Struggling over new asset geographies (original) (raw)
Assetization and the 'new asset geographies'
Dialogues in Human Geography, 2023
An asset is both a resource and property, in that it generates income streams with its sale price based on the capitalization of those revenues. Although an asset's income streams can be financially sliced up, aggregated, and speculated upon across highly diverse geographies, there still has to be something underpinning these financial operations. Something has to generate the income that a political economic actor can lay claim to through a property or other right, entailing a process of enclosure, rent extraction, property formation, and capitalization. Geographers and other social scientists are producing a growing literature illustrating the range of new (and old) asset classes created by capitalists in their search for revenue streams, for which we argue assetization is a necessary concept to focus on the moment of enclosure and rent extraction. It is a pressing task for human geographers to unpack the diverse and contingent 'asset geographies' entailed in this assetization process. As a middle range concept and empirical problematic, we argue that assetization is an important focal point for wider debates in human geography by focusing attention on the moment of enclosure, rent extraction, and material remaking of society which the making of a financial asset implies.
So what is assetization? Filling some theoretical gaps
Dialogues in Human Geography
Birch and Ward (2022) propose the concept of assetization to frame a research agenda in Human Geography. This interesting proposal suffers from a rather imprecise definition of what an asset is, and that is a gap I intend to fill. I argue that assetization, for Birch and Ward, does not concern every type of asset, but only what can be described as ‘financialized assets’, including financial as well as intangible assets. I underline what financialized financial and intangible assets have in common and how that makes them relevant for analyzing contemporary capitalism. More precise specification of the assets created by Birch and Ward's assetization process clarifies the concept's true potential contribution.
Assets and assetization in financialized capitalism
Review of International Political Economy, 2020
In the wake of the global financial crisis of 2007-09, political economists have typically identified and interrogated speculative logics and credit-debt relations as the markers of financialized capitalism. This paper argues that assets, and the contingent processes which turn all manner of things into assets (i.e. 'assetization'), can also be usefully foregrounded to understand the character and movement of financialized capitalism in the contemporary conjuncture, particularly in its Anglo-American heartlands. Centred on assets and assetization, research is refocused on the constitution of political economies of rent and investment, especially as the frontiers of financialized capitalism are extended to further incorporate nature and society. Research into financialized capitalism is also connected more explicitly to wider political debates over intensified inequalities, as the production and distribution of assets is key to wealth disparities and shapes fundamental stratifications across society.
This entry explains the rising popularity of the concept of financialization, despite it being considered a vague and chaotic concept. It also summarizes the wide-ranging multidisciplinary literature on financialization and makes a distinction between seven dimensions, or elements, of financialization, upon which a new definition of financialization is put forward that suggests that the power of the financialization literature lies in how it tries to understand the increasing dominance of financial actors, markets, practices, measurements, and narratives at various scales, resulting in a structural transformation of economies, firms (including financial institutions), states, and households. In discussing the different elements of financialization, the entry focuses on the financialization of the economy, nonfinancial firms, the state and households, but also on the processes of banking disintermediation and assetization. Finally, some avenues for future research are suggested. Keywords: assets, contemporary capitalism, corporate financialization, economic geography, financial geography, financial markets, global financial crisis, housing, globalization, lobbying, neoliberalism, political economy, real estate, state Definition of financialization: the increasing dominance of financial actors, markets, practices, measurements and narratives, at various scales, resulting in a structural transformation of economies, firms (including financial institutions), states and households.
Common problems or different questions: A critique of 'assetisation'
Dialogues in Human Geography , 2023
This commentary provides the contours of a Marxian critique of 'assetisation'. In doing so, the paper identifies a subjective approach to valuation and value which ties together Birch's and Ward's appeal to theoretical pluralism. The argument highlights how a focus on future-orientated valuation practices elide the question of class and production and, therefore, the very basis of rent and value. A call is made for geographers to better interrogate the relationship between rent and interest in the flurry of research around rentiership.
Human Studies, 2014
ABSTRACT This article shows that forms of analysis and calculation specific to finance are spreading, and changing valuation processes in various social settings. This perspective is used to contribute to the study of the recent transformations of capitalism, as financialisation is usually seen as marking the past three decades. After defining what is meant by “financialised valuation,” different examples are discussed. Recent developments concerning the valuation of assets in accounting standards and credit risk in banking regulations are used to suggest that colonisation of financial activities by financialised valuations is taking place. Other changes, concerning the valuation of social or cultural activities and environmental issues are also highlighted in order to support the hypothesis of a parallel colonisation of non-financial activities by financialised valuations. Specifically, the language of finance appears to gradually being incorporated into public policies, especially in Europe—and this trend seems to have gathered pace since the 2000s. Some interpretations are proposed to understand why public policies are seemingly increasingly reliant on financialised valuations.
