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#Unis4all: An Open Letter to the U.S. Higher Education Community

Published by Anonymous (not verified) on Fri, 22/05/2020 - 9:00pm in

For a growing majority of outspoken administrators and faculty, the economic fallout associated with the COVID-19 crisis threatens to catapult U.S. higher...

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Not such a Great Equalizer after all

Published by Anonymous (not verified) on Sat, 09/05/2020 - 11:00pm in

Because it has no regard for borders, the coronavirus has been referred to as the Great Equalizer. But its impact is not equal by any stretch of the imagination. While China, Europe, and Northern America may recover relatively fast, emerging market economies are less resilient. The combined health, economic, and financial tolls they now endure may cause them to face the greatest recession in decades.

By Jack Gao | When COVID-19 hit, China’s strong state and centralized public administration allowed it to suppress the domestic spread. In Europe, welfare systems and appropriate policy responses made sure workers have less to worry about when economies reopen. The United States (despite Trump’s handling leaving much to be desired) enjoys a unique status of its own. The American economy and “exorbitant privilege” of the US dollar mean that policy responses can be put forth in short order, and with relatively few negative repercussions. For most emerging market economies, however, none of this can be taken for granted. The coronavirus is shaping up to be the “perfect storm” that many feared. It could sink the developing world into a deep economic recession.

No Doctors and No Food

Let’s start with public health. While the increase of new deaths in the epicenters—US, UK, Italy, Spain—appears to be slowing, the virus rages on in major developing nations. Russia, India, Mexico, and Brazil continue to report well above a thousand new daily deaths, and many of them are still on an upward trajectory. In India, a brief relaxation of the lockdown was met with a jump in deaths, underscoring that the fight to contain the virus will be an uphill battle.

Although health systems are being tested everywhere, the ones in developing countries were already under strain before COVID-19 reared its head. For example, the average number of health workers per 1000 people in OCED countries is 12.3. In the African region, this ratio is only 1.4.

As if the health crisis is not crushing enough, the United Nations warns of a “hunger pandemic” as an additional 130 million people could be pushed to the brink of starvation this year, with the vast majority of them in developing countries. The coronavirus may cross borders easily, but the suffering it causes is not equal across countries.

Locked Down and Out of Work

If the human toll of the pandemic is appalling, the economic damages to countries are unprecedented as well, as countries implement lockdown and “social distancing” to combat the virus. In the latest World Economic Outlook growth projections by the IMF, emerging market economies as a whole are expected to contract 1% this year, for the first time since the Great Depression. Literally all developing countries may be in economic decline as a result of COVID-19, with India and China eking out paltry growth. Still, these headline numbers mask the true extent of economic hardship.

Take working from home, for example. Economists have documented a clear relationship between the share of jobs that can be done at home and the national income level. In a developed country like the United States, some 37 percent of jobs can be performed at home—education, finance and IT being at the top of the scale. In some developing economies, less than 10 percent of jobs can be done remotely.

On top of all this, global remittances are collapsing. The amount of money transferred to migrants’ home countries may fall by 20 percent as workers see dwindling employment. This is terrible news for countries like Lesotho, where remittances are as much as 16% of GDP.

Where’d the money go?

The global financial system exacerbates these struggles with its core and periphery topology. During good times, foreign capital flows into emerging markets, looking for higher yields. But in bad times, when that capital is needed most, it swiftly disappears. This dynamic is now on full display. As investors started to realize the true scale of the pandemic and major central banks initiated new rounds of monetary easing, emerging economies saw capital flight as investors rushed to safer assets. An estimated 100 billion portfolio dollars fled emerging markets in the first quarter alone.

In the face of such severe dollar shortages and liquidity crunch in developing countries, the Federal Reserve had to expand central bank liquidity swaps and launch a new lending facility to come to the rescue. The impact of such international measures is still an open question. But with currency depreciation, higher borrowing costs, declining official reserves, and falling commodity prices, it appears that the financial stress emerging economies are under may be difficult to reverse.

