2012 Thematic DR Seminar Series: Financialization and the Restructuring of Production
Theme: FINANCIALIZATION AND THE RESTRUCTURING OF PRODUCTION
Background
The financial crisis that ignited in late 2007 and the persistent economic malaise across the global North has brought into stark relief how the massive expansion of global financial flows have impacted on volatility and instability, and the greater penetration of finance into aspects of everyday life from home ownership, pensions, to the price of food.
| The connections made between financial flows and instability, the nature of financial investment and the allocation of capital, or the growth of derivatives markets and the global organization of production, for example, have been either ignored or assumed away by orthodox economists who have emphasized the efficiency of liquid financial markets in allocating capital as if a seamless interface between finance and the ‘real’ economy. |
This misunderstanding of the dynamics of capital accumulation and the role of finance left orthodox economists both surprised by the onset of the crisis and ill equipped to deal with the crisis both in terms of an analysis of what happened, what are the likely impacts, as well as policy responses – we have seen a series of ‘bastard Keynesian’ policies that have served to ‘save’ and benefit bankers at the expense of the poor and an increasingly vulnerable ‘middle class’ in North America and Western Europe.
Meanwhile, the apparent unstoppable expansion of finance through the proliferation of increasingly esoteric and numerous financial instruments since the 1970s had prompted a view amongst critical scholars, from the left, in the 1990s and 2000s that finance has become decoupled from the ‘real’ economy as the former became increasingly dominated by short-term speculative motives divorced from the industrial finance and the needs of production. Over the last decade or so, a rich literature has emerged from traditions of critical political economy emphasizing the centrality of finance and ‘financialization’ in contemporary capitalism. This literature has gone a long way in exposing changes in corporate structure and strategy in favour of finance and at the expense of productive investment, and the expression of the process of financialization in rising and volatile food prices, instability of pension funds and widening inequality. But there is a need to take it further in terms of locating finance as part of the structure of accumulation and understanding how finance and productive capital are nonetheless intertwined. For instance, it is sometimes pointed out, although mostly overlooked, that the overall US non-financial corporate sector came out of the recent crisis in a strongly positive net position on their balance sheets, with cash savings that rival the currency reserves of even China. Unlike China, these cash savings are free to use and have been facilitating a renewed expansion of this US-centered corporate sector abroad, awash with liquidity and profiting from the weakening of other economies – such as those of Europe – faced with austerity and drawn-out financial crises.
The origins of financialization, and neoliberalism more broadly, have been traced to the 1970s. Studies on the productive economy and industrial organization in the 1990s and 2000s have emphasized the fragmentation of production geographically by global production networks, a shift in the form of competition from one based on price to one based on knowledge, and a shift from Fordism to post-Fordism. How do we understand these parallel and interrelated processes – of financialization and global production networks – in recent economic history? And, in this perspective, can it really be said that the recent extremes of financialization truly spell the end of western-centric capitalism centered on the US and Western Europe?
The seminar series will focus upon the relationship between finance and production. Invited speakers come from various disciplines and theoretical perspectives to present on theory, specific contemporary case studies, as well as historical work
Schedule
Date | Speaker | Title |
13 February |
| Money and Finance: The "Real" Determinants of Economic Developments Speaker: Jan Kregel, Levy Economics Institute of Bard College |
20 February |
| From Financialization to (Re)Production Speaker: Ben Fine, School of Oriental and African Studies, University of London |
26 March |
| Financialization and Social Contest in Global Value Chains Speaker: Florence Palpacuer, University of Montpellier |
23 April |
| Financialization of Commodity Markets and Price Signals; Should the Producers be Listening Speaker: Masuma Farooki, Open University |
26 April |
|
China's Capital Control: Questions Effectiveness and Efficiency Speaker: Dic Lo, School of Oriental and African Studies, University of London
|
7 May |
| Essential and Peculiar Causes of the Present Crisis Speaker: Claudio Sardoni, University of Rome “La Sapienza |
14 May |
| Capturing Dynamics Gains From International Trade: The Role of Financialization Speaker: William Milberg, New School University |
4th June |
|
Heterodox Political Economy and Financialization Speaker: Samantha Ashman, University of Johannesburg
|
11th June |
| Development in a time of financial crisis: How good is the bad news? Speaker: Jayati Ghosh, Jawaharlar Nehur University |
