The Everyday Life of Global Finance: Saving and Borrowing in Anglo-America

315 Pages·2008·1.66 MB·English

by  Paul Langley

The Everyday Life of Global Finance: Saving
and Borrowing in Anglo-America
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The Everyday Life of
Global Finance: Saving
and Borrowing in
Anglo-America
Paul Langley
1
3
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Langley,Paul,1972–
Theeverydaylifeofglobalfinance:savingandborrowingin
Anglo-America/PaulLangley.
p. cm.
ISBN 978–0–19–923659–6
1. Savingandinvestment—UnitedStates. 2. Savingand
investment—GreatBritain. 3. Credit—UnitedStates. 4. Credit—Great
Britain. I. Title.
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For mygirls—Lou andGrace
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Preface
The routines and rhythms of saving and borrowing in the United States
of America (US) and United Kingdom (UK) have fundamentally changed
in the last three decades or so. Through the ownership of shares and
contributionsto pensionplans and mutualfunds,thesavings ofa much
greaternumberofindividualsandhouseholdsarenowbound-upwiththe
capital markets. Many savers have, in short, become financial investors.
Atthesametime,theboominborrowingtofundthepurchaseofhomes
and consumer goods and services of all kinds has also been closely tied
todevelopmentsinthecapitalmarkets.Theever-increasingfutureoblig-
ationsofgrowingnumbersofmortgagors,creditcardholders,andinstal-
ment plan borrowers now directly provide for the payment of interest
andprincipalonsecuritiesissuedbytheirlenders.Inmeetingtheiroblig-
ations,Americanmortgagorsare,forexample,oftenunwittinglyensuring
that the wheels of the mortgage-backed securities market continue to
turn, a bond market even larger than that for US federal government
debt.Thefocusofthisbook,then,isontheunprecedentedrelationships
between everyday saving and borrowing in Anglo-America, on the one
hand, and the capital markets that we tend to know as ‘global finance’,
ontheother.
My first motivation in the pages that follow is to begin to reveal
and elucidate these unparalleled relationships. This, in itself, marks a
departurefromthevastmajorityofexistingsocialscientificenquiryinto
contemporaryfinance.Socialscientistsoffinancehavealmostexclusively
concerned themselves with ‘global finance’, that is, with the changes
in the capital markets that tend to be viewed as defining contemporary
finance.Thetransformationsoffinanceappearas‘outtheresomewhere’,
asseparateanddifferentiatedfrom‘real’socio-economiclife.Inthisbook,
in contrast, I seek to break the hold of global finance on the research
imaginationsofsocialscientistsoffinance.Itiscertainlynotthecasethat
we should forget global finance, far from it. In recent times, the capital
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Preface
markets of Wall Street, the City of London, Chicago, and so on have
witnessed profound and ongoing changes which have reverberated and
resonated across the globe. But, as this book will show, the apparently
extra-ordinarytransformationsofglobalfinanceareintimatelyrelatedto
transformationsinseeminglymundaneeverydaysavingandborrowing.
My first motivation leads, therefore, to the intuitive claim that, in
understanding contemporary finance, we need to take seriously the
changes in Anglo-American everyday saving and borrowing that have
forged tight relationships with the capital markets. There is a danger
thatsimplyrevealingtherelationshipsbetweenAnglo-Americaneveryday
savingandborrowingandthecapitalmarketswillnot,however,prompt
a(re)valuingoftheirplaceincontemporaryfinance.Inpresentingmuch
of the research contained in this book to academics across the social
sciences over the last few years, I have become acutely aware of this
hazard. More often than not, sympathetic and supporting discussants
and questioners have suggested that, when all is said and done, ‘small’
or ‘local’ changes in US and UK finance are taking place in the face of
‘bigger’ or ‘global’ forces. My various notes from these presentations are
repletewithlinesofinterrogationthathaveledtoquestionsthathave,for
example,takenthefollowingforms:‘AsthepowerofWallStreet,theCity,
theInternationalMonetaryFund(IMF),andWorldBankextendsglobally
and looms large in the management strategies of even the largest corpo-
rations, is it any wonder that finance capital also penetrates deep into
societyandeconomyathome?’;‘Itisthemajorbanksandfinancehouses
that are driving and selling the transformations in everyday saving and
borrowing,right?’;‘So,yourcentralargumentisthatthefinancialization
of economies includes households and not just firms—surely there is no
surprisethere?’;and‘Shouldwenotspeakof“globalfinanceineveryday
life”,andtherebyrecognizethesecondaryimportanceofthelatter?’
Asthisquestioningservestohighlight,itisclearlyinsufficienttoclaim,
on the basis of empirical research and intuitive assertion alone, that
Anglo-American everyday saving and borrowing should be (re)valued in
our understanding of contemporary finance. My second motivation in
this book, therefore, is to turn many of the usual assumptions that are
shared by social scientists about what matters in contemporary finance,
about the spaces, practices and subjects of global finance, inside out and
on their head. By calling this book The Everyday Life of Global Finance
I have sought to signal an ontological move that elevates the status of
everyday life. For me, everyday life has to come first. The category of
everydaylifedoesnotjustprovokeaconcernwiththatwhichisneglected
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Preface
in the vast majority of accounts of contemporary finance, that is, with
themundaneroutinesofsavingandborrowing.Italsodirectsustoview
transformations in those routines as crucial to the constitution and con-
testation of contemporary finance. The category of everyday life frames
whatwemightinterrogate,andwhatwecometoregardassignificantin
contemporaryfinance.
Thediverseandoftencontradictoryliteratureoneverydaylifedoesnot
provide, however, a straightforward or satisfactory line of sight through
whichwemightpursueourfocushere.Financehasnotbeenofparticular
interest to scholars of everyday life who tend to be preoccupied with
issuesofproduction,work,family,leisure,andconsumption.Fewspecific
cluesareavailableastohowitisthattransformedpracticesofsavingand
borrowing,socloselyintertwinedwiththecapital markets,havebecome
prosaic and ordinary for so many. My first and second motivations in
this book necessarily lead, then, to a third motivation: to draw from
and contribute to recent conceptual debates amongst social scientists
of finance in order to reveal and (re)value transformations in everyday
savingandborrowinginourunderstandingofcontemporaryfinance.
A growing body of research by sociologists, geographers, anthropol-
ogists, and heterodox economists—widely known as ‘the social studies
of finance’—already suggests that the concept of ‘financial networks’
provides a means of decentring finance.1 Related enquiry into the scien-
tific, rational, and calculative representations and performances of mod-
ern finance also suggests that, in order to interrogate financial power,
we should not think only of finance capital, the major states, or the
instrumental rationality of money. Present within the social studies of
financeis,therefore,akernelofconceptualworkthat,withdevelopment
and innovation, provides a basis from which to begin to explore the
transformationsineverydaysavingandborrowingwithoutassumingthat
‘small’ or ‘local’ changes have, at their centre, ‘big’ or ‘global’ forces. At
the same time, several contributors to international political economy
(IPE) are currently questioning the conceptual apparatus that tends to
prevailinthestudyoffinancewithinthatfield.Thisquestioninghasbeen
prompted, at least in part, by a growing awareness of the importance of
societal incorporation to framing the contours of contemporary finance.
In sum, there would seem at present to be conceptual openings that, if
explored,provideuswitharouteintooursubjectmatter.Thisrouteholds
1 FordetailsoftheinterdisciplinarySocialStudiesofFinanceacademicnetworkbasedat
theUniversityofEdinburgh,seehttp://www.sociology.ed.ac.uk/finance/
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