Money and Finance After the Crisis

Critical Thinking for Uncertain Times

Brett Christophers, Andrew Leyshon, Geoff Mann, Brett Christophers, Andrew Leyshon, Geoff Mann

• Publisher: Wiley-Blackwell
• Year: 2017
• Print ISBN: 9781119051435, 9781119051428
• eBook ISBN: 9781119051398
• Edition: 1
• Topic: Scienze fisiche
• Subtopic: Geografia

Money and Finance After the Crisis provides a critical multi-disciplinary perspective on the post-crisis financial world in all its complexity, dynamism and unpredictability. Contributions illuminate the diversity of ways in which money and finance continue to shape global political economy and society.

• A multidisciplinary collection of essays that study the geographies of money and finance that have unfolded in the wake of the financial crisis
• Contributions discuss a wide range of contemporary social formations, including the complexities of modern debt-driven financial markets
• Chapters critically explore proliferating forms and spaces of financial power, from the realms of orthodox finance capital to biodiversity conservation
• Contributions demonstrate the centrality of money and finance to contemporary capitalism and its political and cultural economies

1
Money and Finance After the Crisis: Taking Critical Stock

Brett Christophers, Andrew Leyshon and Geoff Mann

Introduction

This is not another book about the financial crisis, or not exactly. It is, rather, a multidisciplinary collection of essays that dwell on the geographies of money and finance unfolding in its wake – the dynamic and sometimes volatile post‐crisis financial and monetary worlds we inhabit. Indeed, the accounts of these geographies are perhaps best thought of as ‘worldings’: like the crisis itself, the contributions touch upon an extraordinary range of contemporary lifeworlds and social formations, including not only the complexities of modern debt‐driven financial markets, but also their fascinating and unexpected connections to (for example) post‐Apartheid South Africa, the ‘War on Terror’ and biodiversity conservation. They reveal, if we did not already know it, that there is neither a universal experience of the current situation, nor a single ‘correct’ analysis, nor is there any ‘representative' agent, place or scale that captures its dynamics. The breadth and complexity of our monetary‐financial conjuncture demands that we assemble a collection of a breadth and specificity adequate to it.

In addition to the benefits of the range of insights these chapters offer into the processes of financialization and the practices and imaginaries through which it proceeds, bringing them together in one collection illuminates dynamics and questions that would be much less visible without their juxtaposition. One of the most important of these, perhaps, concerns the status of the concept of ‘crisis’ itself. For it seems fair to say that in the serial nature of ‘the’ crisis – which in the simplest sense began in 2007–2008 in a specific set of asset markets in the United States, but has since continually rolled over into other markets, places, and realms of financialized modernity – the term ‘crisis’ has lost some purchase. This is not a merely ‘academic’ problem, and not only because such conditions make it very difficult to determine how, exactly, the financial crisis was made manifest: was it a crisis of the financial sector? Or of the state? Or capitalism? Perhaps neoliberalism? What about money or monetary governance? Or (almost certainly) some combination thereof? We must also consider the fact that if seemingly everything monetary or financial (and much else besides) appears to be always ‘in crisis’, or to sit permanently on the edge of a precipice, how much analytical help is the concept of ‘crisis’ anymore? In an historical moment we might be forgiven for confusing with Walter Benjamin's permanent state of emergency, it is the concept of ‘crisis’ that is in crisis. The ‘beginnings’ and ‘ends’ of crises are relative, not absolute; the solution of a crisis for some often means it has been passed on in a repackaged and repurposed form for others to bear (Christophers 2015a).

If so, the problem we confront is not simply terminological, but existential. The challenge is not just finding another category that can help us rearrange the conceptual bits and pieces. Even if we pretend that the time before the collapse of subprime mortgage‐backed securities markets and the bankruptcy of the New York investment bank Lehman Brothers – two of the most commonly‐identified ‘beginnings’ of the crisis – was somehow an untroubled era of normality (which would of course be absurd), we are forced to acknowledge that the monetary and financial geographies produced since then are not accurately described as ‘post‐crisis’ geographies, as if ‘the’ crisis happened, ended, and now we live in its ‘aftermath’. We do not inhabit ‘post‐crisis geographies’, but ‘crisis geographies’ – spaces, places, imaginaries and practices – that have been and continue to be constituted in and by crisis.

Which means not only is it no longer necessarily possible to analytically isolate or recognize ‘crises’ by the specificity of their dynamics – which would rely on an old model in which crisis is by definition identifiable as an exception to ‘normality’ – but also that one of the key categories through which we narrate modernity has lost much of its concrete reference (Kosselleck 2006). In other words, if ‘crisis’ is both foreground and background, how do we identify it when we see it? If capitalism is defined by its tendency to crises, what does it mean when crises are no longer just tendential, but endemic, even constitutive?

