Financialization and local statecraft: Truth and consequences

Journal Article Casino Capitalism Get access Casino Capitalism. By SUSAN STRANGE. (Oxford: Basil Blackwell, 1986. Pp. vii + 207. £19.50 hardback, £7.95 paperback.) Christopher Bliss Christopher Bliss Nuffield College, Oxford Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 97, Issue 387, 1 September 1987, Pages 779–780, https://doi.org/10.2307/2232954 Published: 01 September 1987

Reinventing government is rapidly becoming the orchestral theme for public sector officials who must face the music of increasing demands on, and a decline in, available resources. Generally associated with issues of productivity and efficiency, the theme of reinventing government has been extended by the Clinton administration to redefine the relationship between the federal government and local communities. Illustrative of this extension is the administration's Empowerment Zones and Enterprise Communities Program enacted by Congress as part of the Omnibus Budget Reconciliation Act of 1993. President Clinton has orchestrated the Empowerment Zones and Enterprise Communities Act (EZEC) as dominant themes in his administrations reinventing government symphony. This dominance is clearly enunciated in his memorandum to the President's Community Enterprise Board, which is chaired by Vice President Gore and includes the secretaries of all major departments and councils in the administration. In his memorandum, the President directs the board to implement the EZEC program so that it reflects the principles of the National Performance Review, the vice president's blueprint for streamlining and reinventing government (Clinton, 1993). The primary tones of the EZEC--enterprise zones and local community planning and empowerment--are not new melodies. The enterprise zone, with its geographically targeted tax reductions and regulatory relief, has been a federal and state refrain for almost 15 years. Community planning and empowerment are dearly repetitions of motifs that linger from the 1960's Model Cities program. Is, then, the EZEC program merely a reorchestration of earlier enterprise zone pieces composed during the Reagan-Bush years, with a Clinton spin from Lyndon Johnson's Great Society? If so, does the EZEC reinvent government? To answer these questions, the concepts of enterprise zones and of the Model Cities program, as well as the lessons learned from them, must be clearly understood. This article begins with the origins of enterprise zones in England and traces their historical development in the United States, on both federal and state levels. After presenting the history of enterprise zones, and the lessons to be learned from them, I proceed to review the lessons to be gleaned from the Model Cities program and close by addressing the question, can reorchestration of historical themes be reinventing government? The Origins of Enterprise Zones: The British ]Experiment The concept of using enterprise zones to encourage economic development did not begin in the United States, but is based on a British experiment in urban revitalization of the late 1970s. Coined as a phrase by geographer Peter Hall, and derived from the apparent economic success of enterprise-zone-type policy precedents established in Hong Kong and in Taiwan, the first public pronouncement of the zone concept is generally traced to England's Sir Goeffrey Howe, a Conservative member of Parliament. Howe's 1978 pronouncement was made in London's dockland district, an area then typical of Britain's distressed urban communities. Howe and his supporters saw the implementation of enterprise zones as a way to alleviate urban distress by allowing entrepreneurs to pursue profit with minimum governmental restrictions. This free-market approach, with its emphasis on tax and regulatory relief, stood in stark contrast to Britain's centrally planned economic development programs, which Howe felt were dismal failures. Howe was given the opportunity to implement enterprise zones when he became Chancellor of the Exchequer in Margaret Thatcher's Conservative administration. His 1980 legislation authorized by Parliament provided for geographically targeted tax incentives and regulatory relief It provided for contractual agreements between the central government and local governments that were to establish zone boundaries and the procedures for granting these tax incentives and regulatory relief to local entrepreneurs. …

The present instability in the world financial system was not inevitable. It is the direct result of a number of decisions (or rather non-decisions) for which the US in particular must be held responsible. The main prerequisite for regaining any form of system stability is that the US resumes its hegemony and leadership. Any hope of a wider international solution is both unrealistic and unworkable. Such is the basic thesis in Susan Strange's Casino Capitalism. The book gives a number of insightful observations concerning the driving forces of today's international financial system. But in discussing the consequences of the new financial order it skirts some of the more troubling facts concerning the ability of the US to exert the leadership called for by Ms. Strange.

