After the Great Complacence Financial Crisis and the Politics of Reform

by Engelen, Ewald; Ertürk, Ismail; Froud, Julie; Johal, Sukhdev; Leaver, Adam; Moran, Mick; Nilsson, Adriana; Williams, Karel

• ISBN13: 9780199589081
• ISBN10: 0199589089
• Format: Hardcover
• Copyright: 2011-11-29
• Publisher: Oxford University Press

Summary

What is the relationship between the financial system and politics? In a democratic system, what kind of control should elected governments have over the financial markets? What policies should be implemented to regulate them? What is the role played by different elites--financial, technocratic, and political--in the operation and regulation of the financial system? And what role should citizens, investors, and savers play? These are some of the questions addressed in this challenging analysis of the particular features of the contemporary capitalist economy in Britain, the USA, and Western Europe. The authors argue that the causes of the financial crisis lay in the bricolage and innovation in financial markets, resulting in long chains and circuits of transactions and instruments that enabled bankers to earn fees, but which did not sufficiently take into account system risk, uncertainty, and unintended consequences. In the wake of the crisis, the authors argue that social scientists, governments, and citizens need to re-engage with the political dimensions of financial markets. This book offers a controversial and accessible exploration of the disorders of our financial capitalism and its justifications. With an innovative emphasis on the economically 'undisclosed' and the political 'mystifying', it combines technical understanding of finance, cultural analysis, and al political account of interests and institutions.

Author Biography

This book is written by an interdisciplinary team based at the ESRC funded Centre for Research on Socio Cultural change at the University of Manchester. The authors are collectively best known for their pioneering work on financialization including team written books such as J. Froud et al, Financialization and Strategy (2006), I Erturk et al, Financialization at Work (2008) and M. Savage and K. Williams, Elites Remembered (2008). Several of the authors also publish individually within their disciplines with books such as M. Moran, The British Regulatory State (2007) and Business, Politics, and Society (2009).

Ewald Engelen is Professor of Financial Geography at the University of Amsterdam.
Ismail Erturk is Senior Lecturer in Innovation, Management, and Policy at the Manchester Business School
Julie Froud is Professor of Financial Innovation at Manchester Business School
Sukhdev Johal is Reader in Strategy and Business Analysis, Royal Holloway
Adam Leaver is Lecturer in Business Analysis, Manchester Business School
Michael Moran is WJM MacKenzie Professor, the University of Manchester
Adriana Nilsson, Post Doctoral Fellow, Manchester Business School
Karel Williams, Professor of Accounting and Political Economy, Manchester Business School

Table of Contents

Acknowledgements	p. vii
List of Figures	p. ix
List of Tables	p. xi
List of Abbreviations	p. xiii
Introduction: Framing the Crisis: Accident, Fiasco, or Debacle?	p. 1
The a priori of accident	p. 2
Not a fiasco	p. 6
Elite debacle and hubris	p. 9
After the Great Complacence	p. 12
The Great Complacence: Bernanke's story	p. 15
Story-driven capitalisms: elites and narrative exchange	p. 21
Debacle: privatization of gains and socialization of losses	p. 27
Apparatus: business models and agendas	p. 32
Financial Innovation or Bricolage?	p. 37
Financial innovation and the promises of securitization	p. 39
Framework, conjuncture, and bricolage	p. 48
The concentration of risk	p. 61
Play it again	p. 63
Notes on Figure 2.6	p. 64
'Alternative Investment' or Nomadic War Machine?	p. 66
Alternative investment funds (in a new conjuncture)	p. 68
War machines: 'making the positions work'	p. 77
Banks Misunderstood	p. 97
Academic understanding: banks as intermediaries?	p. 99
Shareholder value-driven banking	p. 103
Business model changes	p. 115
Banking after a Minskian moment?	p. 125
Prelude: Regulation Undermined Before 2007	p. 132
Regulatory origins of the crisis: framing and liturgies	p. 134
London fog: constitutional and regulatory mystifications	p. 140
Deconstructing the social value of finance	p. 146
Silences, tensions, and failures in other systems	p. 154
Open and Shut? Democratic Opening vs Regulatory Closure After 2008	p. 158
The crisis as repoliticization	p. 160
Three worlds of lobbying	p. 168
Distributional coalitions: organizing financial elites	p. 173
Going for closure: the Bischoff, Wigley, and Walker reports	p. 179
The Limits of Expertise: The United Kingdom as an Unhappy Family	p. 188
Neutralizing bank nationalization: bureaucrats and City networks	p. 191
Technocrats fight back: the policy intelligentsia	p. 197
The wrong kind of credit: inflating asset prices	p. 203
The United Kingdom after Thatcherism: where do the jobs come from?	p. 211
Reform? Hubristic Intervention or Effective Democracy	p. 219
Inhibited politicians	p. 221
Hubristic technocrats	p. 227
Technical fixes?	p. 231
Democratizing finance: possibilities and dangers	p. 242
References	p. 249
Index	p. 271
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