DFG-funded research network

Politics of money

Politics of Money was a DFG-funded research network, led and organized by Kai Koddenbrock and Benjamin Braun, investigating the resilience of finance capitalism.

Deutsche Forschungsgemeinschaft

About the network

Politics of Money is a research network that strives to combine fine-grained money and finance analysis with social theory and larger questions of political economy to investigate the resilience of finance capitalism. It is funded funded by the DFG (Deutsche Forschungsgemeinschaft) and led and organized by Benjamin Braun and Kai Koddenbrock. Here’s where we think we are, where we want to go, and how we hope to get there.

Benjamin Braun MPIfG

Benjamin Braun

Kai Koddenbrock Bayreuth

Kai Koddenbrock

Where are we?

While open to different theoretical approaches when it comes to explaining and understanding the evolution and the consequences of money, our common empirical starting points are that (a) money plays a central role in making private property tradable and hoardable (b) money is a credit-debt relation (the financial liabilities – primarily but not exclusively: deposits – of a set of privileged actors, – primarily but not exclusively: banks – that circulate as other actors’ means of payment), and (c) that the ‘moneyness’ of these relations is the product of an essentially hybrid, public-private partnership. This view is consistent with theoretical diversity within the network – Marxist, Neo-Chartalist, Minskyan or other approaches are all welcome. We take this common ground as the starting point for the ‘big’ questions formulated below. They follow from the intuition that this basic setup of the monetary system is more problematic today than it used to be, serving the interests not of society as a whole but of the owners and the producers of financial capital. We seek a better understanding of the role money and finance play in the cyclical emergence of over-exploitation and extreme inequality under finance capitalism. The following attempt to formulate a research agenda is based on and motivated by this intuition.

Where do we want to go?

To assess the role of capitalist money for the global political economy and to gauge its role for the resilience or lack of fundamental change in crisis-prone capitalism, the network will explore how money works as a global systemic relation, how and which actors work with, for and against it, which hierarchies this entails and what the implications for inequality are. Capitalism imposes a systemic need to compete and to accumulate and invest money in order to make more money – which is how money turns into capital. It follows that money and the actors producing and working with it are crucial for both the stability and the instability of the global political economy.

We ask two main questions throughout our endeavor:

  1. What are the specific historical developments that have rendered the hybrid monetary system less productive, more exploitative, and thus less legitimate?
  2. Why has this latest incarnation of finance capitalism proven so resilient even in the face of deep and recurring crises?

We believe that there is real value in a contribution to the literature that investigates these questions in its various dimensions, while maintaining a collective focus on the big picture of the politics of money and contemporary finance capitalism are intertwined. Such a project would seek to identify and to understand the institutional changes, power shifts, etc. that have transformed capitalist money and finance from a public good into a private good for the few and – potentially – a public bad.

How do we get there?

Here’s a list of six sub-questions that we think the big questions divides into, and which will structure both the workshops and the edited volume.