Click to increase image sizeClick to decrease image size Notes 1. OECD, Literacy Skills for the World of Tomorrow: Further Results from PISA 2000 (www.pisa.oecd.org/dataoecd/43/9/33690591.pdf), Geneva, 2003, pp. 69, 100, 109. 2. John Maynard Keynes, The General Theory of Employment, Interest and Money, London, 1973. 3. Kurt Pritzkoleit, Die neuen Herren: Die Mächtigen in Staat und Wirtschaft, Vienna, 1955; Kurt Pritzkoleit, Wem gehört Deutschland: Eine Chronik von Besitz und Macht, Vienna, 1957. 4. Susan Strange, Casino Capitalism, Manchester and New York, 1997. 5. Joseph Stiglitz, Globalization and its Discontents, London, 2002. 6. Esther Alexander, The Power of Equality in the Economy: The Israeli Economy in the 1980s, Tel Aviv, 1990 (in Hebrew). 7. Pritzkoleit, Wem gehört Deutschland: Eine Chronik von Besitz und Macht, p. 304. 8. Marx already showed this in the second half of the nineteenth century. See Karl Marx, Capital (part 3), in Karl Marx and Frederick Engles, Collected Woks (MECW), 50 vols., New York, 1975–2004, Vol. 37, pp. 310, 541–2. 9. Esther Alexander, The Power of Equality in the Economy, p. 135. 10. The findings of the international institute ISI, Thomson published in the Israeli daily Ha'aretz reveal the following picture. ‘From 1998–2002, Israel was in first place in aerospace sciences and astrophysics. The Hebrew University was ranked first among research institutions in this field, while Tel Aviv University was ranked 49 and the Weizmann Institute of Science was ranked 65. In the field of chemistry, the Weizmann Institute is first among Israeli research institutions. Researchers from the Weizmann Institute are ranked 22 worldwide, compared to Tel Aviv University (77), the Hebrew University (83), Bar-Ilan University (116) and Ben Gurion University (136). Weizmann is ranked first among Israeli research institutes in mathematics (27 worldwide), in immunology (28 worldwide), engineering (8 worldwide), molecular biology (26 worldwide), neuroscience (10 worldwide), computer science (9 worldwide) and others as well. In physics, the Weizmann Institute is also the leader in Israel, though ranked only 52 worldwide, with the other Israeli institutions ranked as follows: Tel Aviv University (96), the Technion (107), the Hebrew University (109), Bar-Ilan University (119) and Ben Gurion University (128). In clinical medicine, the situation is far from ideal. The Weizmann Institute is ranked seventh in the world, with the Technion far behind at 137 and Tel Aviv University ranked 142. In the social sciences, Israeli universities are also in a difficult situation. With respect to the impact of researchers on their fields, all are ranked below the top 100 universities in the world.’ Yuval Dror, ‘Stars in Space, Lame in Medicine’, Ha'aretz, 22 July, 2004. 11. For media reports on Dovrat's business involvement in the company Tecnomatix Technologies, a software company located in Herzliya, see Ha'aretz, 5 January, 2005, Financial Section, pp. C1 and C13; The Marker, 23 February, 2005, pp. 30–1. 12. National Task Force for the Advancement of Education in Israel [Dovrat Commission], National Programme for Education [Dovrat Report], State of Israel, January 2005, p. 54. 13. Ibid., p. 18. 14. Ibid., p. 194. Additional informationNotes on contributorsUri ZilbersheidUri Zilbersheid is a senior lecturer in political philosophy at the Max Stern Academic College of Emek Yezreel. He also teaches political philosophy at the Programme for National Security Studies at the University of Haifa.

