Brett Christophers, Banking across Boundaries: Placing Finance in Capitalism. Malden, MA, Wiley-Blackwell, 2013, 302 pages, £19.99 / €24.00, paper. ISBN: 978-1-4443-3828-7.
Brett Christophers’ Banking across Boundaries: Placing Finance in Capitalism is not a book that simply rides the wave of popularity that studies of finance have been enjoying due to the recent global financial crisis. Of course the book does carry the nasty taste of the past five years’ crisis. This, however, has inspired the author to produce a convincing and well-researched discussion of the process of financialization that integrates, but also transcends, many of the ongoing debates among students of finance. The crux of his argument is that a good understanding of financialization requires the incorporation of the dynamics between an internationalizing banking sector and the appraisals of its “productiveness” by relevant actors in national economies. Both contain a boundary element that, in turn, comprises geographical boundaries of national territories and the imaginary boundary between what is deemed productive and unproductive. Christophers’ originally-devised exposé, then, is structured around the dialectics of these two types of boundary crossings over time.
The first of these boundary crossings reflects a shifting appraisal of finance in economic theory and the wider society from an unproductive towards a productive activity. Christophers hereby problematizes the concept of financialization by placing it in the longue durée of capitalist history. Financialization has indeed been a long-standing victim of a “conceptual stretching” (Engelen, 2008) that has created a false sense of academic dialogue at best and implied the banalization of the matter at worst. Christophers asserts that financialization may refer to a fundamental shift in the nature in contemporary capitalism, but he deplores the practice of “non-specific nodding” to claims about “finance as the principle means of generating profit” in contemporary studies of capitalism (page 235). Interestingly, he thereupon decides not to tackle the issue by providing empirical measurements for the growing share of finance in the economy (although some empirical evidence is presented in the final chapter). Nor does he set out to once-and-for-all establish a clear boundary between productive and unproductive activities, which has been a thorny issue in Marxist theory and classical political economy alike. Instead, Christophers’ main concern is to understand the processes by which appraisals of financial services have crossed the productiveness boundary.
The second type of boundary crossings Christophers discusses is national boundaries transgressed during progressive rounds of financial globalization. Here the author takes at heart the importance of the changing geographies of finance and connects them to the above-mentioned shifting qualitative appraisals of finance. This sounds like a logical move, but it is in fact a surprisingly rare approach in a field where national political economy perspectives are the rule. To be clear, Christophers does not negate the relevance of the national scale, but theorizes it as fundamental for framing finance’s (un)productiveness in the practice of, for instance, national accountants.
The book itself is organized in three parts that document the dialectics of these two types of boundary crossings. These parts are dubbed “Worlds Apart,” “Worlds Aligned,” and “Co-constituted Worlds” and respectively refer to the period before 1930, 1930 to mid-1970s, and mid-1970s until the present day. The overall argument is that the conceptual world of economic theory and the material worlds of (spatial) banking practices became increasingly intertwined throughout the three consecutive periods. The conceptual and material dimensions of the first period were more-or-less separated, and this is also reflected in the book’s mode of exposition at this point with each dimension receiving its own chapter. Drawing mainly on secondary sources, the author first sketches the productiveness debate about finance in (critical) political economy (chapter 1). This is followed by a brief, but useful history of money and finance from the Middle Ages to the first period of financial “globalization” that emerged at the end of the nineteenth century and ended at the hands of the Great Depression (chapter 2). Bringing both elements together, Christophers discovers a paradoxical situation in which a firm appraisal of finance as unproductive did not hinder banking to expand across borders. The main explanation the author offers is that—contrary to the alignment of theory and practices in the realm of trade (cf. mercantilism)—the period prior to 1930 showed limited performativity of economic theory in the field of finance.
During the second period, this gradually changed as concepts and material practices became aligned, making that finance susceptible to framing in economic theory. Chapter 3 first discusses how the post-1930 era led to a retreat to the national scale, which translated in the new-born practice of national accounting to measure economic productiveness. The issue of productiveness generated a practical “banking problem” which was resolved differently in various contexts in line with the then dominant voices in economic theory. Chapter 3 further discusses how the issue was handled in the U.K., France, and Germany, while Chapter 4 discusses the dynamics in the U.S. Christophers concludes that respectively negative and positive appraisals of bank productiveness “fitted” the domestic and expansionist inclinations of European and U.S. banks respectively.
Lastly, in the third period, the author observes a mutual relationship of enablement between concepts and materialities of finance. This dialectic relationship is separated for the sake of clarity. In chapter 5 Christophers focuses on the influence of ideas on materialities. Here he documents how ideas about finance’s productiveness are now actively used to open-up borders for American and European banks. This implies that ideas about finance started to “perform” the actual internationalization of finance. In chapter 6, which is a republication of an earlier article in New Political Economy, the author manages to make a case for the existence of the opposite relationship as well: the fact the growth and globalization of finance have enabled the emergence of an orthodox position in which finance is considered productive.
Engagingly written, Banking across Boundaries provides a balanced and long-term perspective on financialization processes that will certainly speak to a multidisciplinary audience interested in finance. The book’s main contribution lies in its illustration of the performative nature not only of ideas over practices, but also of material practices’ structuring role on the way we conceive and place finance in the world. The only (minor) disappointment is the limited light the book sheds on the (changing) geographies of finance and financialization over time: maps are indeed conspicuously absent from this otherwise excellent book. For geographers in the audience, this should be an encouragement to reintroduce and revaluate empirical research on the materialities of actually existing geographies of finance in a subdiscipline that for a substantial time now has predominantly taken a singularly “cultural” reading of finance.
References
Engelen E (2008) The case for financialization. Competition and Change 12: 111-19
