Panel 1A: Same but Different? Stories on Subordinate Financialization
‘The Political Consequences of Dependent Financialization: Capital Flows, Crisis and the Authoritarian Turn in Turkey’ (Fulya Apaydin (Institut Barcelona d’Estudis Internacionals and M. Kerem Coban, Lee Kuan Yew School of Public Policy)
Recent debates on financialization in developing market economies highlight the terms of unequal exchange that these countries are embedded in, where international capital flows steered by powerful financial actors and transnationalized banks have a major impact on economic growth performance. As a result, many of these countries have become increasingly sensitive to international market volatilities as the post-2008 Global Financial Crisis (GFC) episode has shown. Yet, we know much less about the political implications of these interactions. How do unequal financial relations influence the political trajectories in emerging market economies? Using process tracing and based on original evidence from Turkey, we find that electoral democracies are politically vulnerable in the face of monetary policy decisions of major central banks when private debt is high. Under these circumstances, the constraints on the domestic policy space following an economic crisis facilitate democratic backsliding and opens the door to authoritarianism under right-wing rulers.
‘Aspects of Financialisation in the Global South: The Case of India’ (Kaustav K. Sarkar, Tata Institute of Social Sciences, Mumbai)
The globalised world is witnessing increasing dominance of financialisation of the economy and the society. There have been changing associations among finance capitalists, individuals, economy, geography and the society – with financialisation at the centre of these relationships. However, research on the subject is primarily concentrated on advanced capitalist economies of the global North. As finance is penetrating in the global South as well, there is a need to understand the various aspects, features, nuances and the theoretical debate surrounding financialisation inthe context of countries from the global South. A comprehensive review of the literature reveals that financialisation studies have unsettled debate in relation to thegenesis, characteristics, causes and consequences of the phenomenon. In the case of India, it is very difficult to gather strong evidence on financialisation of the Indian economy. In the Indian context, we find that macro-evidences of financialisation are not robust in comparison to evidences from the developed capitalist economies in the global North. However, some recent micro studies provide contrary indication to theabove – finding traces of financialisation in microfinance and digital banking in India. As financialisation is a complex and multi-layered subject and most of the economies from the global South do not display usage of complex financial products on a large scale, macro findings may not fully justify to the subject. Sector specific micro studies may prove advantageous to the former.
‘Peripheral Financialization in Georgia: Unravelling Financialization through a State Theory’ (Ia Eradze, Leibniz Centre for Contemporary History, Potsdam)
Financialization has become a buzz word in political economic debates on finance. Yet, it remains puzzling which common roots this process in different places has and how does it emerge? In order to shed some light on these questions from the global south perspective, this paper engages with the Georgian case. Financialization of household debt is analysed through a peripheral state theory, to identify different forces, power relations and policies. Georgia is an illustrative case for the rise of finance in a transitional country, along marketization and liberalization reforms. The paper looks at the post-Revolution period from 2003 to 2012, which marked the new state building process, as well as the revival of the financial system and rapid entry of foreign capital. By now, almost all commercial banks are in foreign ownership and unofficial dollarization rate exceeds 50%. Commercial banks turned into the main drivers of financialization, fostering over indebtedness of households through foreign currency lending and consumer credit boom, which started in 2005. The pandemic has led to rising debt levels and increased unemployment, creating new threats forhouseholds. Due to the high rate of dollarization also in retail loans, depreciation of the Georgian Lari throughout the pandemic has created a further burden for foreign currency borrowers. Thus, the paper analyses financialization of everyday life in Georgia and aims to contribute to the empirical, as well as the methodological debate on financialization in the Global South.
‘Central Banking and Financialization in the Global South: Credit and financial stability in Mexico’ (Jorge Quintero-Sanchez, University of Warwick)
The literature on financialisation has expanded considerably in the past decade taking into consideration finance and its developments in the Global South. However, some issues of relevant interest for its advancement remain underexplored. For instance, considerable attention is placed on financialisation in the US and the UK and these examples are typically used as benchmarks for comparison with other geographies. The effect obscures the empirical reality in the Global South along with the varieties of financialisation that can be identified elsewhere. In addition to this Western parochialism of the political economy of finance, analysis of the political processes in which institutional actors and economic agents are conceived together (i.e., the actual politics of financialisation) tends to remain scarce. To confront these issues, a critical constructivist IPE lens can help to unveil the political constructions underpinning the effects of finance that have driven financialisation in the domestic economies of the Global South. To make the case, here financialisation is understood in the words of Montgomerie (2006) where finance and its power are social constructs shaped by social forces. Once installed in this realm, the claim is that finance has been constructed by following the economic rules to liberalise and deregulate markets in order to have access to international credit. To discuss this the central bank of Mexico’s monetary and exchange rate policies in the 1990s and early-2000s are used as evidence. Sovereign creditworthiness, fiscal discipline and financial stabilisation narratives were used as core political arguments to accommodate finance as an economic engine in Mexico.
Panel 1B: Will This Time Be Different? Sovereign Debt Crises and COVID-19
‘Who’s the Credible Sovereign? The Corona Crisis as a Challenge to Sovereign Creditworthiness in the Eurozone’ (Carolin Müller, Hamburg Institute for Social Research)
Despite its importance, there is hardly an issue in the economy that is so rarely explicitly addressed and concretized as the question of what exactly makes a sovereign eligible to take out loans. As evident in the rules of the European Monetary Union, it is often assumed that markets have the most adequate means to assess good governance of public finances and therefore serve as the ultimate “site of veridiction” of sovereign creditworthiness. This renders questions of state deficits and sovereign bond ratings into technical and depoliticized phenomena. However, as legally unenforceable claims, public promises to pay can only be understood as political acts, which are assessed according to the willingness attributed to the sovereign to fulfil its obligations. Therefore, I argue that sovereign creditworthiness emerges in a political conflict between a variety of actors and in different spheres. I differentiate between three dimensions in which the concept of sovereign creditworthiness is constituted, namely “fiscal space”, “safe haven” and “collateral”. They all revolve and condense around the concept of the government bond but contrasting these contexts shows that different actors, dynamics and political conflicts are involved. In this paper, I take a closer look at how sovereign creditworthiness in the Eurozone has been challenged and renegotiated in the course of the COVID-19 pandemic. In particular, I aim to show that “the sovereign” to which creditworthiness is ascribed is itself subject to a transformation. The question of where or from which political institutions sovereign creditworthiness originates has always been ambiguous in the euro area and currently shifts from the national level of member states to a supranational, “European” creditworthiness. The financial consequences of the pandemic highlighted again that only a guarantee of convertibility into central bank money can make Euro government bonds safe and prevent yield spreads that endanger the stability of the Euro zone. The Recovery Fund further acknowledges that creditworthiness in the monetary union is not just a question of individual governments’ spending policies. The crisis has also shown once again that sovereign creditworthiness clearly links the spheres of monetary and fiscal policy. The monetary policy of the ECB, whose task is essentially to control private credit creation, thus also depends on government bonds prices and fiscal policy. These developments in the constitution of sovereign creditworthiness highlight, that finance is a result of political, legal, and social conditions in different spheres, which together form an inconsistent “regime” with immanent ramifications on political, social and economic dependencies.
‘Private Sector Involvement in Sovereign Debt Crises and the G20 Initiatives in the Wake of the Pandemic: Paradigm Shift or Continuity?’ (Livia Hinz, European University Institute, Florence)
The COVID-19 pandemic spread in a fragile global economic context, characterized by the accumulation of high levels of public and private debt. The rise in fiscal expenditure, contraction of economic activity and capital flight derived from the pandemic rapidly exacerbated existing vulnerabilities, threatening to cause a wave of debt crises in low-income and middle- income economies. Against this background, the submission investigates recent developments in sovereign debt governance focusing on the G20 initiatives aimed at addressing the impact of the pandemic on low-income countries, the ‘Det Service Suspension Initiative’ (DSSI) and the ‘Common Framework for Debt Treatment Beyond DSSI’. The analysis revolves specifically around the ‘comparability of treatment’ requirement, a longstanding principle of Paris Club bilateral debt management practice reintroduced in the Common Framework as a tool to foster private and public sector burden sharing and cooperation.
The objective of the contribution is two-fold. On the one hand, based on the analysis of debt restructuring practices under the auspices of the Paris Club through relevant academic literature and policy documents, the submission evaluates the concrete implementation of the comparable treatment’ requirement in the past, in order to assess which lessons could be drawn for future G20 debt treatment operations. Specifically, by investigating the evolution of the meaning and economic function of the ‘comparable treatment’ principle in parallel to the transformation of the global sovereign debt structure, the contribution attempts to shed some light on the challenges and friction points surrounding its operation, focusing on the lack of transparency in sovereign debt obligations and on fundamental differences in the approach to debt treatments between official and commercial creditors. On such grounds, the submission identifies some defining features that are likely to shape the principle’s application in the context of the Common Framework and sketches a few tentative options for future developments. On the other hand, the contribution explores the possibility for the international community to signal its commitment in enforcing ‘comparability of treatment’ by resorting to exceptional statutory tools, capable of influencing creditors’ incentives. The proposed contribution fits into the topic of the conference, addressing issues related to the effective involvement of private financial actors in the management and resolution of sovereign debt crises in the aftermath of the COVID-19 pandemic.
