Huw Macartney

Variegated neo-liberalism: transnationally oriented fractions of capital in EU financial market integration

This article develops a twofold critique: on the one hand it addresses those accounts commonly associated with the Varieties of Capitalism literature and their associated understanding of neo-liberalism to argue that there is a dominant tendency to collapse into a binary analysis that asserts either we are witnessing convergence or we are experiencing path dependency. On the other hand it addresses ‘neo-Gramscian’ accounts which tend to overemphasise processes of transnational convergence and the emergence of a transnational capitalist class at the expense of the embeddedness of capital in national-domestic contexts. On this basis, it is argued that several contributions within political geography pose meaningful questions about the premise that neo-liberalism is inherently variegated. Principally, this involves developing the notion of variegated neo-liberalism to analyse the dynamics of a contingent neo-liberal consensus between transnationally-oriented fractions that both drives EU reform in a neo-liberal direction and reinforces domestic linkages organic to the national context. As a result, the article suggests we therefore reject the notion of a transnational capitalist class somehow detached from the national.

Finance Unravelled: A Historical Materialist Analysis of EU Public Policy

The 2007–09 financial crisis has prompted critical self-reflection, not least because of the socioeconomic costs to more susceptible social groups. This paper targets public policy accounts of EU integration for their agent-centred, pluralist analysis, which systematically failed to address latent asymmetries and inequalities. For this reason, these accounts are largely incapable of either explaining the crisis except in contingent terms or of suggesting fruitful political responses. Instead I outline a historical materialist apparatus to contextualize the financial crisis within the longer-term rise of financialized capitalism in Europe, its key agents and dominant world-views. In turn, I employ this apparatus to examine post-2000 EU financial integration before suggesting certain key lessons for a post-crisis agenda.

EU ring-fencing and the defence of too-big-to-fail banks

Abstract Bank ring-fencing is an important post-crisis regulatory response to the moral hazard dilemma surrounding too-big-to-fail banks. Since national governments bore the worst of the costs of rescuing the largest banks, it is reasonable to expect that the authorities would have the greatest incentive to promote tough ring-fence reform. However, in confrontation with the EU’s Liikanen Group and the EU Commission, France and Germany established a weaker set of national reforms. This article asks why these national governments pursued legislation that was more accommodating to their largest banks than the EU proposals. It argues that France and Germany were defending market-based banking in their largest universal banks. They were defending the ability of their largest banks to hold large volumes of trading assets which, in the view of the EU Commission and others, was a major cause of the financial crisis. The conclusions suggest that the direction of change will continue to be towards further market-based banking, despite the associated costs revealed by the crisis.

From Merlin to Oz: The strange case of failed lending targets in the UK

ABSTRACT As a response to the crisis in the British banking system and reduced lending, the British government established Project Merlin, a series of lending targets aimed at boosting lending to the British economy, and small and medium-sized enterprises (SMEs) in particular. Given the economic importance of the targets, however, this paper questions why the Merlin agreements were so ineffective. Three explanations are given: first, in light of the challenges in accessing wholesale funding for the largest UK-owned banks, there was a lack of capacity and incentive to lend more; second, the lack of decisive intervention by the British state to compel banks to lend was also a determinant; third, though, I argue that boosting actual lending figures was not the primary aim of Project Merlin. Instead, the targets were performative, rather than substantive. I argue that these three explanations have important implications for the varieties of capitalism (VoC) debate and the economic and political economic literature on foreign versus domestic bank ownership. To the first literature, the article explains the degree to which politics underpins the structure of even the UKs purportedly liberal market economy (LME), whilst to the second, it explores the limitations to political control over even domestically-owned banks.

Disagreeing to Agree: Financial Crisis Management within the ‘Logic of No Alternative’

The article argues that amid a cacophony of analyses of the causes of the current financial crisis, those daring to consider its implications and outcomes are decidedly cautious. Fundamentally, crisis managers appear intent on treating this as a minor glitch in an otherwise functioning market. This is a controversial claim. Nonetheless it is the legacy of the perception that neoliberalism is ‘the only alternative’; it emphasises the need, however, for truly alternative voices in the ad hoc settlements and negotiations. The article argues that, through the lenses of historical materialism, this crisis is the inevitable result of the prolonged period of credit expansion and financial market reform in recent decades. With this in mind it suggests that the economists and state managers who established these conditions are themselves both unlikely to and incapable of reversing them.

