Financial markets punish governments through currency devaluation and downgrades (financialization’s disciplinary power).
Evidence
Beyond this more abstract transformation, finance disciplines social and economic actors more directly. For instance, should a government choose to buck the neoliberal trend and consider instituting greater protection for workers, communities and environments, or should it dare breathe a hint about nationalization, financial markets interpret this possibility and respond by devaluing currency and downgrading bond ratings, or divesting themselves of shares in risky local ventures (LiPuma and Lee 2004, 151–156). This resistance need not even come to pass for markets to pre-emptively respond with financial discipline; the mere rumour is often enough. — Max Haiven, Cultures of Financialization, 548
Categorization
- XREF: Direct mechanism for how finance colonizes political will — relates to deWaard’s cultural argument about finance shaping everyday consciousness and to the strip-mining of public power under austerity. — connects to: A central bank veto on all policy save austerity turned devaluation into economic harm. — Mark Blyth, Austerity: The History of a Dangerous…, 554; Democratic politics and internal deflation make currency pegs politically uncredible. — Mark Blyth, Austerity: The History of a Dangerous…, 214; Currency pegs fail when markets can bet against limited reserves and force devaluation. — Mark Blyth, Austerity: The History of a Dangerous…, 213 (+5 more)
- DEFINE: Illustrates how ‘financialization’ operates as a disciplinary device, not just an economic shift — markets pre-emptively sanction rumored deviations from neoliberal policy.
Broader Connections
- Derivatives markets can destabilize elected governments in the Global South
#exemplifies(0.88) - Financial markets destabilized governments without directly orchestrating their fall
#corroborates(0.85) - Stabilizing currency deliberately imposed the costs on workers.
#qualifies(0.75) — Clara E. Mattei, The Capital Order, 983 - Fighting financialization requires wielding speculation on shifting ground
#responds-to(0.72) — Aris Komporozos-Athanasiou, Speculative Communities, 43