Hostname: page-component-76fb5796d-wq484 Total loading time: 0 Render date: 2024-04-27T08:29:02.270Z Has data issue: false hasContentIssue false
  • English
  • Français

Perceptions of the global financial crisis in the US, UK, Canada and Australia: a comparative editorial analysis of the legitimacy of finance

Published online by Cambridge University Press:  20 January 2017

John Mikler ,
Sundran Rajendra  and
Ainsley Dianne Elbra
Sundran Rajendra
Affiliation:
McKinsey and Company, European Private Equity Practice, London, SW1Y 4UH, UK
Ainsley Dianne Elbra
Affiliation:
Department of Government and International Relations, The University of Sydney, Sydney NSW 2006, Australia
Get access Rights & Permissions [Opens in a new window]

Abstract

The Global Financial Crisis (GFC) is seen as arising from a new social structure of accumulation that institutionalised a neoliberal form of capitalism post the 1980s. This gave rise to “financialization,” which has increased both the power of financial markets over other economic sectors, and of financial market actors over national governments. However, while the neoliberal ideology underpinning financialization had a global impact, it sprang from the leading free market economies of the US and UK and was most readily embraced by states sharing their institutional support for it, such as Australia and Canada. But to what extent has it been questioned in these states since the crisis? In this article we examine perceptions of the legitimacy of finance via a 6 year comparative study of editorials in the mainstream press over 2007–2012. We do so because shifts in perceptions of the legitimacy suggest the extent to which the GFC produced the potential for more fundamental institutional change. We find that rather than this legitimacy having been undermined, or transformed, existing viewpoints instead hardened over the period considered. This indicates that, despite regulatory reform, the power of finance remains relatively unchanged.

Type
Research Articles
Information
Business and Politics , Volume 18 , Issue 1 , April 2016 , pp. 1 - 25
Copyright
Copyright © V.K. Aggarwal 2016 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Altman, R. 2009. “The Great Crash: A Geopolitical Setback for the West.” Foreign Affairs 88 (1): 2–14.Google Scholar
Bachrach, P., and Baratz, M. 1970. “Two Faces of Power.” American Political Science Review 56: 947–952.Google Scholar
Bakir, C. 2013. Bank Behavior and Resilience: The Effect of Structures, Institutions and Agents. Houndmills, Basingstoke: Palgrave Macmillan.Google Scholar
Bank of England Prudential Regulatory Authority. 2014. Bank and Building Society Lists. Accessed 10 June 2014. http://www.bankofengland.co.uk/pra/Pages/authorisations/banksbuildingsocietieslist.aspx.Google Scholar
Banks Around the World. 2014. Top Banks in the World 2013. Accessed 10 June 2014. http://www.relbanks.com/worlds-top-banks/assets.Google Scholar
Beck, T., Kunt, D., and Levine, R. 2005. “Bank Concentration and Fragility: Impact and Mechanics.” Working Paper 11500. The National Bureau of Economic Research. Accessed 10 June 2014. http://www.nber.org/papers/w11500.Google Scholar
Bell, S. 2011. “Do We Really Need a New “Constructivist Institutionalism to Explain Institutional Change?” British Journal of Political Science 41 (4): 883–906.Google Scholar
Bell, S., and Hindmoor, A. 2015. “Masters of the Universe but Slaves of the Market: Bankers and the Great Financial Meltdown.” British Journal of Politics and International Relations 17: 1–22.Google Scholar