This paper seeks to consider games — and more particularly card games and gambling — as an American form of resistance in Thomas Pynchon’s novels. As opposed to agôn, a category of games that Roger Caillois delineates in Man, Play and Games (1958) as “a combat in which equality of chances is artificially created, in order that the adversaries should confront each other under ideal conditions,” alea encompasses games of chance which are “a strict negation of controlled effort, […] efficacious resort to skill, power, and calculation, and self-control; respect for the rules; the desire to test oneself under conditions of equality.” It will be my contention that alea, in Pynchon’s novels, offers the possibility of an alternative world and becomes a necessary mode of resistance in the face of a plenty-flushed adversity which threatens to hold sway over the American continent. For Pynchon’s players, more often than not cheaters and fraudsters, use such games of chance to fulfil their longing for emancipation and flight, at a time in history when the American continent is about to be mapped by the abstractions of colonial companies and Enlightenment science. Gaming clubs — ranging from taverns in Mason & Dixon to casinos and gambling dens in Gravity’s Rainbow (1973), Against the Day (2006), and Inherent Vice (2009) — can be recognized as heterotopian sites where otherwise dispersed groups of people momentarily gather in order to gain freedom from the ruling few. Although the moralism of Puritan ministers sternly reminded their flocks to refrain from wasting their earnings on rash bets, gambling can thus be envisioned as a way to escape from the hyper-productivity expounded by modernity, intersecting with Walter Benjamin’s discourse on the materialist form of gambling within industrial capitalism. Following Gerda Reith’s and Susan Strange’s arguments in The Age of Chance (1999) and Casino Capitalism (1986), I will further argue that, in the new capitalist economy, Pynchon anticipates in his novels the attention of late capitalism to new areas for capitalization, overseeing both the commodification of idleness and the insinuation into the fabric of existence of the same risk assessment strategy as that applied by capitalism.

Books for managers: Casino Capitalism, Susan Strange, Basil Blackwell Ltd, 1986, 207 pages, £7.95 pbk

The authors place reinventing government (REGO) efforts in the context of mayor-council municipalities. After briefly reviewing the emerging body of local government research on reinventing government, they address two principal research questions: First, what are the correlates and extent of REGO actions by managers, mayors, and city councils? Second, what is the nature of REGO interactions among managers, mayors, and councils? Employing two International City Management Association data sets, the authors conclude that although managers may be the prime movers of REGO in U.S. municipalities, they can only accomplish what their community, governmental, and political environments permit.

Across the country, there is wide interest in new ways of doing the public's business. Most of the activity so far, chronicled in books like Osborne and Gaebler's (1992) Reinventing Government and Barzelay and Armajani's Breaking Through Bureaucracy (1992), has been in state and local government. (See also Frederickson, 1992; Roselle, 1992; and Walters, 1992). President Clinton is a member of the movement for new governance, so the new ideas will soon be put to the test in Washington, DC. An Emerging, Unmapped Area As Zhiyong Lan and David Rosenbloom suggest in Administration in Transition? (1992), new governance is more a cluster of ideas and symbols than a rigorous, tested body of thought. New ways of doing the public's business are emerging gradually and unevenly. Furthermore, especially at the national level, most of the advocates for new governance are public policy specialists rather than students of public administration, and they have come to new governance out of frustration about the implementation of policy ideas in their fields. As a consequence, ideas about how to reinvent the federal government are often framed in terms like human service integration, school reform, or Third Wave economic development rather than as cross-cutting ideas about public administration. To provoke a substantive debate between advocates of new governance and traditionalists in public administration, Lan and Rosenbloom present a framework for comparing old and new ideas. They emphasize how agencies operate internally, especially how they deliver services. This emphasis is appropriate because the new governance movement has focused on local and state governments, where services are delivered. As new governance reaches to the federal level, the shape of new governance may change, because in most areas of domestic policy, the federal role is not to deliver services but to provide a legal structure, pay entitlements, and supervise those who deliver services. Reinventing Interdepart-mental, Intergovernmental Rural Policy This comment presents a rough map of the directions that the new governance movement might take at the federal level. It is based on discussions at a roundtable that the National Academy of Public Administration (NAPA) helped to organize in October 1992.(1) NAPA's partner was the little-known but highly regarded federal Rural Development Initiative (RDI). It encompasses State Rural Development Councils in over 30 states and supporting activities in Washington, DC, and elsewhere. As of last October, RDI had been working for over two years to find new ways to address the problems of areas, and its leaders were intensely interested in the ideas of Osborne and others in the new governance movement. RDI stands out from other efforts to redesign governance in two respects. First, RDI deals with all of the issues facing America and thus cuts across virtually every public program and policy. Second, although launched by the federal government, RDI is a collaborative enterprise, involving states, local governments, tribes, the private sector, and numerous federal agencies. Although the RDI effort was limited in many respects, including weak support from the Bush White House, it is an interesting starting point for mapping how new governance might work at the federal level. New governance may take different forms in different geographic areas and for different issues. Rural areas are highly diverse, including chronically poor communities, prosperous resorts, manufacturing towns, timberlands and farm counties. This diversity is one reason why anyone can benefit from thinking about problems. The rural dimension encourages thinking about diversity rather than about generic answers. And one of the central themes of the movement to redesign governance is empowering people to design answers that fit their load situations. Why Reinvent Governance? …

