Financialization

Financialization, as theorized in Kornbluh's Realizing Capital, names a specific historical-economic regime in which speculative, abstract representations of value—derivatives, fictitious capital, virtual transactions—supersede industrial production and finite material exchange. Under financialization, "economy" is structurally detached from connotations of closure, scarcity, and constriction, and reattached instead to images of open, self-reflexive expansion. This is not merely a description of economic history but a critical-theoretical claim: financialization produces a new ideological formation in which the subject's psychic interior is modeled on—and thereby recruited into—the logic of circulating, interest-bearing, anonymous capital. The "psychic economy" metaphor that Victorian literature proliferates is simultaneously symptom and ideological apparatus of this regime.

Crucially, Kornbluh's argument is that financialization does not merely reflect an external economic shift but actively reorganizes subjectivity and affective life. When the self is figured as an economy, the rationing of affective ties—the decision of which relationships "pay"—acquires a spurious rationality. This ideological operation forecloses genuine reciprocity and the possibility of guilt, producing a subject structurally incapable of ethical encounter with the other. Victorian realist narrative, particularly the Bildungsroman form, ironizes this operation by dramatizing how characters like Pip recapitulate anonymous investment logic even in their most apparently intimate sentiments—exposing the instability of "the person" as simultaneously a legal, financial, and linguistic construct produced under financialized capitalism.

Financialization appears exclusively in kornbluh-anna-realizing-capital-financial-and-psychic-economies-in-victorian-for, where it functions as the historical-material condition of possibility for the book's central concept, Psychic Economy. It is not an abstract theoretical term imported from Lacan but a periodizing marker that anchors Kornbluh's reading of Victorian literature in the specific transition from industrial to speculative capital. The concept operates as both backdrop and critical target: by naming financialization as the epoch in which the psychic economy metaphor gains cultural traction, Kornbluh exposes Ideology (cross-ref) not as false consciousness but as a structural operation that is constitutive of social and subjective reality—precisely the sense in which the Lacanian tradition defines ideology as working through what subjects enjoy and enact rather than consciously believe.

Financialization also resonates strongly with the cross-ref'd concepts of Surplus-jouissance and Alienation. The shift from finite goods to abstract representations of value maps structurally onto the Lacanian account of the signifier as that which, by extracting the subject from bodily immediacy, simultaneously produces a surplus—a remainder of jouissance that can never be fully recovered. The Subject (cross-ref) under financialization is "the person" as an unstable legal-financial-linguistic construct, aligning with the Lacanian barred subject ($) who is constituted in the gap between signifiers rather than in any positive substance. Financialization, in Kornbluh's argument, is the historical moment when this structural instability of the subject becomes economically legible—when the open, self-expanding logic of capital mirrors and reinforces the endless, never-completed circuit of Repetition (cross-ref) that characterizes both the drive and the Bildungsroman's failed developmental arc.

Realizing Capital: Financial and Psychic Economies in Victorian FormAnna Kornbluh · 2014 (p.69)

Under financialization, economic production and transactions moved away from finite material goods and toward abstract representations of value like derivatives, untethering 'economy' from connotations of closure and constriction, adjoining it instead onto images of open expansion.

The quote is theoretically loaded because the double movement it describes—"untethering" economy from "closure and constriction" while "adjoining" it to "open expansion"—maps directly onto the ideological operation Kornbluh diagnoses: the very signifier "economy," once anchored to scarcity and finitude, is resignified to naturalize unlimited, self-reproducing accumulation, making the psychic economy metaphor available as an expansive, rather than limiting, model of subjectivity and affect.