COVID-19 and Macrofinancial Debt Crises: What Role for the SDR System?’ (Tobias Pforr (European University Institute, Florence), Steffen Murau (Boston University) and Fabian Pape (University of Warwick)
The Covid-19 pandemic has led to dramatic increases in government borrowing. The Institute of International Finance (IIF) has gone so far as to speak of an “attack of a debt tsunami”, as global debt increased by over USD 15 trillion by Q3 2020, hitting a new record of USD 272 trillion. Even though government borrowing rates have so far remained at historic lows for many countries, such developments are also a recipe for possible macroeconomic instabilities over the longer term. This opens the question of how such instabilities should be managed on the international stage and what role the IMF and its Special Drawing Rights (SDR) system can play in managing future macroeconomic stability. In this article, we adopt the perspective of critical macro-finance and present an analysis of the real-world SDR system as a web of hierarchical interlocking balance sheets. The SDR system is a small payment community that comprises one institution of each IMF member state, called ‘participant’ (typically the central bank), the IMF General Department as well as prescribed holders, such as development banks and intergovernmental monetary institutions. We stress that the SDR system has an idiosyncratic accounting logic—the result of a French-American compromise made in the 1960s—which makes SDRs unlike any other financial instrument. The term SDR is effectively used to refer to three things: a unit of account (today defined as a currency basket), a non- tradeable liability of the participants (called SDR allocation), and an asset (called SDR holding) that is tradable within the SDR system. After the demise of the Bretton Woods System, theSDR system was long seen as a ‘solution in search of a problem’, with an unclear practical purpose. Based on the analysis of original IMF data, we argue that the SDR system today has three different functions: First, it acts as a de-facto credit line for participants to borrow usable currency, predominantly USD, from other participants which can be obtained by selling SDR holdings. Second, it allows the IMF member states to pay contributions to the IMF General Department and to other prescribed holders. Third, it allows for those prescribed holders to ask for contributions in usable currency from IMF member states. Based on this analysis, we see the SDR system in its present form as serving a very minor and narrow role in the international monetary architecture. Given its accounting structure and functions, we caution against suggestions that this system can be used as a ready-made remedy against potential large scale solvency problems that may finally break out in the aftermath of the COVID-19 pandemic.
Panel 2A: Finance and Racial Capitalism
‘Refugee Finance: Racial Ordering and the Financialization of International Protection’ (Daria Davitti, Lund University)
This paper examines the emergence of refugee finance (i.e. the mobilization of private capital to fund refugee responses) as a key migration control tool for the containment, externalization and management of racialized bodies. The project challenges the humanitarian narrative of refugee finance by tracing its racial ordering structures and analysing the legal and economic forms of expropriation, violence and exploitation that itsustains and reproduces. To do so, it studies the World Bank’s Global Concessional Financing Facility (GCFF), a key refugee finance instrument extended to Colombia in 2019 to respond to the arrival of Venezuelan refugees. The research traces the projects funded by the GCFF in Colombia to see how they may counter precarity or reinforce it. By applying the theoretical lens of racial capitalism (Robinson, 1983) to the processes of racialization uniqueto Latin America (Eslava, 2015), the project traces the way in which refugee finance is key to migration containment and externalization, to the management of ‘superfluous’ population, and to the end of asylum options in the Global North.
‘Finance as Racist or Finance as Emancipatory? Investing in Closing the Racial Wealth Gap in the United States’ (Emily Rosenman, Penn State University)
This paper examines the geographies of finance-based ‘solutions’ to racialized wealth disparities in the United States. Under the banner of “racial justice investing,” investment managers, community-based investment funds, and financial institutions are offering investment products that claim to increase racial equality in the US economy. This paper introduces the major actors in the racial justice investing industry and analyzes various types of investments being offered. I focus on how these investments are connected, discursively and materially, to financial actors’ understandings of justice in the current moment of awareness and concern about racialized inequality. The analysis reveals a wide range of financial arrangements connected to diverse understandings of justice. What unites these arrangements is an understanding of the racial wealth gap as an investible object, which is subject to processes of marketization under the banner of racial progress – progress that centers on uplifting marginalized people rather than disrupting white people’s overaccumulation of wealth. In this contemporary racial justice investing largely sidesteps the questions of power and, paradoxically, distribution that animate many contemporary racial justice movements.
‘Financialization in the Global South, International Capital Flows and Neoliberalism: The Case of Wilhelm Röpke’s Racial Capitalism’ (Kevin Rösch, University of Siegen)
Following the outbreak of the COVID-19 pandemic, the fragility of the current global financial system has again been revealed. In particular, the Global South has experienced a sudden stop of inward financial flows, coupled with a reversal of flows to the Global North. Such international capital flows are a significant aspect of the external financialization of the Global South, which entail a high degree of dependence on foreign investment. While often examined empirically but rarely embedded in terms of intellectual history, this phenomenon is a well-known stylized fact in the literature on the financialization of the Global South. Theoretically, this is commonly claimed to be a consequence of neoliberal liberalization of markets. Such a characterization, however, contradicts parts of recent research on the foundations of neoliberalism, which understand neoliberalism as an attempt to encase and design markets, rather than assuming self-regulating and free markets. To bridge this theoretical gap, this article therefore provides an intellectual history of neoliberalism in relation to international financial flows. By focusing on Wilhelm Röpke’s oeuvre – one of the most influential proponents of the neoliberal Geneva School – this contribution illustrates the central role of the ‘strong state’ in enabling as well as enforcing capital flows and identifies linkages between neoliberal thought and a historically specific version of racial capitalism that, far from universalist liberal principles, culminated in Röpke’s cultural essentialist and racist apologia of Apartheid South Africa in 1964. Against this background, one can certainly question whether neoliberal policy proposals are suitable for ‘building back better’.
Panel 2B: Global Hierarchies of Money
‘Exchange Rate and Balance of Payment Crisis Risks in the Global Development Finance Architecture’ (Alfredo Schclarek National University of Cordoba Argentina and Jiajun Xu, Peking University)
We analyze the exchange rate and balance of payment crisis risks when MDBs lend, in hard currency, to NDBs, for NDBs to onlend to investment projects. Investment projects maybe “export-enhancing” (EXIPs), which generate hard currency (for example, building a port or developing export agriculture), or “domestic-oriented” (DOIPs), which don’t generate hard currency (for example, a solar farm or a sewage system). If MDBs want to increase the proportion of onlending to DOIPs, they need to increase their refinancing to NDBs, and allow more time to pay back the loans. Further, MDBs need to reduce the interest rate charged on NDBs. In addition, high return EXIPs need to be financed to increase the supply of hard currency.
‘Post-Keynesian Perspective on the Eco Zone Project: Liquidity Premiums and External Financial Fragility in the West African Economic and Monetary Union, Ghana and Nigeria’ (Florian Lampe, University of Hamburg and Anne Löscher, University of Siegen)
A growing discontent with France’s influence on monetary policy issues in its former colonies in West Africa led to an intensified debate about the future of the African CFA franc zone in recent years. In December 2019, as reaction to sustained criticism of the colonial continuities of the CFA currency regime, the presidents of Côte d’Ivoire and France announced a reform of the West African Economic and Monetary Union (WAEMU), i.e. the independent Western subzone of the CFA union. The reform aims to introduce the eco as new currency for the WAEMU, to abandon requirements to hold reserves at the operations account at the French treasury and to further restrict the French influence on the composition of the central bank’s board. It furthermore envisions a common monetary union of the WAEMU and the remaining non-CFA countries of the Economic Community of West African States (ECOWAS) with Nigeria and Ghana as the economically most important member states. The Eco- project therefore aims to strengthen monetary sovereignty with positive effects for the democratisation of policies.
The paper focuses on this eco zone project and its implications for monetary policies against the backdrop of the international monetary order from a post-Keynesian perspective. The literature on the international currency hierarchy developed by Latin-American structuralists and the Post- Keynesian Berlin School of thought focuses on the notion of a currency-specific liquidity premium that structurally determines the interest rate level in the corresponding currency areas. Based on this set of literature, we conduct a comparison between the liquidity premiums of the Western CFA franc, the Nigerian naira and the Ghanaian cedi to make conjectures about what implications the monetary union would have for their monetary policy space. Being a non-pecuniary variable, the liquidity premium cannot be observed directly. We therefore approximate the liquidity premia by calculating differences in interest rates such as the central bank’s base rate, the coupon rate on T-bills and bonds and the interest rate spread between Eurobonds and bonds denominated in local currency both issued by the same country. Besides, we use balance of payment data to identify external financial fragilities that might become a crucial factor for monetary policy due to an increasing financialisation in West Africa.
‘Why Asia Matters: Comparative Capitalisms, East Asia and Post-Crisis Shifts in the Global Dollar System’ (Fabian Pape (University of Warwick and Johannes Petry, Scripts Cluster of Excellence, Berlin)
Since the global financial crisis (GFC) 2007-2009, the global dollar system has undergone a series of significant transformations. With Critical-Macro Finance, a large research programme has emerged in IPE that addresses these shifts – from the rise of (passive) asset management, the growing importance of repo-transactions and the central clearing of such market transactions to examining the larger role of central banks as market actors. One post-crisis shift in global finance that has so far not been addressed by IPE scholars is the growing importance of East Asia in the global dollar system. Contemporary analyses of global finance still largely focus on financial flows in transatlantic banking which had dominated the global dollar system before the GFC and whose market-based nature actively facilitated the global credit crunch. However, we argue that with the shift to global asset management has increased the importance of East Asia for the global system (at the expense of Europe). The domestic institutional arrangements that underpin financial transactions and relationships in East Asia, however, differ significantly from the more market-based, deregulated arrangements that underpinned transatlantic financial transactions in the pre-crisis system. To understand the implications of this increasing connection, we argue that IPE literature must more extensively engage with both East Asian financial systems as well as the literature on East Asian capitalisms. We illustrate our case by analysing the growing importance of (a) Asian investors in global markets as well as (b) global investors in Asian markets. Our analysis draws on an analysis of secondary literature, financial news, data and reports as well as expert interviews.
