roberts 2012). Sociocultural perspectives are also an important part of the conversation, offering an entry point for theorizing how financialization not only reshapes urban space, but also subjectivities, behavior, and lived experience, as seen in the work of Randy Martin (2002), Paul Langley (2010), and Fiona Allon (2010).
As this brief discussion shows, the process of financialization cuts across disciplinary boundaries. This is also reflected in the transdisciplinary collection of texts included below. For this bibliography I have chosen 30 articles and books that offer insights into the increased interdependence of housing markets and financial markets, and the implications of this financialization for urban life and development. The texts are grouped into three (loose, nonexclusive) categories: theorizing the financialization of housing and urban development; social, cultural and gendered perspectives on financialization, and accounts of the foreclosure and financial crises of 2007-2009. All of the pieces (and many more) cited in this discussion are included. This bibliography intersects with many themes from The People, Place and Space Reader, particularly Meanings of Home, The Social Production of Space and Time, and Shifting Perspectives: Optics for Revealing Change and Reworking Space.