176 research outputs found
Financialisation at a Watershed in the USA
In the period following the Great Recession of 2007-9 the financialisation of the US economy reached a watershed characterised by stagnant financial profits, falling proportions of financial sector and mortgage debt, and rising proportion of public debt. The main macroeconomic indicators of financialisation in the USA show structural breaks that can be dated around the period of the Great Recession. The reliance of households on the formal financial system appears to have weakened for the first time since the early 1980s. The financial sector has lacked the dynamism of the previous three decades becoming more reliant on government. The state has increased its own indebtedness and supported large financial institutions via unconventional monetary policy measures. At the same time, state intervention has tightened the regulatory framework for big banks. The future path of financialisation in the USA will depend heavily on government policy with regard to state debt and financial regulation, although the scope for boosting financialisation is narrow
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Greece in crisis: austerity, populism and the politics of blame
Within the broader debate on the Greek crisis, the theory of âpopulist democracyâ postulates that populism is fundamental to the sustenance of the Greek political system and is at the heart of Greece's endemic domestic weaknesses. This article tests this assumption empirically through the use of a sophisticated framing analysis of speeches delivered by the leaders of the five parties in the Greek parliament in the period 2009â11. The findings confirm that populism: (a) is expressed through the narratives of political actors; (b) is observed across the party system; (c) is expressed in the forms of blame-shifting and exclusivity; and (d) differs depending on position in the party system. The article contributes to the debate by testing and building on the theory of democratic populism, providing a novel way of measuring and operationalizing populism and identifying a new typology that distinguishes between mainstream and fringe populism
The effects of financialisation and financial development on investment: Evidence from firm-level data in Europe
In this paper we estimate the effects of financialization on physical investment in selected western European countries using panel data based on the balance-sheets of publicly listed non-financial companies (NFCs) supplied by Worldscope for the period 1995-2015. We find robust evidence of an adverse effect of both financial payments
(interests and dividends) and financial incomes on investment in fixed assets by the NFCs. This finding is robust for both the pool of all Western European firms and single country estimations. The negative impacts of financial incomes are non-linear with respect to the companiesâ size: financial incomes crowd-out investment in large companies, and have a positive effect on the investment of only small, relatively more credit-constrained companies. Moreover, we find that a higher degree of financial development is associated with a stronger negative effect of financial incomes on companiesâ investment. This finding challenges the common wisdom on âfinance-growth nexusâ. Our findings support the âfinancialization thesisâ that the increasing orientation of the non-financial sector towards financial activities is ultimately leading to lower physical investment, hence to stagnant or fragile growth, as well as long term stagnation in productivity
The international face of Thessaloniki: the âGreek crisis,â the entrepreneurial mayor, and mainstream media discourses
Thessaloniki and its mayor have been portrayed quite favourably in international mainstream media compared to the Greek state after the 2008 economic crisis. The dominant (media) discourses on Greece interpret the crisis as the result of the failure of the Greek state to reform due to the prevalence of a traditional political culture over a modern one and the moral failures of the population. In the international media representations of Thessaloniki, the local government has been described as âexceptionalâ in its crisis management compared to the state and other local governments, and the city's mayor, Yiannis Boutaris, has been portrayed as a reform hero, due to the implemented entrepreneurial development strategy and the revamp of the city's image through place branding. Analysing the key role of international media in the production and reproduction of a place-branding campaign of Thessaloniki in international media by employing critical discourse analysis, the paper questions the favourable representations of the city compared to the Greek state during the same period. I argue that the serial repetition of positive images contributed to Thessaloniki being perceived as an example to be followed by other Greek local governments and the central state, acting as a best practice example for transformations envisioned on wider scales. The paper contributes to place-branding debates by illustrating the important role of international media in the dissemination of place brands, and by analysing how media representations of place may serve the legitimation of processes of neoliberalisation on scales wider than the concrete urban setting where they occur
Beyond âgeo-economicsâ: advanced unevenness and the anatomy of German austerity