The Triple Whammy

This way, developing countries face a health-blow, and economic-blow, and a financial-blow, all at once. An emerging market economy faced with just one of those would have resulted in a crisis. But amid COVID-19, all emerging economies were are confronted with all three crises at the same time. The damage done by this “triple whammy” could plague the developing world for years to come.

Jack Gao is a Program Economist at the Institute for New Economic Thinking. He is interested in international economics and finance, energy policy, economic development, and the Chinese economy.  He previously worked in financial product and data departments in Bloomberg Singapore, and reported on Asian financial markets in Bloomberg News from Shanghai. Jack holds a MPA in International Development from Harvard Kennedy School, and a B.S. in Economics from Singapore Management University. He has published articles on China Policy Review and Harvard Kennedy School Review.

The post Not such a Great Equalizer after all appeared first on Economic Questions.

Democratic socialism: We already know it works

Published by Anonymous (not verified) on Wed, 11/07/2018 - 9:48pm in

This piece was originally published on Patreon

For the first time since its inception, socialism is not a dirty word.

And try as they might to compromise its integrity, critics know they are unable to address the concept on its merits, because democratic socialism offers policies most people would actually vote for, epitomised by the success of Ocasio Cortez, Bernie Sanders, Jeremy Corbyn, and the election of Lopez Obrador in Mexico.

So they are forced to resort to the same old play book of character assassination and class warfare and spurious allegations.

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But too few of us really understand what democratic socialism is, though at least three generations have lived through one form of it or another. Yet we have come to lazily accept those ‘better days’ as the best capitalism had to offer.

The great irony is that the prosperity that transformed America and its allies into robust first-world nations is owed not to capitalism, but to democratic socialism whose policies, (though not without their flaws), helped shape the better part of the 19th and 20th centuries. But we’ll get to that shortly.

What is socialism?

Socialism is not what occurs when all industry is owned by the state, that’s communism.

True socialism is when workers own the means of production. It is the co-op model for the global economy. It opposes private profits and believes that private ownership constrains economic planning and leads to irrational decision making that concentrates wealth and power in the hands of a small minority.

Put simply, if the work you do results in profits for the company that employs you, you should be entitled to a share of those profits. When all workers hold some kind of equity in their own employment, companies and businesses are structured democratically where all staff are involved in operational decision making and there is greater incentive for productivity and efficiency. Socialism gives workers proverbial skin in the game. Work is no longer just a job that people can punch in and out of, but an investment in their own financial futures.

But democratic socialism doesn’t even go that far, embracing a public / private ownership model to guarantee full employment.

And, as I have written before, it rightly acknowledges the role of government as the private sector’s bank and offers corporate incentives like tax cuts and subsidies if it supports business and employment. (The private sector has been enjoying the benefits of corporate socialism for years. Yet somehow it objects when they are directed towards workers and households).

What is democratic socialism?

Democratic socialism believes that employment, education and health care are a universal human right, along with the right to organise into unions. It recognises there are significant conflicts of interest in the way the global economy is currently structured.

It advocates for full employment and the right to meaningful work that covers the basic costs of living.

It opposes the use of gender and racial discrimination, coercion, brutality and violence to defend the status quo.

It believes in the responsibility of government to plan economies to ensure sustainable employment, and an equitable distribution of resources in a way that ensures a basic quality of life for the greatest number of people. (Besides which, real democratic socialism recognises that the wealthy needn’t pay a cent more in tax to ensure that, to quote Ocasio-Cortez, “nobody should be too poor to live”).

It recognises the existence of an ever fragmenting class system and advocates for policy that address the gross inequality that pervades the current economic order of, to paraphrase journalist Elliot Gabriel, “monopoly-finance and surveillance capitalism, commodifying and intruding into every aspect of existence.”

This is not a new or radical concept. In fact, much of the developed world has benefited greatly from democratic socialism since at least the end of WWII.

