Duncan Wigan

Powering ideas through expertise: professionals in global tax battles

ABSTRACT This contribution discusses how ideas are powered through expertise and moral authority. Professionals compete with each other to power ideas by linking claims to expertise, how things best work, to moral claims about how things should be. To show how, we draw on a case of battles over global tax policy. Corporate reporting for tax purposes is an area where the European Union, Organization for Economic Co-operation and Development, the United Nations, large global accountancy firms and non-governmental organizations have been active. The point of contention here is what form of financial reporting multinational corporations should provide to ensure they pay their fair share of tax. Ideas powered by expertise contain shared causal beliefs, as well as principled beliefs about value systems. We demonstrate that professionals can contest the established order when demonstrations of expertise can be fused with claims to moral authority. Such a constellation is more likely when political conditions are favourable.

Global wealth chains in the international political economy

As this special issue demonstrates, the literature on Global Value Chains (GVCs), Global Production Networks, and Global Commodity Chains continues to provide important insights into the governance and organization of production and distribution networks. The continuing promise of these investigations is that knowledge about processes of information sharing enables developing countries to compete in the world economy, and that the wealth arising from production can better reflect where value is created. This commentary piece suggests that GVCs (hereafter ‘value chains’) co-exist with what we call Global Wealth Chains (GWCs or ‘wealth chains’). This co-existence undermines many of the development objectives articulated in research on value chains. We define Global Wealth Chains as linked forms of capital seeking to avoid accountability during processes of pecuniary wealth creation. By accountability we mean fiscal claims, legal obligations, or regulatory oversight. Global Wealth Chains are commonly located in offshore jurisdictions, but these places are not only the Caribbean islands we imagine as ‘tax havens’, but also include London, Amsterdam, and Singapore, among many others. Further, wealth chains are articulated not only through cartographic and sovereign spaces but also within financial products such as hybrids and derivatives. We suggest that wealth chains are the yin to the yang of value chains. While actors in value chains share an interest in transparency and coordination, those in wealth chains thrive on rendering movements through the chain opaque. Wealth chains hide, obscure and relocate wealth to the extent that they break loose from the location of value creation and heighten inequality. This commentary piece suggests that investigating the relationship between value chains and wealth chains is a much needed research agenda that is not currently being adequately addressed by scholars and policymakers.

The governance of global wealth chains

ABSTRACT This article offers a theoretical framework to explain how Global Wealth Chains (GWCs) are created, maintained, and governed. We draw upon different strands of literature, including scholarship in International Political Economy and Economic Geography on Global Value Chains, literature on finance and law in Institutional Economics, and work from Economic Sociology on network dynamics within markets. This scholarship assists us in highlighting three variables in how GWCs are articulated and change according to: (1) the complexity of transactions, (2) regulatory liability, and (3) innovation capacities among suppliers of products used in wealth chains. We then differentiate five types of GWC governance – Market, Modular, Relational, Captive, and Hierarchy – which range from simple ‘off shelf’ products shielded from regulators by advantageous international tax laws to highly complex and flexible innovative financial products produced by large financial institutions and corporations. This article highlights how GWCs intersect with value chains, and provides brief case examples of wealth chains and how they interact.

How activists use benchmarks: Reformist and revolutionary benchmarks for global economic justice

Non-governmental organisations use benchmarks as a form of symbolic violence to place political pressure on firms, states, and international organisations. The development of benchmarks requires three elements: (1) salience, that the community of concern is aware of the issue and views it as important; (2) will, that activists and issue entrepreneurs will carry the message forward; and (3) expertise, that benchmarks created can be defended as accurate representations of what is happening on the issue of concern. We contrast two types of benchmarking cycles where salience, will, and expertise are put to the test. The first is a reformist benchmarking cycle where organisations defer to experts to create a benchmark that conforms with the broader system of politico-economic norms. The second is a revolutionary benchmarking cycle driven by expert-activists that seek to contest strong vested interests and challenge established politico-economic norms. Differentiating these cycles provides insights into how activists work through organisations and with expert networks, as well as how campaigns on complex economic issues can be mounted and sustained.

Politics, time and space in the era of shadow banking

ABSTRACT In the wake of the Global Financial Crisis, there has been an understandable focus on the financial fragility and contagion aspects of shadow banking. This article argues that shadow banking is important for another set of reasons. It has been well established that shadow banking permits the transformation of assets and financial claims. It has also been established that fiscal and regulatory arbitrage occurs through shadow banking, and associated offshore financial activities. The article develops the argument that together these are transforming the times and spaces of modern finance, and directly challenging earlier spatio-temporal concepts of finance, and the regulatory/jurisdictional order built on them. The article suggests that the longer term significance of shadow banking may not just be its role in financial crisis, or even tax and regulatory arbitrage, but that it was here that innovative forms of capital were produced and generalised which transcended the spaces and times of earlier institutional, transactional and jurisdictional concepts of capital and wealth.