The paradox of integration? European democracy and the debt crisis

Europe is facing both a political crisis of democracy and legitimacy and an economic crisis of debt and competitiveness. These crises seem to point in two distinct directions, growing social unrest over the Europeanized mechanisms of economic adjustment, and increasing efforts at strengthening those same institutions that regulate the adjustment process. Recent analyses have suggested that this failure of democracy will prove decisive; legitimacy for crisis management efforts requires a redemocratization of the European polity. Instead, drawing on an analysis of ordo- and neo-liberal traditions, the article explains how European integration was itself a response to the perceived threat of democratic demands at the domestic level. The body of the article then traces the crisis through three phases, arguing that efforts by state managers reflect a deliberate attempt to depoliticize policy-making processes. Yet the selective intervention—to restore accumulation whilst withdrawing social spending—has only fuelled the politicization of segments of European society. This threatens to test the limits of depoliticization as a governing strategy.

Space, the Latest Frontier? A Scalar-Relational Approach to Critical IPE

This chapter focuses predominantly on the treatment of the international as a space within International Political Economy (IPE). This edited volume highlights, albeit often implicitly, two areas of concern within IPE. Many of the chapters tend to focus on the relationship between the political and the economic, for example in addressing the relationship between IPE and International Relations (IR). We argue that where the relationship between the political and economic has been the primary focus of debate within the discipline, the analogous question of the relationship between different spaces has been anything but clear. We further argue that in spite of numerous attempts to overcome it, the national-international dichotomy continues to permeate too much of contemporary IPE. We see this as somewhat ironic, given that critical IPE has deliberately positioned itself in opposition to orthodox IPE precisely because of the orthodoxy’s failure to capture the social content or underlying power structures of global capitalism. This is most obvious in those attempts that analyse the historical and social but only include space as a nodal point for analysis of the political agency of capital (compare Morton, 2007b; Underhill, 2003). In contrast we argue that a more nuanced understanding of space as one constitutive element of capitalism is central to the notions of emancipation and resistance which are at the heart of a critical IPE project.

Conclusion: IPE and the international political economy? IPE or the international political economy?

Our intention in bringing together this collection of scholars has been to begin a process of reflection on why volumes such as these are particularly timely in the current period, for both the discipline of IPE and the study of the international political economy. Although the debates on the ‘British’ and ‘American’ schools were an important catalyst for such reflections, they also built upon earlier marginalizations and silencings which were, in our view, unwarranted. Recall, for example, Robert Keohane’s more explicit invitation in the late 1980s to ‘reflectivist’ scholars to produce systematic research agendas and falsifiable claims as a means of engaging with the ‘rationalism’ dominant in IR — in other words, a demand for ‘post-positivist’ research to abandon its raison d’etre and engage in narrow specifics which take for granted wider questions about the world in which we live. More recently, the explosion of contributions on ‘globalization’ tended to produce a neat conjuring trick, whereby a globalized world was (magically and tautologically) both the outcome — what needed to be explained — and the explanation of this outcome. In the process, alternative narratives were pushed to the sidelines (Rosenberg, 2000).

Critical International Political Economy and the Importance of Dissensus

This short piece responds to Matthias Kranke’s extended review of our 2011 book Critical International Political Economy: Dialogue, Debate, Dissensus. We reiterate the book’s commitment to challenging disciplinary orthodoxies and immanent critique. The response also observes how the review elides a number of crucial definitions to abrogate our commitment to an expansive disciplinary engagement.

Introduction: ‘Critical’ and ‘International Political Economy'.

Since the late 1970s, International Political Economy (IPE) has tended to be divided into those scholars who focus primarily upon empirical research questions in order to understand the dynamics of actors within the international system, and those who prefer to focus upon an ontological enquiry into its historical evolution. In recent developments this division has been extended into the ‘British’ and ‘American’ schools, or more vividly into the division of the ‘orthodox/heterodox’ or the ‘positivist’ and the ‘critical’ (Murphy and Nelson, 2001, 2002; Cohen, 2008a), which in turn has led to concerns that such divisions might be overplayed (Higgott and Watson, 2008). The development of critical perspectives in IPE has brought with it interpretations that have drawn from Marx, Gramsci, Polanyi, Schumpeter and from poststructuralism (especially Foucault), and have been applied to a wide variety of cases. Yet, for all the work done in developing this critical ontology, precisely what binds the diversity of approaches remains confusing, as core analytical categories are too often assumed to be self-evident (for example, the critical method, methodological eclecticism, and a multidisciplinary approach).