Everyday Legitimacy and International Financial Orders: a brief summary

Leonard Seabrooke’s ‘Everyday Legitimacy and International Financial Orders: The Social Sources of Imperialism and Hegemony in Global Finance’ (2007)

This article draws attention to the influencing role that non-elite players have on a state’s global financial power. Seabrooke places importance on ‘everyday practices’ and the way they can help to determine a state’s financial policy agenda. The article demonstrates this by focusing on the last two periods of intensive financial globalisation: English imperialism in the late nineteenth and early twentieth centuries, and US hegemony in the late twentieth century. It focuses on each country’s ‘financial reform nexus’- the credit, tax and property policies which have a significant impact on the everyday lives of citizens from LGIs (low income groups). A state granting its citizens greater access to credit and wealth is beneficial as it leads to more capital being ‘recycled through the domestic system’, thus improving ‘their international financial capacity to export and attract capital’, and has a ‘regulatory and normative influence on its international financial order’ (p1).

Seabrooke pays particular attention to the agency of non-elites’ changing intersubjective understandings. He links three social mechanisms in order to demonstrate how citizens’ preferences on a ground level work up through the domestic political system which in turn makes an impact on global financial relations. He describes how everyday perceptions of the financial reform nexus (expressed through protest and other forms of activism) leads to a state redistributing political and economic assets and access, which lower income groups will either agree or disagree with. The state will then attempt to spread economic social norms in an attempt to influence these citizens’ perceptions of the economy. The way that these social mechanisms play out is what shapes the country’s influence on the international financial order.

In the case of England, the government’s failure to improve lower income citizens’ financial mobility meant that the state struggled to retain its international financial order as its increasingly concentrated and narrow pool of capital left the nation’s financial power fragile to shock on the global stage.

In the case of the US, whilst the nation’s economic inequality was not improved, unlike in England, the agency of advocacy groups and everyday actors was seen to improve hand-in-hand with changing expectations about rights and entitlements within the economy. As well as this, the US’s emphasis on creditworthiness through domestic financial reform towards the end of the twentieth century, shaped the state’s hegemonic influence over the global financial order by encouraging ‘the intensification of the international institutionalisation of surveillance for creditworthiness’ (p11), upholding its hegemonic power. However, the US’s success declined as its heavy promotion of entrepreneurial values took a hit on the lowest income citizens. The regressive tax reforms of Bush’s administration, among other policies during the early twenty-first century, have taken place alongside the state’s shift from hegemonic power to imperialist.  

The cases of England and the US highlight the agency that non-elite players possess in transforming their social and economic environments. This in turn influences the state’s hegemonic or imperialist influence on the international financial order. This suggests that the understanding of the financial needs of low income groups is relevant for helping to ensure long-term global financial power.