Money and Finance

'Susan Strange saw the financial crisis coming, Your Majesty': The Case for the LSE's Great Global Political Economist

Dyer, Nat. Real-World Economic Review 98 (2021): 92-111.

This paper makes three arguments. First, that Susan Strange (1923-1998), who founded the field of international political economy in the UK, is one of the principal thinkers who foresaw multiple aspects of the global financial crisis of 2008 and its aftermath. She deserves credit for her prescience but has been overlooked. Second, that Strange's insight was not a series of lucky guesses but emerged from a rich and consistent theoretical and philosophical understanding of 'the political economy of the planet.' Third, that Strange should interest economists today and be thought of as a 'worldly philosopher' – after Heilbroner's term for the first political economists – rather than a figure in a sub-discipline of international relations. With the centenary of her birth in 2023, the time is ripe to reassess this great global political economist of the London School of Economics. It is time to put Strange back into the story we tell about financial globalisation and its discontents.

Keywords: Money and Finance

Contributor(s): Nat Dyer
Keywords: Money and Finance, Strange-Influenced Works, 2020's
Source and Medium: Journal Article

Year of Publication: 2021

Globalization and the Rise of Integrated World Society: Deterritorialization, Structural-Power, and the Endogenization of International Society.

Babones, Salvatore, John H.S. Aberg. International Theory 11, no. 3 (2019): 293-317.

There is a widespread feeling that globalization represents a major system change that has or should have brought world society to the forefront of international relations theory. Nonetheless, world society remains an amorphous and undertheorized concept, and its potential role in shaping the structure of the international society of states has scarcely been raised. We build on Buzan's (2018, 2) master concept of 'integrated' world society ('a label to describe the merger of world and interstate society') to locate the integration of world society in the globalization of social networks. Following the advice of Buzan (2001) and Williams (2014), we use conceptual frameworks from international political economy to systematically explore the structure of integrated world society along six dimensions derived from Mann (1986) and Strange (1988): military/security, political, economic/production, credit, knowledge, and ideological. Our empirical survey suggests that, on each of these dimensions, power has centralized as it has globalized, generating steep global hierarchies in world society that are similar to those that characterize national societies. The centrality of the United States in the networks of world society makes it, in effect, the 'central state' of a new kind of international society that is endogenized within integrated world society.

Keywords: Globalization; Structural Power, Power; Money and Finance; Security; General Framework

Contributor(s): Salvatore Babones and John H.S. Aberg
Keywords: Globalization, Structural Power, Power, Money and Finance, Security, General Framework, Strange-Influenced Works, 2010's
Source and Medium: Journal Article

Year of Publication: 2019

Power and Counter-Power: Knowledge Structure and the Limits of Control.

David, Matthew, Cynthia Meersohn Schmidt. Sociological Research Online 24, no. 1 (2019): 21-37.

In this article, we explore Susan Strange's multidimensional and non-reductive international political economy (IPE) approach to structural power. Strange's key weakness is the failure to account for her knowledge structure's regulative form relative to her security, production and financial structures. We seek to develop Strange's account through the addition of Manuel Castells' account of digital network structures. Castells' morphogenic structural approach to digital network power helps to clarify the mechanisms by which today's knowledge structure achieves autonomy, internal regulation and generative capacity. This sociological completion of Strange's theory, an international socio-political economy approach as it were, better explains the capacity and limits of today's digital network knowledge structure to resist reduction to other structural interests. Strange's non-reductive structural approach to power is significant for sociology as it helps identify 'social order' in a global age, but an additional sociological dimension is also necessary for the fulfilment of Strange's theoretical project.

Keywords: Knowledge; Production; Security; Money and Finance; General Framework

Contributor(s): Matthew David and Cynthia Meersohn Schmidt
Keywords: Knowledge, Production, Security, Money and Finance, General Framework, Strange-Influenced Works, 2010's
Source and Medium: Journal Article

Year of Publication: 2019

The Political Economy of Currency Internationalisation: The Case of the RMB

Germain, Randall, Herman Mark Schwartz. Review of International Studies 43, no. 3 (2017): 765-787.

The rise of China has sparked a debate about the economic and political consequences for the global economy of the internationalisation of the renminbi. We argue that the dominant focus of this literature – primarily the external conditions and requirements for a national currency to become an international currency – misspecifies the connections between the international and domestic requirements for currency internationalisation, as well as the potential to become the dominant international reserve currency. We correct this oversight by developing an integrated theoretical framework that highlights the domestic adjustment costs which a state must accommodate before its currency can carry the weight of internationalisation. These costs constitute a critical element of an international currency’s ‘political economy’, and they force states to negotiate contentious social trade-offs among competing domestic claims on finite public resources in a sustainable manner. Our analysis suggests that the likelihood of China being able to successfully negotiate the social costs associated with running a fully internationalised currency is currently very low, precisely because this will place unacceptable pressure on groups benefiting from the economic and political status quo. This further suggests that the American dollar will remain unchallenged as the global economy’s pre-eminent international currency for the foreseeable future.

