Globalization and Economy, Vol. 2: Global Finance and the New Global Economy (2007) (original) (raw)
2007
Does the contemporary dominance of haut finance, or ‘mighty finance’, constitute a new era of globalizing economics? Or is it just another phase of globalization and not much different from the processes of financial exchange evident at the end of the nineteenth century? These questions are dramatic but unhelpful. Such dichotomous ways of understanding globalizing finance have been behind a series of debates in the globalization literature. They have tended to disallow the possibility of talking about both long-run processes and significant (qualitative) changes in the contemporary period of intensifying globalization. This volume presents many different takes on these central questions of globalizing finance. Nevertheless, the framing consideration of the volume is that we need to be able to say, without being contradictory, that at one level we can see long-term continuities in the mode of exchange; at another level there are new formations of practice that in their emerging dominance have reconstituted the face of contemporary global finance. Financial exchange, as an expression of the changing modes of exchange across history began as far back as the development of coinage in antiquity. It has undergone significant and momentous shifts in its dominant forms of practice. However, these have tended to layer across prior formations rather than simply replace them. For example, derivatives exchange as one of the driving globalizing modalities of the last decade, and which involves hedging against fluctuations in the value of a currency, overlays the agricultural futures markets of the nineteenth century when the producers of such basics as wool and wheat hedged against the possibility that when their produce went to market the price may have fallen. In other words, the emerging dominance of derivatives might be said to represent a further aspect of what Karl Polanyi calls the ‘Great Transformation’ of international financial exchange, even as it has it historical antecedents in dealing with the long-run practical problems of a time-delay between seeding a crop and selling it in an international market.
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