Billeaudeaux, A., Domke, D., Hutcheson, J. S., and Garland, P. 2003. “Newspaper Editorials Follow Lead of Bush Administration.” Newspaper Research Journal 24 (1): 166–184.Google Scholar
Blackmon, Pamela 2008. “Rethinking Poverty Through the Eyes of the International Monetary Fund and the World Bank.” International Studies Review 10 (2): 179–202.Google Scholar
Bollard, A., and Ng, T. 2012. “Learnings from the Global Financial Crisis: Sir Leslie Melville Lecture, The Australian National University, Canberra, 9 August.” Reserve Bank of New Zealand Bulletin 75 (3): 57–66.Google Scholar
Braithwaite, J. 2008. Regulatory Capitalism: How it Works, Ideas for Making it Work Better. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
Cahill, D. 2009. “Is Neoliberalism History?” Social Alternatives 28 (1): 12–16.Google Scholar
Cahill, D. 2014. The End of Laissez Faire? On the Durability of Embedded Neoliberalism, Cheltenham: Edward Elgar.Google Scholar
Crouch, C. 2011. The Strange Non-Death of Neoliberalism. Cambridge: Polity Press.Google Scholar
Crouch, C., and Streeck, W., eds. 1997. Political Economy of Modern Capitalism: Mapping Convergence and Diversity. London: Sage Publications.Google Scholar
Culpepper, P. D. 2005. “Institutional Change in Contemporary Capitalism: Coordinated Financial Systems Since 1990.” World Politics 57 (2): 173–199.Google Scholar
Dahl, R. 1957. “The Concept of Power.” Behavioral Science 2: 201–215.Google Scholar
Datz, G. 2009. “State of Change: Global Turmoil and Government Reinvention.” Public Administration Review 69 (4): 660–667.Google Scholar
Esping-Andersen, G. 1990. The Three Worlds of Welfare Capitalism. Cambridge: Polity Press.Google Scholar
Fichtner, J. 2015. “Visualizations of Global Finance.” Accessed 25 March 2015. http://www.jfichtner.net/visualizations-of-global-finance/.Google Scholar
Fligstein, N., and Habinek, J. 2014. “Sucker-Punched by the Invisible Hand: The World Financial Markets and the Globalization of the US Mortgage Crisis.” Socio-Economic Review 12 (4): 637–665.Google Scholar
Friedman, T. 2000. The Lexus and the Olive Tree. London: Harper Collins.Google Scholar
Fuchs, D. 2007. Business Power in Global Governance. Boulder: Lynne Rienner.Google Scholar
Fuchs, D., and Lederer, M. 2007. “The Power of Business.” Business and Politics 9 (3): Article 1.Google Scholar
Fukuyama, F. 1992. The End of History and the Last Man. New York: Avon Books.Google Scholar
Gallagher, K. 2008. “The Death of the Washington Consensus?” The Guardian, 14 October. Accessed 28 October 2010. http://www.guardian.co.uk/commentisfree/2008/oct/14/economy-development.Google Scholar
Gamson, W. A. 1992. Talking Politics. New York: Cambridge University Press.Google Scholar
Germain, R. 2012. “Introduction: Governing Global Finance and Banking.” New Political Economy 19 (4): 530–535.Google Scholar
Hall, P. A. 1993. “Policy Paradigms, Social Learning, and the State: The Case of Economic Policymaking in Britain.” Comparative Politics 25 (3): 275–296.Google Scholar
Hall, P. A., and Soskice, D., eds. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press.Google Scholar
Harrod, J. 2006. “The Century of the Corporation.” In Global Corporate Power, edited by May, C. Boulder: Lynne Rienner.Google Scholar
Harvey, David. 2005. A Brief History of Neoliberalism, Oxford: Oxford University Press.Google Scholar
Headey, Derek. 2009. “Appraising a Post-Washington Paradigm: What Professor Rodrik Means by Policy Reform.” Review of International Political Economy 16 (4): 698–728.Google Scholar