THE VALUE OF FINANCIALIZATION AND THE FINANCIALIZATION OF VALUE
BC: Among the most forceful and compelling of the various arguments for the value of the concept of financialization is the thesis that in recent decades, capitalism has changed, and that the financialization concept helpfully captures one of the most significant vectors of this transformation. I am thinking in particular here of the types of definition of financialization offered by Greta , Till van Treeck (2009) and Costas Lapavitsas , where financialization is understood fundamentally in terms of a shift in the weighting of the capitalist economy toward financial forms of revenue and profit, whether or not those happen to be realized by the financial sector per se. It is striking, however, that some of the most forthright champions of the idea that capitalism has changed in this waythat it has, in a word, been financializednonetheless cling to an essentially unchanged (Marxian) understanding of value. 1 Lapavitsas, in my view, is one such; John Bellamy Foster (2008) is clearly another. For these scholars, following Marx, there are essentially two types of labour under capitalism. There is productive labour, which produces value, and thus wealth; and there is unproductive labour, which does not. And the finance sector and the labour embodied within it are, in this schema, fundamentally unproductive. Hence Lapavitsas' claim, as per the title of his book (Lapavitsas 2013), that financeand financializationentails profiting without producing (value), or in other words profiting by extracting value that is exclusively produced elsewhere in the economy. But isn't this contradictory, or, at the very least, paradoxical? Is it in fact credible that capitalism has been financialized, while capitalist valuecapitalism's sine qua nonhas not?
The Potential for Financialization
The financialization literature tries to make sense of how the world has been changing and continues to do so. There is real potential for financialization to conjoin real-world processes and practices that are conceptually treated as discrete entities. Financialization is an inherently spatial phenomenon that should be much more central to economic-geographic analysis, explaining how the financialization of the global economy is tied to financialization at other scales as well as to the financialization of the state, economic sectors, individual firms and daily-life.
Research on housing financialization argues that property assets are important stores of value that collateralise global systems of financial accumulation. Yet remarkably little is known about how those assets are constructed, valued and generate returns. This paper draws on the assetization literature to unpack how investment properties are constructed as 'assets', applying an accounting lens to locate their growing importance within the move towards a fair value accounting regime. We argue that property investors benefit from a generous 'distributional apparatus'-that is, a collection of rules, norms, reporting technologies and market-orienting devices that act as both a resource and an incentive to engage in practices of valuation that maximise potential distributions. In the case of property assets, accounting rule IAS40 determines how housing assets should be recognised in an annual statement; the RICS Red Book acts as a market device which articulates with IAS40, providing rules and principles on the techniques of valuation and revaluation; and the ICAEW provides guidance on whether revaluations amount to a 'realised profit' which can be distributed to shareholders legally. Together these three features underpin the assetization process in investment property. We use two case studies to show that this apparatus acts as a flexible resource as companies build different valuation and distribution strategies around the RICS Red Book revaluation process, with different risk implications. Our findings contribute to financialization, assetization and accounting scholarship.
Some thoughts on the recognition of assets, notably in respect of intangible assets
Accounting Forum, 2013
The paper presents interview based research directed towards a four part proposition (in bold type), namely, that the accounting recognition of an asset is rights-based,. .. separable in nature and capable of being measured financially. When combined together the recorded financial picture is one that only purports to represent economic reality. The distinguishing feature from that which is contained in many conceptual frameworks is the centrality of a 'right to transfer' an asset in the asset recognition process.
Capital unchained: finance, intangible assets and the double life of capital in the offshore world
Review of International Political Economy, 2017
The growing production and sale of intangible commodities and services, along with their enabling intangible assets is one of the key historical developments of our epoch. Yet many current analyses of production and trade remain rooted in industrial modes of organisation. This paper builds an analysis of intangible assets that engages with the emergent Global Wealth Chains (GWCs) concept. The rise of intangible assets and other forms of abstract capital has been significant, but has occurred in ways that have confounded extant measures and regulatory concepts of accumulation and wealth. The expanded spatial and jurisdictional deployment of these forms of capital by multinational corporations in GWCs has been central to widespread recognition of a growing disjuncture between the locations of value creation and the spatial and jurisdictional appropriation of wealth. The unbundling of attributes of activity and value from corporations and nation-states has also been facilitated by innovations in finance and jurisdictional forms, coalescing notably in the rise of Offshore Financial Centres (OFCs). The offshore world has a history of pioneering new forms of economic and financial organisation, and changing political and regulatory spaces and temporalities. A large and growing proportion of the world's intangible capital now resides in or passes through OFCs. This article explores the longer-term implications of accumulation of internationalised capital in intangible and abstract forms, and the prominent role of finance and offshore finance in giving mobility and fluidity to these forms of capital. The analysis suggests that limited regulatory traction on the labour, environmental and fiscal activities occurring in Global Value Chains (GVCs) is not simply due to a lack of political will, but also a function of conceptual and regulatory ambiguity in the face of historic transformations in accumulation. While the GVC approach has helped us to better follow increasingly fragmented and fluid networks of commodity production, and distribution, there is also a need to better follow the global double life of internationalised abstract and intangible wealth, and the parallel way state forms are being reorganised in response to those transformations.