  1. The starting point: Money, financialization and finance capitalism: The nature of the changes triggered by recent forms of financialization is contested. The expansionary nature of capitalist money, the de-coupling and re-coupling of the financial and the real sphere have been recurrent. What is more, the relationship between capital and labor, and between capital and the state has sometimes been more cooperative and at times conflictive. Is there anything new in current practices of fiat money creation, asset and liability management and the entrenched position of rentiers? Or are we just witnessing another form of capitalist crisis, tied to the contradictions enshrined in the labor-capital relation, money, capital and the international division of labor?
  2. Practices: banking, accounting, technology: The evolution of financial markets has shown that theory and technology – the two being often inseparable – have fundamentally transformed modern finance. However, the task of integrating these theoretical and technological developments into the analysis of modern money is still ahead of us. What role did pricing and risk management models and technologies play in the evolution of the shadow banking system? How has the evolution of accounting impacted the capacity of different actors to acquire and control assets? Can a case be made that financial technology has ‘disrupted’ the social contract (if there ever was one) underpinning the finance franchise of the pre-digital era?
  3. The changing ecology of the financial system I: The actors and the system. The ecology of the financial system is constantly in flux. While banks have always been central to capitalist money, their activities have changed, as manifest in the growth, for instance, of Special Purpose Vehicles or derivative trading. Along the capital investment chain, we have seen the proliferation of asset managers (mutual, hedge, private equity, venture capital, and exchange-traded funds), investment advisors, and proxy voting firms. Corporate cash pools and sovereign wealth funds have altered the investor landscape, while households have increasingly been drawn into the finance capitalism both as investors and as debtors. How do these changes impact the politics of money and finance?
  4. The changing ecology of the financial system II: Global financial integration and dependency: To say that the global monetary system is a hierarchical system is to point to the relations of power, dependency, and violence that are the flipside of monetary and financial relations between creditors and debtors. In dealing with global money, what opportunities and risks confront governments and countries in the Global South? Has global financial integration eroded the domestic institutional arrangements that underpinned global money relations under the post-war Bretton Woods system? (How) did the evolution of global value chains increase the pressure of firms in non-core economies to borrow in foreign currencies, and thus their dependency on foreign lenders?
  5. Governance, regulation and the law: What were the key institutional changes that unleashed the finance franchise, turning credit into fuel for financial rather than real economic expansion? How can we connect developments such as the end of US dollar gold convertibility, the repeal of Glass-Steagall, or the taming of inflation and the global diffusion of central bank independence? The law, including legal loopholes and their exploitation for profit, are essential to making money. What role do regulatory arbitrage, law firms and law enforcement play in keeping that business profitable?
  6. Inequality: In a sense, inequality is the bottom line for the entire project. But inequality is not just a consequence of the developments mentioned under themes 1 to 5, but also a causal force for (further) financialization. Greater concentration of wealth means more demand for financial assets on one end of the spectrum, and greater demand for credit on the other. Does the degree of inequality alter the cost-benefit analysis for a financial system based on private credit money? Might a more prominent role for the state as in public banking be the next step to counter these developments?

Workshops

Workshop I: Brighton

16-18 May 2018

The starting point: Financialisation and the future of money

Workshop I: hamburg

21-23 November 2018

Practices: Banking, accounting, technology

Workshop III: COlogne

16-17 May 2019

The changing ecology of the financial system I: The actors and the system

Workshop IV: amsterda

5-6 December 2019

Global financial integration and dependency

Workshop v: Naples

20-21 May 2023

Whither globale finance?

