The Alchemy of Finance: A Political Economy

Abstract:     
Global finance is often demonised by its critics; those critics may be well intentioned in that they speak on behalf of the welfare of working men and women. Critics may be also entrenched elites concerned with protecting their own power and privilege rather than the future welfare of society. The recent history of continental Europe can be written in terms of the encroaching power of global financial institutions set against regimes of accumulation hostage to the past. Remarkably, the recent history of continental Europe can be also written in terms of the companies, industries, and regions that have sought their own future through the market opportunities provided by global portfolio investment managers (amongst others). In this paper, the political economy of global finance is considered in the light of recent research on the evolution of corporate capitalism with applications for pan-European financial integration, the fragility of the German model, and the response of large firms to the imperatives driving global financial markets. Implications are drawn for conceptualizing the alchemy of finance, as well as its place in the emerging geopolitics of the 21st century.

Keywords: History and geography, finance, continental Europe, Germany

JEL Classifications: F22

Working Paper Series