Asset development policy: the new opportunity
2001
• http://www.centeronhunger.org I would like to thank the Ford Foundation, especially Lisa Mensah and Melvin Oliver on its behalf, for the generous support that has enabled the establishment of the Asset Development Institute of which this work is one product. My thanks also go to J. Larry Brown, Executive Director of the Center on Hunger on Poverty whose vision led to the creation of ADI and who has encouraged and inspired the writing of this essay. Clearly, the work draws on the research and analysis found in the writings of many knowledgeable and talented people. I have also benefited from the insights of leading academics, policy researchers, and others who traveled from afar to participate in one of the three all-day discussion sessions organized by ADI in the spring of 2000 to assess the promise of an asset development policy framework. I was able to gain further insights from many others, not only in the worlds of scholarship and policy, but also from public officials, advocates, and program leaders. My colleagues at the Center, Sandra Venner, Dorie Seavey, and Ashley Sullivan, have been very generous in taking time from other duties to read and offer valuable comments about numerous drafts along the way. My special thanks go to Jon Saxton who, as a friendly critic, did me the great favor of offering criticisms of the essay on the merits that were among the toughest and most demanding editorially. For these reasons, his was a particularly helpful contribution. Foreword There are several paradoxes at the opening years of the 21st century. One is that, notwithstanding the nation's relative prosperity, many people are still hungry. Another is that, even with relatively high rates of employment, millions of workers still struggle to make ends meet. A third is that, despite the many choices and opportunities created by new technologies and a global economy, many people worry they may not be able to take advantage of them, and will be left by the way side. As this essay makes clear, asset development can respond to these paradoxes. It can provide people more economic security while also enabling them to enjoy economic mobility. The idea is not entirely new-asset-development proposals already have begun to appear in scholarly journals, policy think tanks, and legislative committees. This essay does the useful job of synthesizing and clarifying current thinking, and charts a path for further research. Many of today's public policies implicitly recognize the importance of assets and asset building but largely favor the more affluent and often exclude the low-income and poor. Yet it's possible to craft asset-based policies to improve the lives of low-income families while at the same time creating a broader and more nuanced view of poverty-one that extends beyond simple measures to focus on peoples' capabilities, their effective use of those capabilities, and their freedom and opportunity to achieve. In so doing, the New Deal vision of "social insurance" can be adapted to the twenty-first century. The idea of asset development is likely to be attractive to a wide cross-section of the political spectrum, and can become an important element of a new consensus on how to enable low-income families to prosper. Hopefully, this essay will both inspire and guide us toward such a consensus.
Editorial: The politics of financialization (2013)
2013
The politics of financialization as a focus of academic study arguably has become more important in the context of recent public debates about the contribution of the financial sector to economic well-being, particularly in the United Kingdom. Whereas financial deepening has been widely seen as an option for enhancing economic growth and competitiveness pre-2007, this stance has become much more controversial over the last few of years. While processes of financialization in the past have been rather seen as a technocratic issue, they have more recently become much more a topic of public debate. In this context, highlighting the political origins of financialization contributes to the point that financialization is a human-made phenomenon, not a force of nature, and thus can also be made undone by political action. Based on these considerations, this paper follows two major avenues of research in order to analyze the politics of financialization. A first, obvious take is on the political projects and processes that have led to the emergence of financialization. Whereas we are already broadly familiar with the politics involved in the globalization of financial markets, much less is known about the political determinants of the processes that have led to the spread of financialization outside the financial sector and the incorporation of new assets, such as natural resources, into the process of financialization. Second, we are witnessing intense political conflicts about the future role of the financial sector in our economies after the financial crisis. Although this conflict is far from being concluded, it provides us with a political agenda that demands exploration and explanation, thereby opening up a second avenue of research.