Publications

  • Bezemer, D., 2018, “Unproductive debt causes crisis”, in Money, currency and crisis: In Search of Trust, 2000 BC to AD 2000. van der Spek, R. J. & van Leeuwen, B. (eds.). Abingdon: Routledge, p. 37-52.
  • Bezemer, D. & Zhang, L., 2018, “Credit composition and the severity of post-crisis recessions”, (Accepted/In press) Journal of Financial Stability.
  • Bezemer, D. J. (2016).”Towards an ‘accounting view’ on money, banking and the macroeconomy: history, empirics, theory.”Cambridge Journal of Economics, 40(5), 1275–1295.
  • Bezemer, D. J. (2014). “Schumpeter might be right again: the functional differentiation of credit.” Journal of Evolutionary Economics, 24(5), 935-950
  • Braun, Benjamin (2015a) Governing the Future: The European Central Bank’s Expectation Management During the Great Moderation. In: Economy and Society 44 (3), 367-391.
  • Braun, Benjamin (2015b) Preparedness, Crisis Management and Policy Change: The Euro Area at the Critical Juncture of 2008-2013. In: The British Journal of Politics & International Relations 17 (3), 419–441.
  • Braun, Benjamin (2016a) From performativity to political economy: index investing, ETFs and asset manager capitalism. In: New Political Economy 21 (3), 257-273.
  • Braun, Benjamin (2016b) Speaking to the people? Money, trust, and central bank legitimacy in the age of quantitative easing. In: Review of International Political Economy 23 (6), 1064–1092.
  • Braun, Benjamin (2018) Central banking and the infrastructural power of finance: the case of ECB support for repo and securitization markets. In: Socio-Economic Review, online first: https://doi.org/10.1093/ser/mwy008.
  • Braun, Benjamin and Hübner, Marina (2018) Fiscal fault, financial fix? Capital Markets Union and the quest for macroeconomic stabilization in the Euro Area. In: Competition & Change, online first: https://doi.org/10.1177/1024529417753555.
  • Dutta, S. J. (2018). Sovereign debt management and the globalization of finance: Recasting the City of London’s ‘Big Bang’. Competition & Change, 22(1), 3-22.
  • Fichtner, Jan (2013) The Rise of Hedge Funds: A Story of Inequality. In: Momentum Quarterly 2 (1), 3–20.
  • Fichtner, Jan (2014) Privateers of the Caribbean: The Hedge Funds-US-UK-Offshore Nexus. In: Competition & Change 18 (1), 37–53.
  • Fichtner, Jan (2015a) Rhenish Capitalism Meets Activist Hedge Funds: Blockholders and the Impact of Impatient Capital. In: Competition & Change 19 (4), 336–352.
  • Fichtner, Jan (2015b) The Offshore-Intensity Ratio: Identifying the Strongest Magnets for Foreign Capital. City University London. CITYPERC Working Paper Series 2015/02.
  • Fichtner, Jan (2016) The anatomy of the Cayman Islands offshore financial center: Anglo-America, Japan, and the role of hedge funds. In: Review of International Political Economy 23, 1034–1063.
  • Fichtner, Jan (2017) Perpetual Decline or Persistent Dominance? Uncovering Anglo-America’s True Structural Power in Global Finance. In: Review of International Studies 43(1), 3-28.
  • Fichtner, Jan; Heemskerk, Eelke; Garcia-Bernardo, Javier (2017) Hidden Power of the Big Three? Passive Index Funds, Re-Concentration of Corporate Ownership, and New Financial Risk. In: Business & Politics, accepted.
  • Gabor, Daniela (2015) A step too far? The European financial transactions tax on shadow banking. In: Journal of European Public Policy, 1–21.
  • Gabor, Daniela; Ban, Cornel (2016a) Banking on Bonds: The New Links Between States and Markets. In: Journal of Common Market Studies, n/a.
  • Gabor, Daniel; Jakob Vestergaard (2016) Towards a theory of shadow money. London: INET
  • Gabor, Daniela (2016b) The (impossible) repo trinity: the political economy of repo markets. In: Review of International Political Economy 23, 967–1000.
  • Hager, Sandy Brian (2015) Corporate ownership of the public debt: mapping the new aristocracy of finance. In: Socio-Economic Review 13 (3), 505–523.
  • Hager, Sandy Brian (2016) Public debt, inequality, and power. The making of a modern debt state. Oakland, California: University of California Press.
  • Hübner, Marina (2016) “Securitization to the Rescue! The European Capital Markets Union Project, the Euro, Crisis and the ECB as ‘Macroeconomic Stabilizer of Last Resort.’” Foundation for European Progressive Studies: FEPS Studies, September 2016.
