Book Review: Financialization

Financialization: Relational Approaches, edited by Chris Hann and Don Kalb (2020). New York: Berghahn Books.

Departing from earlier anthropological studies that examined the “cultures of finance” as modes of knowledge, a new edited volume of ethnographic case studies follows David Graeber’s Debt: The First 5,000 Years (2011) by approaching financialization “as a relational and uneven process over time and space” (4). Moving beyond mere description, each chapter in Chris Hann and Don Kalb’s Financialization: Relational Approaches explains the social relations of financialization across different regions of the world, with close attention to these relations’ historical development and contestation. By doing so, the collection reveals the role of morality, law, the state, environments, and local cultural expectations in determining the precise form that credit and debt structures take within a particular local context.

Don Kalb’s introduction and the first chapter from Richard Robbins form a solid foundation for further critical study of financialization. The former author outlines the theoretical orientation upon which the collection is based, with financialization consisting of the creation of new “monetary streams” that are generated by debt and flow toward the owners of interest-bearing assets. The latter takes us back to the origins of modern finance in 1694, when the creation of the Bank of England institutionalized a form of money creation whereby private institutions became able to create money as interest-bearing debt. Tracing the way that this financial innovation locked the nation-state and financial institutions into a partnership dedicated to maintaining economic growth at any cost, Robbins brings us to present day and asks: what happens when financialization reaches the point where a declining rate of economic growth is unable to keep up with ever-increasing debt and debt-based assets?

The next six chapters investigate a diverse assortment of finance forms at the national level. Sohini Kar analyzes how state-driven “financial inclusion” in India generates continuous small monetary flows extracted from the informal economy and produces “cashless subjects” (Chapter 2)—while Charlotte Bruckerman explores “Green Finance” in China and its extraction of monetary streams from forests into carbon credits traded on the national carbon market (Chapter 3). These credits confer the “right to pollute” by converting forests into “green infrastructure” and financializing the risk of future ecological crises. Aaron Pitluck examines “Islamic Finance” in Malaysia as consisting of an institutionalized power struggle between investment bankers, Shariah scholars, and Shariah personnel working within the financial-services commodity chain (Chapter 4)—whereas Norway’s sovereign wealth fund, the largest in the world, is an example of what Knut Christian Myhre calls “Custodial Finance” (Chapter 6). Norwegian oil wealth is understood as belonging to the nation as a whole and the fund’s asset managers are subordinate to the democratic will of the Norwegian people. In each case, financialization is a complex process of both meaning-making and the re-organization of existing social relations.

The remaining six chapters subtly shift from nation-level formations to household-level processes—with debt repayment, moral politics, and kinship taking a central frame. In Chapters 10 and 11, Marek Mikus and Dimitra Kofti address the absence of debt collection from the existing anthropological literature on debt and credit by theorizing debt collection as a “dynamic frontier of financialization of households and social reproduction” and a “major site of power dynamics and violence” (255). This raises an important question: what happens when the debtor defaults? Croatia’s blank state support for private debt collection is contrasted with how the Greek court system limits the effectiveness of coercion to collect outstanding debts. In both cases, although individuals are ultimately held legally responsible for repayment, debtors frequently draw on kinship networks and informal debts among relatives and friends to fulfill their legal obligations.

Resistance, and its ability to change the trajectory of financialization, appears throughout the case studies in this collection. Pitluck demonstrates that “Islamic Finance” is capable of tempering the usury of conventional finance, with potential to be generalized into other moralized markets where entrepreneurs, moral critics, and bureaucratic ethicists shape financialization. In Chapter 12, Natalia Buier observes a neighborhood association-turned-political party that was formed in the aftermath of the collapse of the Spanish housing market in 2007—while in Chapter 13, Marc Morell considers how social movements in Majorca are responding to the financialization of property and the replacement of residential rentals with short-term tourist accommodations. Although most authors refrain from endorsing specific forms of political action, Robbins argues that in our current finance-based economy, debt has replaced labor as the primary class relation, making a debt strike as formidable as a labor strike once was in an economy based on material production.

Given the crises brought on by the last forty-five years of financial expansion, Hann and Kalb’s volume is a much-needed contribution to the study of financialization, with valuable insights for academics, policy makers, and activists alike. Scholars of kinship will find much to parse in the latter half of the collection—while anthropologists of work will be challenged to move away from sites of production and grapple with the decreased relevance of labor in financialized economies. Political economists across disciplines, and especially economic anthropologists, will appreciate this collection’s analytical rigor, while those outside the academy will find it to be surprisingly readable, even with minimal background in economics or anthropology. Thought-provoking and timely, Financialization: Relational Approaches is an invaluable addition to the anthropological study of debt and credit.