Panel 3A: The Socio-Technical Lives of Money and Finance
‘Error R51: The Materiality of The Point-of-Sale Credit Assessments’ (Fatih Karakaya, Istanbul University)
Error 51 is the error code for insufficient funds. Error 51 signals on a POS terminal to tell the seller that the card-holder has maxed out his credit limit or he is not creditworthy for the time being for the product about to be sold. Although a POS terminal has sped up the process, point-of-sale credit assessment is as old as human history. A seller always wants to build customer loyalty. Selling on credit has been one of the most significant services a seller could offer to succeed in his goal to build customer loyalty. A buyer always seeks for exceptional services attached to his regular buying. Buying on credit with dear terms has been one of the most significant services a buyer could find in his goal to get the most benefit out of buying. Hence the encounter between buyer and seller may lead a credit sale. However, the seller would want to evaluate the creditworthiness of the buyer to avoid the loss of a bad trade. Debt books of shoppers, sale forms of instalment sale firms and POS terminals are those market devices that enable the seller to assess the creditworthiness and the credit limit of the buyer. The material aspects of these market devices matter in the assessment processes. Debt book of shoppers records the routine shopping of customers. Hence, a rhythmic evaluation process leads seller to trust the customer on credit. It also determines a certain credit limit and credit restructuring terms for the customer. Sale form of an instalment sale firm makes a buyer answer definite questions that are weighted instantly. Hence, a clinical evaluation process leads seller to trust on the customer on credit. POS terminal calls the server of Credit Card Company to receive authorization for the credit sale. Hence, an algorithmic evaluation process leads seller to trust on his sale on a credit card. Based on interviews with relevant parties of credit sale transactions and published materials as well as literary works, this paper aims to open the black box of point-of-sale credit assessment processes by analysing the materiality of the market devices that enable credit assessment. Bridging the historical figurational analysis of Norbert Elias, and in situ encounter analysis of Erving Goffman with the emphasis on non-human actants of Actor Network Theory, the paper seeks for an alternative explanation of trust issue. This alternative explanation would deconstruct the grand narrative of the loss of trust in modern society.
‘Forms of Software and Data Reuse in Machine Learning-Driven Finance’ (Kristian Bondo Hansen (Copenhagen Business School) and Nanna Bonde Thylstrup, (Copenhagen Business School)
This paper explores the concept of reuse (Pasquetto et al., 2017) in machine learning (ML)-driven investment management and algorithmic trading. The reuse of data and software is steadily becoming an integral part of the work practices of many developers and users of ML techniques in financial services. ML-software libraries such as Google’s TensorFlow and the general explosion in available standard and alternative data enable and encourage reuse and repurposing, which affects views on as well as the actual practices of investment and trading model development and deployment. Moreover, the assetization – the transformation of resources into assets (Birch et al., 2021; Birch and Muniesa, 2020) – of data and software hinges on and accelerates reuse as in the case of data, technology and analytics vending. Drawing on 182 interviews with market professionals working primarily in quantitative investment management and algorithmic trading, we argue that there are (at least) three forms of reuse in quantitative finance: (1) a pragmatic form in which reuse is an integral part of ML modelling; (2) an economic form relating to the assetization and commodification of data and software; (3) an idealistic- organizational form in which reuse is considered an ordering principle rather than a concrete practice. Finally, we discuss the fine line between innovation and function creep that seems to cut through and also accelerate reuse practices in quantitative finance.
‘Inclusion of the Fittest: Uberization, Indebtedness and the Future of Work in Africa’ (Gianluca Iazzolino, University of Oxford)
My paper highlights the significance of financialization in the Future of Work in Africa debate by focusing on the booming Kenyan gig economy. It draws on an ethnography conducted before the Covid-19 pandemic to examine the unequal distribution of opportunities and risks among Uber drivers in Nairobi. It shows how, notwithstanding narratives of disintermediation advanced by digital firms, formal and informal financial intermediaries have emerged on the Kenyan market to provide access to cars and loans to struggling drivers. My analysis uses Maurizio Lazzarato’s notion of debt as a ‘technique of power’ and Zenia Kish and Justin Leroy’s conceptualisation of ‘bonded life’ to argue that, while helping lower the entry barriers, financial actors raise the exit barriers for the drivers through debt.
This case study lays bare the contradictions between market-driven solutions to address unemployment and socio-economic exclusion and the entrenchment of pre-existing power relations. In so doing, my contribution critically engages with the political economy literature on the Future of Work in Africa by challenging the emphasis placed by both development and corporate actors on connectivity and entrepreneurship as key drivers of upward social mobility. Instead, it suggests that the Future of Work agenda is premised upon a process of subjectification from above in which the workers are constituted as entrepreneurs and disciplined through finance.
Panel 3B: Private Finance for a Resilient Recovery?
The Impact of Innovative Finance to Address Pandemic Preparedness’ (Jenna Marie Randolph, University of Bologna)
The COVID-19 pandemic has resulted in unprecedented economic, social, and governmental repercussions, prompting questions about how the world can best prepare for and respond to emerging disease threats. Throughout the past century two novel zoonotic viruses have spilled over to humans each year (Woolhouse et al. 2012). The damage caused by recent outbreaks of MERS, SARS, the 2009 H1N1 epidemics, HIV/AIDS, Ebola, and now the 2019 SARS-CoV-2 pandemic reveal the impact of zoonotic pathogens. The complex public health challenges arising from the multi-host ecology of zoonotic infections alongside rapidly changing relationships between humans and nonhumans due to accelerating environmental and anthropogenic demands attention from a diverse set of global stakeholders. In June 2017, the World Bank launched specialized pandemic bonds through the Pandemic Emergency Financing (PEF) Facility to channel surge funding to developing countries facing an outbreak and minimize the resulting health and economic consequences. As this facility comes to a close, critics argue that the bond was too expensive and ineffective, in part due to its lack of focus on preventative measures. A recent study suggests that coordinated net pandemic prevention costs range from $18 to $27 billion per year as opposed to the immense potential cost of a pandemic, such as the estimated $ trillion in GDP in 2020 due to COVID-19 (Dobson et al., 2020). This paper explores the multispecies exchange relations that shape innovative finance as it relates to One Health governance in the midst of the COVID-19 pandemic, and a consideration of how these relations privilege certain futures in which only some life forms and forms of life have value. The focus on innovative financial mechanisms is inspired by Marcel Mauss’s classic use of the Maori concept of hau, the ‘spirit of the gift’ (Mauss, 2011), as it relates to the use of markets to drive incentives for pandemic preparedness and response in low-and-middle-income countries while considering the ways in which changing relationships and perspectives amongst various stakeholders provides multiple orders in global health and sustainability. Rather than exploring pandemic preparedness and finance as separate entities, this paper reimagines boundaries between economic, legal, social, cultural and political realms by approaching finance through a multispecies lens and introducing new approaches for understanding how the marketization of global health has led to an increased risk of pandemic outbreak through changing the relationships between humans and nonhumans.
Emerging Dynamics of Financialization in Global South: Study of growth, structural difference and systemic importance of Shadow banks in India and China.’ (Dawa Sherpa, Jawaharlal Nehru University, New Delhi)
Under the backdrop of financial liberalisation and associated deregulation in many countries, the emergence of shadow banking and its importance from point of view of systemic stability of financial system and consequent recessionary impact on real economy cannot be overlooked. Shadow banking exist side by side with traditional formal banking system performing similar kind of banking services except that, they are lightly or not regulated at all by the regulators and does not enjoy liquidity facility of the central bank. These institutions are highly leveraged, deeply interconnected and more prone to “bank runs”. Shadow banks have emerged as fastest growing sub sector of financial system across Globe(both North and South) and were at heart of Global financial Crisis, 2007-08. Accordingto Financial Stability Board (FSB),2017 report, the global shadow system peaked at $62 trillion in 2007, declined to $59 trillion during the crisis, and rebounded to $99 trillion at the end of 2016. The shadow banking system’s share of total financial intermediation has reached 30 percent in 2016. Shadow financial systems, which epitomise the world of unregulated finance, have emerged as prime driver of process of financialization in contemporary world. Amongst other factors, Shadow banks are also facilitating the rapid process of financialization of economy in developing countries. Shadow banks are growing at phenomenal rate in developing countries like India and China. In contrast to the shadow banks in developed world, shadow banking in most of the developing countries consists of a broad spectrum of financial institutions and activities, which may not resemble typical Anglo Saxon model of financial system. India has a very complex and diversified credit system which has historically evolved to meet various developmental needs of the country. Shadow banking in India is growing at compound annual growth rate of 23% from 2002 to 2016 and accounted for 15.5 % of bank assets in March 31, 2017. It has also become the fastest growing segment in Indian Financial system. Similarly, Shadow financial institutions existed for decades in China after the financial deregulation of 1979, without creating any systemic risk to the financial system. But post great financial crisis of 2008, the injection of massive stimulus in economy and the consequent rapid expansion of shadow financial institutions has created systemic risk concerns in China. Chinese shadow bank are growing at alarming rate of 29% per annum in 2016 and has become third largest in the world. Massive shadow credit boom in post Global Financial Crisis period has created multiple boom bust cycles of asset price bubbles (real estate price and stock price) in Chinese economy. This paper will try to delineate the specificities of the process of financialization in global south under Neoliberal era by tracing the historical genesis, structural difference and the systemic importance of shadow banking in developing countries with particular emphasis in India and China.
