Warwick Critical Finance Group Newsletter

June 9, 2020

Our forum is out!

Greetings all,

We are proud to announce that we have edited a Special Forum on critical macro-finance in Finance and Society, developed from our last workshop in September, and are very excited that it has now been published.

Also, we would like to share with you: a Twitter thread on post-colonial and anti-racist political economy, a much loved blog that has had an overhaul, a podcast episode hosted by one of our members, a call for papers for the virtual Critical Finance Studies Conference, as well as two new publications from our group members.

Thank you for reading and stay tuned!

Fabian, Johannes, Marco, Ruben and Sahil

Special Forum in Finance and Society on Critical Macro-Finance as an Emerging Research Agenda

After our workshop on critical macro-finance (CMF) in September 2019, jointly organised with the Political Economy Research Centre (PERC) at Goldsmiths, we are happy to announce the publication of a Special Forum in Finance and Society that discusses CMF as an emerging research agenda.

In our introduction, we argue that CMF has become an influential avenue of research aimed at shedding light on how the global payments system is governed and explore three main themes: (i) the intellectual lineage of CMF, highlighting how its grounding in a Minskian analysis of liquidity and balance sheets and relates to existing financialisation studies, (ii) the relevance of CMF to policy discussions and contemporary events, and (iii) its ‘critical’ position.

In the first contribution, Daniela Gabor outlines four theoretical propositions that constitute CMF as a conceptual framework: drawing on the post-Keynesian/IPE tradition, she highlights (i) how the Americanisation of finance has anchored financial globalisation in market-based finance, (ii) that global finance is a set of interconnected, hierarchical balance sheets, increasingly subject to time-critical liquidity, (ii) that credit creation in market-based finance involves new forms of money, and (iv) that market-based finance structurally requires a de-risking state capable both of protecting systemic liabilities and creating new investment opportunities.

Following Gabor’s propositions, Steffen Murau and Tobias Pforr present their suggestion for conceptualising money in a CMF research agenda. Based on a credit theory of money, they consider not only traditional forms of money but also ‘shadow money’: private credit instruments which are not regulated as money from a legal standpoint, but in many respects are functionally equivalent to ‘established’ forms of money. To connect different positions in this discourse, they propose several core criteria for defining shadow money as a baseline position for future critical macro-financial research.

In the next contribution, Fabian Pape highlights the centrality of liquidity to CMF analysis. Liquidity always matters, but far from financial crises and cycles of stability and instability, the question is why some particular institutions or sectors are supported by the state with seemingly limitless access to liquidity, while others are not. Rather than a purely technical artefact, financial structures always require evolving liquidity regimes to govern and facilitate financial activitieswhich entails crucial questions about power in the global economy.

While the Minskyan lineages of CMF analysis are clear, Bruno Bonizzi and Annina Kaltenbrunner argue that much is to be learned from Minsky’s Keynesian foundation. They suggest that CMF scholars and post-Keynesian monetary theorists would profit from a more explicit engagement with each other. Post-Keynesian scholars would benefit from the detailed empirical insights that CMF provides, particularly through its analysis of non-bank financial institutions and the conceptual focus on liquidity and liabilities. Meanwhile, the CMF literature would benefit from more explicit grounding in earlier post-Keynesian concepts. In particular, the theory of liquidity preference, the concept of the liquidity premium, and the theory of endogenous money highlight macroeconomic issues missing from CMF scholarship.

Finally, Samuel Knafo critically examines the pitfalls of CMF research. He argues that the commitment to placing finance at the centre of our economic conceptions comes with significant risks that speak directly to the politics of financialisation. By redirecting the focus of economic governance towards finance, macro-finance may consolidate rather than challenge the problematic trends of global finance. More specifically, he queries whether the focus of the money view on liquidity has contributed to depoliticising financial governance and aligned it further with the demands of financialisation.

Collection of Works on Post-Colonial and Anti-Racist Political Economy/IR

In view of the current political events, we would like to draw your attention to a fantastic collection of works on Post-Colonial and Anti-Racist Political Economy/IR that circulated on Twitter. It was posted by Lisa Tilley from Birkbeck University as a welcome reminder of this rich tradition of scholarly thought. You can check out the thread here!

PERC podcast: The political economy of the corporation with Sandy Hager

WCF member and PERC lecturer Sahil Jai Dutta is joined by Dr Sandy Brian Hager (City, University of London) to discuss the political economy of the corporation. He is the author of the book Public Debt, Inequality, and Power: The Making of a Modern Debt State, published by University of California Press (2016). The conversation spans across the topics of ownership and the politics of public debt, the power of large banks in the US, and his most recent work exploring what drives long-term shifts in the stock markets in the ‘advanced’ economies.