In this chapter, I explore the contribution of Susan Strange’s work to economic geography. The chapter begins by locating her work within the wider field of work on the geographies of money and finance. In particular I emphasize her contribution in two main areas: first, work on the political economy of monetary relations; and second, the centrality of risk and uncertainty within the international financial system. In so doing, the chapter documents how work has been central in demonstrating the importance of a distinctly geographical approach to money and finance. For example, Strange’s work has been vital to the now extensive literature on the role of offshore spaces and place within global finance. The chapter examines how, during the financialized boom of the 2000s, while geographers’ concerns typically moved away from Strange’s research foci, this was not true in cognate social sciences, notably international political economy and heterodox economics that continued to focus on what Strange termed ‘casino capitalism’. I call for Strange’s work to again be placed centrally within work on the geographies of money and finance. I set out how her work is now more important than ever in relation to a number of empirical developments such as financial crises, the reliance on debt finance and profound changes in international monetary relations such as the growing importance of China in the international financial system.

Susan Strange’s phrase ‘Casino Capitalism’ (Strange, 1986) continues to resonate in both academic and policy circles. This fused image signified the rise of a risk culture embedded in the International Political Economy (IPE), most notably in the world of global finance. Strange (1986: 1) wrote: ‘As in a Casino the world of high finance today offers the players a choice of games. Instead of roulette, blackjack, or poker, there is dealing to be done — the foreign exchange market and all its variations, or in bonds, government securities or shares. In all these markets you may place bets on the future by dealing forward and by buying or selling options and all sorts of other recondite financial inventions … Some of the players — banks especially — play with very large stakes.’

I was a lecturer at the Institute for Local Government Studies (INLOGOV) between 1970 and 1975. It was the unofficial staff college for senior officers in local government. It had two sides-development studies and British local government. I was in development studies for no better reason than they advertised the job. My research was on British local government. I had never taken a course in development studies, let alone taught such a course to others. I was a fish out of water among "expats" who were colleagues from the Colonial Civil Service; used to display an effortless superiority over the natives, I fear the expats saw me as a native. I did not fit in. My immediate boss was Ken Pickering who ran the division as if he was still a District Commissioner. The flash point was a patronage appointment to a lecturing post. I protested, politely at first, and suggested we advertise. He refused and told me to mind my own business. I became bolshy and appealed his decision to Henry Maddick, head of INLOGOV. It transpired that Henry agreed with me, although he never said so to my face. The job was advertised. Ken summoned me to his office for some name-calling. I was "a snake in the grass." I was on a two-year contract. He