Keywords: Money and Finance; Economic Competition

Contributor(s): Randall Germain and Herman Mark Schwartz
Keywords: Money and Finance, Strange-Influenced Works, 2010's
Source and Medium: Journal Article

Year of Publication: 2017

Money, Power, Authority

Cohen, Benjamin J. In Susan Strange and the Future of Global Political Economy: Power, Control and Transformation, edited by Randall Germain, 129-143. London: Routledge, 2016.

This chapter discusses the political economy of the global transformation. The share of American gross domestic product (GDP) in relation to global GDP had declined; the control of American corporations over key international markets remained high and was even growing. Strange argued that the global articulation of power was constituted by a complicated amalgam of public and the private authority. The superior innovative capacities of the firms, bolstered by government-sponsored military research, bestowed onto certain segments of the Americas economy, an unalloyed competitive advantage. The financial crisis began in the US financial system, even if it was aided and abetted by global forces and dynamics. The Carr suggests through his analysis of the foundations of mass society in the middle years of the twentieth century, when society exerts pressure on the operation of government, government in turn becomes much more involved in society, including the economy and its financial system.

Keywords: Money and Finance; Authority; Markets; Structural Power, Power; General Framework

Contributor(s): Benjamin J. Cohen and Editor: Randall Germain
Keywords: Money and Finance, Authority, Markets, Structural Power, Power, Strange-Influenced Works, 2010's
Source and Medium: Book Chapter

Year of Publication: 2016

Still an Extraordinary Power After All These Years: The US and the Global Financial Crisis of 2008

Helleiner, Eric. In Susan Strange and the Future of Global Political Economy: Power, Control and Transformation, edited by Randall Germain, 111-126. London: Routledge, 2016.

This chapter explores Strange's analysis of the centrality of dominant knowledge and financial structures in the constitution of the contours of the global political economy and of financial capitalism. It draws upon critical political economy, focusing on the how of power and its mobilization through dominant knowledge and financial structures to establish central bank independence and financial liberalization as grundnorms of the global financial system. In seeking to develop a sociological understanding of the construction of dominant power structures, the chapter draws upon critical political economy traditions inspired by the works of Michel Foucault and Antonio Gramsci. Strange identified the central problematique as a problem of governance and the absence of the leadership required to address the economic malaise of the 1980s. This chapter examines Strange's analysis of problems in global financial leadership and it reveals her significant contribution to the understanding of the material dimensions of financial governance.

Keywords: Hegemony; Money and Finance; Structural Power, Power; General Framework

Contributor(s): Eric Helleiner and Editor: Randall Germain
Keywords: Hegemony, Money and Finance, Structural Power, Power, Strange-Influenced Works, 2010's
Source and Medium: Book Chapter

Year of Publication: 2016

Strange Bedfellows? Bankers, Business(men) and Bureaucrats in Global Financial Governance

Cutler, A. Claire. In Susan Strange and the Future of Global Political Economy: Power, Control and Transformation, edited by Randall Germain, 144-169. London: Routledge, 2016.

This chapter explains how to diagnose the human condition in a dynamic global system. Strange was the one who insisted that the things to be explained were not always what they seemed, and that theory, especially the grand theory, could obscure the fundamental realities. Discerning the causes and the larger meanings behind the social and political arrangements through which these values are distributed in the particular global policy arenas framed Strange's IPE. Murphy focused on the capital markets that are not reliably backstopped by the emergency fiscal capabilities, and therefore not reliably regulated; expansive systems for producing goods and the services that depend on degrading the life-sustaining bio-sphere; and the absence of redistributive instruments adequate enough to stabilize an emerging global society. Helleiner used the conceptual and the empirical grounding to show us precisely how the global financial system worked during the crisis of 2008.

Keywords: Money and Finance; Authority; Westfailure System

Contributor(s): A. Claire Cutler and Editor: Randall Germain
Keywords: Money and Finance, Authority, Strange-Influenced Works, 2010's
Source and Medium: Book Chapter

Year of Publication: 2016

Strange Power Over Credit; or the Enduring Strength of US Structural-Power

Schwartz, Herman Mark. In Susan Strange and the Future of Global Political Economy: Power, Control and Transformation, edited by Randall Germain, 87-110. London: Routledge, 2016.