‘COVID Bonds and the Ethics of Financialization in West Africa’ (Chelsie Yount-André, University of Bologna)
As economies worldwide stagnated during the Covid-19 pandemic, the ESG market experienced an unprecedented surge. The volume of social bonds issued jumped eight-fold in 2020, with the pandemic serving as a catalyst for new Covid-themed social bonds. This paper takes an anthropological approach to examine one such bond issued by the African Development Bank (AfDB). With this $3 billion social bond aimed at helping African nations manage the effects of the pandemic and its attendant economic crisis, the AfDB proposed a for-profit solution to the Covid crisis, the effects of which, they argued, were too urgent and severe for national governments to manage alone. Drawing on a total of 23 months of ethnographic research in Senegalese households and a 6-month examination of the development and disbursement of the AfDB’s “Fight Covid-19” social bond, this paper critically analyzes the ethical discourses that meditated the bond’s creation relative to the ways the funds have been used on the ground in Dakar, Senegal. Pairing discourse analysis of the banks’ claims regarding the bond’s aims with qualitative research on the effects it has had on its intended beneficiaries, I explore the ways the Covid crisis is giving rise to new forms of financialization on the African continent.
Panel 3C: Financial Hegemony in Organizations
‘Accounting Control as Hegemony: The Dynamics of Control in Financialized Professional Service Firm’ (Scott Allan, University of Aberdeen)
Professional service firms (PSFs) are a particularly pertinent context for studying management accounting control and especially its resistance. Autonomy is a key logic of professional work (Freidson, 1984), and partnerships are designed to defend such logics (Empson & Chapman, 2006; Smets et al., 2017). As such, the imposition of control through accounting contradicts with the logic of the PSF (D. J. Cooper et al., 1996). However, research increasingly reports a managerialist logic (Brock, 2006; Empson et al., 2013) and, most recently, forms of financialization in PSFs, (Allan, 2018, Faulconbridge and Thomas 2018; Alvehus & Spicer, 2012; Cushen, 2013) that lead to the proliferation of control mechanisms. However research in PSFs has noted deliberate and calculated resistance to management accounting control (Brivot & Gendron, 2011; Covaleski et al., 1998). Such studies of resistance raise questions about the extent to which management accounting control is totalising (Martinez, 2011; Brivot & Gendron, 2011) and able to establish “hegemonic narratives” (Cushen, 2013). They draw attention to the processes and activities of resistance and subversion that enable the bypassing of disciplinary forms of accounting control (Ezzamel et al., 2004). We use Laclau and Mouffe’s (2001) discourse-based reconceptualization of hegemony to theorize the political dimensions of management control (Bridgman & Willmott, 2006; Boon & Walton, 2014) and, more specifically, the discursive and articulatory struggles engendered in the control process, to enhance understanding of how “unexpected outcomes” emerge when management accounting control is enacted or, at least, attempted in the PSF.
‘The Financial Value of Cultural Values: International Evidence’ (Vipin Mogha (Universite Clermont Auvergne) & Benjamin Williams-Rambaud, IEA Clermont Auvergne)
This paper studies the effects of Hofstede’s cultural dimensions on firm’s value. On a sample of 4714 manufacturing firms from 32 countries, our results show that firms with country-of-origin’s cultural values of higher individualism, lower masculinity, lower uncertainty avoidance, and higher long-term orientation have a higher market value. The opposite relationship is true with firms having lower market value. Our theoretical backgrounds builds upon culture’s influence on a country’s institutions and business systems leading to industry and firm’s competitiveness. It emphasizes culture’s role on human capital aptitude in acquiring specific skills, which add value to firm’s goodwill. Based on firm’s country- of-origin’s cultural values, this goodwill leads to higher or lower financial value. The results remain stable to firm-level, country-level, and sample-level robustness tests. Our findings can help entrepreneurs, multinational firms’ managers, and policy-makers, in building industries’ and firms’ in cultures and countries where their competiveness would be enhanced. It could bring them higher financial value.
‘Financialization as Recombination: Bureaucracy and Neo-Patrimonialism on Wall Street (Felix Bühlmann, University of Lausanne)
Finance is widely seen as a driving force of modern capitalism, a progress of organizational rationalization, and scaffolding for meritocratic elite reproduction. Using Orbis data on over 28,000 US financial firms, and sociodemographic data on 806 founders and managers in key firms, we show that neo-patrimonial elements, such as hybrid legal forms and trust relationships, are spreading within finance. Our article contributes to the debate of wether financialization is a modernization process or a return to pre-modern forms, by framing capitalism as a system that relies on competing institutional logics – bureaucratic and neo-patrimonial – promoted by elites and executed by organizations. We argue that to date, neo-patrimonial logics are an integral part of US finance and co-exist with modern, bureaucratic logics within the capitalist system. We evidence our argument in three steps. First, we hypothesize that partnerships and hybrid organizational forms – such as limited liability companies (LLCs) and Limited liability partnerships (LLPs) ̶ have become increasingly important in specific segments of the finance industry (private equity and hedge funds) but not in others (banking). This divergence indicates a polarization between the bureaucratic and neo-patrimonial sectors within finance. Second, we posit that the founders of these neo-patrimonial firms are disproportionally sourced from traditional elite groups (male whites with high social status). These groups have both the resources (in terms of networks and wealth) to found these new financial firms, and a feeling of being threatened in their elite status by the bureaucratized modernization of finance. Third, we argue that even in 2018, op managers who are male, white and enjoy elite social status, tend to get preferentially selected in hybrid organizational firms compared to public firms. We posit that the reason is that these hybrid organizational forms recruit people according to principles of trust and social similarity. Our analyses draw on firm-level Orbis data to locate LLCs and LLPs within the financial industry, and on a stratified sample of 806 individuals, who in 2018 occupied top positions in the 40 largest organizations in key segments of the US financial field (investment banks, hedge funds, private equity and asset management firms). Overall, our results confirm that hybrid firms are dominant and increasing in hedge funds and private equity. Moreover, “elite white men” are over-represented among founders and top managers within hybrid organizations, holding constant their educational backgrounds and social networks. We conclude that the modernization of finance is accompanied by the emergence of neo-patrimonialism. Contemporary finance combines both bureaucratic logics (especially in asset management and investment banking) with neo-patrimonial logics (in hedge funds and private equity).
‘Shall We Aim For 50-50? The Limitations of Annual Report Named Numbers in Representing the Gender Gap Closure’ (Amee Kim, Canterbury Christ Church University and Ann-Christine Frandsen, University of Birmingham)
In 2017, Debenhams plc Annual Report & Accounts showed 26% of their board members were female. Simultaneously, the company employed 22,123 people, of which 17,092 were male and 5,031 were female. With the increased awareness of gender gaps in the UK, and many companies striving toward a more equal distribution of leadership roles between male and female directors, companies often portray their efforts to close the gap through statistics and ‘named numbers’ in annual reports. Undoubtfully, these named numbers (which are never just purely ‘numbers’) can work to create positive impressions in gender gap reduction narratives. However, they can lead to misinterpretation of the extent and day-to-day effects of gender gaps on female employees whether in the workplace or boardroom. We seek to open up the role of statements made up of ‘named numbers’ as a distinctive ‘mode of veridiction’, with their own grammar, logic and rhetoric, from their genesis as accounting statements (c 7500-3000 BCE), and through such ancient extensions as inventory lists, money (of account), and mathematical proofs and equations, to ‘modern’ forms (c. 1500 CE – present) such as statistics, tables, diagrams, graphs, pie charts, and frequency distributions. We draw on the thesis (Foucault, 1971; Damerow, 1999; Hyman, 2006; Hoyrup, 2009; Scott, 2015) that this form of statement is the first writing, and the foundational form of any arche-writing (Derrida, 1967), since it is writing as pure difference from both its predecessor, speech, and its extension as ‘speech made writing’; where the latter is therefore a ‘glottographic’ form of statement-making, all ‘naming and counting’ statement forms from accounting to today are ‘non-glottographic’ and ‘unspeakable’ (Bassnett, Frandsen & Hoskin, 2018; Frandsen & Hoskin, 2021). This approach therefore goes beyond even critical accounting (and finance and management) research discourses which either leave this statement form as a silence or as purely a form of ‘inscription’, ‘visualism’ or ‘data’ (e.g. in accounting Cooper et al,. 1994; 1996; Daff and Parker, 2021), with the consequence that their discursive and performative force remains an absence. So for instance, assuming boards of directors generally had (and so could be ‘visualised’) as a 50-50 gender representation of board members, the linguistic question should then be: ‘what does that mean/signify/simulate/dissimulate?’ In this paper, we therefore argue for the absolute necessity of comprehending these statements as articulations in and of a different mode of statement-making: and therefore as an integral component ‘methodologically’ and ‘linguistically’ of any serious attempt to explain what current non-50/50 gender representations in workforces or boardrooms both signify and conceal.
