Debtfare States and the Poverty Industry

WINNER of the BISA IPEG Book Prize 2015 http://www.bisa-ipeg.org/ipeg-book-prize-2015-winner-announced/ Under the rubric of ‘financial inclusion’, lending to the poor –in both the global North and global South –has become a highly lucrative and rapidly expanding industry since the 1990s. A key inquiry of this book is what is ‘the financial’ in which the poor are asked to join. Instead of embracing the mainstream position that financial inclusion is a natural, inevitable and mutually beneficial arrangement, Debtfare States and the Poverty Industry suggests that the structural violence inherent to neoliberalism and credit-led accumulation have created and normalized a reality in which the working poor can no longer afford to live without expensive credit. The book further transcends economic treatments of credit and debt by revealing how the poverty industry is extricably linked to the social power of money, the paradoxes in credit-led accumulation, and ‘debtfarism’. The latter refers to rhetorical and regulatory forms of governance that mediate and facilitate the expansion of the poverty industry and the reliance of the poor on credit to augment/replace their wages. Through a historically grounded analysis, the author examines various dimensions of the poverty industry ranging from the credit card, payday loan, and student loan industries in the United States to micro-lending and low-income housing finance industries in Mexico. Providing a much-needed theorization of the politics of debt, Debtfare States and the Poverty Industry has wider implications of the increasing dependence of the poor on consumer credit across the globe, this book will be of very strong interest to students and scholars of Global Political Economy, Finance, Development Studies, Geography, Law, History, and Sociology. https://www.youtube.com/watch?v=2lU6PHjyOz

Responsibility for the developing world?

Öffentliche Pensionsfonds sind eine Marktkraft, mit der Regierungen und Firmen rechnen müssen. Einer der Hauptvertreter von Shareholder-Verantwortung hat versucht, bei Investitionen Umwelt-, soziale und finanzielle Aspekte zu balancieren

Corporate Governance for Sustainability

The current model of corporate governance needs reform. There is mounting evidence that the practices of shareholder primacy drive company directors and executives to adopt the same short time horizon as financial markets. Pressure to meet the demands of the financial markets drives stock buybacks, excessive dividends and a failure to invest in productive capabilities. The result is a ‘tragedy of the horizon’, with corporations and their shareholders failing to consider environmental, social or even their own, long-term, economic sustainability. With less than a decade left to address the threat of climate change, and with consensus emerging that businesses need to be held accountable for their contribution, it is time to act and reform corporate governance in the EU. The statement puts forward specific recommendations to clarify the obligations of company boards and directors and make corporate governance practice significantly more sustainable and focused on the long term

Cannibalistic Capitalism: The Paradoxes of Neoliberal Pension Securitization

Workers have become increasingly dependent on the economic performance of corporations for the value of their retirement savings as pension funds across the OECD area have ramped up investment in corporate stocks and bonds. This phenomenon, known as pension securitization and wrapped in the discourse of the ‘empowerment’ of the worker as a shareholder, has become a defining and highly problematic feature of the neoliberal era. Neoliberalism -- and, by extension, securitization -- needs to be understood not as an end state but as an ongoing and contradictory process aimed at deepening and widening the marketization of society. This process demands that the manifestations of crises of capital accumulation, including struggles that threaten to delegitimize neoliberal rule, be absorbed or displaced, spatially and temporally. It also necessitates that states and capitalist classes continually engage in the construction, naturalization and social reproduction of highly paradoxical neoliberal accumulation strategies such as pension securitization. Cannibalistic capitalism captures the processes by which workers’ savings in the form of pension funds feed off both their own increased indebtedness and that of other workers, a condition driven largely by stagnant real wages and unemployment. As has especially been evidenced in the US, which shall be the focus of this essay, due to the dependence of pension funds on high-risk investments, their investment strategies mutilate the value of pension savings with the advent of more frequent and deeper financial crises that serve to wipe out gains made during a speculative run. Instead of serving to weaken cannibalistic capitalism, crises have had the effect of deepening neoliberalisation by allowing financial corporations and their shareholders (which include pension funds) to prey on those dispossessed workers, who, in the absence of a safety net, strive to maintain basic living standards through the credit system. It is critical to understand the securitization of pension savings and the increased reliance of workers on financial markets as a result of complex forms of struggles between workers and capitalists, mediated by the state. Generally speaking, the dependence of labour on the market has been accomplished through ongoing and intensifying attempts to discipline workers -- both inside and outside the reserve labour army. As forms of state intervention, financial fetishism and the marketization of labour reveal that securitization, and its intensification in the form of cannibalistic capitalism, is neither a natural nor neutral phenomenon. Cannibalistic capitalism serves the capitalist class in at least three interlocking ways. First, due to their reliance on Wall Street, workers (i.e., ‘Main Street’) have a strong stake in the preservation of the system that exploits them because the destruction of the capitalist system entails the annihilation of their savings. Second, with each crisis, dispossessed workers become increasingly reliant on the credit system, thus exposing themselves to the disciplinary, demobilizing, and individualizing tendencies of debt (collection agencies, bond rating agencies, prisons, courts, and so forth). Third, workers have been relegated to the ever-growing reserve army of underemployed and unemployed labour. This, in turn, serves to erode solidarity, weakening collective action against the class-based and capitalist nature of securitization

The New International Financial Architecture: Imposed Leadership and 'Emerging Markets'

The Asian bust of 1997 caught the international financial community by surprise. It also opened the floodgates to a torrent of criticism about the ability of financial liberalization to create sustained prosperity. The United States government launched an impassioned defence of capital mobility by blaming the 'emerging markets'. In the larger framework of the G7 (Group of Seven) the US sought to strengthen the existing rules of the game through the creation of the so-called New International Financial Architecture (NIFA) at the Cologne summit in 1999. The chief significance of the NIFA lies in its attempt to incorporate what are called 'systematically important' emerging market economies into a carefully-structured international policy-making environment, so as to ensure that they adopt the rules and standards of the West, by integrating these countries more closely with the International Monetary Fund (IMF) and the World Bank