The Political Economy of International Capital Mobility

This book considers the distinction between the spatial and the functional mobility of capital, and uses this to enhance explanations of real-world financial events and to depoliticize the rentier interests, which lie at the heart of crisis moments.

International capital mobility is a fundamental aspect of the political economy of globalization, and this study develops a new framework for understanding this crucial phenomenon. Matthew Watson draws a distinction between the spatial and the functional mobility of capital, allowing fresh insights into existing work on the subject whilst repoliticizing the very idea of capital being ‘in motion’. The dynamics of capital mobility and the patterns of risk exposure are illustrated through four cases: the Asian financial crisis; the Tobin tax; the Enron affair; and the proposed consolidation of the European stock market.

MATTHEW WATSON is Associate Professor (Reader) in Political Economy at the University of Warwick.

“Matthew Watson’s book reaches beyond questions of international financial architecture, or critiques of homo economicus, to open up the black box of how financial markets actually work. This book is essential reading for all who wish to understand how processes of financial innovation, liberalisation, and socialisation are transforming the global financial order and introducing new forms of risk into our societies.”–Leonard Seabrooke, International Center for Business and Politics, Copenhagen Business School, Denmark

Introduction * Controlling, Creating and Cashing-In on Risk: The Essence of International Financial Markets * Spatial Versus Functional Mobility of Capital: A Framework for Analysis * The Intellectual Conditions for Recent Increases in Capital Mobility * The Historical Conditions for Recent Increases in Capital Mobility * Capital Mobility, Exchange Rate Instability and Contagious Credit Crunches: The Causes and The Spread of The Asian Financial Crisis * Currency Market Transactions and The Desire for Progressive Regulation: Capital Mobility and Tobin Tax Avoidance * Stock Price Psychosis and The Pathology of a Corporate Meltdown: The Collapse of Enron * Capital Mobility in an Age of Shareholder Value: The Battle for Control of the London Stock Exchange * Conclusion