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Regulating Global Finance MSOC 2

Regulating Global Finance MSOC 2. Presentation of Research Paper outline Matt Smith. Overview of presentation and research paper outline. Research question Two fundamental problems caused by today’s global financial agriculture Keynesian Policy, International Clearing Union

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Regulating Global Finance MSOC 2

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  1. Regulating Global Finance MSOC 2 Presentation of Research Paper outline Matt Smith

  2. Overview of presentation and research paper outline • Research question • Two fundamental problems caused by today’s global financial agriculture • Keynesian Policy, International Clearing Union • Barriers to implementation, Neo Gramscian perspective • Conclusion…and questions for the group

  3. Research question The case for Keynesian International Clearing Union, and explaining it’s political barriers opportunities to implementation

  4. Two fundamental problems caused by today’s global financial agriculture • Volatile capital markets and exchange rates • Environment of ‘uncertainly’ for business • Global ‘crowding out’ • Reduced long term investment, global growth

  5. Two fundamental problems caused by today’s global financial agriculture • Global balance of payment disequilibria • No adjustment mechanism for surplus countries, unlike gold standard • Surplus in one countries means deficit else where, more surplus = more debtor • Surplus’s feed hedge finds and Euromarkets • Adjustment burden placed upon deficit country

  6. International Clearing Union • Post Keynesian proposal, International Clearing Unit • Currency trade only in International Money Clearing Units (IMCU), between central banks • Countries implement currency control, to minimise non productive flows (customise) • Clearing Union monitors flows and stores of IMCU

  7. International Clearing Union • Countries which accumulate IMCU by running balance of payment surplus, are… • encouraged to spend IMCU (if not spent for them), on either, additional exports, new FDI, aid to deficit countries • Any LDC that regularly continue to run deficits will be given preference for spending of IMCU accumulators

  8. Neo-Gramscian theory • Stefan Gill’s concept: ‘international financial panopticism’ • Developed by Michel Foucault, based on Jeremy Bentham’s blue print of a prison • Surveillance, disciplinary, conformity • ‘disciplinary neo-liberalism’

  9. Regulation? Areas of thought • Is the international financial system causing contradictions within the hegemonic classes alliances? Business uncertainly and crowding out, risk of crisis • National bourgeoisie in the productive economy • Currency crisis in Key nation states, threat to ideology?

  10. References • Blecker, Robert (1999): Taming Global Finance • Davidson, Paul (2002): Financial Markets, Money and the Real World • Gill, Stephen (2000): The Constitution of Global Capitalism, Department of Political Science, http://www.ciaonet.org/isa/gis01/ • Gill, Stephen (1997): Finance, Production and Panopticism: inequality, risk and resistance in the era of disciplinary neo-liberalism • Helleiner, Erik (1994): States and the Emergence of Global Finance • Blecker, Robert (1999): Taming Global Finance

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