World financial orders and world financial centres :an historical international political economy

Abstract

Attempts to comprehend contemporary world finance are confronted by a dual problematic: inquiry encounters not only significant change that cannot easily be captured, but also the predominance of neo-classical economics as a mode of knowledge. By taking as its starting point existing research in the field of International Political Economy (IPE) and grounding inquiry in an 'Historical IPE' approach, 'World Financial Orders and World Financial Centres' offers an alternative mode of knowledge of contemporary world finance. An Historical IPE of world finance proceeds by focusing upon the changing organisation of world credit practices since the seventeenth century. World credit practices are organised in the context of the structures of power in successive social orders, that is, world financial orders. Relative stability in world financial orders is reproduced by structures of authority which articulate interdependent relationships between state, civil and market institutions in the organisation of world credit practices. World financial centres (WFCs) are identified as necessary to an understanding of world finance in two main senses. First, WFCs are the key social spaces for world finance, where world credit practices and the material, ideational and institutional forces that frame them become centralised. Second, WFCs are key spaces of authority in world finance, the social loci for the reproduction of world financial orders. It is shown that periods of relative stability in successive world financial orders tend to coincide with the dominance of a single WFC. With the present standing of New York, London and Tokyo as a 'triad' of WFCs, contemporary world finance is characterised by its 'unstable reproduction'.