In Value's Shadows: Devaluation as Accumulation Frontier
Environment and Planning A, 2018
Editors' Introduction, Theme Issue Devaluation is the shadow haunting every capitalist fantasy of endless accumulation. Its ever-present threat, in competitive capitalist struggles and recurrent economic crises, compels capital forward to enclosures of new values and to new realms, techniques, and geographies of production and surplus extraction. It drives bitter struggles among capitalists as different actors, sectors, and places strive to deflect the ravages of devaluation “elsewhere” – with profound consequences for the human and environmental geographies “brought in”, altered, and/or destroyed in such processes. These competitive devaluations, crisis-fueled jostlings, and transformations have a long history. With this special issue, however, we seek to open a lens onto contemporary encounters with devaluation that are novel in significant, yet insufficiently explored ways. Articles collected here consider new forms of value destruction and biophysical wasting as capital compulsively seeks to reproduce itself on an expanded scale – global-systemic and intimate transformations reflected in mainstream narratives of the Anthropocene and a so-called “used” planet (Ellis et al. 2013). Simultaneously, these articles interrogate qualitatively novel ways in which such devaluations have been recast as opportunities for capital accumulation, whether during acute crises or in the context of capitalist volatility-as-usual. Taken as a collection, they forge new analytical ground by illuminating parallels and interrelations between sites of de- and re-valuation usually considered separately: industrial obsolescence and waste-to-resource schemes; rural landscape degradation and ecological restoration; urban blight and redevelopment/gentrification; collapsed financial asset prices and new forms of speculation; and beyond. This discussion suggests key lineaments of an expanded theory of devaluation for capitalism’s contemporary moment – and makes a case for the significance and vitality of such an agenda for further geographic research...
A major question in understanding emerging geographies of property transformation is what discourses are impelling capital into new spaces and places: if powerful economic players are framing urban and rural land globally as part of a common landscape of accumulation, how are they narrating this commensuration? The spread of investment vehicles such as asset-‐backed securities and real estate investment trusts (REITs) is heightening institutional investors' ability to invest in real property, in various forms: urban real estate, infrastructure, and rural land. Financialization is facilitating new forms of land ownership, large-‐scale property transfers, and more rapid speculative flows. These transformations stand to reshape landscapes and livelihoods worldwide, from small farmers in the global South to renters in rapidly gentrifying cities in the North. Critical scholarship must dig deeper into why institutional investors, in the United States and beyond, are pushing into these new frontiers. I highlight a significant defensive element cropping up in the financial industry's crisis-‐era narratives, circulating among investors, economists, and US and international regulators: questions about what investments might be safe in a time of economic volatility. Emerging storylines, and reform measures such as Dodd-‐Frank and Basel III, look variously to safe assets – sometimes defined as real property, sometimes as anything but real property – to protect individual life chances, stabilize " too big to fail " financial institutions, and secure the future of the international financial system. I argue that this often-‐paradoxical search for safe assets is a powerful force in contemporary property transformations. The years since the 2008 collapse have been a peculiar time for observers of US cities: a crisis initially triggered by failed financial experiments in US real estate has produced a fresh wave of real property speculation globally, one which is rapidly exporting US urban financial instruments to a startlingly diverse set of landscapes. Banks and fund managers in twenty-‐six countries and counting across six continents are now using US-‐style real estate investment trusts (REITs) or REIT-‐like vehicles to speculate in urban real estate; more radical financial innovators are engineering REITs around farmland and timberland in the United States and beyond; ambitious solar infrastructure developers have tried their hand at asset-‐backed securitization (ABSs) and even more exotic financial vehicles like yieldcos 1 in their US, European, North and South American, and Asian expansions. Explaining this global phenomenon and apparent paradox is imperative: the lives of billions of people, from country and city, Global North and South, stand to be affected by its transformations in the meanings and treatment of property. Moreover, this new financialization offers an important lens into how formidable but brittle financial institutions in an era of " too big to fail, " and their neoliberal regulators, are attempting to reassert their power in an increasingly unruly world. In this chapter, I suggest that these diverse geographies and forms of real property financialization, in real estate, infrastructure, and rural resource-‐producing land, are being driven by common storylines and institutional imperatives at the center, even as contingent politics and cultural meanings shape a variety of experiences on the ground. It is tempting to read today's financial experiments as simply capitalism's latest move to transgress traditional boundaries in search of gain. The financial sector's own narratives often advance this sense of an aggressive but successful and creative capitalism, e.g. via Hernando de Soto-‐style " yield gap " arguments about markets' power to unlock nascent value in the world (e.g. Christophers 2010; White et al. 2012, Li 2014). In contrast, I argue here that defensive understandings are powerfully shaping the new property boom. Major financial institutions in the United States and beyond, and system regulators such as the International Monetary Fund (IMF), US Federal Reserve, and Bank of International Settlements (BIS) have been rocked by repeated shocks since 2008, made no less serious by their ability to displace this pain onto the less powerful. In response, they have promulgated influential