Democratic socialism: We already know it works

The thing is, we already know democratic socialism works. Our parents, grand-parents and great-grandparents were all beneficiaries of its policies, before they pulled the proverbial drawbridge up behind them. Social Security. Medicare. The minimum wage. All the result of democratic socialism. The New Deal was a form of democratic socialism, (but in order for it to pass Congress, it was legally structured to exclude African Americans and other minorities, Roosevelt’s unforgivable concession to the South).

Post-War public spending & job guarantees across the US, UK and Australia. Women’s suffrage. The Voting Rights Act. The right to form unions and job programs for the unemployed:

Democratic. Socialism.

These things all helped to create and enrich the middle class, without which we would still be mired in Great Depression style living standards.

Whether they know it or not, white America has long been the beneficiary of democratic socialism, while the rest of the country, and the world, has been forced to live off its table scraps. Perhaps the wave of white supremacist sentiment sweeping the globe can be interpreted as the white middle class being forced to confront for the first time, a significant decline in living standards that most of us have long been accustomed to.

Yet, instead of recognising they have been lumped in with the rest of us, too many conservatives, Trump supporters and out-and-out racists have the audacity to blame immigrants, black people, women, the LGBTIQA and ‘political correctness’ for their economic dispossession instead of recognising that the system was always designed to put workers at a disadvantage, and the remnants of the white middle class are simply its latest victims. Welcome to the real world.

One would hope that, despite our political differences, instead of turning on each other, we should all be aiming our vitriol and discontent at the system itself, and those whose deliberate acts of legislation has led to what anthropologist, professor David Graeber describes as “managerial feudalism”: a system so precarious and with so few rights for workers that it has forced upon us a great compliance.

Graeber argues that the very structure of the job market is a long-standing political project and form of social control that systematically extracts wealth and resources, channeling it to the barons of industry, creating a permanent pool of unemployed that it makes alternative employment so difficult to come by that it keeps workers just insecure enough that they cannot rebel either against government or the conditions of their employment. (And thus, we turn on each other, instead).

The greatest trick late stage capitalism has ever played, is convincing the public it has always been this way. But in reality, over the last 30–40 years we have witnessed the great dismantling of the democratic socialist state, and watched as it was slowly replaced by financialisation and corporatocracy.

We are only just beginning to see the true nature of capitalism as more than half of America’s population now lives below the poverty line, while the underclass in the UK and Australia continue to grow.

Millennials may not remember — or even have been alive for — the last drops of prosperity that trickled through the 80s and 90s. Regardless, it is young people that are now driving the engine of democratic socialism and are responsible for its growing popularity.

Many may not have been alive for the New Deal or post-war job guarantees, but millennials are the first generation to experience less prosperity than their parents, grand-parents, or great-grandparents.

We have lived through the privatisation of schools and publicly owned assets. Older millennials have lived through two major financial crises, and two Gulf Wars. We’ve seen the cost of basic health care become prohibitive to all but the wealthiest of our communities. We know it’s harder now than almost during any other time in history to find a full time job, and even if we’re lucky enough to hold one down, it’s unlikely to cover the cost of living and thus requires us to plunge ourselves into ever more debt just to keep the lights and heat on.

As I mentioned before, democratic socialism is not a new concept. Government once existed to serve the needs of the great majority. Finally, it seems more of us are coming to the conclusion that if it was good enough for our grandparents, and it’s good enough for the private sector, then it’s good enough for the rest of us.

Thank you for reading. I couldn’t afford to continue my research, or write this book, were it not for the support of my generous sponsors. Support independent journalism, sponsor me on Patreon, starting at $3 a month, or throw some money at my PayPal.

Democratic socialism: We already know it works was originally published in Hello Humans on Medium, where people are continuing the conversation by highlighting and responding to this story.

Susanne Soederberg, Debtfare States and the Poverty Industry

Published by Anonymous (not verified) on Sun, 05/06/2016 - 12:02pm in

Tags 

finance

“Did you know that approximately 3 million Australians – around 16.9% of the adult population – are either fully or severely excluded from obtaining credit from the banks?” So asks the peak body representing Australia’s payday lenders as part of their Small Loans Big Need campaign.

