Capitalism has become 'financialized'. Since the 1970s, the swelling of financial markets and asset price bubbles has occurred alongside weaker underlying economic growth. Yet financialization was not a spontaneous market development - it was deeply political. States fuelled this process through policies of financial liberalization, and the British state lies at the heart of the story. Britain's radical financial liberalizations in the 1970s and 1980s were instrumental in creating a financialized global economic order in which the City of London emerged as a central hub.
But why did the British state propel financialization? The conventional wisdom points to the lobbying power of financial elites and the strength of neoliberal ideology. However, Governing Financialization offers an alternative explanation through an in-depth exploration of declassified state archives. By examining key financial liberalizations in the 1970s and 1980s - including the notorious 'Big Bang' - this book argues that these policies were not part of an intentional scheme to create a new finance-led economic model. Instead, they were designed to address immediate governing dilemmas related to the grinding 'stagflation' crisis and its aftershocks. In this era, British governments found themselves trapped between global competitive pressures to enforce painful domestic adjustment and national political pressures to maintain existing living standards. Financial liberalization was pursued in a trial-and-error manner to navigate this dilemma. By unleashing financial markets, the
state hoped to either postpone the worst effects of the crisis, or enact tough economic restructuring in an arm's-length fashion. Financialization was an accidental outcome, not an intentional result.
Industry Reviews
Copley provides an account of state actors as powerful but still themselves compelled by mute compulsion, specifically in the form of crisis, though their responses are significantly underdetermined. In effect, governments scramble to ride the tiger rather than proceeding via any grand master plans and in doing so they generate policy outcomes that then influence the actions of future governments...The book demonstrates both the power of Marxist theory to inform empirical inquiry and of such inquiry to generate concepts which apply to other objects of analysis in other times and places. * Nate Holdren, Author of Injury Impoverished (Cambridge, 2020) *
This book is essential reading for scholars interested in financialisation and the role of the state in propelling it. But it will also be of interest to those seeking to understand state action under capitalism more generally. * Hannah Hasenberger, Economic Issues *
Copley provides an analytically sharp and empirically rich account of the politics of financial liberalization in Britain. Looking at key moments in Britain's post-war financial history, and drawing on an extensive body of archival research, his powerful narrative demonstrates the contingent origins of financialization dynamics as different British governments sought to navigate a rapidly shifting economic terrain caused by the falling global profitability of capital. * Lena Rethel, Professor of International Political Economy, University of Warwick *
The penetration of finance into every aspect of modern life is a central feature of our times. In this arresting new analysis and based on extensive archival research Jack Copley shows how financialization in Britain developed in the 1970s and 1980s not because of a long-term plan to impose it, but as a series of pragmatic responses to particular political problems which reflected perennial governing dilemmas of managing a capitalist economy. This book makes a major contribution to our understanding of policy change and policy outcomes in contemporary political economies. * Andrew Gamble, Professor of Politics, University of Sheffield *
Jack Copley's outstanding book argues against the grain of contemporary analyses of financialization and public policy. Its central theme is the limitations and constraints on state action which arise from the global flow of money. It makes its case by carrying forward the most advanced thinking on the critique of political economy. This is an exquisitely argued book. * Werner Bonefeld, Professor of Politics, University of York *
If you think you already know all you need to about financialization, think again. Through meticulously detailed archival research Jack Copley pieces together the decisions through which financializing dynamics were first inserted into the British economy in the 1970s and 1980s. He shows that there was no grand plan, no careful step-by-step introduction of a pre-determined long-term reform trajectory, only governments attempting to navigate their way in a hit-and-miss manner through a seemingly intractable crisis of profitability. The exquisite reconstruction of events as they unfolded in real time makes for a thrilling read, as well as for a very important book. * Matthew Watson, Professor of Political Economy, University of Warwick *
