From casino capitalism to financial crisis : a constructivist analysis of the post-cold war financial order

Bergsvik, Robert (2015-12)

Thesis (MA)--Stellenbosch University, 2015.


ENGLISH ABSTRACT: This study applies a constructivist analysis in order to examine the extent to which the global capitalist system has gone through a process of financialisation in the post-Cold War order. Parallel to financialisation of the capitalist system, an increased degree of financial instability has followed. This has made the system more prone to financial crises. The study compares the core dimensions of the financial sector to that of a casino, explaining how champions of finance have forced everyone to become gamblers in the global economic system. The aim of the study is to identify, describe and explain the process of financialisation by looking at the power of norms. The approach of this study is an in-depth analysis of a single case i.e. the process of financialisation, which makes it to be of a qualitative nature. The study has chosen to focus on the process of financialisation because of its close connection to financial crises on a regional and global scale. This links financialisation to globalisation and the actions of international finance in the developing world. The utility of the norm life cycle theory is demonstrated through its ability to account for changes occurring in international institutions. Moreover, how their mission and framework are susceptible to the influence of norms. The study argues that the increased influence of finance in the international system must be understood in connection with the rise of neoliberalism in the USA and Britain during the 1980s. The norms of finance emerged with powerful politicians such as Margaret Thatcher and Ronald Reagan; they represent a larger group of norm entrepreneurs that have championed the norms of finance in the political and economic sector simultaneously. The study explains how with the help of these entrepreneurs the norms of finance cascaded through the international system, capturing powerful institutions such as the International Monetary Fund and the World Trade Organisation. This enabled the norms of finance to reach the third and final stage of the norm life cycle, which is internalisation. The resilience of these norms is discussed in connection with the global financial crisis of 2008-2009; a crisis largely created by an out-of-control financial sector.

AFRIKAANSE OPSOMMING: Hierdie studie verskaf ‘n konstruktiwistiese analise ten einde die mate te ondersoek waartoe die globale kapitalistiese stelsel deur ‘n proses van finansialisering gegaan het in die na-Koue Oorlog orde. Parallel tot die finansialisering van die kapitalistiese stelsel was daar ‘n toename in finansiële onstabiliteit. Dit het die stelsel meer kwesbaar gemaak vir finansiële krisisse. Die studie stel die kerndimensies van die finansiële sektor gelyk aan ‘n casino, en verduidelik hoe die kampioene van finansies ander geforseer het om saam te speel in ‘n globale dobbelspel in die ekonomiese stelsel. Die doelwit van die studie is om die proses van finansialisering te identifiseer, te beskryf en te verduidelik deur te kyk na die mag van norme. Die studie se benadering is ‘n in-diepte analise van ‘n enkele gevallestudie (die finansialiseringsproses); hierdie is dus ‘n kwalitatiewe studie. Hierdie keuse fokus op die proses van finansialisering, aangesien lg. ‘n nabye band het met regionale en globale finansiële krisisse. Dit koppel finansialisering aan globalisering en die programme van internasionale finansies in die ontwikkelende wêreld. Die nut van norme se lewensiklus teorie word gedemonstreer deur die vermoë daarvan om veranderinge in internasionale instellings te verklaar. Dit verklaar verder hoe die doelwitte en raamwerke van hierdie instellings kwesbaar is vir die invloed van norme. Die studie maak die punt dat die toenemende invloed van finansies in die internasionale stelsel begryp moet word aan die hand van die onluiking van neo-liberalisme in die VSA en Brittanje gedurende die 1980’s. Die norme van finansies het ontluik tesame met magtige politici soos Margaret Thatcher en Ronald Reagan; hulle verteenwoordig ‘n groter groep van norme entrepreneurs wat die norme van finansies voortgebring het in gelyktydig die politieke en die ekonomiese sektore. Die studie verduidelik hoe hierdie entrepreneurs gehelp het om die norme van finansies te laat versprei deur die internasionale stelsel, en hoe dit magtige instelligns soos die Internasionale Monetêre Fonds en die Wêreld Handelsorganisasie ingesluit het. Dit het dit moontlik gemaak vir die norme van finansies om die derde en finale fase van die norm lewensiklus te bereik: internalisering. Die langslewendheid van hierdie norme word bespreek in die konteks van die globale finansiële krisis van 2008-2009; ‘n krisis wat grootliks gebeur het weens ‘n anargistiese finansiële sektor.

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