In 1990, the term seldom, if ever, emerged in everyday discourse, let alone as an organizing concept for the pursuit of administrative reform. By the end of the decade, it was the stuff of New York Times headlines (Steinberg 1997) and concept that permeated discussions of how to improve the design and delivery of public programs. Reinvention's reach extended well beyond the borders of the United States. By the end of the 1990s, Government (Osborne and Gaebler 1992), the best-selling book that did so much to galvanize the movement bearing its name, had been translated into at least 15 different languages (Thompson and Riccucci 1998). One astute observer affirmed that a global revolution in public was clearly under way, much of it along the lines recommended by reinvention proponents (Kettl 1997). Within the United reinvention has sparked much debate within the public administration community, substantial portion of which has appeared on the pages of Public Administration Review. Does the reinvention movement provide appropriate language, principles, and prescriptions to guide officials in their approach to public administration and management? More specifically, does reinvention's commitment to letting mangers manage and to entrepreneurship erode the rule of law and political accountability? Does its emphasis on defining and surveying customers and its effort to infuse public programs with market mechanisms threaten the fabric of citizenship in democracy? These and countless other questions have fueled sharp exchanges among students of governance. In all the debate about reinvention, however, systematic efforts to trace the degree to which the 87,000 units of government in the United States have actually adopted reinvention reforms and the consequences of such adoption have been much less evident. To be sure, some useful case analyses of reform efforts exist (Barzelay and Armajani 1992; Thompson 2000), and others have employed broad survey methodology to probe reinvention's penetration of city-manager governments (Kearney, Feldman, and Scavo 2000). But valuable as these and related studies are, full mapping of the diffusion of reinvention practices to jurisdictions and public agencies has yet to occur. In this regard, the article by Brudney, Hebert, and Wright on Reinventing Government in the American States, which draws on survey of more than 1,200 top administrators in all 50 states, is an important step forward. The authors' focus on state governments is particularly welcome, in part, because the debate about reinvention has arguably devoted disproportionate attention to the federal and the National Performance Review. State governments employ close to five million workers, over two million more than the national government and close to quarter of all civilian public employees. States not only enact and implement their own policies, they also stand at the crossroads of intergovernmental management in the American system of federalism. The fortunes of many important national policies, such as Medicaid, depend heavily on state implementation. States also do much to shape policy and administrative parameters for local governments (where well over 60 percent of civilian government employees work). Reinvention proponents have, for instance, stressed the need to reform human resource (merit) systems. State governments frequently structure rules and policies that determine how easy or difficult it will be for local officials to modify these systems. In their assessment of reinvention in the states, Brudney, Hebert, and Wright reach an important conclusion, namely, that reinvention principles have made only modest headway in penetrating the practices of state governments. They assert, Reinventing government has received wide publicity and prestigious political endorsements, but it appears to be more of ripple than reform wave at the state level (28-29). …

In her extraordinarily prophetic book, Casino Capitalism, Susan Strange paints a bleak picture of the increasing instability of world financial markets. In essence, she explains, world financial markets have become so powerful that the financial tail has begun to wag the governmental and industrial dog. At the time of publication (1986), this view went strongly against the prevailing political and economic orthodoxy. While it now has much more currency than it previously had, at least since the dramatic collapse of the Lira and the Pound within the ERM, in many ways this view has yet to triumph against the orthodoxy.KeywordsCapital ExpenditureBase LoadRegional CompanyFederal Energy Regulatory CommissionPrice TransparencyThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

The editors of this volume have been generous and perhaps a little foolhardy in asking an outsider and dilettante in the subject of International Relations to write this postscript. Yet for its author the request was irresistible. It is a pleasure to be able to praise and honour Susan Strange. She (and Andrew Shonfield) helped me come to terms with the puzzling and important events of 1971 when the United States gave notice to the post-war international (economic) order by suspending the convertibility of the dollar into gold, thereby effectively abdicating their claim to hegemony. Susan Strange impressed me by the unflustered firmness with which she broke into the bastion of an inter-state understanding of international relations at the London School of Economics and Political Science (LSE). She not only coined a term but also took the veil off a myth with her book Casino Capitalism. Throughout, her incorruptible independence has been an inspiration to others.KeywordsMonetary UnionEuropean Monetary UnionWorld OrderMaastricht TreatyInternational Monetary SystemThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Although the “Administrative Reform Program” was initiated by former Premier Lian Chain in 1993, the comprehensive “Government Reinvention” programs which emphasized the notion of entrepreneurial government were proposed and implemented by former Premier Vincent Shiew in 1998, and similar reform strategies and designs have been followed by the DPP administration since 2000. Despite the continuity in reform efforts, full-scale reform assessment based on concrete empirical evidences is still difficult to be found. The proposed study attempts to evaluate the results of government reform in Taiwan's local government by focusing on one major question: Have local governments in Taiwan become “smaller and better”? This question will be addressed by looking at indicators in three areas: changes in the size of local government in terms of human and financial resources, changes in the level of corruption, and changes in citizen's evaluation of the performance of local government. It is argued that the progress of government reform at the local level is slow, and the tentative evaluation show warning signals.