Abstract

Rightwing theorists argue that we owe the current financial crisis to the democratization of credit, or financial inclusion: politics interfered with the market to benefit marginalized actors, only to cause instability and risk. Leftwing theorists focus instead on financialization: namely, the shift of profit-making activities from industry to finance. These views implicitly draw on Schumpeter and Marx. Much like their intellectual progenitors, they emphasize exogenous processes to explain financial change. Here I claim that the connection between financial innovation and financial inclusion is endogenous. I suggest two main typologies of financial innovators: Market Utopians (MUs) and Populist Innovators (PIs). Financial inclusion, I submit, is the byproduct of the quest for power of the latter.