Panel 4A: Financializing Culture
‘Assetization in the Art Education and Investee Condition of the Artists in Finland’ (Tero Nauha, University of the Arts, Helsinki)
The MA students of the arts and professional artists mustassess the arrangements implicated by financialization affecting their practice: what arethe options, futures and risk, the evaluation and speculation of intangible assets like reputation, loyalty, taste, memory, affective capacity,and singularity. In institutional contexts, assetization and investee function have becomea necessity with ongoing management of value and ‘portfolio’, even volatility. It is a process of ‘colonization’ by finance (Birch & Muniesa 2020). The universities are becoming hubs for promoting self-assetization and in the education of the performing arts, assets appear in participatory and care activities, collective and processual practices. The MA students and artists are conditioned as investees. In the context of Finland, one of the significant changes in the past decade has been the emerging role of private foundations (often linked with the global financial market) in funding for research and the arts. These funders play a part in introducing the financial logic where an individual needs to obtain investee condition and practice self-assetization. The MA students and artists may define their practice through options, futures, and risk. University institutions aim to produce knowledge as the gatekeepers in the distribution of knowledge. The knowledge produced in the arts shifted from commodity forms to option ‘contracts’. The question in my paper is, how artists (often spontaneously) adopt positions designated by the logic of finance? But, despite these conditions, students and artists may also gain an active role in such contractual relationships. I will use the concept of ‘posture’ (Laruelle 2010, 2012, 2013) to define an active and motile subjectivity. If artists are conditioned to create an investee portfolio of intangible assets, then a critical ‘posture’ is needed to provide leveragefor counter performativity. This is an immanent and corporeal set, not an abstract futures position. The pedagogical proposition is to activate an inquiry into how conditions by finance are localized and incorporated, and then, how to practice de-colonization of these conditions.
‘Is More Always Better? Financial Narratives of the Value of Contemporary Art in Crisis’ (Pierre d’Alancaisez, Birmingham City University)
Faced with the pandemic, contemporary art institutions have been forced to make a case for their public value. Their argument has often invoked the economic value of the cultural sector: the arts are worth saving because they contribute more to the economy than aviation, for example, or that the forthcoming cuts to arts education will make a dent in art’s £32bn of GVA. More art means more GVA, more public good. These narratives are surprising because the public arts sector routinely rejects any absolute financial accounts of its value. Yet this ‘more is more’ argument applies Jean-Baptise Say’s now-debunked 1803 law of markets, paraphrased by ‘if you build it, they will come’, that motivated the expansion of art schools and institutions in recent decades. How much art and art education, is enough? Who gets to decide? What happens when the supply of contemporary artists does become synonymous with demand? How can a £32bn financial system justify the poor economic outcomes of most artists? This is a profound challenge to competing narratives of artistic and cultural value as public goods that is only exacerbated by the opaqueness of financial systems that underpin them. My paper will highlight some of the problems of the present formulations of art’s public value (busting some financial myths in the process) and suggest that the uncomfortable implications of the financial arguments may in fact help construct a more resilient and more equitable arts ecosystem. By disrupting the prevalent logic of growth from which publicly supported art has not been immune despite its generally anti-market orientation, I propose that a knowing engagement with the mechanisms of managerialism and financialisation could, in fact, help in subverting them in the formation of viable alternatives resistant to financialisation.
‘Us vs. Them: How Social Media Discourse Creates an Ambiguously Populist Financial Subjectivity’ (Erin Lockwood, University of California, Irvine and Elsa Massoc, Goethe University Frankfurt)
In early 2020, prices of several so-called ‘meme-stocks’ soared, buoyed by the conversation on the r/WallStreetBets Reddit forum, where users reveled in their collective power to move markets and celebrated striking a blow against hedge funds. Many of the forum’s 8.8 million users traded stocks and options using commission-free platforms marketed to users as ‘democratizing finance.’ How do these people, who are at once critical of and deeply imbricated with financial markets understand themselves as financial subjects? Does their discourse actually reflect the populist framing the media quickly ascribed to the social media fueled rise in stock prices? We conduct a mixed method discourse analysis of posts and comments on the r/WallStreetBets forum from January-March 2021, pairing topic modelling with a qualitative analysis of the forum’s tropes as they relate to questions of identity, conflict, and politics. We find that this forum carves out a distinctive and deeply gendered position for non-elite financial traders, framing particular kinds of financial knowledge as authoritative even while juxtaposing the redditors’ identity against those perceived as financial elites. These ambiguities reflect the power of finance over everyday lives, as well as of the pervasive undercurrent of populist conspiracy theorizing in popular representations of finance.
Panel 4B: Private Finance for the Public Good?
‘The Private Finance Initiative: Policy Problem-Solving and the Construction of the Asset Economy’ (Jenny McArthur, University College London)
The role of finance as a political tool to shift costs or risks across time, space, social groups or political constituencies is well-established, through examples like the creation of mortgage credit as a form of statecraft in the US (Quinn, 2019), or the inadvertent financialisation of the US economy after policymakers delegated credit control to financial markets (Krippner, 2011). Finance’s role as a tool to solve policy problems warrants closer attention, to understand how the processes and rationales of selecting financial tools to solve specific policy problems has shaped the asset economy. This paper addresses this issue by analysing how the UK’s Private Finance Initiative (PFI) was conceived and implemented as a political tool. This research on the history of the PFI is relevant to show how policy problem-solving from previous decades shaped the financialised economy in the UK today. The PFI aimed to systematise the use of private finance for public projects and services across the UK, by securitising long-term, design-build-finance-operate contracts for public assets and service provision. Under the PFI, £55 billion was raised from private investors between 1992 and 2018, and despite its abolition in 2018, PFI contracts are estimated to run until 2052. The PFI is a useful case to understand how and why specific financial tools are mobilised by governments. This paper applies a sociological approach to finance to scrutinise how the PFI functioned as a political tool. The findings show that the PFI was used to support the government’s agenda for fiscal responsibility by raising off-balance sheet debt for public investments, amidst pressures to address historic under-investment in healthcare, education and local government projects. They also show how the PFI was shaped by the preceding privatisation programme, which had claimed major utilities and resource industries, leaving the PFI to find a new model to attract private finance to invest in healthcare, education and defense investments. These findings show how the PFI used financial instruments in an effort to overcome fundamental tensions between fiscal conservatism and demands for public projects and services, but led to a number of unintended consequences that have shaped state-market relations and the asset economy of the UK today.
‘EIOPA: A Cautious Political Entrepreneur in Risk’ (Greg Van Elsen, Ghent University)
On the 4th of February 2021, the EU insurance and pensions’ watchdog EIOPA (European Insurance and Occupational Pensions Authority), celebrated its 10th anniversary with a high-level conference .Its agenda underscores the broad societal significance of insurance and pensions: a first panel session dealt with the role of both sectors in supporting the EU’s post-Covid recovery, in the context of the European Green Deal, the Capital Markets Union and the digital transition. The second panel – neither unambitious in scope – pertained ‘closing protection gaps’ and how societies’ challenges ranging from an aging population, natural catastrophes and cybersecurity can be met by the private provision of insurance and pensions. In this paper I will not judge whether the title of the conference ‘EIOPA at the heart of insurance and pensions supervision in Europe’, is an imagery of self-inflating importance or whether it comes close to reflecting EIOPA’s actual role. Instead, I argue that it highlights how EIOPA increasingly acts as a political entrepreneur, putting market-based solutions based on private insurance mechanisms on the regulatory menu, concomitant with earlier accounts of EU-led marketisation/financialisation. Traditionally, the creation of EU agencies has been viewed as a method to insulate them from politics and its particular interests, and studies on EU agencies have mostly focused on their accountability towards national member states and formal EU institutions. However, recent research pictured the power of these agencies as more dynamic, with agencies using entrepreneurial methods to disseminate information and ideas. While EIOPA has been classified as an insulating political entrepreneur, scoring relatively low in terms of using entrepreneurial methods, this paper shows that this portrayal of an agency with a strong regulatory mandate but modest external ambition, might need to be corrected. In order to better contextualize EIOPAs political entrepreneurial spirit, I will go beyond formalized conceptions of entrepreneurship and interrogate more critically the content of the ideas EIOPA disseminates, and the policy narratives supporting them. Therefore, I will draw upon on earlier research, highlighting the strategic use of ideas in the politics of both European integration and marketisation/financialisation. My overarching research question pertains than the specific role of EIOPA in sustaining andreinforcing a market-based and insurance-friendly agenda, concomitant with broader processes of marketisation/financialisation at EU level. This paper is organized as follows. First I will highlight the importance of private insurance and its ideational foundations as a potential vector of EU-led marketisation/financialisation. I then move to introducing EIOPA as a potential political entrepreneur, building my argument further on scholarship dealing with the politicization of the EUs ‘not so technical’ agencies. In the third, empirical section I showcase the specific policy narratives in the context of the post-pandemic recovery which EIOPA is using to foster a market-friendly policy agenda in the realm of EU insurance and pensions governance.
‘Financialized Victimhood: An Anthropological Exploration of Impact Investing in Colombia’ (Natalia Gómez Muñoz, University of Bologna)
The last decade has witnessed the rise of impact investing (II) as an attempt to tackle pressing social and environmental issues around the world. What distinguishes II from other forms of finance is its declared active engagement in pairing financial returns with explicit and measurable social and environmental outcomes. In this paper I analyze the case of Colombia, a country with a long- standing armed conflict, an unfolding peacebuilding process, and a growing II market presented by its promoters as key in achieving a stable and durable peace. There, people’s deservingness and possibility to participate in initiatives funded by impact capital is determined through a highly bureaucratized assessment of their “victimhood” and “vulnerability”, while their success or failure is measured and evaluated according to specific metrics. In thinking about these issues, I reflect on the implications that II proposed vision could have on the capacity to imagine a more equitable, peaceful and sustainable future.
