The Collateralization of Social Policy under Financialized Capitalism

ABSTRACT This article examines how financialized capitalism has radically subverted the role and logic of social policy, provoking a sea change in the realm of social welfare, particularly in the global South, and breaking with previous frameworks which were grounded in principles of redistribution. In the process, new blueprints have emerged which raise concerns: re‐commodification has replaced de‐commodification; and debt, through financial inclusion, now serves as an alternative to exclusion. Drawing on the Brazilian case, the author scrutinizes the social protection paradigm that tends to prevail in the developing world in the 21 st century, based on microfinance, conditional cash transfers, basic pensions and social floors. The author's assumption is that we are witnessing the collateralization of social policy: credit and debt, along with new financial devices, are becoming the cornerstones of what used to be social protection systems, so as to respond to the needs of finance‐dominated capitalism. As a result, economic insecurity is likely to increase, accentuating inequality trends and exacerbating vulnerability.