Hollingsworth, J. Rogers, and Boyer, R., eds. 1997. Contemporary Capitalism: the Embeddedness of Institutions. Cambridge: Cambridge University Press.Google Scholar
IMF 2008. World Economic Outlook: Housing and the Business Cycle, April 2008. Washington DC: IMF. Accessed 16 June 2014. http://www.imf.org/external/pubs/ft/weo/2008/01/pdf/text.pdf.Google Scholar
IMF. 2012. Global Financial Stability Report: Restoring Confidence and Progressing Reforms, October 2012. Washington DC: IMF. Accessed 10 June 2014. http://www.imf.org/external/pubs/ft/gfsr/2012/02/pdf/text.pdf.Google Scholar
Johal, S., Moran, M., and Williams, K. 2015. “Power, Politics and the City of London After the Great Financial Crisis.” Government and Opposition 49 (3): 400–425.Google Scholar
Koch, T. 1990. News as Myth: Fact and Context in Journalism. New York: Greenwood.Google Scholar
Konings, M. 2009. “Rethinking Neoliberalism and the Subprime Crisis: Beyond the Re-Regulation Agenda.” Competition and Change 13 (2): 108–127.Google Scholar
Kus, B. 2006. “Neoliberalism, Institutional Change and the Welfare State: The Case of Britain and France.” International Journal of Comparative Sociology 47 (6): 488–525.Google Scholar
Larcinese, V., Puglisi, R., and Snyder, J. M. Jr. 2011. “Partisan Bias in Economic News: Evidence on the Agenda-Setting Behavior of US Newspapers.” Journal of Public Economics 95: 1178–1189.Google Scholar
Lipset, S. 1983. Political Man: The Social Basis of Politics. London: Heinemann.Google Scholar
Lowndes, V. 2002. “Institutionalism.” In Theory and Methods in Political Science, 2nd ed. edited by Marsh, D. and Stoker, G. Houndmills Basingstoke: Palgrave Macmillan.Google Scholar
Lukes, S. 1974. Power, a Radical View. London: Macmillan.Google Scholar
Mahoney, J., and Thelen, K. eds. 2010. Explaining Institutional Change: Ambiguity, Agency and Power. Cambridge: Cambridge University Press.Google Scholar
Mercille, J. 2014. “The Role of the Media in Sustaining Ireland's Housing Bubble.” New Political Economy 19 (2): 282–301.Google Scholar
Nolke, A., and Vliegenthart, A. 2009. “Enlarging the Varieties of Capitalism: The Emergence of Dependent Market Economies in East Central Europe.” World Politics 61 (4): 670–702.Google Scholar
North, D. 1990. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.Google Scholar
OECD. 2011. Bank Competition and Financial Stability. Accessed 10 June 2014. http://www.oecd.org/finance/financial-markets/48501035.pdf.Google Scholar
OECD. 2014. “Concentration of the Banking Sector: Assets of Three Largest Banks as a Share of Assets of all Commercial Banks, percent, 2011.” OECD Economic Surveys: Netherlands 2014. Accessed 10 June 2014. 10.1787/eco_surveys-nld-2014-graph31-en.Google Scholar
Olsen, J. P. 2009. “Change and Continuity: An Institutional Approach to Institutions of Democratic Government.” European Political Science Review 1 (1): 3–32.Google Scholar
Olukoshi, A. 2004. “Democratization, Globalization and Effective Policy Making in Africa.” In The Politics of Trade and Industrial Policy in Africa, edited by Soludo, C., Ogbu, O., and Chang, H. Trenton: Africa World Press, and Ottawa: International Development Research Centre.Google Scholar
Panitch, L., and Konings, M. 2009. “Myths of Neoliberal Deregulation.” New Left Review 57: 67–83.Google Scholar
Pierson, P., and Skocpol, T. 2000. “Historical Institutionalism in Contemporary Political Science” In Political Science: The State of the Discipline, edited by Katznelson, I. and Milner, H. V. New York: W.W. Norton and Company.Google Scholar