Debtfare states and the poverty industrydebtfare provides a timely corrective to this rhetoric of “financial inclusion”, which seeks to recast poverty as a problem of underdeveloped consumer credit markets. The award-winning book seeks to “pierce this fetishised surface to grasp that consumer credit is not only infused with class-based power, but also structural violence and silent compulsions.” With the aid of a historical materialist framework, Susanne Soederberg powerfully demonstrates how movements by capital and states to create financial equality in credit markets simultaneously exacerbate and conceal class, race and gender inequality through the “social power of money.”

Soederberg offers an account of the rise of the poverty industry by developing Marxist understandings of consumer credit as “privately created money” and the marginalised workers that that depend on it as the “surplus population.” This grounds detailed case studies of the payday lending, credit card and student loan industries in the United States, as well as the microfinance and housing finance industries in Mexico, within the contradictory dynamics of capital accumulation.

According to Soederberg, these types of debt are critical to the reproduction of the unemployed and underemployed workers that make up the surplus population because repayment obligations intensify the compulsion for debtors to work in low paid jobs. The private creation of money also provides direct opportunities for the poverty industry to profit from the “secondary exploitation” of already-exploited workers by charging often exorbitant interest rates, fees and commissions.

Debtfare states illuminates a fundamental tension between these two components of a credit-led accumulation strategy based on the commodification of social reproduction: consumer credit is a “fictitious value” that is based on a “risk/gamble” on the future earnings of workers that have a precarious relationship to the labour market. Asset-backed securitisation provides a temporary “fix” for creditors by bringing forward these income streams. But ultimately, as David Harvey via Soederberg reminds us, “no matter how far afield a privately contracted bill of exchange may circulate, it must always return to its place of origin for redemption” – that is, to the repayments of the debtor.

Enter “debtfare states”, a concept that represents the most innovative, original and important contribution of the book. Meticulous empirical work demonstrates the crucial role of institutional, regulatory and rhetorical strategies by public authorities in the United States and Mexico in mediating tensions between the requirements of privately created money and the conditions of the surplus population. Debtfare states have boosted profit rates for the poverty industry through actions such as lifting interest rate caps while working to ensure repayment obligations are met, for example by amending legislation to make bankruptcy out of reach for the surplus population. When states have acted in response to public outcry or financial crisis, this has been limited to consumer protection efforts that seek to enhance transparency and disclosure in order to provide consumers with the information they need to make rational decisions.

HarveyBetween the different credit markets and geographical locations covered in the book, it is commonality in state policy, rather than variegation, that stands out. The modus operandi of debtfare states is to naturalise debt and discipline the debtor while depoliticising the underlying causes of indebtedness: below living wages, inadequate pensions and unemployment benefits and the marketisation of public services.

From the vantage point of the Department of Political Economy’s Past & Present reading group at the University of Sydney, it is clear that debtfarism has become a central component of Australian public policy. State-issued student debt has underpinned the privatisation of the vocational education and training system, which has been sold by successive Australian governments as extending access to income-contingent loans to a new layer of students. Through its international aid program, the Australian government has also been focused on extending access of the big banks to Pacific Island communities by teaming up with Westpac and ANZ to “bank the unbanked.”

Debtfare states makes valid criticisms of post-structuralist scholars, such as Andrew Leyshon and Paul Langley, for reproducing this financial inclusion discourse by remaining in the sphere of exchange. However, the rich analysis of the intertwining relations between the spheres of production and exchange is at times limited by a tendency to assert Marxist categories in an a priori fashion. For example, Soederberg clearly distinguishes between credit advanced for personal consumption as the “money-form of revenue” and credit advanced for private investment as “fictitious capital.” But efforts to leverage and risk manage skills, in the case of student loans in the United States and Australia, and communities, in the case of microfinance in Mexico and the Pacific, raise interesting questions about whether the capital relation itself is being transformed by debtfarism, and how conceptual distinctions between production and exchange may also need to change with it.

