Ch. 2 Making finance -Social Science

Ch. 2 Making finance -Social Science

1. Human-produced flows

   • movements of commodities, goods, people, ideas

2. Bretton Wood conference: 1944 establish gobal architecture for financial systems

   • Keynes and White drew the Bretton Woods Agreement
     • Blueprint for post war financial systems
       • fixed but adjustable exchange rates
     • Allowed for states to control stable passage of financial flows
       • Financial architecture was a dream or concept of how flows could move between territories with a min. risk
       • TERRITORIALLY BASED
   • Governments agreed to establish rules and give stability to international financial systems
   • System collapsed in early 1970s
     • Shift of power from state to financial markets: flexible exchange rates
       • NEO-LIBERALISM
         • a belief in free market, corporate power and free regulation
           • Financial globalisation
             • Unregulated capitalism
         • Last 30 years
         • Thatcher, Reagan champions of neolib.
         • Pro liberalisation: relationship bw. territories and private flow is very clear
           • If country play by the rules , financial flows will get in, economic long term grow and living standards for poorer countires
           • Ending geography barriers
         • Anti liberalisation: Patnaik: developing countries don't benefit in the long term. They have to offer tax benefits for private investors
           • Interdependency between nation states
         • Martin 1994: power is with private sector org. investment banks, IMF, pernsion funds, capitalist countries (G7, G8 or G10).
           • This is not ending geography, it is reconfiguring geographies of money, power and dependency (Martin 94 p, 66)
       • FINANCIAL FLOWS
         • Financial flows create a set if interdependencies btw. territories (p. 92)
           • Financial power can reshape territories, like poorer countries. financial resources can or cannot be made available from the global financial markets ( 92)
       • Financial markets are sophisticated combination of technology and human resouces located in specific territories (p72)
         • London, New York , Tokyo have 68% of world capitalisation of stock, 60% of key global financial markets - Concentration of power rather than dispersal, p 75
           • Financial Centres are important for the global finance to happen, they are the territories, buildings, face to face contact etc. (p76)
             • London and NY symbolise financial power and strenght of private finance (p.76)
           • OFC: Offshore Financial Centres show the complex interdependency bw. territory and financial flows shaping new territories (p. 83)
             • OFC are considered a problem for tax evasion and responsibility (reading by Duncan Bell Guardian p. 101)
               • Global responsibility linked to Young's concept of responsib. in a globalised world. (Barnett et al. 2008)
         • Global finc. markets and flows create a potential for controlling and having economic power over territories of states around the world (p. 72)
           • Digital technology allows territory and flows to interconnect and be interdependent (p.74)

3. World Bank: shapes economic policy at global level

4. IMF: central coordinator of international monetary system

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