Institutional investors and the reproduction of neoliberalism

Abstract

Despite their increasing prominence within the contemporary financial system, the collective impact of institutional investors (i.e. mutual, pension and hedge funds) and, in particular, their role in the reproduction of neoliberalism has received little attention among scholars. The argument of this article is that a focus on institutional investors is necessary in order to develop a more complete understanding of the shift towards neoliberal social relations of production. More precisely, it argues that institutional investors possess specific characteristics which are serving to reproduce neoliberal restructuring in both coercive and consensual ways. In terms of the former, it argues that the rise of institutional investors has led to a centralization of investment decision making and to a situation in which neoliberalism is being reproduced in a coercive fashion. In terms of consent, this article argues that the specific characteristics of institutional investors are serving to link a broad range of interests in civil society to those of financial institutions. Taken as whole, this analysis contributes to the growing international relations scholarship which identifies the increasing power of non-state actors in the international system and their role in the contemporary process of restructuring.