This article aims to shed new light on Germanyâs domineering role in the eurocrisis. I argue that the realist-inspired depiction of Germany as a âgeo-economic powerâ, locked into zero-sum competition with its European partners, is built around an empty core: unable to theorise how anarchy shapes the calculus of states where security competition has receded, it cannot explain why German state managers have insisted on an austerity response to the crisis despite its significant risks and costs even for Germany itself. To unlock this puzzle, this article outlines a version of uneven and combined development (UCD) that is better able to capture the international pressures and opportunities faced by policy elites in advanced capitalist states that no longer encounter one another as direct security rivals. Applied to Germany, this lens reveals a twofold unevenness in the historical structures and growth cycles of capitalist economies that shape its contradictory choice for austerity. In the long run, the reorientation of the export-dependent German economy from Europe towards Asian and Latin American late industrialisers renders the structural adjustment of the eurozone an opportunityâfrom the cost-saving view of German manufacturers producing in the European home market for export abroad, as well as for German state officials keen to sustain a crumbling class compromise centred on Germanyâs world market success. In the short term, however, its exposed position between the divergent post-crisis trajectories of the US and Europe accelerates pressures for austerity beyond what German state and corporate elites would otherwise consider feasible
The meta-crisis of secular capitalism
The current global economic crisis concerns the way in which contemporary capitalism has turned to financialisation as a double cure for both a falling rate of profit and a deficiency of demand. Although this turning is by no means unprecedented, policies of financialisation have depressed demand (in part as a result of the long-term stagnation of average wages) while at the same time not proving adequate to restore profits and growth. This paper argues that the current crisis is less the ânormalâ one that has to do with a constitutive need to balance growth of abstract wealth with demand for concrete commodities. Rather, it marks a meta-crisis of capitalism that is to do with the difficulties of sustaining abstract growth as such. This meta-crisis is the tendency at once to abstract from the real economy of productive activities and to reduce everything to its bare materiality. By contrast with a market economy that binds material value to symbolic meaning, a capitalist economy tends to separate matter from symbol and reduce materiality to calculable numbers representing âwealthâ. Such a conception of wealth rests on the aggregation of abstract numbers that cuts out all the relational goods and the âcommonsâ on which shared prosperity depends
The state and class discipline: European labour market policy after the financial crisis
This paper looks at two related labour market policies that have persisted and even proliferated across Europe both before and after the financial crisis: wage restraint, and punitive workfare programmes. It asks why these policies, despite their weak empirical records, have been so durable. Moving beyond comparative-institutionalist explanations which emphasise institutional stickiness, it draws on Marxist and Kaleckian ideas around the concept of âclass disciplineâ. It argues that under financialisation, the need for states to implement policies that discipline the working class is intensified, even if these policies do little to enable (and may even counteract) future stability. Wage restraint and punitive active labour market policies are two examples of such measures. Moreover, this disciplinary impetus has subverted and marginalised regulatory labour market institutions, rather than being embedded within them
Austerity, ageing and the financialisation of pensions policy in the UK
This article offers a detailed analysis of the recent history of pensions policy in the United Kingdom, culminating in two apparent ârevolutionsâ in policy now underway: the introduction of âautomatic enrolmentâ into private pensions, and proposals for a new âsingle-tierâ state pension. These reforms are considered exemplary of the âfinancialisationâ of UK welfare provision â typified in pensions policy by the notion that individuals must take personal responsibility for their own long-term financial security, and engage intimately with the financial services industry to do so. As such, the reforms represent the continuation of pensions policy between the Labour and coalition governments, despite the coalition governmentâs novel rhetorical commitment to austerity. In fact, the pensions revolutions will actually cost the state significantly more than current arrangements, yet the importance of fears about population ageing means that the government is both able to marshal the imagery of austerity to justify financialisation, but is also required to partly conceal the increased expenditure this requires. The article shows therefore how the financialisation agenda in pensions policy was evident before the financial crisis, but has evolved to both take advantage, and mitigate the constraints, of a post-crisis political climate
The financialization of the nonâfinancial corporation. A critique to the financial turn of accumulation hypothesis
One aspect in which non-financial corporations (NFCs) are said to be financialized is that they have been increasingly engaged in financial accumulation from which they derive a growing proportion of financial income. This is what we call the financial turn of accumulation hypothesis. In this article, we show that the evidence used to sustain it, in the U.S. setting, has to be reconsidered. Our findings show that, contrary to the financial turn of accumulation hypothesis, financial income averages 2.5% of NFCsâ total income since the 1980s, oscillating since the beginnings of the 1990s until 2005 and then declining. In terms of assets, some of the alleged financial assets might actually reflect other activities in which NFCs have been increasingly engaged, such as tax avoidance, internationalization of production, activities refocusing and M&As
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