The PERC podcast can be accessed here.

Renewed Blog: Progress in Political Economy

Progress in Political Economy has had a makeover. Many will know the blog associated with the Department of Political Economy at the University of Sydney. Those of you who don’t know it, or haven’t visited it in a while, go have a look! Contributions cover a broad range of IPE topics, many speaking to critical finance concerns. For instance, last month’s pieces on COVID Life and the Asset Economy and State Capialism and Monetary Sovereignty After Coronavirus.

Congratulations to the PPE team. It is a great new look!

CfP: 12th Annual Critical Finance Studies Conference (Virtual Get-Together), 27-28 August 2020

Critical scholars are accustomed to questioning the dominant narratives that surround finance, challenging the belief that finance could be beneficial to society, if only it were regulated effectively – and if only everyone had sufficient financial knowledge. Shedding light on the limitations of current economic systems, the COVID-19 pandemic has made it all the more urgent to develop critical financial insights. Instead of an in-person conference at Goldsmiths, University of London, the Critical Finance Studies Conference goes virtual. The organisers invite papers that stage risky confrontations between finance and current issues, such as (but not limited to) the COVID-19 pandemic, climate change, the breakdown of parliamentary politics, the persistence of racism and gender discrimination, the rise of populism and crises of migration.

Please submit your 250-word abstract by 15 June 2020 to indicating whether you want to do an audio/video presentation or discuss written papers in the networking section.
Check out the CfP here!

WCF on paper

WCF-member Johannes Petry recently published an article titled ‘Financialization with Chinese characteristics? Exchanges, control & capital markets in authoritarian capitalism’ in Economy & Society. Please find below a brief summary.

A growing body of research has analysed the variegation of financialisation processes and the role of states as important actors therein. Contributing to this literature, the article argues that more than important actors facilitating financialisation, states can also (partially) exert control over, actively manage and shape financialisation. In the context of China’s variegated financialisation process, the paper analyses the crucial role of securities exchanges in the development of China’s capital markets since the global financial crisis 2007–09. These state-owned exchanges act as intermediaries between the Chinese state, society and finance by shaping the infrastructural arrangements of capital markets. Thereby, they facilitate the authorities’ ability to control markets and direct their outcomes towards state policies. Financialisation is thereby decoupled from a neoliberal policy paradigm, and rather than a break with China’s authoritarian capitalism, exchanges facilitate state control within and through financialisation.

WCF member Marco Andreu recently co-authored a book chapter with James Brassett entitled ‘International Political Economy (IPE): Towards a contested ethics of globalization’, published in The Routledge Handbook to Rethinking Ethics in International Relations.

Recent years have seen a (re-)emergent critique of global production, trade, and finance which is no longer the province of left-wing activists and politicians, but which has also been taken up by popular movements of (economic) nationalism. Such new anti-globalisation discourses confront global capitalism precisely because of its ability to thrive beyond the control of ‘the people’. The shift presents something of a challenge for IPE. From the current vantage of post-crisis, austerity politics, and widespread popular acknowledgement of the limits of neo-liberalism, the chapter discusses the role of ethics and ethical contest in the formation of political agency within the global economic context. It challenges the idea of ethics as ‘a corrective’ to the politics of globalisation. Instead, the chapter illustrates how different IPE ontologies seek to delineate how self-understandings are collectively produced and how they, in turn, direct human activity. Therefore, the authors suggest to think of ethics in IPE as an ethos of enquiry, not an end in itself.

Also check out the WCF publications section on our website.

WCF Events in Times of COVID-19

As a consequence of social distancing measures, a plethora of webinars are hosted around the world, open to everyone interested. We are excited about this outburst of experimentation with digital event formats and its potentially inclusive effects. But we also think that the flood of events can at times be overwhelmingthere is so much great content out there at the moment that we find it hard to keep track. We are also a little wary to overcommit and produce content for the sake of producing content, which might not be very helpful as times are difficult enough already and fear of missing out only makes things worse.

Therefore, as a group we decided to take some time for reflection, rather than jumping to hosting our own webinars during the covid-19 pandemic. So, we are currently thinking about new creative and collaborative formats for Early Career Researchersone-off events that might help break away from the zoom conference routine. We try to work towards devising other ways of engaging with each other, exchanging and further developing ideasboth virtually and in-personto actively support early career researchers amidst impending lockdown.

So, stay in touch, and we’ll keep you in the loop about our future plans!

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Warwick Critical Finance Group · Department of Politics and International Studies · University of Warwick · Coventry, CV4 7AL · United Kingdom

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