Capital flight Research Papers - Academia.edu (original) (raw)

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