Sticky Power: Global Financial Networks in the World Economy

Money is a representation of and medium for decentralized networks of social trust, but its production is controlled by centralized networks of firms, places, and governments. Sticky Power introduces a novel conceptual lens, Global Financial Networks, to cast new light on the geography, history, politics, and sociology of finance from the Middle Ages to the global financial crisis and beyond. It shows that the power of finance is inherently sticky, and that a recognition of this durability calls for a new approach to reforming finance, less reactively focused on regulation and more proactively focused on building new institutional systems with a long-term sticky power of their own.

Format: Hardback
Length: 400 pages
Publication date: 26 May 2022
Publisher: Oxford University Press

The nature of money is a complex and paradoxical concept that plays a central role in modern civilization. While it is often seen as a representation of and medium for decentralized networks of social trust, the production of money is actually controlled by highly centralized networks of firms, places, and governments. This centralization creates a scarcity of money, as there is never enough to meet the demands of all individuals and businesses. Moreover, the creation of money, as credit, is based on expectations, making it an instrument for human agency to shape the future.

However, the financial systems that produce money are deeply rooted in the past and have perpetuated themselves through history. Sticky Power, a book by Haberly and Wójcik, seeks to deepen our understanding of the paradox of money by introducing a novel conceptual lens, Global Financial Networks. Through this lens, the authors argue that the power of finance is inherently sticky, meaning that seemingly new innovations such as offshore finance actually date back centuries, and global financial networks more broadly have adapted to the rise and fall of empires and the development of new technologies while changing surprisingly little in their basic character.

The book shows that global financial networks have evolved over time, but they have done so in a way that maintains their core principles and structures. These networks have adapted to the changing political and economic landscapes, but they have remained largely unchanged in their basic nature. For example, the book discusses the development of merchant banking in the Middle Ages, which was a key precursor to the modern financial system. Merchant banks played a crucial role in financing trade and commerce, and they were often associated with the rise and fall of empires. However, the basic principles of merchant banking, such as the use of credit and the accumulation of wealth, have remained unchanged over centuries.

Similarly, the book discusses the rise and fall of the Bretton Woods system of international finance in the 1940s and 1950s. The Bretton Woods system was a set of institutions and agreements that governed international trade and finance, and it was designed to promote stability and growth. However, the system was eventually replaced by a more decentralized system of financial markets, such as the International Monetary Fund (IMF) and the World Bank. While the new system was more flexible and adaptable, it also lacked the stability and predictability of the Bretton Woods system.

The authors argue that a recognition of the mechanics of this durability calls for a new approach to reforming finance. Rather than focusing on regulation and trying to prevent crises, they suggest that we should focus on building new institutional systems with a long-term sticky power of their own. This means creating financial systems that are more resilient to shocks and disruptions, and that are better able to adapt to changing economic and political conditions.

One example of this approach is the development of sustainable finance, which aims to finance projects and businesses that are environmentally and socially responsible. Sustainable finance has gained traction in recent years, as investors and policymakers increasingly recognize the importance of investing in sustainable businesses and projects. By creating new financial instruments and markets that prioritize sustainability, we can create a more resilient and sustainable financial system that is better able to adapt to the challenges of the 21st century.

Another example of this approach is the development of financial technology (fintech), which has revolutionized the way we interact with and use money. Fintech companies have created new financial instruments and platforms that are more efficient, accessible, and affordable, and they have disrupted traditional financial institutions. By creating new financial systems that are more open and inclusive, we can create a more equitable and sustainable financial system that is better able to meet the needs of all individuals and businesses.

In conclusion, the nature of money is a complex and paradoxical concept that plays a central role
role in modern civilization. While it is often seen as a representation of and medium for decentralized networks of social trust, the production of money is actually controlled by highly centralized networks of firms, places, and governments. Sticky Power seeks to deepen our understanding of the paradox of money by introducing a novel conceptual lens, Global Financial Networks, to cast new light on the geography, history, politics, and sociology of finance from the Middle Ages to the global financial crisis and beyond. The book shows that the power of finance is inherently sticky, meaning that seemingly new innovations such as offshore finance actually date back centuries, and global financial networks more broadly have adapted to the rise
to the rise and fall of empires and the development of new technologies while changing surprisingly little in their basic character. By recognizing the mechanics of this durability, we can create new institutional systems with a long-term sticky power of their own that are more resilient, sustainable, and equitable. This will require a shift in our approach to reforming finance, away from a focus on regulation and towards a more proactive focus on building new institutional systems with a long-term sticky power of their own.

Weight: 718g
Dimension: 242 x 163 x 26 (mm)
ISBN-13: 9780198870982