Panel 4C: Governing Financial Futures
‘Powers of Finance and Modes of Reform: A Comparison of Behavioural, Regulatory, Supplemental and Control Reforms’ (Michael A. McCarthy, Marquette University)
Scholars from a variety of disciplines have described and studied several dimensions of business power in capitalist political economies. Their research explores how business shapes policymaking directly through instrumental engagement with formal politics, indirectly through structural prominence in economic relationships, and infrastructurally through logistical entanglements in political governance. This paper compares activist initiatives and proposals for financial reform in the US and UK since the 2008 downturn through the lens of this body of work. While financial reform is often analyzed with respect to its desirability in economic terms, few ask how reform might also address finance/society power relations. Four approaches to financial reform are analyzed: behavioral, regulatory, supplemental and control. The paper argues that modes of financial reform vary in their relationship to business power, especially as it is exercised by the financial sector.
‘With Liberty and Reinsurance for All: Demanding a Government Backstop in Health Care’ (Christina S. Ho, Rutgers University)
This article calls attention to our differential neglect of state-sponsored reinsurance for health care when viewed in light of the robust backstopping of risk that the U.S. government undertakes in other domains. For all our vaunted aversion to entitlements, whenever Americans have deemed a material interest to be vital, we have provided state guarantees. For instance, the U.S. federal government provides standard reinsurance for private crop insurers, virtually full risk- assumption for private flood insurance, guarantees for employer pension benefits, robust backstops for bank liquidity risks, FHA mortgage insurance and a federal secondary market to absorb the risks of housing finance. These guarantees, however, do not necessarily back the individual beneficiary directly, but rather the primary private insurer or financier who bridges beneficiary access to that good or service. Across these non-health domains, government reinsurance represents the distinctive structure of public-private power in our era. Who steps in as risk guarantor, and under what conditions? When does an outcome count as catastrophic such that our existing risk management institutions cannot be expected to absorb it or hold reserves to meet it? Who gets a bail-out, and who must take the consequences of their bad bets? Asking who enjoys government reinsurance is a lensthat helps us penetrate many of the mysteries of our current political situation.In these arenas and more, statistically correlated or high-magnitude catastrophic losses are shed onto the state in order to smooth out and shore up the underlying private risk market. But we have yet to commit similarly in the health care domain. Health care risks should be on at least equal footing. The COVID-19 pandemic brings sharply into view the political choice over whose risk gets handed off to government. The CARES Act bailed out too-big-to-fail corporations to the tune of half a trillion dollars which became effectively $4.54 trillion when leveraged by the Federal Reserve. Yet food stamp and unemployment assistance came only haltingly. Government should instead “bail out humans,” which, in the context of health coverage, means performing the reinsurance function by backstopping catastrophic health costs. The U.S. has taken only halting and imperfect steps in this regard. The development of our patchwork system health coverage can be understood as a history of implicit reinsurance, as yet incomplete. Medicaid originally focused on the “aged, blind and disabled” and those who were institutionalized. These groups were most vulnerable to exclusion from private coverage, in part because they included some of the costliest health care utilizers whom no one would insure. The fight for Medicare was supported by unions and employers in part to off-load the cost of retiree health insurance onto the government. Many of the groups later added to Medicare also exemplified the reinsurance principle whereby high-cost risks that would skew insurance risk pools were ceded to the state. For instance, in 1972, the U.S. gave Medicare eligibility to permanently disabled individuals who have qualified for Social Security for two years. The following year, end-stage renal dis-ease patients were added, and in 2001, Medicare was extended to patients with amyotrophic lateral sclerosis (ALS). Even ERISA, a notoriously deregulatory federal health law, was itself a pension reinsurance act. ERISA’s displacement of state laws with its own scant remedial scheme functioned as limited liability for employer- sponsored health plans; it constituted a government-sponsored risk ceiling that distributed the risks of benefit denial across patient-beneficiaries rather than employers in order to keep employers in the market for health benefits. As Jeanne Lambrew, one of the architects of the ACA has observed, “Reinsurance was the only proposal in BOTH the Republicans’ 2017 ‘repeal and replace’ bills and the Democratic alternatives.” Yet the policy is no mere bipartisan sop. Reinsurance could position us on the glide-path to a broader collective commitment to health care. To paraphrase the Brookings health economist, Henry Aaron, what would we call reinsurance with an attachment point of zero? We would call it single-payer.
‘Central Bank Capitalism’ (Joscha Wullweber, Witten/Herdecke University)
With the rise of the shadow banking system, a new form of state–market hybridity has emerged, challenging existing monetary approaches to financial stability. A stable financial system today has essentially come to depend on a stable shadow banking system. Central banks are in the process of adapting to this new development. To secure the logic of laissez-faire market liberalism, the sovereign must resort to unprecedented measures and radically intervene in the financial markets. This new form of state–market hybridity forces central banks to provide ample reserves, to act as a dealer of last resort, and to give shadow banking actors access to their balance sheets. Such policies, however, produce new contradictions and fragilities. Based on Foucault’s concepts of sovereignty and security, this paper argues that in today’s world, the rationality of the laissez-faire security dispositif has become flanked by the rationality of sovereignty to a much greater extent than previously. Without losing its dominant status, the security dispositif is currently adapting so as to operate in crisis mode based on a post-laissez-faire rationality. The repo crisis of 2019 has demonstrated that central banks are still in the process of searching for ways to handle this new constellation.
Panel 5A: Financing Green Futures
‘Green Bonds: At the Crossroads between Finance, Law, Environment and Society’ (Tomaso Ferrando (University of Antwerp), Iagê Z. Miola (Federal University of Sao Paulo), Diogo R. Coutinho (University of Sao Paulo), Flávio M. Prol (Brazilian Centre for Analysis and Planning) & Gabriela Junqueira, (University of Sao Paulo)
In line with Paris Agreement’s political commitment of relying on financial markets to fund the transition to a low carbon economy (Article 2, 1 (c)), sustainable and climate finance have seen an exponential growth in financial flows and a diversification of financial instruments. Within the field, green bonds are one of the latest financial instruments to ‘join the ball’ and are set to occupy an increasing role in financing the transition towards a ‘green’ economy. Green Bonds are nothing but a new form of raising debt and are increasingly being promoted throughout the world as a low cost and appealing way for public and private actors to access liquidity to finance activities or projects that contribute to climate change mitigation and (although in a limited way) adaptation. The more recent popularity of green bonds is exemplified by the central role attributed to them in the European Green Deal (which is going to be almost entirely financed through ‘green’ debt) and by the establishment of an European taxonomy and standards that aim to define the boundaries of what can be considered a green bond and thus provide investors and borrowers with a recognition of their commitment to greening the economy. However, green bonds are not only popular at the European level and are increasingly issued by public and private actors in the Global South.
At the crossroad between law, finance, society and environment, green bonds raise important questions and offer a privileged entry point to discuss the implications of adapting mainstream financial responses, i.e. debt, to address the ongoing ecological crisis. In this chapter we combine a multi-disciplinary and critical overview of green bonds as a ‘financial instrument’ that keeps together multiple actors and spaces, with reflections on specific cases that illuminate the manifold nature of this instrument and some of the most significant concerns that they raise. The aim is to provide both an introductory framework and enrich it with a critical assessment of green bonds’ historical development and current uses. Section I describes the functioning of green bonds, their origins and the processes and actors that turned this financial instrument into a popular form of sustainable finance. Although still representing a small fraction of the global debt market, green bonds have experienced an exponential growth with a significant diversification of issuers, relying mainly on financial arguments regarding the existence of a greenium. Who issues green bonds? Who invests in green bonds and why? What are green bonds financing? In this section we answer these questions pointing to the empirical trends around green bonds in a global scale. Section II engages the institutional apparatus that surrounds the emission and performance of green bonds. As debt instruments whose proceeds are previously earmarked to environmentally beneficial projects, one central dimension of green bonds is the regulation of eligible green assets, with relevant standards being set at a transnational, private self-regulatory level that, nonetheless, do not forego public involvement. The relevant background activity that precedes the ‘landing’ of global standards in local contexts will also be addressed, as well as other relevant institutional aspects associated with the creation and expansion of green bonds, such as taxation. Section III uses concrete examples to discuss the way in which green bonds operate on the ground and what are the main criticalities that may arise when local players (public or private) borrow ‘green capital’ from the market. By examining concrete emissions in the Global North and the Global South, the section aims to deal with the question of the functionalities of green bonds under an unequal global economy and in a context of intense political and environmental contestation. This bottom-up approach to the ‘real life’ of the green bonds is used to flag existing gaps in the academic discourse around green bonds and to suggest to pay more attention to ‘green debt’ as a mechanism to finance the transition to a greener economy. Section IV then builds on the information of the preceding sections in order to discuss the potential and limits of relying on green bonds for the construction of a green and just future. In an attempt to counterbalance mainstream literature that praises almost any intervention that contributes to the mitigation of GHG, we explicitly question the role of the financial sector in supporting the transition, in particular in the form of debt instruments.
‘Derivatives and Environmental Problem-Solving’ (Jordan P. Howell, Rowan University)
In this paper I examine the potential for derivatives to address environmental problems. Though they are frequently maligned (and sometimes with good reason), derivatives play an important risk management role in the world of high finance. But can these also be useful tools in directly addressing, or even solving, pressing environmental problems related to land protection, biodiversity, and cycles of material use? I consider three cases of derivatives and the market mechanisms that facilitate their exchange: the Pinelands Development Credit program in New Jersey, USA; the Single.Earth “MERIT” token aimed at monetizing and making tradeable a “token” representing ecosystem services; and RRex, a (conceptual) marketplace for trading futures contracts for recyclable post-consumer materials. Each of these concepts represent a different application of a derivatives concept, and while each is somewhat abstract, also has the ability to directly shape environmental outcomes in a positive manner. What should we make of these abstractions of abstractions of environmental concern? Do they hold the potential to democratize participation in environmental protection or will they become the preserve of investment banks and speculators? Do we, or should we, care either way?
