By El Mouhoub Mouhoud, Dominique Plihon
This paper analyzes the relationships between finance and knowledge, which are the two major pillars of modern capitalism. It shows first that the knowledge-based economy is not identical either to the information economy or to the IT-driven "new economy." Instead, the knowledge-based economy must be analyzed in terms of a new division of labor, including different productive schemes. Finance plays a crucial role in cognitive, knowledge-based capitalism. The two major institutions of financial capitalism, i.e., the financial markets and firms driven by stockholder value, can be analyzed as endogenous responses to the needs of the knowledge-based economy. In a nutshell, financial institutions contribute to the marketization of knowledge and to the private appropriation of the wealth created by knowledge. Interactions between finance and knowledge also strengthen internal contradictions in capitalism and lead to increased instability and the polarizations of wealth. JEL O32, G15, P17.