Capital unchained: finance, intangible assets and the double life of capital in the offshore world

ABSTRACT The rise of intangible assets such as brand names, research and development, patents and other forms of abstract capital such as digital platforms and data flows has confounded extant measures and concepts of capital and accumulation. What used to be a residual asset category known as ‘goodwill’ has now overtaken so-called fixed or tangible assets in the profitability and valuation of many leading corporations. Yet these intangible assets lead a double life as both spatial and temporal in some dimensions, yet fluid and spatio-temporally elusive in others. Using a framework focused on measuring (by accountants), managing (by corporations) and monitoring (by International Political Economy scholars and regulators), this article explores the longer term implications of accumulation of internationalised capital in intangible and abstract forms, and the prominent role of finance and offshore in giving mobility and fluidity to these forms of capital. The article suggests that while global value chain and global production network analyses have helped researchers and policy-makers to track increasingly fragmented and fluid networks of commodity production, there also is a need to follow the global double life of internationalised and financialised intangible assets and wealth flows, and parallel reorganisations of state forms in response to those transformations.

Constructing and contesting City of London power: NGOs and the emergence of noisier financial politics

Abstract Existing literature on the City of London has tended to focus on its ‘structural power’, while neglecting political and narrative agency. This paper acts as a corrective by presenting evidence to show that since the financial crash of 2008 the political terrain the City operates on has become more contested, crowded and noisier. The contribution develops a middle course between a positive assessment of the role of civil society in relation to global finance, and a more pessimistic reading. We demonstrate how macro-narratives and public story-telling both construct and contest City and financial sector power. In a new pattern since the financial crash, NGOs have moved from campaigns of limited duration and narrow focus, to a more sustained presence on macro-structural issues. Adopting a supply–demand framework for assessing governance and regulatory change, we look at the emergence of TheCityUK as a new advocacy arm and the strategies of three of the more prominent and focused NGOs that have mobilized in the aftermath of the crash: the Tax Justice Network’s (TJN) use of the ‘finance curse’; Positive Money on private endogenous money creation; and Finance Watch counterweight strategies at the level of the European Union. We suggest these mobilizations highlight the need for a more concerted and orchestrated construction of a global institutional civil society infrastructure in finance (a global financial public sphere) to achieve greater access, resources, scrutiny and oversight for a range of specialist expert NGOs.

Veblen, Bataille and Financial Innovation

This article advances towards the reconceptualization of financial innovation. It examines the calamitous role of financial innovation in the global financial crisis, developing a non-rational theorization of finance within the social economy that factors in the role of affect. Outlining the foundations for such an approach, the analysis draws on Thorstein Veblen and Georges Bataille, whose work encompasses psycho-social conceptions of political-economic agency. From the more anthropological lens of Veblen and Batailles theorizations, it is possible to move beyond instrumentalist accounts of financial innovation premised on pecuniary expedients and aspirations of market completion. As we argue, in a broader affective economy, contemporary financial innovation serves invidious ends, providing a means of attaining social distinction, constituting a medium for violent expenditure and bestowing access to sovereign expression on its purveyors. Highlighting the non-rational dimension of financial markets prompts a reconsideration of the nature of crisis and the means of its redress.

Brexit and Global Wealth Chains

Abstract One vision of a post Brexit Britain is of a political economy sustained by highly flexible labour markets, light touch regulation, and a hyper competitive low-tax regime. This article focuses on the tax element, evaluating the prospects of this vision’s realization on the basis of the attributes of the British political economy, the substance of the Britain’s new found freedoms and the forces at play in the European and international regulatory environment. Britain is seeking a smooth transition via a strategy of upgrading and expanding national position in global wealth chains (GWCs). Occupying space in GWCs requires a series of careful balancing acts between making a tax offer attractive to mobile capital and maintaining revenue, designing a low-tax regime and staying within the boundaries of accepted practice established by multilateral rules and norms, and between multiple, often conflicting, goals that Britain must simultaneously pursue as it leaves the European Union. With hard Brexit, Britain will pursue this vision, but these balances are likely to prove illusive.

The map and the territory: exploring capital’s new financialized spatialities

The aim of this timely work, which appears in the wake of the worst global financial crisis since the late 1920s, is to bring together high quality research-based contributions from leading international scholars involved in constructing a geographical perspective on money. Topics covered include the crisis, the spatial circuits of finance, regulation, mainstream financial markets (banking, equity, etc), through to the various ‘alternative’ and ‘disruptive’ forms of money that have arisen in recent years. It will be of interest to geographers, political scientists, sociologists, economists, planners and all those interested in how money shapes and reshapes socio-economic space and conditions local and regional development.