  • Kessler, Oliver (2008) Die internationale politische Ökonomie des Risikos. Eine Analyse am Beispiel der Diskussion um die Reformierung der Finanzmärkte. Wiesbaden: VS, Verl. für Sozialwiss.
  • Kessler, Oliver; Wilhelm, Benjamin (2013) Financialization and the Three Utopias of Shadow Banking. In: Competition & Change 17 (3), 248-264.
  • Knafo, S., & Dutta, S. J. (2016). Patient capital in the age of financialized managerialism. Socio-Economic Review, 14(4), 771-788.
  • Knafo, Samuel (2013) The making of modern finance. Liberal governance and the gold standard. New York: Routledge.
    Knafo, Samuel (2012) Financial Crises and the Political Economy of Speculative Bubbles. In: Critical Sociology 39, 851–867.
  • Koddenbrock, Kai (2015): Strategies of critique in International Relations: From Foucault and Latour towards Marx. In: European Journal of International Relations 21 (2), 243–266.
  • Koddenbrock, Kai (2016) The practice of humanitarian intervention: Aid workers, agencies and institutions in the DR Congo. Abingdon: Routledge.
  • Koddenbrock, Kai (2017a) What money does: An inquiry into the blackbone of capitalist political economy, Discussion paper, Max-Planck-Institute for the Study of Societies, Cologne.
  • Koddenbrock, Kai (2017a) Mehr Kapitalismus wagen: Herrschaftsanalyse ‚jenseits der Anarchie‘ und die Rolle des Gelds.  In: Politische Vierteljahresschrift, Issue 2, 269-284.
  • Koddenbrock, Kai; Hoffmann, S (2017) There is no alternative: Der Aufstieg der humanitären Hilfe in der internationalen Politik. In: Zeitschrift für Friedens- und Konfliktforschung 5 (1), 73-106.
  • Mertens, Daniel (2015) Erst sparen, dann kaufen? Privatverschuldung in Deutschland. Frankfurt/New York: Campus.
  • Mertens, Daniel (2017a) Putting ‚merchants of debt‘ in their place: the political economy of retail-banking and credit-based financialization in Germany. In: New Political Economy 17 (1), 12-31.
  • Mertens, Daniel (2017b) Borrowing for social security? Credit, asset-based welfare and the decline of the German savings regime. Journal of European Social Policy 27 (5), 474-490.
  • Mertens, Daniel and Thiemann, Matthias (2017) Building a hidden investment state? The European Investment Bank, national development banks and European economic governance. In: Journal of European Public Policy, online first: http://dx.doi.org/10.1080/13501763.2017.1382556.
  • Murau, Steffen (2018a) The Future of Offshore Dollar Creation: Four Scenarios for the International Monetary System by 2040 (with Joe Rini and Armin Haas), Institute for Advanced Sustainability Studies, Potsdam, and Weatherhead Center for International Affairs, Harvard University, Discussion Paper, June 2018.
  • Murau, Steffen (2018b) Offshore Dollar Creation and the Emergence of the post-2008 International Monetary System, Institute for Advanced Sustainability Studies, Potsdam, and Weatherhead Center for International Affairs, Harvard University, Discussion Paper, June 2018.
  • Murau, Steffen (2017) ‘Shadow money and the public money supply. The impact of the 2007-2009 Financial Crisis on the Monetary System’, Review of International Political Economy 24 (5), pp. 802-838.
  • Nölke, Andreas (2016a) Economic causes of the Eurozone crisis: the analytical contribution of Comparative Capitalism. In: Socio-Economic Review 14 (1), 141-161.
  • Nölke, Andreas (2016b) Finanzialisierung als Kernproblem eines sozialen Europas. WSI-Mitteilungen 69 (1), 41-48.
  • Nölke, Andreas (2017) Financialisation as the Core Problem for a “Social Europe”. In: Revista de Economia Mundial 46, 27-48.
  • Nölke, Andreas (2018a) Beware of Financialization! In: Pixley, Jocelyn; Flam, Helena (eds.) Critical Junctures in Mobile Capital. Cambridge: Cambridge University Press, 156-181.
  • Nölke, Andreas (2018b) Finanzialisierung und die Entstehung der Eurokrise: Die Perspektive der Vergleichenden Kapitalismusforschung. In: KZfSS Kölner Zeitschrift für Soziologie und Sozialpsychologie 70 (1), 439-459.
  • Heires, Marcel; Nölke, Andreas (eds.) (2014) Politische Ökonomie der Finanzialisierung. Wiesbaden: Springer VS.
  • Nölke, Andreas; Heires, Marcel and Bieling, Hans-Jürgen (eds.) (2013) The Politics of Financialization. In: Competition and Change 17 (3), 209–218.
  • Nölke, Andreas; Perry, James (2008) The Power of Transnational Private Governance: Financialization and the IASB. In: Business and Politics 9 (3), 1-27.
  • Perry, James; Nölke, Andreas (2006) The Political Economy of International Accounting Standards. In: Review of International Political Economy 13 (3), 559-586.
