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Transcript

Flows of Capital

IS221 Week SIX Lecture, 2024Dr Nazanin Shahrokni

Song of the Week

Merci Julianne Mazuy! https://youtu.be/ofwI7yfjvUw?si=mrxB3OvtCjzL05pW Lyrics: https://lyricstranslate.com/en/les-nouveaux-partisans-new-partisans.html

Gendering the Market

The State & SEZa in Rwanda

The Social Embeddedness of the Market

Spiderweb Capitalism: Markets Constructed by The People

Special Economic Zones: Markets' Impact on The People

Markets are socially embedded

This perspective challenges the idea that markets are purely driven by supply and demand, highlighting how factors like trust, power dynamics, laws, and social networks affect economic behavior and outcomes. Essentially, markets are part of broader social contexts and cannot be fully understood without considering the social forces that shape them.

Spider web capitalism is a system which features a complex web of subsidiaries that are interconnected across multiple sovereignties and are virtually impossible to identify. Offshore financial centers have enabled both economic and po liti cal elites— who in less developed economies are often one and the same—to secure exclusive and quasi- legal opportunities for the private accumulation of wealth.

By analyzing how corruption actually facilitates economic transactions in frontier markets and how that capital gets cleaned up in offshore structures and as it graduates to the public on global stock exchanges, I show how these two opposing economies (legal/illegal), when woven together through a complicated chain of shell companies, ultimately end up as one unified system of capitalism.

A frontier market refers to a type of emerging economy that is smaller, less developed, and less accessible than traditional emerging markets but still shows potential for growth. These markets are often in countries with less stable political and economic environments, lower liquidity, and less mature financial systems. However, they attract investors looking for high returns due to their potential for rapid economic expansion.

The big spiders are the UHNWIs who control the web. But those spiders use “agents” or “fixers” to cover close connections to transactions that would be considered “dirty” or corrupt. Those agents are smaller spiders who provide the connective silk between massive global webs and smaller ones on new frontiers. The smaller spiders are high- net worth individuals (HNWIs) who are highly compen-sated to carry out the groundwork in building out these capital webs on behalf of UHNWIs.

SPIDERWEB CAPITALISM

GIVING FACE TO GLOBAL CAPITALISM: WHO CONSTRUCTS THE MARKET?

Transnational business masculinity

SPECIAL ECONOMIC ZONES(SEZs)

Definition

The zone, demarcated geographic areas contained within a country’s national governed by a differential set of rules, is given a business environment that is more liberal from a policy perspective & more effective from an administrative perspective than that of the national territory

Context

The rapid growth of SEZs & their success in contributing to export-led growth in regions like East Asia, is due in part to an unprecedented globalization of trade and investment that took place since the 1970s and accelerated during the 1990s and 2000s. This growth was enabled by the vertical and spatial fragmentation of manufacturing into highly integrated “global production networks,” particularly in light manufacturing such as apparel

Objectives

1. To attract foreign direct investment (FDI) 2. To serve as “pressure valves” to alleviate large-scale unemployment 3. In support of a wider economic reform strategy 4. As experimental laboratories for the application of new policies and approaches

Cons

> Formation of “white elephants,” or zones that largely have resulted in an industry taking advantage of tax breaks without producing substantial employment or export earnings. > Many have been successful in attracting investment and creating employment in the short term, but have failed to remain sustainable when labor costs have risen for example. > Zones, by and large, have failed to extend benefits outside their enclaves or to contribute to upgrading of skills and the production base.

Success factors

1. make economic zones successful in attracting firms that create jobs (the role of government) 2. ensure that zones are economically sustainable (critical to this process is the degree of integration of zones in the domestic economy) 3. ensure that zones are sustainable from an institutional, social, and environmental perspective (inclusion on what terms?)

GIVING FACE TO GLOBAL CAPITALISM: WHO BENEFITS IN THE MARKET?

Gender inSEZs

Feminisation of Labour

The trope of productive femininity (cheap and docile)

Defeminisation of Labour

A number of reasons have been identified in the literature for this defeminization, including industrial upgrading, closing of the gender wage gap, cyclical factors such as recessions, and outsourcing to home-based workers, which leads to statistical defeminization.

Mixed Blessings

Women’s entry into export-oriented manufacturing has been described as a double-edged and contradictory phenomenon, in which some structures of gender inequality have eroded even as others have been constructed anew.

Terms of Inclusion?

> Flexibility of Employment > Working Conditions

GIVING FACE TO GLOBAL CAPITALISM: WHO BENEFITS IN THE MARKET?

Market Construction

Market Implications

Gender

Productive Femininity

Transnational Business Masculinity

SEZs

Offshore holding companies

The State

THE SOCIAL EMBEDDEDNESS OF THE MARKET

See you next week!