The challenges these questions place before us cannot be dismissed, and as such they merge the analytical problems with the existential. Money and finance are no longer ‘containable’ to their proper spheres, if they ever were. They are, today, some of the principal means by which ‘crisis’ becomes remarkably unremarkable, normal even, because immanent to both money and finance is a contradictory sense of possibility, one that always carries a potential ‘solution’ and a ‘dissolution’ to the future. In Kurt Vonnegut's God Bless You, Mr. Rosewater (1965, p. 171), a character defines money as ‘dehydrated utopia’, which in some respects it certainly is. But it is also, no less certainly, dehydrated disorder; a little bit of rain and it is apparently as likely to precipitate calamity as it is utopia – and it does so in geographically and historically specific ways. What can scholarship contribute at such a conjuncture? In some ways, it is as simple as keeping one's feet on the ground – in the world – at a moment when the temptation to exercise analytical control leads so many to unmoored abstraction. As the poet Anne Carson (2016, p. 4) put it, with precisely these challenges in mind, ‘What can you control? Wrong question. Can you treat everything as an emergency without losing the reality of time, which continues to drip, laughtear by laughtear?’

The chapters in this book attempt something like this: to approach the (post‐) crisis world as a collection of emergencies without losing the reality of time – and space. They illuminate the complex and often unpredictable variations on a monetary and financial theme, from the realms of orthodox finance capital to biodiversity conservation. The chapters were all written several years after the moment of 2007–2008, and draw attention to the significance of thinking about money and finance geographically, especially given that the roots of the crisis took hold in distinctive and interlinked geographies. These ranged from the global financial centres of New York and London, wherein financial innovation and alchemy was applied to ever more complex and interlayered financial products, through the surplus economies of Asia and the Middle East that provided the financial boom that preceded the crash with so much momentum and financial weight, to the everyday markets that shape, to no small extent, both the financial realm of investment and debt opportunities, and the vagaries of our collective and individual fortunes.

The remainder of this introductory chapter is organized as follows. In the section ‘The Crisis and the Academy: “I told you so”’ we explore the relationship between academic work and the financial crisis, focusing in particular on the constitutive role played by the discipline of economics in justifying the reregulation of markets and institutions that preceded the crisis, but also on the response to the crisis in that discipline and in cognate social sciences. Next, in ‘The Crisis, the State and Regulation: “What have I done?”’ we focus on the role of states, policy makers and regulators in the period preceding and following the crisis. ‘The Crisis and the Financial Sector: “What shall we do now?”’ looks at the implications of the crisis for the financial services sector. The final section, ‘The Content of the Book’, provides a summary of the chapters that make up the rest of this volume.

The Crisis and the Academy: ‘I told you so’

The political‐economic upheaval that began in 2007–2008 has, in the years since, fundamentally reshaped research trajectories across the social sciences. For mainstream economics the implications are, of course, potentially soul‐shattering, what Mirowski (2010; 2013) labels the ‘Great Mortification’. Even those who still refuse to abandon the fortress of orthodoxy that defended the forces of financial chaos enjoy little peace, compelled as they have been to pull up the drawbridge and self‐righteously repel wave after wave of critique from fellow‐economists and non‐economists alike (e.g., Lucas 2009). But the new ‘economic reality’ has effected significant, if less existential, changes in other social sciences too (as well as in the humanities, though that is not our focus here). In this, the extraordinary scholarly breadth of its impacts, the first major capitalist crisis of the twenty‐first century is quite different than the Great Depression of the 1930s or the collapse of the post‐World War II ‘Long Boom’ in the 1970s.

Of course, both those moments were important objects of scholarly analysis, and contemporary interest certainly extended beyond the halls of economics departments. Poverty, unemployment, homelessness, the relation between the state and markets – all of this was, unsurprisingly, on everyone’s radar. But – to borrow a phrase from one of the most celebrated of orthodox economics’ recent apologias (Reinhart and Rogoff 2009) – on the wide scholarly front, this time is different, in one crucial sense: never before have so many non‐economists delved so deeply into the ‘technical’ details of modern (capitalist) economic science, policy and practice. Social scientists of all stripes have found the formerly impenetrable and even uninteresting fortress of economics and finance irresistible and, if not captured it, have certainly gathered a lot of intelligence about the goings on inside the walls. Geographers, anthropologists, sociologists, psychologists, historians, political scientists – all have in the last less‐than‐a‐decade, written, often wisely and compellingly, on such once‐esoteric subjects as mortgage securitization (Walks and Clifford 2015), credit risk (Ashton 2011), and investment strategy (Hansen 2015). Topics that might once have anaesthetized most non‐economists, like the yield curve and accounting practices, have (justifiably) become hot topics (Christophers 2017; Joseph 2014; Zaloom 2009). Economics and ‘finance’ in particular, are now, more than ever, more than economic.

It must be said that this explosion in scholarship – especially in its so‐called ‘critical’ variety – is partly caught up in a somewhat irrepressible Schadenfreude. Almost every scholar outside orthodox ‘neoclassical’ economics has secretly (or not so secretly) enjoyed the crisis in the self‐described ‘queen of the social sciences’ (Samuelson 1973, p. 6). Many, heterodox economists in particular, have understandably been unable to suppress the urge to say ‘I told you so’ (Wolff 2010; Taylor 2010; Mirowski 2013). But that is hardly the entirety of the non‐mainstream...

Table of contents

• Cover
• Title Page
• Table of Contents
• Series Editors’ Preface
• Notes on Contributors
• 1 Money and Finance After the Crisis
• Part I: Financial Imaginaries
• Part II: Financial Practices
• Part III: Financialization
• Index
• End User License Agreement