Over the past 15 years we have witnessed a steady stream of scholarship on the financialization of global capitalism, and relatedly the growth of the financial sector in critical nodes of the world economy. For criminologists interested in the crimes of the powerful, the shifting locus of global economic power to financialized market and asset structures means that a growing number of crimes that deplete ecologies, drain wealth from the Global South, and undermine democratic governance systems, will be concocted from the suites of family offices, hedge funds, investment banks, and the retinue of allied industries, sometimes referred to under the umbrella of financial and advanced business services (FABS). Making sense of global finance, therefore, is an urgent criminological imperative (see, for example, Barak 2012). Given that the world of high finance is a secretive society which conducts its business in coded language, having a serious Marxist theoretician who is also fluent in this financial code is the great strength of The City: London and the Global Power of Finance, written by Dr Tony Norfield. His resume includes over 20 years of experience in European banking.
Norfield argues in The City that the global power of finance rests in the way significant volumes of capital today are invested through complex corporate and financial structures, often through the mediation of investment banks, equity funds, hedge funds, family offices, pension funds, and insurers. This means that financial centres and the FABS institutions that conglomerate in them, are in a prime position to be global market makers. Norfield observes in this regard:
The capitalist laws of the market are only modified, not abolished, by the financial system … The key point for now is that the extra power in the world economy that the financial system provides is made available mostly to those with privileged access to finance: the corporations and states of the richer, more powerful countries. This is an important means by which the major powers maintain their economic privileges: they can use financial markets to control world resources and siphon off the value created elsewhere. (144)
It is Norfield’s contention that financialization is not a conjunctural product of certain policy choices in the 1980s, that has unleashed a parasitic phase of financial growth. Instead, he argues that financialization is the manner in which advanced capitalism organizes its interests, which, of course, gives the FABS sector a lynchpin role. Expounding on this process, Norfield notes: “Rather than being like a cancer that surgery might remove to restore the capitalist body to health, it is more like a central nervous system: without finance, modern capitalism is dead” (20). Registering this reality, his analysis centres on the financial system’s integral function to the healthy operation of capitalism.
This theoretical framing sets the stage for the central argument in Norfield’s book, that a declining British capitalism has been able to reorganize itself in the aftermath of World War II, by specializing in the international intermediation of global financialization using the City of London and its offshore estuaries. This occurred first through the Eurodollar and Eurobond markets, where UK banks were able to deal in US currency accounts and bonds, outside the regulatory control of the Bank of England and the strict regulation that emerged in the United States following the great depression—a process which he contends was done both with Bank of England and UK government’s approval.
As a result, Norfield argues,
British capitalism was no longer the lender to the world that it had been in the period up to the First World War. Instead, the City’s new markets were based upon the development of a new role: that of an intermediary … These boosted the earnings of the City, especially from overseas. (119)
This, in effect, positioned the UK to increasingly specialize in financial and advanced business services during a period when US global hegemony was helping to initiate a new phase in extensive and intensive capitalist globalization. Norfield asserts by “1975, the UK was by far the biggest international banking centre, with 27 per cent of global business, twice the size of the next biggest, the US. Japan was only in seventh place among the major countries, with less than 5 per cent of the market” (121).
Later it was the “big bang” of the 1980s which saw a period of deregulation modernize and internationalize the UK’s financial sector, further entrenching its national and international position. In this respect Norfield argues: “Far from the Thatcher government being ‘pro-City’ and backing a clique of wealthy financiers, its objective was to promote the City as an expanding business area for British capitalism as whole” (106).
The UK’s growth as an international financial centre has brought, Norfield contends, knock-on benefits to the wider British political economy. He argues that the financial sector’s international earnings help, for instance, to counterbalance the UK’s ongoing trade deficit in goods. Additionally, Norfield contends, the City of London readily facilitates financing for any balance of payments shortfall, typically at low expense. These benefits extend to UK-based firms, who are enabled, through access to funds in a global financial centre, to extend their influence and operations globally.
This indicates that those capitalist centres which understand and control the financial codes of contemporary capitalism, are in a preeminent position to use their economic, cultural and political power, to extract wealth globally through complex financial engineering. Norfield characterizes this as contemporary financialized imperialism in action. He notes:
Under [contemporary] imperialism … [w]hile poor countries also have banks, and while their companies may also issue bonds and equities, their ability to gain privileges by way of the global financial market is equally poor. This is because they have to operate in a system run by the major powers, one in which they take the prices offered to them and have little say over the terms of the deal. (22)
In this sense while Norfield’s volume is primarily one which critically examines financialization and the role which centres such as London play in engineering new sites of global power. His arguments provide a provocative basis for thinking about how these dynamics are among the most virulent frontiers in which the ruling classes on a global scale extract wealth using means that stray far beyond what even by their own standards is normatively acceptable. Therefore, The City is an important contribution to the general literature on financialization, with a uniquely sophisticated analysis of the role played by the City of London. But it also offers significant prompts that can help advance criminological thinking about the crimes of the powerful taking place through global financial structures that are set up and operated from major international centres such as London.