Soederberg’s study of the rise poverty industry nonetheless makes a significant step towards an expanded conception of class relations in contemporary capitalism that accounts for the integral role of finance in social reproduction. Its contribution to state theory through this opens up an important research agenda into debtfare states as a terrain of class struggle.

Indeed, the campaign by the Australian payday lending industry, which has been challenged in the past year by class actions and media exposés, shows that debtfarism is a contested process that remains politicised. That states continue to frame the problem as one of market failure was typified by a recent penalty imposed by the financial regulator ASIC on pay day lender Nimble for irresponsible lending practices, which required the online operator to donate $50,000 towards financial literacy programs. In this context, Debtfare states and the poverty industry provides an essential resource to understand, and question, individualised solutions to poverty.

The post Susanne Soederberg, Debtfare States and the Poverty Industry appeared first on Progress in Political Economy (PPE).

Phil Toner and Mike Rafferty, ‘Financialisation of the Australian Construction Industry’

Published by Anonymous (not verified) on Tue, 31/05/2016 - 2:18pm in

Tags 

Events, finance

Phil Toner and Mike Rafferty (University of Sydney), 'Financialisation of the Australian Construction Industry'

This is the seventh seminar in the Semester 1 series of 2016 organised by the Department of Political Economy at the University of Sydney.

Date and Location:

2 June 2016, Darlington Centre Boardroom, 4:00pm – 5.30pm

All welcome!

2016 - Toner & Rafferty Web

 

The post Phil Toner and Mike Rafferty, ‘Financialisation of the Australian Construction Industry’ appeared first on Progress in Political Economy (PPE).

2016 Transdisciplinary Humanities Book Award

Published by Anonymous (not verified) on Tue, 24/05/2016 - 8:55am in

pid_25513 (1)Recently I learned that my book The Emotional Logic of Capitalism has been awarded the Transdisciplinary Humanities Book Award, sponsored by the Humanities Research Institute at Arizona State University. The award is given each year to “a non-fiction work that exemplifies transdisciplinary, socially engaged humanities-based scholarship.” The list of previous awardees show the wide range of work considered to fall under this heading, and I am grateful to the Institute’s Director Sally Kitch and the Board for selecting my book. I’m looking forward to visiting the Institute in the fall.

Of course recognition of one’s work is always nice, but there is something particularly gratifying about receiving this award. One reason would be that I did not in fact realize that the book had been nominated (many thanks to my wonderful Stanford editor Emily-Jane Cohen!). More to the point, going down the path that eventually led to the writing of this book has not been free of occasional professional uncertainty. Having been trained as a meat-and-potatoes political economist, and having done most of my early work on the question of power in American finance, The Emotional Logic of Capitalism is a more theoretical work that draws on perspectives and fields that are not usually brought to bear on questions of money and finance – semiotics, psychoanalyis, pragmatism, religious history, among others. Contemporary academia does not always take kindly to interdisciplinary work, so the recognition bestowed on the book by this award is gratefully received.

So what led me to write the book, and why did I feel it was necessary to venture deeply into social theory to make sense of questions of money and finance? Let’s go back for a moment to the financial crisis of 2007-08. Progressively minded commentators immediately took this event as announcing the end of neoliberal capitalism, and they loudly declared an imminent return to Keynesian intervention and public regulation. Such arguments are closely associated with the revival of Polanyi’s work, which sees capitalist history as driven by alternating movements of market disembedding (when the speculative and individualizing logic of the market spirals out of control) and re-embedding, (when society regroups and resubordinates markets to the public good). In the book I take this “double movement” model as emblematic of a highly influential but problematic way of thinking about economic and financial life.