  • Sahr, Aaron (2017) Das Versprechen des Geldes. Eine Praxistheorie des Kredits. Hamburg; Hamburger Edition.
  • Sahr, Aaron (2016) Reichtum aus Feenstaub. Das Free-Lunch Privileg im Keystroke-Kapitalismus. In: Bude, Heinz; Staab, Philipp (eds.) Ungleichheit im Kapitalismus. Frankfurt am Main: Campus, 25-44.
  • Sahr, Aaron (2015) Wären wir die besseren Banken? Zur Debatte um die Repolitisierung des Kreditgeldes. In: Widerspruch 34 (66), 103-113.
  • Simon, Jenny; Tittor, Anne (2014) The Financialization of Food, Land, and Nature. In: Journal für Entwicklungspolitik 30 (2), 4-15.
  • Simon, Jenny (forthcoming 2017): Am Rande des Imperiums. Chinas Staatskapitalismus zwischen Rivalität und Interdependenz. In: Wissenschaft & Frieden.
  • Sgambati, Stefano (2015b) Rethinking banking. Debt discounting and the making of modern money as liquidity. In: New Political Economy, 1–17.
  • Sgambati, Stefano (2015a) The significance of money. Beyond Ingham’s sociology of money. In: European Journal of Sociology, 56 (2), 307-339.
  • Thiemann, Matthias (2012) Out of the shadow? Accounting for Special Purpose Entities in European banking systems. In: Competition and Change 16 (1), 37-55.
  • Thiemann, Matthias (2014) In the Shadow of Basel: How Competitive Politics Bred the Crisis. In: Review of International Political Economy 21 (6), 1203-1239.
  • Thiemann, Matthias (2014) The impact of meta-standardization upon standards convergence: The case of the international accounting standard for off-balance sheet financing. In: Business and Politics.
  • Thiemann, Matthias (2016) Capital markets union and the threat of the regulatory competition, Foundation for European Progressive Studies, September 2016.
  • Thiemann, M.; Lepoutre, J. (2017)  Stitched on the edge: Rule Evasion, Regulatory Embeddedness, and the Evolution of Markets. In: American Journal of Sociology.
  • Wullweber, J.; Graf, A. and Behrens, M. (2013) Theorien der Internationalen Politischen Ökonomie. Wiesbaden: Imprint: Springer VS.
  • Wullweber, Joscha (2014) The Question Is Which Is to Be Master – That’s All! Amerikanische Internationale Politische Ökonomie vs. britische Internationale Politische Ökonomie? In: Zeitschrift für Internationale Beziehungen (2).
  • Wullweber, Joscha (2015) Die Performativität des Finanzsystems und die Selektivität stratifizierter Finanzstrukturen. In: Leviathan 43 (2), 270-298.
  • Wullweber, Joscha (2016) A Grave Case of Myopia? Die globale Finanzmarktkrise und die Internationale Politische Ökonomie. In: Zeitschrift für Politikwissenschaft 26 (1), 105-121.
  • Wullweber, Joscha (2016) Performative Global Finance: Bridging Micro and Macro Approaches with a Stratified Perspective. In: New Political Economy 21 (3), 305-321.
  • Wullweber, Joscha (2017) Leviathan vs. selbstregulierende Märkte? Die globale Finanzkrise und die Governance von Finanzmarktliquidität. In: Politische Vierteljahresschrift 58 (1): 98-123.
  • Wullweber, Joscha (2018) Zentralbanken als marktmachende Akteure: Die Global Governance des Finanzsystems, das Schattenbankensystem und unkonventionelle Zentralbankpolitik seit der globalen Finanzkrise. In: Zeitschrift für Internationale Beziehungen 25 (2), 33-63.
  • Wullweber, Joscha (2019a) Geld, Staat und Liquiditätsketten. Die Politik der Geldschöpfung und Zentralbankpolitik in Postkrisenzeiten, in: Politische Vierteljahresschrift, Vol. 60 (1), 45-70.
  • Wullweber, Joscha (2019b) Money, State, Hegemony. A political ontology of money, in: New Political Science, 41 (2), 313-328.
  • Wullweber, Joscha (2019c) Constructing hegemony in global politics. A discourse-theoretical approach to policy analysis, in: Administrative Theory and Praxis, 47 (3), 148-167.
  • Wullweber, Joscha (2019d) Monism vs. Pluralism, the global financial crisis, and the methodological struggle in the field of International Political Economy, in: Competition and Change, 23 (3), 287–311.
  • Wullweber, Joscha (2019e) Research in International Political Economy, in: Marlin-Bennett, Renée (Hrsg.): Oxford Research Encyclopedia of International Studies, Oxford University Press, DOI: 10.1093/acrefore/9780190846626.013.468.
Deutsche Forschungsgemeinschaft

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Dr. habil. Kai Koddenbrock

Bayreuth University

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