‘The Preferential Treatment of Green Bonds’ (Matthias Kaldorf (University of Cologne), Francesco Giovanardi (University of Cologne), Lucas Radke (University of Cologne) and Florian Wicknig (University of Cologne)
We study the preferential treatment of green bonds in the Central Bank collateral frame- work as an environmental policy instrument. To evaluate the effects of preferential treatment, we build an augmented New-Keynesian model, in which green and conventional entrepreneurs issue defaultable bonds to banks that use them as collateral. Lenient collateral policy increases bond issuance and default risk, such that the Central Bank faces a financial stability trade-off between increasing collateral supply and subsidizing entrepreneur leverage. In a calibration to the Euro Area, optimal collateral policy features substantial preferential treatment, implying a green-conventional bond spread of 73bp. This increases the green bond share by 0.69 percentage points, while the green capital share increases by 0.32 percentage points, which in turn reduces pollution. The limited response of green investment is caused by higher risk taking of green entrepreneurs. When optimal Pigouvian taxation is available, optimal collateral policy does not feature preferential treatment, but still improves welfare by addressing adverse effects of taxation on financial stability.
Panel 5B: Financial Subjectivities
‘Robinson Crusoe, Again: A Heterodox, Humanistic Reading’ (Melissa Kennedy and Natalie Roxburgh, University of Hamburg)
Why do we always (re-)turn to Daniel Defoe’s Robinson Crusoe (1719)? To prove that the homo economicus exists; to show that it doesn’t; to demonstrate that economic principles are historically contingent; to extract universals of economic behaviour; and, of course, to teach both economics and English literature. One of the most-read of eighteenth-century novels, the narrative is used by commentators from a wide variety of fields, but often in a limited way that emphasizes only a small part of the novel’s storyline. This paper will revisit Robinson Crusoe (again) to reflect on the selective use of the text that supports a mainstream economic, Western, colonialist, and canonical reading before turning to heterodox and humanistic economics approaches. We will put together Natalie’s work on the spirituality of dissenting Christian conversion narratives alongside the logic of public credit and Melissa’s reading of Crusoe’s relationship to nature and community. While an orthodox economics reading focuses on the sole-island-survivor second part of the novel, this paper suggests that cutting off the narrative’s beginning and ending has important implications for how we imagine the modern economy. Restoring the difficult beginning and chaotic ending, we argue, sheds light on the important role of narrative and storytelling in economic theory. Becoming aware of where we stop telling the story is thus a key step in building back better.
‘The Portfolio Management of the Self: A Critical Reflection on Uncertainty-Adjusted Human Capital Investment Practices in Modern Work-Life’ (Kristian Bondo Hansen (Copenhagen Business School), Marius Gudmand-Høyer (Copenhagen Business School) and Kaspar Villadsen (Copenhagen Business School))
Hidden away in a footnote of the introduction to the second edition of his seminal book Human Capital, Gary Becker admits to having ‘ignored’ the ‘literature on optimal portfolio’ in his assessment of human capital investments in education (Becker 1993 ) . Consequently, Becker arguably failed to capture the full extent to which risk and uncertainty affect investments in human capital (Olson, White, and Shefrin 1979; Williams 1978, 1979) . Thinking of human capital investment as a portfolio problem introduces uncertainty as a factor that people try to manage by weighing their options against their existing skills and making decisions based on estimates about potential depreciation and obsolescence of skills and future wage rates (Williams 1978) . The portfolio optimization perspective on human capital investment thus accounts for the uncertainty that accompanies decision-making, but also the flexibility in deciding between work and leisure, which education to apply for, what skills to acquire and hone, etc. (Bodie, Merton, and Samuelson 1992) . Hence, taking the effects of uncertainty into consideration allegedly makes for a more empirically accurate theory on human capital investment. However, the ambition of this article is not to argue that the portfolio management add-on to human capital theory bolsters the empirical accuracy of the latter. Instead, what we want to discuss here is the possibility of using the idea of the portfolio management of human capital assets as a model for thinking about the way people weigh and make choices about education, career as well as extra-educational skill-building. Recently, the notions of human capital and the portfolio management of individual skills have been devoted a fair bit of scholarly attention in studies of the implications of the rise to prominence of platform capitalism and the gig economy (Fleming 2017; Gregory and Sadowski 2021; McKenzie 2020) . Although human capital theory seems to lend itself well to critical assessments of the alleged fragmentation of work and skill in the transient and ephemeral gig-organization of work, we content that the portfolio management of human capital investments is indeed not limited to this particular economic regime. Earlier work on ‘portfolio careers’ (Mallon 1998) and the ‘portfolio person’ (Gee 2000, 2004; O’Flynn and Petersen 2007) suggest that the portfolio perspective has been around for a while and might prove a concept worthwhile to critically discuss in a slightly broader context of work than the gig economy. First, we browse through economic literature on the portfolio management add-on to human capital theory – most of which was published in the 1970s – and discuss to what extent this add-on helped economists to shed light on what Foucault called the fundamental problem of analyzing labor in economic terms, namely to figure out ‘how the person who works uses the means available to him [sic.]’ (Foucault 2008: 223) . Second, we examine the recent literature on human capital and the portfolio management of skills in platform capitalism and questions the oft-stated conclusion reducing the portfolio managed self to an ‘entrepreneurialized’ and thoroughly ‘alienated’ shell of a human caught in a neoliberal stranglehold.
‘Short and Distort? Speculative Politics and Epistemic Ruptures in Financialized Capitalism’ (Aris Komporozos-Athanasiou, University College London)
What do political spectacles like the storming of Capitol Hill on 06/01 and recent market frenzies like the mass shorting of Wall Street’s hedge funds have in common with the growing appeal of bizarre conspiracy theories? How can we explain the paradox of a pervasive political discourse that is intent on countering ‘misinformation’ and ‘fake news’, yet appears to be at odds with an increasingly chaotic reality punctuated by the coronavirus crisis? This paper develops a sociological inquiry into the ways in which finance shapes and distorts such chaotic reality by arbitrating the competing claims to ‘truth’ that underpin it. First, I problematise an emerging dominant narrative, which alleges that the deceitful tropes of a nefarious ‘post-truth’ condition (Fuller, 2020) cleave economy and society along new fault lines, in battles fought over the very nature of reality and fiction. Responding to a swelling tide of right-wing populism stoked by ‘fake news’, this narrative advocates a return to a mythical market-driven society, imbued by scientific truth and Enlightenment rationalism (Gilroy-Ware, 2020). I argue that such a return fulfils a twofold purpose. On the one hand, it seeks to restore societies’ enfeebled capacity to distinguish what’s true from what’s false, and thus to avert ‘an epistemological crisis’ in capitalism’s ‘market-place of ideas’ (in the words of Barack Obama’s post 2020 election statement). On the other hand, it aims to provide a corrective to the skewed realities of financial markets, by denouncing the herd mentality of an unhinged ‘casino capitalism’ and containing the lewd irrationalities of whimsical speculators. Departing from these views, I argue that what is framed as an ‘epistemological crisis’ is in fact immanent in late financialized capitalism. States of ‘post-truth’ do not originate within conspiracy and ‘fake news’; it is in finance itself where they express themselves with most force. Tinkering with reality has long animated speculators’ ‘short and distort’ practices, while traders have often encompassed ‘other worlds’ and even embraced the occult when staking unpredictable futures. Yet, markets do not merely abstract away from fundamental values in their pursuits of profit under radical uncertainty; rather, they thrive in the very interplay of the fictitious and the real, and blend the rational with the irrational to navigate the darkest corners of the unknown (Komporozos-Athanasiou, 2021). I contend, therefore, that the historical origins of the current conjuncture must be traced in financial modes of speculation and divination, which have shaped our dominant concepts of truth while also suffusing the political mythologies that underpin them: from the Washington Consensus and the Deficit Myth, to the American Dream and There is No Alternative. I explore the intellectual history of these concepts across converging economic, scientific and political narratives during the financialisation of global capitalism in late 20th and early 21st century. The conclusion I draw from this analysis is that fighting to untangle the current states of reality and fiction is a futile distraction from the perennial struggle for more democratic, collective ways of inhabiting our disorienting present. Rather than reviving the homo oeconomicus of an Enlightened capitalism, I explore overlooked epistemic ruptures that are rendered possible by this opening, and evaluate the possibilities for ‘counter-speculation’ germinating in financialized capitalism.
