Commentary on Kvangraven and Styve, ‘The Hierarchies of Global Finance’

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Ingrid Harold Kvangraven and Maria Dyveke Styve have written a wonderful paper. It was written in the spirit of cross-field dialogue. One achievement of its anti-disciplinary agenda is spotlighting existing points of scholarly engagement that could be given further scope to flourish.

‘Hierarchies of Global Finance’ can be read productively alongside Kvangraven and her co-authors’ recent intervention that introduced the concept of ‘international financial subordination’ (Alami et al. 2023) and consolidated a research agenda around three heterodox traditions: dependency theory, post-Keynesian economics, and Marxism. That intellectual DNA is apparent in the anti-disciplinary agenda presented in their paper. In economic anthropology there is a growing awareness and shared concerned with how, in developing and emerging economies, financial subordination stretches far beyond periodic crises (see Weiss 2020). As Alami et al. (2023, p. 1361) note, ‘it shapes day-to-day economic relations in ways that have far-reaching implications for development prospects, from policymaking to industrial development, patterns of urban growth and spatial restructuring, class relations and distributional conflicts, as well as value transfers within and across borders.’ Like the more targeted analysis of ‘hierarchies of global finance’ presented here, the analysis of international financial subordination finds that persistent crises and inequitable power dynamics that constitute financialisation in developing economies are a feature rather than a bug — and that our scholarship should focus on the set of processes and relations that maintain that subordinate position.

To extend that agenda through exemplification — that is, developing robust frameworks to understand the historical and structural determinants of the unequal impacts of financialisation — Kvangraven and Styve seek to ground their critique developed through the lens of subordination. In this essay, they focus on the South African experience of incorporation into global, and specifically British, financial markets beginning in the 19th century, and persisting into the post-apartheid mining economy. And they do this with a great sense of intellectual generosity, by carefully introducing readers to conventional approaches in neoclassical economics since the marginal revolution in economics, presenting the blind-spots in that approach, as well as surveying literature in economic sociology and anthropology that offer what the authors call a ‘relational’ approach. The critique of methodological individualism and quantitative cross-country comparison resonates strongly with similar critiques lodged by anthropologists (see Kar and Schuster 2016). However, these critiques have been limited by their specialised language; they are, for better or worse, addressing like-minded anthropologists. Kvangraven and Styve’s mission of ‘breaking down disciplinary boundaries’ is accomplished by writing that does not presume deep specialised knowledge in any of these specific scholarly approaches. The article invites a wide range of readers into the conversation rather than erecting walls around disciplinary silos with the terminology and assumptions of a reader already steeped in ‘the canon.’

By way of extending that cross-disciplinary dialogue, I now turn to two points of tension that I see in the paper. Rather than a criticism, I suggest that this tension is productive as it can help us identify both our shared and divergent research frameworks. In the places where we chafe most uncomfortably, the debate can be most rewarding.

Kvagraven and Styve argue that drawing overaching contributions from the social sciences can offer a more robust understanding the role of finance from a global perspective. These are (1) a structural approach that puts power and history at the centre of the analysis and (2) social relations that centre complex expressions of agency, while at the same time attending to local configurations of racial and gendered exclusion. However, I suggest that it is worth lingering on the ‘global perspective’ that sets that agenda, since I see it as the conceptual hinge-point between a critique of neoclassical economics on the one hand, and a focus on durable hierarchies that are revealed by heterodox economics on the other hand. The analytic of ‘hierarchies of global finance’ is implicitly a shot across the bow of the axiomatic assumptions that construct the unit of analysis for neoclassical economics, and the methods used to generate and test hypotheses about economic behaviour. As Kvangraven and Styve go on to show, marginalist economics relies on the individual rational actor and/or cross-national regressions (where nations are presumed to behave like individual rational actors). So even when we see a ‘flourishing of empirical papers attempting to measure the “threshold” at which finance remains good for growth’ (p. 5) the unit of analysis remains the national economy, which misses the dynamics of power — especially white supremacy, gendered domination, and so on — at work within and across national boundaries.

From the vantage point of anthropology, this insight raises further questions. First, Kvangraven and Styve (2023, p. 5) note that many studies that rely on neoclassical methodologies and assumptions do not have a satisfactory theory to explain socio-economic phenomenon. This is an astute observation. However, this resolves one set of problems while leaving the wider question of developing satisfactory theories unsettled. I worry that this move towards an omnivorous diet of quantitative and qualitative data risks reinforcing a peculiar sort of labour exploitation within our academic institutions. That is, that fieldwork-based disciplines (whether ethnographic or archival/historical) do the hard work of documenting the complex ‘bottom-up’ social categories that are then fed into macro-structural analysis that provides the ‘satisfactory theory.’ Academic prestige tends to flow towards the latter.

Kvagraven and Styve acknowledge the methodological attention that historians and anthropologists pay to social relations. In anthropology and sociology, this is generally referred to this as ‘grounded theory’ (e.g., Small 2009, 2021). In relation to finance, it aims to carefully trace out the processes that ‘generate’ financial markets (Bear et al. 2015). These grounded theories are then read by mainstream economists and political scientists as simply ‘untheorised’ empirical description. Kvangraven and Styve seek to remedy this through an anti-disciplinary approach. But because grounded theory is not legible as satisfactory theory on its own terms, the insights from ethno-historical fieldwork become the case studies that feed into the work of other disciplines but rarely carry their theoretical contributions along with them as they travel.