Porter, T. 2011. “Public and Private Authority in the Transnational Response to the 2008 Financial Crisis.” Policy and Society 30 (3): 175–184.Google Scholar
Rudd, K. 2009. “The Global Financial Crisis.” The Monthly 42: 20–29.Google Scholar
Ryan, M. 2004. “Framing the War Against Terrorism: US Newspaper Editorials and Military Action in Afghanistan.” Citizen: The International Journal for Communications Studies 66 (5): 363–382.Google Scholar
Schelke, W., and Hassel, A. 2012. “The Policy Consensus Ruling European Political Economy: The Political Attractions of Discredited Economics.” Global Policy 3 (1): 16–27.Google Scholar
Schmidt, V. 2002. The Futures of European Capitalism. Oxford: Oxford University Press.Google Scholar
Schonfield, A. 1965. Modern Capitalism: The Changing Balance of Public and Private Power. Oxford: Oxford University Press.Google Scholar
Streeck, W., and Yamamura, K., eds. 2001. The Origins of Nonliberal Capitalism: Germany and Japan in Comparison. Ithaca: Cornell University Press.Google Scholar
Sumpter, R. S. 2000. “Daily Newspaper Editors’ Audience Construction Routines: A Case Study.” Critical Studies in Media Communication 17 (3): 334–346.Google Scholar
Teeple, G., and McBride, S., eds. 2011. Relations of Global Power: Neoliberal Order and Disorder. Toronto: University of Toronto Press.Google Scholar
Economist, The. 2008. “Europe and the Financial Crisis: The End of the Beginning?” 16 October. Accessed 10 June 2014. http://www.economist.com/node/12436221.Google Scholar
UNCTAD. 2013. World Investment Report 2013. Annex Table 30: The Top 50 Financial TNCs Ranked by Geographical Spread Index 2012. Accessed 4 March 2014. http://unctad.org/en/pages/DIAE/World%20Investment%20Report/Annex-Tables.aspx.Google Scholar
Vogel, S. 1996. Freer Markets More Rules: Regulatory Reform in Advanced Industrialised Countries. Ithaca: Cornell University Press.Google Scholar
Wade, R. 2008. “Financial Regime Change?” New Left Review 53: 5–21.Google Scholar
Wade, R. 2009. “Is the Globalization Consensus Dead?” Antipode 41 (S1): 142–165.Google Scholar
Walter, A., and Zhang, X., eds. 2012. East Asian Capitalism: Diversity, Continuity and Change. Oxford: Oxford University Press.Google Scholar
Watkins, S. 2010. “Shifting Sands.” New Left Review 61: 5–27.Google Scholar
Watson, M. 2003. “Ricardian Political Economy and the Varieties of Capitalism Approach: Specialization, Trade and Comparative Institutional Advantage.” Comparative European Politics 1 (2): 227–240.Google Scholar
Wendt, A. 1998. “On Constitution and Causation in International Relations.” Review of International Studies 24 (4): 101–117.Google Scholar
Wigger, A., and Buch-Hansen, H. 2014. “Explaining (Missing) Regulatory Paradigm Shifts: EU Competition Regulation in Times of Economic Crisis.” New Political Economy 19 (1): 113–137.Google Scholar
Winnett, R., Porter, A., Conway, E., and Swaine, J. 2009. “G20 Summit: Gordon Brown Unveils $1.1 Trillion Global Recession Fightback.” The Telegraph, 2 April. Accessed 10 June 2014. http://www.telegraph.co.uk/finance/g20-summit/5094824/G20-summit-Gordon-Brown-unveils-1.1trn-global-recession-fight-back.html.Google Scholar
Bank, World. 2014. Data. Accessed 10 June 2014. http://data.worldbank.org/country/united-states.Google Scholar
Worth, O., and Buckley, K. 2009. “The World Social Forum: Postmodern Prince or Court Jester?” Third World Quarterly 30 (4): 649–661.Google Scholar
Zuckerman, M. 2013. “Mistreating Ben Bernanke, the Man Who Saved the Economy.” Wall Street Journal, 25 July. Accessed 6 June 2014. http://online.wsj.com/news/articles/SB10001424127887324110404578627833228970760.Google Scholar