Panel 6A: Power Dynamics in the Green Transition
‘Disclose and Punish: A Battle for the Making of a New Climate Statecraft in China and Europe’ (Giulia Dal Maso, University of Bologna and Alessandro Maresca, University of Bologna)
The urgency of tackling climate change is leading to a general “green” consensus among both regional and private financial institutions. Not only is the giant asset manager Blackrock leading the corporate world towards the “net zero” emissions; China has recently committed to zero emission within 2060, building a global leading role to climate neutrality. In the current turn towards the increasing financialization of nature, multiple financial institutions, from central banks to private funds are mobilizing a new “green” “wall of money.” This systemic convergence, however, appears to travel along locally situated and clashing trajectories driven by new forms of green power/ “environmentality.” This term refers to the power strategies that render “nature governable” and, through a “ecological rationality,” attempts to make the environment a site of (bio) political calculations (Fletcher 2017; Agrawal 2005). In this paper, we focus on these frictional points. Focusing on two case studies in both China and Europe, we explore the way in which these new modes of green power become operationalized. Building on Eve Chiapello’s analysis on the disciplinarisation of (green) corporations, we discuss how this burgeoning “green” power both exceeds old analytical categories, i.e. “disciplinary society”, “society of control”, “biopolitics” and reshuffles new ones, i.e. “green biopolitics.” First, we explore the conflict between the Chinese state and the tech-empire Alibaba over the production of new green financial practices that shape “green” trustworthy citizens and corporations. By dismantling Alibaba’s Big Data infrastructure and incorporating it into its own centralized Social Credit System (SCS), the Chinese State appears to exert a distinct form of green sovereign power. The SCS is based on a vertical centralized mechanism of “punishments and rewards” that are based on, among others, their environmental performance. Second, we describe the emerging new European regime of non-financial disclosure (NFD). In contrast to the Chinese context, this relies mainly on private fintech platforms — such as Aladdin run by Blackrock — that process and analyze ESG (environmental, social, governance) information. These political technologies point to yet another mode of environmentality, one where the disciplining of corporations through environmental disclosure by markets actors increasingly influence the way the EU climate statecraft.
‘Demarking their Own Territory? How Elites Shape the “Green Finance” Narrative in Europe’ (Daniel Tischer, University of Bristol) and Tomaso Ferrando, University of Antwerp)
In this paper, we explore the individual and institutional relationships that operate behind the emerging market for Green Financial instruments across Europe and how that may influence national and EU-level narratives and policy making. Using network analytic tools, we explore the various types of actors that partake in different policy-focused and multistakeholder spaces at national- and EU-level between 2016 and 2021. Our analysis provides insights into the different compositions of these spaces and identifies key organisational actors and individuals that partake in multiple meetings. We argue that the this enables elites to coordinate the narrative around what Green Finance ought to be and in doing so, may provide these elites to advance their own and collective market and profit-oriented agenda whilst limiting outside voice and influence of non-market actors.
‘Securing Property for a 21st Century Economy? The Limits of Real Asset “Climate Value Capture” in Florida’ (Sarah Knuth, Durham University and Zac Taylor, TU Delft)
Within emergent discussions of climate-related financial regulation and green ‘recovery’ schemes, risks to real property assets, and their future and present value, have become a central focus. Entangled climate-financial moves to defer devaluation and speculate upon value appreciation in ‘green’ or ‘climate-proof’ assets are increasingly rolling out on the ground within the same built environments and pre-existing investment landscapes. Sometimes, these remain parallel, unarticulated projects. In other cases, financialized value risks and opportunities stemming from climate change and its societal responses are being directly positioned in relation to one another, in projects which seek to materially remake and formally-institutionally reposition the future and present investment value of real assets. In this paper, we examine two such financial mechanisms which seek to maintain the ‘investability’ of real assets: Property Assessed Clean Energy (PACE) instruments deployed to finance ‘low-carbon’ and energy efficiency home retrofits, and insurance-linked securitization (ILS) schemes intended to capitalize residential insurers, and their policyholders, from increase insured catastrophe losses. While both mechanisms promise more durable residential property value under future climate change conditions (and to secure present value from the specter of devaluation), so too have they faced documented obstacles to achieving the scale and circulation envisioned by their proponents. In this paper, we adopt a different approach by examining the emergence and convergence of PACE and ILS in Florida cities, and in relation to single-family residential assets in particular. Florida is a key site of both climate change mitigation and adaptation, with urban built environments that are energy and emissions-intense and highly exposed to multiple physical climate risks. We trace how these ‘climate value capture’ mechanisms are financing asset-level climate action in Florida cities, likely in relation to the same assets, drawing on inherited state governance practices and fiscal toolkits, and deployed against deep spatial inequalities, in potentially contradictory ways. In so doing, we seek to infuse contemporary green recovery and climate risk financial regulation debates with a critical appraisal of the promises, contradictions, and limits of real asset climate value capture.
Panel 6B: Technocracy, Hegemony, and Power: The Cognitive Authority of Central Banks
‘A New Idea of Financialisation? Analysing Economic Reports of the Bank for International Settlement’ (Sarah Naima Roller, WSB Berlin)
This paper addresses the shifting paradigm of financialisation at the Bank for International Settlement (BIS) from an ideational and critical angle, asking if international regulators’ perception of the increasingly systemic reliance on private debt in the global economy has changed between the years of 2004 and 2020. I develop a concept of financialisation that combines accounts of politically driven debt market liberalisation, beginning in the U.S. in the 1960s and in many countries thereafter, with the emergence of innovative security trading activities in the private sector at the turn of the millennial. Applying this frame to reports published by the BIS, I conduct qualitative analysis to identify continuous and changing ideas of financialisation within BIS reports. Results indicate that there have been meaningful shifts: in particular, regulators perceive debt market expansion and the sophisticated short-term financing thereof with increasing scepticism that persists in more recent years rather than emphasising a hope for correlation with higher levels of growth. In contrast, related mechanisms of financial markets deregulation such as capital market liberalisation across countries are viewed as overall beneficial to societies with little variation throughout the years of analysis. This is one of several indications that changing ideas of financialisation do not seem to coincide with a preference for a more restrictive (nation)state per se. When analysing regulators’ ideas about financialisation at an international institution often regarded as technocratic, I stress that financial market (de)regulation at BIS has been and continues to be inherently socio-political.
‘The Politics of Technocracy: ECB’s Fiscal Policy Ideas, Cognitive Authority and the Shifting Construction of Economic Rectitude’ (Iacopo Mugnai, University of Warwick)
The purpose of rules-based regime is to depoliticise economic policy making by shielding policy makers from the interference of popular, democratic politics. A concrete instance of that can be found in Europe’s Economic and Monetary Union (EMU), whereby monetary policy tasks were reassigned away from national governments to a supranational independent central bank, while fiscal rules were established to limit national capacity for discretionary fiscal policies. By looking at the ECB’s interventions in the realm of fiscal policy and its internal politics of ideas, my research seeks to extend scholarly understanding of the politics of technocratic governance. One purpose of fiscal rules is to depoliticise fiscal policy by insulating it from democratic and societal pressures. Yet, far from removing politics from budgetary decisions, this engenders new forms of contested fiscal politics – i.e. “the politics of an elite statecraft and expert technocracy”. Since the birth of the euro the ECB has been remarkably vocal over the conduct of national fiscal policies and the need to strengthen EMU fiscal regime. ECB’s interventions over the best way to reform EMU economic governance are informed by normative views of how the economy works, what role the state should play in it, and how far the market can be relied upon as a mechanism to bring the economy back into equilibrium. I argue that these interventions can be seen as instances of a supranational organisation deploying its cognitive authority to mobilise a specific construction of economic rectitude.Building on actor-centred constructivism, I posit that the evolution of ECB’s fiscal views is the consequence of a power contest triggered by changes at the helm of the organisation as well as by external political economic developments. In a situation where monetary policy is constrained at the ‘zero lower bound’, the ECB gradually reconsidered its conservative fiscal views, somewhat accepting a partial rehabilitation of more interventionist fiscal policies.Crucially, the ideational context occurring among ECB officials is revealing of the unobtrusive politics of technocracy. By looking at the battle of fiscal ideas occurring among ECB officials, my research aims to contribute to political economy explorations of the politics of technocratic economic governance.
‘Central Banks as Hegemonic Apparatuses’ (Galip Yalman, Middle East Technical University, Ankara)
Given the conceptualisation of financialization as an integral feature of neoliberal capitalism and the characterisation of the state as a major agent of finance dependent ‘system of accumulation’, central banks emerge a key component of the power relations in terms of the ‘state-finance nexus’. With the granting of their status as “independent” agencies, in accordance with the neoliberal rhetoric of reducing political discretion in economic decisions, they have been empowered to fulfil the dual tasks of price and financial stability in the context of full capital mobility across the national borders. Yet, delineated as the linchpins of the global financial system, a diversification of central bank policy goals and objectives is said to be under way. For the classic paradigm of inflation-fighting independence becomes obsolete at least for the majority of the Western capitalist countries which experience a period of deflation with very low interest rates. Furthermore, as both the ecological and the COVID-19 crises have made clear, the neoliberal model of central bank independence cannot be sustained with calls for central banks to embrace objectives such as climate change abatement, inequality and distribution. However, a duality seems to be in the making, since the IMF would still consider the independence of the central bank as a key premise, at least for the countries implementing an IMF guided stabilization programme, thus underlining its adherence to the neoliberal logjam. This paper will contend that the specific roles attributed to the Central Banks imply their constitution as a hegemonic apparatus, that is to say, as an institution that organises, mediates and confirms the hegemony of a class. By functioning as a social and ideological terrain upon which ideas, beliefs, values and practices are contested, it plays a crucial role in reproducing ‘common sense’ and maintaining its dominance as a mode of thought. By way of illustration, it will focus on the recent episode of AKP rule in Turkey where a key plank of opposition (both intellectual and party political) is based on restoring the independence of the Central Bank, thereby confirming the hegemony of neoliberal mindset so as to maintain international credibility for the economic policymaking. This becomes intriguing as it also reveals the ‘crisis of the crisis management’ since the process of neoliberal transformation in Turkey is driven forward by a series of crises over the last four decades.