Towards some clarification on financialisation?

Financialization, London

Existing debates on ‘financialization’ in urban studies, and beyond, are intense. Given the nature of the WHIG project, we will inevitably be addressing the issue of financialization, financializing and financing head on. On Thursday 23 May, The Open University hosted a workshop which aimed to take stock of the interdisciplinary trends and search for ‘some much needed coherence in its operationalization in future empirical research’. The day included 7 paper presentations, an overview of recent developments and questioning where future research might go.

The day opened with Natascha van der Zwan and Philip Mader introducing their hotly anticipated ‘International Handbook of Financialization’ out with Routledge soon. The book, with 41 chapters and 65 contributors, is set to be a wide-ranging analysis through the depths of financialisation research. Divided into six sections, Natascha and Philip outlined the key aims of the book: explaining its origin in bringing together researchers working on financialization from vastly different perspectives. They emphasise the variegated processes in financialization and how actually having a non-concrete definition enables different disciplines to speak to one another.  This of course is not without issues, as was picked up later in the day by Stuart Parris and Pauline Gleadle in their presentation on the financialization of non-financial corporations and the need for a tighter definition. If we continue to have a non-unified definition and apply the ideas inconsistently will disciplines actually just be speaking in parallel?

Michael Pryke on the financialization of water in San Diego

Next up after Natascha and Philip was Michael Pryke, presenting his work from San Diego on the financialization of urban water, specifically how a desalination plant in Carsblud becomes linked to the stock markets and financial activities of New York. Following Latour, Pryke (and Allen) show how the ‘storying’ of the plant enables it to be translated for investor – they are made into opportunities. As a geographer, I particularly enjoyed the employment of the topological way of thinking about this process. The desalination plant morphs as it travels and an initiative use of finance, through mundane practices of financial institutions, makes legible the investment opportunity. Again, this paper was not presented without queries. As one participant highlighted with his ‘neoclassical hat on’, if California needs its desalination plant funding and pension funds need returns, isn’t the set-up actually working for all the various parties? And I think this really gets to the heart of the financialization debates – so what? Why does this matter? For me, I often return to Desiree Fields work on the ‘unwilling subject of financialization’ – citizens become enrolled in processes without having a chance to participate.

Value creation versus value extraction

The morning continued with analysis of financialization and value creation. A debate ensued around value creation versus value extraction – does finance make or extract value? How does the relationship between finance and industry shape financial strategies of the ‘productive’ sector of the economy? These questions were grappled with effectively by Phillip Kern and Gerhard Schnyder. The latter highlighting how surprising he found, arriving in the UK from Switzerland, that banks barely lend to firms: ‘what’s the point in banks’?

The financialization of non-financial organsiations

Carrying on with a similar line of analysis, Daniele Tori opened the afternoon addressing the financialization of non-financial organsiations. The afternoon moved away from commercial analysis in its second paper, where Hanna Szymborska presented her economic analysis of wealth structures and income distribution of US households before and after the Great Recession. Taking up the joint challenges of looking at wealth and inequality (raised most famously by Piketty) and the ‘inclusivity’ debates around finance, Hanna drew attention to the ways in which the well-rehearsed narratives around financial inclusion are unequally experienced.

The day finished by returning to some of the big questions raised by the presentations. Mader kicked off this discussion highlighting that some of the problems of operationalization just come from difficulty of reducing qualitative experience to quantitative indicators – we should not stop quantifying or the ‘best’ or ‘better’ yardsticks but to connect quantitative analysis to qualitative. To this point, van der Swaan highlighted the benefits of this – that employing financialization encourages us to interact with other disciplines. In this endeavour, WHIG is well placed – a team of geographers, planners, political scientists and sociologists – we each bring different understandings of financialization as a process. How we take this forward in our analysis will of course undoubtedly require addressing the debates raised at the OU workshop, but our different literatures and analytical approaches will undoubtedly help us in this.

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