Diverging Capitalisms: Britain, the City of London and Europe (Building a Sustainable Political Economy: SPERI Research & Policy)

This book analyses the changing nature of the British economy and the consequences of Brexit upon its place within the European economic space. The overhang from the global financial crisis, the Eurozone crisis, the political negotiation of prolonged economic downturn and now the spectre of 'Brexit' provide the backdrop for various forms of capitalist restructuring designed to restore competitiveness and prosperity. This re-structuring has clear implications for existing European growth models, the structural imbalances and inequalities which characterise the British economy, the fortunes of the City of London and competing financial districts internationally, and the prospective strategies of progressive politics in this context. Adopting a broadly critical political economy lens - which gives analytical weight to the relationship between economic and political dynamics - the book will draw on the research of eminent scholars to assess divergence in the foundations of economic competitiveness and their social repercussions. Colin Hay is Professor of Political Science in the Centre d'études européennes at Sciences Po, Paris, and the Department of Politics at the University of Sheffield. He is also the Co-Director of the Sheffield Political Economy Research Institute. Daniel Bailey is Post-Doctoral Research Fellow at the University of Manchester having previously worked at the Sheffield Political Economy Research Institute and the University of York.-- Provided by publisher Foreword 6 Acknowledgements 8 Contents 9 Contributors 11 List of Tables 12 Chapter 1 Introduction: Brexit and European Capitalism—A Parting of the Waves? 13 References 26 Chapter 2 After Brexit: The Past and Future of the Anglo-Liberal Model 29 Introduction 29 Empire and Decline: The Peculiarities of the Anglo-Liberal Model 31 Models Old and New 35 The Trajectory of British Capitalism 1945–2017 37 1942–1956, The Relaunching of the UK Model 37 1956–1992, The Crisis of the UK Model 38 1992–2016, The Financial Growth Model 41 Europe and America 45 The 2008 Financial Crash and Brexit 48 References 53 Chapter 3 “Pragmatic Adaptation” and the Future of the City of London: Between Globalisation and Brexit 55 Introduction 55 Pragmatic Adaptation in Theory 56 A Global City: How Does Globalisation Affect the City of London 63 Pragmatic Adaptation and Brexit: Its Beginning to Look a Lot like Brexit! 72 Conclusion: The Future of the Cityof London Between Globalisation and Brexit 77 References 79 Chapter 4 The Limits of the City’s Structural Power: The City’s Offshore Interests and the Brexit Referendum 84 Introduction 84 The Structural Power of the City and the City’s Offshore Currency Interests: A History 89 After the Crash: Where Next? 92 The Eurozone Crisis and the Path to the Referendum 97 Conclusions 103 References 105 Chapter 5 European Union Financial Regulation, Banking Union, Capital Markets Union and the UK 109 Introduction 109 Member States in the EU Policy Process 110 A Typology of Roles 111 The Domestic Process of National Preference Formation 113 The Sources of Member States Influence 113 Post-crisis EU Financial Regulation 114 Banking Union 119 The Building of CMU 122 Brexit and Finance 125 Conclusion 127 References 129 Chapter 6 Integration and Disintegration: Two-Level Games in the EU 134 Integration and Disintegration in Post-crisis Europe 134 Instrumental and Normative Two-Level Games 137 The Ins and Outs of Two-Level Games 140 The Fiscal Compact 141 The European Stability Mechanism 145 The Banking Union 148 Concluding Remarks 152 References 154 Chapter 7 The UK’s Growth Model, Business Strategy and Brexit 157 Introduction 157 The UK’s Growth Model and the European Single Market 159 British Business Strategy and the State 161 The CBI, Business Strategy and EU Employment Policy 164 The City and Capital Markets Union 166 British Business, the UK’s Growth Model and the Political Economy of Brexit 170 Conclusion 174 References 175 Chapter 8 The Bed You Made: Social Democracy and Industrial Policy in the EU 179 Introduction 179 Through the Competition Glass: EU Crisis Management Revisited 182 Towards a Social Democratic Vision of Industrial Policy? 185 Industrial Renaissance Through Internal Devaluation 187 Internal Devaluation Through the Labour Market 189 The Competition-Competitiveness Nexus in Internal Devaluation 190 Putting ‘the Social’ Back into Competitiveness? 192 Concluding Reflections 197 References 198 Chapter 9 Unusual Bedfellows? The IMF, Tackling Inequality and Social Democratic Policy Renewal 202 Introduction: Inequality, Nationalism and Social Democratic Policy Space 202 The Ends of Social Democracy: Tackling Inequality and the Bretton Woods Order 206 Austerity and All that 208 Social Democracy and Methodological Nationalism: The French Example 210 The Post-crash IMF and the Contingent Expansion of Policy Space 214 The IMF, Fiscal Space and Tackling Inequality 216 Conclusion 220 References 222 Index 227 This book analyses the changing nature of the British economy and the consequences of Brexit upon its place within the European economic space. The overhang from the global financial crisis, the Eurozone crisis, the political negotiation of prolonged economic downturn and now the spectre of 'Brexit' provide the backdrop for various forms of capitalist restructuring designed to restore competitiveness and prosperity. This re-structuring has clear implications for existing European growth models, the structural imbalances and inequalities which characterise the British economy, the fortunes of the City of London and competing financial districts internationally, and the prospective strategies of progressive politics in this context. Adopting a broadly critical political economy lens - which gives analytical weight to the relationship between economic and political dynamics - the book will draw on the research of eminent scholars to assess divergence in the foundations of economic competitiveness and their social repercussions. Colin Hay is Professor of Political Science in the Centre d'études européennes at Sciences Po, Paris, and the Department of Politics at the University of Sheffield. He is also the Co-Director of the Sheffield Political Economy Research Institute. Daniel Bailey is Post-Doctoral Research Fellow at the University of Manchester having previously worked at the Sheffield Political Economy Research Institute and the University of York.-- Provided by publisher Front Matter ....Pages i-xiii Introduction: Brexit and European Capitalism—A Parting of the Waves? (Colin Hay, Daniel Bailey)....Pages 1-16 After Brexit: The Past and Future of the Anglo-Liberal Model (Andrew Gamble)....Pages 17-42 “Pragmatic Adaptation” and the Future of the City of London: Between Globalisation and Brexit (Leila Simona Talani)....Pages 43-71 The Limits of the City’s Structural Power: The City’s Offshore Interests and the Brexit Referendum (Helen Thompson)....Pages 73-97 European Union Financial Regulation, Banking Union, Capital Markets Union and the UK (Lucia Quaglia)....Pages 99-123 Integration and Disintegration: Two-Level Games in the EU (Waltraud Schelkle)....Pages 125-147 The UK’s Growth Model, Business Strategy and Brexit (Scott Lavery)....Pages 149-170 The Bed You Made: Social Democracy and Industrial Policy in the EU (Angela Wigger, Laura Horn)....Pages 171-193 Unusual Bedfellows? The IMF, Tackling Inequality and Social Democratic Policy Renewal (Ben Clift)....Pages 195-219 Back Matter ....Pages 221-224