A FIRE economy is any economy based primarily on the
finance
Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...
,
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect ...
, and
real estate sectors.
[ Finance, insurance, and real estate are ]United States Census Bureau
The United States Census Bureau, officially the Bureau of the Census, is a principal agency of the Federal statistical system, U.S. federal statistical system, responsible for producing data about the American people and American economy, econ ...
classifications. Barry Popik describes some early uses as far back as 1982.New York City
New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...
's largest industry and a prominent part of the service industry in the United States overall economy and other Western developed countries.
Census Bureau classification
This term is frequently used in the financial press and blogs. Its origin is in the realm of North American industrial classification.
[ "Finance, Insurance, and Real Estate" is the title of ''1992 U.S. Census Bureau ]Standard Industrial Classification
The Standard Industrial Classification (SIC) is a system for classifying industries by a four-digit code as a method of standardizing industry classification for statistical purposes across agencies. Established in the United States in 1937, it ...
(SIC) Division H''. Its coverage was "All domestic establishments that provide financial, insurance, or real estate services." Its coverage was elaborated in two-digit SIC codes 60 through 67. The SIC was replaced by the North American (Canada, US, Mexico) Industry Classification System ( NAICS) starting in 1997. The SIC had ten top-level divisions, NAICS has twenty. The new NAICS essentially split the old Division H into code 52 Finance and Insurance and code 53 Real Estate and Rental and Leasing.
The newer NAIC two-digit codes, 52 and 53, are extensively elaborated – down to the five-digit level. They remain largely unchanged in the 2007 NAICS drill down chart whose details are this for code 52 and this for code 53.
The second use of the term derives from the study of financial capital and income – as opposed to industrial capital and income. To characterize the so-called financial services industries, economists carved out part of the SIC/NAIS breakdown of types of industry: finance, insurance, and real estate. They contracted this to FIRE, deliberately invoking the negative connotations which were, at least then, contrary to conventional wisdom
The conventional wisdom or received opinion is the body of ideas or explanations generally accepted by the public and/or by experts in a field.
History
The term "conventional wisdom" dates back to at least 1838, as a synonym for "commonplace kno ...
. The following table elaborates on this dichotomy in the header row and gives examples in ensuing rows (where?).
At the city scale, Sassen has done a lot of researches of the FIRE influences to the Global Cities, such New York, London and Tokyo, since 1984. She and a group of scholars including Feistein, argued that FIRE aggravated social inequality and polarization of these cities.
Criticisms
Much criticism exists on the shifting of the US economy to a FIRE economy at the expense of a manufacturing and export-based economy. As the consumer of last resort, many believe that the United States has eschewed productive elements of its economy in favor of consumption to its long term detriment: Particularly after 1973 ..pundits of the status quo hailed the proliferation of the "FIRE" (finance, insurance, real estate) economy as the coming of a new "service" "post-industrial" economy that would replace the old "smokestack" economy and the jobs lost through plant closings, restructuring, and down-sizing ..
See also
* Boomburb
A boomburb is a large, rapidly-growing city that remains essentially suburban in character, even as it reaches populations more typical of urban core cities. It describes a relatively recent phenomenon in a United States context. The neologism wa ...
s
* Edge city
An edge city is a concentration of business, shopping, and entertainment outside a traditional downtown or central business district, in what had previously been a suburban, residential or rural area. The term was popularized by the 1991 boo ...
* Exurb
An exurb (or alternately: exurban area) is an area outside the typically denser inner suburbs, suburban area, at the edge of a metropolitan area, which has some economic and commuting connection to the metro area, low housing-density,
and rela ...
* Financialization
Financialization (or financialisation in British English) is a term sometimes used to describe the development of financial capitalism during the period from 1980 to the present, in which debt-to-equity ratios increased, and financial service ...
References
{{DEFAULTSORT:Fire Economy
Economic systems
Services sector of the economy
Renting
Economics neologisms