The Financialization of Welfare

  • Philipp Golka


In this chapter, Golka provides a much-needed analysis of how social impact investing in the UK can be seen as a case of financialization. To that end, Golka shows how those interventions that proponents deem as creating “social impact” entail severe constraints to nonfinancial actors’ possibilities to act. Investors, on the other hand, gain an increasingly central governance position as they are ascribed the authority to define what counts and does not count as social impact, while they are enabled to redefine profit-maximizing activity as impactful through new labels such as “finance-first impact investor.” Analyzing financial data, Golka shows how this social impact economy allows investors to extract revenues from public and charitable organizations, and redistribute resources from labor to capital.


  1. Barman, E. (2015). Of principle and principal: Value plurality in the market of impact investing. Valuation Studies, 3(1), 9–44.Google Scholar
  2. Battilana, J., & Lee, M. (2014). Advancing research on hybrid organizing: Insights from the study of social enterprises. Academy of Management Annals, 8(1), 397–441.CrossRefGoogle Scholar
  3. Beckert, J. (2016). Imagined futures. Fictional expectations and capitalist dynamics. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  4. Chiapello, E., & Godefroy, G. (2017). The dual function of judgment devices. Why does the plurality of market classifications matter? Historical Social Research, 42(1), 152–188.Google Scholar
  5. Dowling, E. (2016). In the wake of austerity: Social impact bonds and the financialisation of the welfare state in Britain. New Political Economy, 22(3), 294–310.CrossRefGoogle Scholar
  6. Esping-Andersen, G. (1990). The three worlds of welfare capitalism. Princeton, NJ: Princeton University Press.Google Scholar
  7. Fligstein, N. (1990). The transformation of corporate control. Cambridge, MA: Harvard University Press.Google Scholar
  8. Godechot, O. (2015). Financialization is marketization! A study on the respective impact of various dimensions of financialization on the increase of global inequality. Sociological Science, 3, 495–519.Google Scholar
  9. Golka, P. (2015). Impact Investing: Ein Begriff, zwei Handlungsfelder. Unpublished manuscript.Google Scholar
  10. JP Morgan. (2014). Spotlight on the market: The impact investor survey. Retrieved from
  11. Lin, K.-H., & Tomaskovic-Devey, D. (2013). Financialization and US income inequality, 1970–20081. American Journal of Sociology, 118(5), 1284–1329.Google Scholar
  12. Mair, J., & Hehenberger, L. (2014). Front-stage and backstage convening: The transition from opposition to mutualistic coexistence in organizational philanthropy. Academy of Management Journal, 57(4), 1174–1200.CrossRefGoogle Scholar
  13. McGoey, L. (2012). Philanthrocapitalism and its critics. Poetics, 40(2), 185–199.CrossRefGoogle Scholar
  14. McGoey, L. (2015). No such thing as a free gift: The gates foundation and the price of philanthropy. London: Verso Books.Google Scholar
  15. Milberg, W. (2008). Shifting sources and uses of profits: Sustaining US financialization with global value chains. Economy and Society, 37(3), 420–451.Google Scholar
  16. Polanyi, K. (1944). The great transformation: The political and economic origins of our time. Boston, MA: Beacon Press.Google Scholar
  17. Social Finance. (2011). Social impact bonds: The one* service. One year on. Retrieved from One Service One Year On.pdf
  18. Social Finance. (2012). Enabling long-term recovery from addiction. Retrieved from
  19. Social Finance. (2014). Technical guide: Building a business case for prevention. Retrieved from
  20. Tavory, I., & Timmermans, S. (2014). Abductive analysis: Theorizing qualitative research. Chicago, IL: University of Chicago Press.CrossRefGoogle Scholar
  21. Van der Zwan, N. (2014). Making sense of financialization. Socio-Economic Review, 12(1), 99–129.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Philipp Golka
    • 1
  1. 1.Sociology of Markets, Organizations and GovernanceFriedrich Schiller University JenaJenaGermany

Personalised recommendations