The idea of the double movement has turned out to be a poor guide to the development of capitalism since the financial crisis: instead of a break with the politics of financial expansion, what we got was a neoliberalism recharged. My book is essentially an extended reflection on the deeper – psychological and emotional – sources of resilience that capital can tap into and that have eluded the tendency to understand it in terms of the Polanyian image of market disembedding. To this end, it recovers the moral and theological origins of the concept of “economy,” arguing that our relationship to money is regulated by a complex infrastructure of affectively charged (inter)subjective investments. In this way, the book develops an understanding of economy that is critical but takes seriously the idea that money and markets have self-organizing and self-regulating properties.

The second part of the book traces how, over the course of the twentieth century, progressive thought gradually lost sight of the emotional and theological content of economy. It argues that the turn to a disembedding narrative should be understood as the way progressive thinkers have sought to come to terms with the disappointments of democratic capitalism. To lament the speculative and individualizing character of the market always seems like a promising move in the moment – it offers a way to make a critical point that is relatable and so offers a particular kind of rhetorical traction. But over time it has resulted in a critique that is moralistic and increasingly unable to engage the complex, subterranean ways and often not fully conscious ways in which people are invested in (neoliberal) capitalism.

The book can be read as a way of doing political economy that is different from where it is currently heading in its leading journals – which is characterized by a definite and growing scepticism about the value of theory. That sentiment is no doubt understandable, as one of political economy’s main concerns has always been the “reality-blindness” of the formal models that mainstream economists build. But not doing theory is doing theory by default, and the current sway of the Polanyian model seems to me to be a result of a reluctance to revisit thorny but fundamental conceptual issues.

For interested readers, elsewhere on PPE I have elaborated these points with more specific reference to the question of austerity politics, and this discussion by my colleague Fiona Allon provides an excellent account of the book’s key conceptual moves. The book’s introduction can be read here.

The post 2016 Transdisciplinary Humanities Book Award appeared first on Progress in Political Economy (PPE).

Shadow Banking and Alternative Finance in China

Published by Anonymous (not verified) on Thu, 19/05/2016 - 9:54am in

Tags 

Events, China, finance

The recent growth in the scale and different forms of shadow banking and alternative finance mechanisms in China poses many questions of understanding, from its sustainability; different forms of credit growth; to the role of local government financing, and the tensions between financial reform policy and practice.

While shadow banking and alternative finance are not new in China, its growth in scale and diversity after 2009 poses old problems of understanding economic, social and political relations in China in new ways. This is because informal financial relations in China, much like the concept of state capitalism, cuts across many of the traditional dualisms of state and market, formal and informal, official and unofficial relations in China.

The workshop, to be held on 27 May at the University of Sydney, will act as a forum for researchers from across various disciplines to share their perspectives and research on questions arising from these topics.

Programme

8:30am – 9:00am Welcome and introductory remarks

Jeffrey Riegel (China Studies Centre, Director, USYD)

9:00am – 10:00am China’s rising leverage challenges

Opening keynote by Guonan Ma (Bruegel, EU-based think tank & ACRI-UTS)

10:00am – 10:30am Morning break

10.30am – 12.30pm Panel 1

Too important to fail? The politics of banking reform in China

Stephen Bell (University of Queensland) & Hui Feng (Griffith University)

Digital disruption with Chinese characteristics: Internet Finance and regulatory dilemma

Hui Feng (Griffith University)

Implications of the internationalisation of the RMB for banking in China

Kathy Walsh (ANU)

Towards a Money View of liquidity relations in China

Michael Beggs & Luke Deer (USYD)

12:30pm – 2:00pm Lunch

2:00pm – 3:00pm China’s shadow banking and small and medium enterprises

Afternoon keynote by Kellee Tsai (HKUST) Discussant: Vivienne Bath (USYD)

3:00pm – 3:30pm Afternoon break

3:30pm – 5:00pm Panel 2

China’s informal finance, an enterprise perspective

Hans Hendrischke (USYD) and Wei Li (USYD)

Shadow banking and underground banking in China

David Chaikin (USYD)

Microcredit, (under)development and (de)marginalisation in rural China

Nicholas Loubere (ANU)

5:00pm – 6:00pm Concluding remarks and discussion about publication plans

Luke Deer (USYD) to lead the discussion

Tickets are available HERE

The post Shadow Banking and Alternative Finance in China appeared first on Progress in Political Economy (PPE).