Local analyses of financialisation and providing a detailed account of gendered and racialised economic practices, as Kvagraven and Styve so successfully do, leaves the question of satisfactory theory unresolved. As Carla Freeman, a feminist economic anthropologist researching the offshoring of ‘pink collar’ labour from the United States to the Caribbean in the late 1990s, warned us in her critique of globalisation that this is a wider problem for feminist theories of capitalism. Nearly two decades ago she was already alerting globalisation scholars to power imbalances in knowledge production when the theoretical questions of class, race and gender are misinterpreted as hyper-specific local social relations rather than macro-theories themselves: ‘the turn to gender on local terrain has inadvertently been the slippery slope on which the equation between local and feminine gets reinscribed’ (Freeman 2001, p. 1012). Put more sharply, an anti-disciplinary approach might, in practice, paper over the disciplinary division of labour that produces ‘satisfactory theory’ in heterodox economics and ‘local case studies’ in fieldwork-based disciplines.

The question raised by the anti-disciplinary approach advanced by this paper, then, is how self-aware heterodox economics can be about the hierarchies of knowledge production about finance, and not just the hierarchies of global finance. Are there ways to engage not just the empirical account based on fieldwork and its attention to local social relations and expressions of agency, but also the explanatory frameworks such as anthropological theories of value? This is a distinct analytic approach from the local concepts generated out of ethnographic observation, which Kvangraven and Styve (2023, p. 14) very helpfully survey (e.g., householding, obligation and saving). For instance, while Julia Elyachar’s ground breaking monograph Markets of Dispossession (2005) shows how financial markets generally reinforce class, race and gender hierarchies, as Kvangraven and Styve cite in their paper, her macro-structural theoretical argument draws on anthropological theories of value to account for ‘the conceptual transformation [by social scientists] of the social networks among the poor into an economic resource for capital entails … a process of dispossession. A vast amount of labour is involved in persuading people that they should embrace markets of dispossession’ (Elyachar 2005, p. 10). Elyachar’s ethnography not only describes the local social relations of Egyptian micro-entrepreneurs, but also the analytical frameworks of ‘anthropologists, sociologists, economists, and the labour of officials and clerks of states and international organisations’ (Elyachar 2005, p. 10) that do the work of capturing and converting the social relations of the poor as a resource for capital — a novel theoretical contribution that she calls markets of dispossession. These theoretical contributions fall away when her research is re-cast as a description of ‘social relations’ limited to the Egyptian case.

Kvangraven and Styve astutely observe that fieldwork-based disciplines are relegated to irrelevance under the paradigm of neoclassical economics’ methodological individualism and black-boxing by cross-country regressions (p. 5). However, when the anti-disciplinary agenda reframes ethnography as ‘alternative insights’ that contribute to analytical holism in heterodox economics, their theoretical contributions rarely travel with the empirical description. To put it more provocatively, I suggest that we need to bring a critical political economy perspective, and its attention to hierarchy and power, to knowledge-production within the anti-disciplinary agenda itself.

A second question arises from centring on the implications of taking that ‘global’ perspective — seeing finance as part of a capitalist system of accumulation enabled by profit extraction and dominated by capital, which is itself a system based on specific historical forms of coercion. I suggest that this would invite further generative dialogue between anthropology and heterodox economics about criteria for satisfactory theories in this anti-disciplinary agenda. One of the most important contributions of Kvangraven and Styve’s (2023, p. 11) paper is its claim that, in the peripheries ‘dependence, subordination, and imperialism are particularly important’. Though the paper focuses specifically on South Africa, the claim can and should be read as going beyond finance in the peripheries. Could ‘Hierarchies of Global Finance’ challenge the assumption that economic growth has been largely successful in the world’s centres? This need not be read as a spatial dynamic, where Kvangraven and Styve very aptly show that South Africa is characterised by internal hierarchies that ally a small minority who benefited from conglomerate ownership and control of the mining sector with London as a financial hub. The paper’s normative conclusions are excellent — that we should think about the policy implications of the push for financial inclusion led by mainstream economics. But I wonder if Kvangraven and Styve might expand their framework by drawing on anthropological theories of knowledge production such as Elyachar’s markets of dispossession to consider not just how peripheral economies are incorporated into dominant financial systems, with disastrous impacts on agents and communities, but also to critically re-evaluate seemingly ‘functional’ financial arrangements (e.g., the City of London). The most radical claim of the paper may in fact be that we need a different language than inequality to fully address these hierarchies. If I read their argument correctly, it is not about recalibrating or equalising these global flows of wealth, but rather dismantling them altogether.

Acknowledgements

[I/we] would like to use this opportunity to acknowledge and thank the reviewers who reviewed this article and aided in its publication.

Disclosure Statement

No potential conflict of interest was reported by the author(s).