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Political Economy Institute

Finance and the remaking of capitalism

The credit crunch of summer 2007 turned into financial crisis and bank failure in metropolitan capitalist countries by autumn 2008, after which malfunctioning finance induced a major world-wide recession.

These events spectacularly discredited received ideas about the marketisation of risk in the wholesale markets and the democratisation of finance in retail banking. They also undermined assumptions about institutional complementarity which had been central to theories of the varieties of capitalism and other mechanical political economies. These static theories had failed to register shifts like the reinvention of banking after the 1980s when intermediation was replaced by proprietary trading and fee-based mass marketing of retail products.

In our work on finance and the remaking of capitalism, we are fortunate to be able to draw on the programme of work on financialisation and financial innovation which has been organised with the ESRC funded Centre for Research in Socio-Cultural Change (CRESC).

Working within a cultural political economy frame, CRESC researchers pioneered work on financialisation through three substantial books: Financialization and Strategy (Julie Froud et al., 2006) focuses on giant firm strategy; Financialization at Work (Ismail Erturk et al. 2008) advances a distinctive conjunctural definition of financialisation and highlights the role of new intermediary elites; separately examined in Remembering Elites (Mike Savage and Karel Williams, 2008).

This prepares the way for CRESC's new programme of work on financial innovation as bricolage, which runs alongside ongoing work on credit and debt by Johnna Montgomerie.


The PEI and CRESC agendas overlap in many ways and this is reflected in several joint activities which also take in the International Working Group on Financialization, which is sponsored by Alliance Manchester Business School. In 2007, PEI and CRESC co-funded an international workshop on credit and debt, which led to a special issue of Competition and Change edited by Montgomerie.

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