Susanne Soederberg, Debtfare States and the Poverty Industry

Published by Anonymous (not verified) on Mon, 09/05/2016 - 4:30pm in

Tags 

finance

debtfare“Did you know that approximately 3 million Australians – around 16.9% of the adult population – are either fully or severely excluded from obtaining credit from the banks?” So asks the peak body representing Australia’s payday lenders as part of their Small Loans Big Need campaign.

Debtfare states and the poverty industry provides a timely corrective to this rhetoric of “financial inclusion”, which seeks to recast poverty as a problem of underdeveloped consumer credit markets. The award-winning book seeks to “pierce this fetishised surface to grasp that consumer credit is not only infused with class-based power, but also structural violence and silent compulsions.” With the aid of a historical materialist framework, Susanne Soederberg powerfully demonstrates how movements by capital and states to create financial equality in credit markets simultaneously exacerbate and conceal class, race and gender inequality through the “social power of money.”

Soederberg offers an account of the rise of the poverty industry by developing Marxist understandings of consumer credit as “privately created money” and the marginalised workers that that depend on it as the “surplus population.” This grounds detailed case studies of the payday lending, credit card and student loan industries in the United States, as well as the microfinance and housing finance industries in Mexico, within the contradictory dynamics of capital accumulation.

According to Soederberg, these types of debt are critical to the reproduction of the unemployed and underemployed workers that make up the surplus population because repayment obligations intensify the compulsion for debtors to work in low paid jobs. The private creation of money also provides direct opportunities for the poverty industry to profit from the “secondary exploitation” of already-exploited workers by charging often exorbitant interest rates, fees and commissions.

Debtfare states illuminates a fundamental tension between these two components of a credit-led accumulation strategy based on the commodification of social reproduction: consumer credit is a “fictitious value” that is based on a “risk/gamble” on the future earnings of workers that have a precarious relationship to the labour market. Asset-backed securitisation provides a temporary “fix” for creditors by bringing forward these income streams. But ultimately, as David Harvey via Soederberg reminds us, “no matter how far afield a privately contracted bill of exchange may circulate, it must always return to its place of origin for redemption” – that is, to the repayments of the debtor.

Enter “debtfare states”, a concept that represents the most innovative, original and important contribution of the book. Meticulous empirical work demonstrates the crucial role of institutional, regulatory and rhetorical strategies by public authorities in the United States and Mexico in mediating tensions between the requirements of privately created money and the conditions of the surplus population. Debtfare states have boosted profit rates for the poverty industry through actions such as lifting interest rate caps while working to ensure repayment obligations are met, for example by amending legislation to make bankruptcy out of reach for the surplus population. When states have acted in response to public outcry or financial crisis, this has been limited to consumer protection efforts that seek to enhance transparency and disclosure in order to provide consumers with the information they need to make rational decisions.

HarveyBetween the different credit markets and geographical locations covered in the book, it is commonality in state policy, rather than variegation, that stands out. The modus operandi of debtfare states is to naturalise debt and discipline the debtor while depoliticising the underlying causes of indebtedness: below living wages, inadequate pensions and unemployment benefits and the marketisation of public services.

From the vantage point of the Department of Political Economy’s Past & Present reading group at the University of Sydney, it is clear that debtfarism has become a central component of Australian public policy. State-issued student debt has underpinned the privatisation of the vocational education and training system, which has been sold by successive Australian governments as extending access to income-contingent loans to a new layer of students. Through its international aid program, the Australian government has also been focused on extending access of the big banks to Pacific Island communities by teaming up with Westpac and ANZ to “bank the unbanked.”

