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Ch 13: The Financialized State

Author

Listed:
  • Dick Bryan

    (The University of Sydney)

  • David Harvie

    (University of Leicester)

  • Mike Rafferty

    (The University of Sydney)

  • Bruno Tinel

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract
In this chapter, we explore states' strategic use of financial ways of thinking in policy formation, resulting in the "financialization" of many aspects of state policy. Specifically, we argue that, following Randy Martin's formulation, a "social logic of the derivative" is being incorporated into the design of state intervention. Paying particular attention to leverage and liquidity we develop three key propositions, namely, that this derivative logic is changing, and even erasing, earlier distinctions between: (i) the state and financial markets; (ii) those state activities-namely, monetary and fiscal policy-once thought to be formally discrete; and (iii) finance and community or social policy. We illustrate our argument with examples of specific policies and initiatives-such as Quantitative Easing, bank liquidity guarantees, and the social impact bond-drawn primarily from the United States and the United Kingdom.

Suggested Citation

  • Dick Bryan & David Harvie & Mike Rafferty & Bruno Tinel, 2020. "Ch 13: The Financialized State," Post-Print halshs-02955815, HAL.
    • Handle: RePEc:hal:journl:halshs-02955815
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02955815
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    References listed on IDEAS

    as
    1. Rabah Arezki & Patrick Bolton & Sanjay Peters & Frederic Samana & Joseph Stiglitz, 2015. "From Global Savings Glut to Financing Infrastructure: The Advent of Investment Platforms," OxCarre Working Papers 166, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    2. Zhiguo He & Arvind Krishnamurthy & Konstantin Milbradt, 2016. "What Makes US Government Bonds Safe Assets?," American Economic Review, American Economic Association, vol. 106(5), pages 519-523, May.
    3. Dick Bryan & Michael Rafferty & Bruno Tinel, 2016. "Households at the Frontiers of Monetary Development," Post-Print halshs-01424278, HAL.
    4. Dick Bryan & Michael Rafferty, 2006. "Capitalism with Derivatives," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-50154-6, March.
    5. Gary B. Gorton, 2016. "The History and Economics of Safe Assets," NBER Working Papers 22210, National Bureau of Economic Research, Inc.
    6. Ricardo J. Caballero & Emmanuel Farhi & Pierre-Olivier Gourinchas, 2017. "The Safe Assets Shortage Conundrum," Journal of Economic Perspectives, American Economic Association, vol. 31(3), pages 29-46, Summer.
    7. Javier Alonso & Alfonso Arellano & David Tuesta, 2016. "Pension fund investments in infrastructure and the global financial regulation," Working Papers 16/19, BBVA Bank, Economic Research Department.
    8. Dick Bryan & Michael Rafferty & Bruno Tinel, 2016. "Households at the Frontiers of Monetary Development," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01424278, HAL.
    9. Golec, Pascal & Perotti, Enrico, 2017. "Safe assets: a review," Working Paper Series 2035, European Central Bank.
    Full references (including those not matched with items on IDEAS)

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