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11 - The locational and institutional embeddedness of electronic markets: the case of the global capital markets

Published online by Cambridge University Press:  22 July 2009

Saskia Sassen
Affiliation:
Ralph Lewis Professor of Sociology University of Chicago
Mark Bevir
Affiliation:
University of California, Berkeley
Frank Trentmann
Affiliation:
Birkbeck College, University of London
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Summary

We might expect today's global financial market to be generally unlike other current and past markets and to approximate, and even enact, key principles of neo-classical market theory. The prevalent representation of this market as electronic, transjurisdictional, and globally interconnected indicates that more than any other type of market it is well captured by neo-classical theory. According to this account, demand and supply forces are less hindered in the case of financial markets by the frictions of time and distance and the imperfections of knowledge. Market supply and demand can thus carry more weight in the coordination and regulation of the financial sector than they are likely to in other markets and sectors. Therewith market forces can be seen to strengthen the weight of liberal dynamics in the political order.

Today's global capital market is indeed a complex formation markedly different from earlier global financial markets and from other types of markets in the past and today. Largely electronic and consisting of the movement of dematerialized instruments, this market can be expected to be largely disembedded from the social worlds characterizing the functioning of most markets. Hence this market would represent old notions and their current reincarnations of the market as a depersonalized force that can further the development of contemporary capitalism. It is in fact a powerful market with vast shadow effects over just about all economic sectors, with often significant transformative force.

Type
Chapter
Information
Markets in Historical Contexts
Ideas and Politics in the Modern World
, pp. 224 - 246
Publisher: Cambridge University Press
Print publication year: 2004

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