Debtfare states makes valid criticisms of post-structuralist scholars, such as Andrew Leyshon and Paul Langley, for reproducing this financial inclusion discourse by remaining in the sphere of exchange. However, the rich analysis of the intertwining relations between the spheres of production and exchange is at times limited by a tendency to assert Marxist categories in an a priori fashion. For example, Soederberg clearly distinguishes between credit advanced for personal consumption as the “money-form of revenue” and credit advanced for private investment as “fictitious capital.” But efforts to leverage and risk manage skills, in the case of student loans in the United States and Australia, and communities, in the case of microfinance in Mexico and the Pacific, raise interesting questions about whether the capital relation itself is being transformed by debtfarism, and how conceptual distinctions between production and exchange may also need to change with it.

Soederberg’s study of the rise poverty industry nonetheless makes a significant step towards an expanded conception of class relations in contemporary capitalism that accounts for the integral role of finance in social reproduction. Its contribution to state theory through this opens up an important research agenda into debtfare states as a terrain of class struggle.

Indeed, the campaign by the Australian payday lending industry, which has been challenged in the past year by class actions and media exposés, shows that debtfarism is a contested process that remains politicised. That states continue to frame the problem as one of market failure was typified by a recent penalty imposed by the financial regulator ASIC on pay day lender Nimble for irresponsible lending practices, which required the online operator to donate $50,000 towards financial literacy programs. In this context, Debtfare states and the poverty industry provides an essential resource to understand, and question, individualised solutions to poverty.

The post Susanne Soederberg, Debtfare States and the Poverty Industry appeared first on Progress in Political Economy (PPE).

Call for Papers: Intersections of Finance and Society

Published by Anonymous (not verified) on Fri, 22/04/2016 - 12:04pm in

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Blog, finance

FS_CoverImageRecent years have seen a growth in innovative research on finance across the humanities and social sciences. Following on from the success of the ‘social studies of finance’ approach and the new literature on ‘financialisation’, scholars are taking up the challenge of theorising money and finance beyond the conceptual constraints of orthodox economic theory, with different research agendas emerging under various new monikers. This two-day conference aims to bring these approaches into closer dialogue. In particular, it seeks to identify new synergies between heterodox political economy and various sociological, historical, and philosophical perspectives on the intersections of finance and society.

The conference is organised by the journal Finance and Society (with support from the Department of International Politics at City University London), together with the Social Studies of Finance Network at the University of Sydney (with support from the Faculty of Arts and Social Sciences, University of Sydney).

Date: 3-4 November 2016
Location: City University London, UK

Confirmed keynote speakers:
• Nigel Dodd (London School of Economics)
• Elena Esposito (University of Modena-Reggio Emilia)
• Perry Mehrling (Columbia University)
• Anastasia Nesvetailova (City University London)

Confirmed roundtable participants:
• Lisa Adkins (University of Newcastle Australia)
• Dick Bryan (University of Sydney)
• Melinda Cooper (University of Sydney)
• Marieke de Goede (University of Amsterdam)
• Ronen Palan (City University London)

Themes on which we encourage contributions include (but are not limited to):
Money and/beyond language, including themes of performativity and affect; Finance and social theory; Derivative finance; Engaging orthodox economics and finance theory; Central banking and shadow banking; Historicity and futurity; Gifts and debts; Financial crises, past and present; Finance and neoliberalism; The politics of finance.

Contributions are invited in two formats:

• Papers; abstract of up to 300 words
• Panels; panel proposal plus paper abstracts

Please submit abstracts and proposals by 1 August 2016 to both

Amin Samman (amin.samman.1@city.ac.uk) and

Martijn Konings (martijn.konings@sydney.edu.au)

The conference organisers aim to publish a selection of the papers as special issues in Finance and Society and other prominent peer-reviewed journals. Participants who would like to be considered for these should aim to submit a draft of an original paper by 1 October 2016.

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Attitudes to Financing Social Sector Stuck in the Past

Published by Anonymous (not verified) on Tue, 29/09/2015 - 9:48am in

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