This chapter provides some retrospective comments on what Strange says on the nexus of money and power; and second, in the light of what she had to say, to assess her vision of where the monetary system is heading. Strange was certainly right that the dynamics of power and governance in global finance today are changing. A leaderless diffusion of power is generating greater uncertainty about the underlying rules of the game. The linkage between money and power was one of the most enduring themes in Strange's work. The US political scientists, Peter Bachrach and Morton Baratz, had pointed out that the direct action represented just one face of power, and perhaps not even the most important. The causal mechanism works along the lines of the sequential Stackelberg leadership model of game theory. The United States acts unilaterally, as it typically does, exploiting what is often described as its exorbitant privilege.

Keywords: Money and Finance; Hegemony; Structural Power, Power; General Framework

Contributor(s): Herman Mark Schwartz and Editor: Randall Germain
Keywords: Money and Finance, Hegemony, Structural Power, Power, Strange-Influenced Works, 2010's
Source and Medium: Book Chapter

Year of Publication: 2016

Susan Strange and the Future of Global Political Economy: Power, Control and Transformation

Germain, Randall, editor. London: Routledge, 2016.

This edited volume addresses the 2007/2009 financial crisis as the occasion to engage critically with the corpus of Susan Strange's work, in order to consider what changes (if any) this crisis portends for the structural organization of the global political economy. The contributors use Strange's rich conceptual framework to explore the financial crisis and its aftermath, and reflect critically on the broader contributions which her work has made to the discipline of IPE. The volume makes three valuable contributions for scholars and students. First, it raises the profile of Susan Strange, a unique and powerful contributor to the field of IPE whose ideas matter to our current circumstance and can provide deep and enduring insights into important questions and issues. Secondly, each contributor to this volume combines her work and ideas with that of other traditions or individual theorists in ways that extend and/or deepen Strange's own efforts. Finally, this volume leaves us with a judicious optimism about the future of both IPE and the world as it actually is, on the ground.

Keywords: Money and Finance; Structural Power, Power; Authority; Markets

Contributor(s): Editor: Randall Germain
Keywords: Money and Finance, Structural Power, Power, Authority, Markets, Strange-Influenced Works, 2010's
Source and Medium: Edited Volume

Year of Publication: 2016

Transnational Corporations and the Proliferation of Bilateral Investment Treaties: More Than a Bit Influential

Jacobs, Michael. Transnational Corporations Review 8, no. 2 (2016): 93-111.

To date, over 2500 bilateral investment treaties (BITs) have been signed. The popularity of these treaties raises the question, what has driven the proliferation of BITs? Previous research argues that the proliferation of BITs is the product of competition for capital among developing states. This study hypothesises that the developed state transnational corporations (TNCs) are driving the spread of BITs. The results from a time series logistic regression support the TNC hypothesis, adding support to the argument that transnationals should be recognised as major actors in the international political economy.

Keywords: Corporations; Money and Finance; Structural Power, Power; Authority; Markets

Contributor(s): Michael Jacobs
Keywords: Corporations, Money and Finance, Structural Power, Power, Authority, Markets, Strange-Influenced Works, 2010's
Source and Medium: Journal Article

Year of Publication: 2016

Dollar Hegemony: A Power Analysis

Norrlof, Carla. Review of International Political Economy 21, no. 5 (2014): 1042-1070.

The dollar has been the world's first currency since the end of World War II, possibly since the inter-war period, and is the leading currency today. A growing chorus of observers believes this dollar-centered order is coming to an end. While much commentary revolves around changes in the distribution of power, measures are only loosely related to the material basis for currency dominance. A proper understanding of the dollar's global role requires a quantitative assessment of the United States' monetary capabilities and currency influence relative to potential rivals. Moreover, while there is general recognition that a shift in power capabilities away from the United States to another actor in the international system is an insufficient, although necessary, condition for the prevailing currency hierarchy to reverse, there exists no systematic exploration of how power is exercised when converting monetary capabilities into currency influence. This paper offers a systematic assessment of the monetary capabilities and currency influence of all countries in the world as well as an analysis of how the three faces of power sustain dollar hegemony.

Keywords: Structural Power, Power; Money and Finance

Contributor(s): Carla Norrof
Keywords: Structural Power, Power, Money and Finance, Strange-Influenced Works, 2010's
Source and Medium: Journal Article

Year of Publication: 2014

Return of the State? The G20, the Financial Crisis and Power in the World Economy

Nordberg, Donald. Review of Political Economy 24, no. 2 (2012): 289-302.

The Group of Twenty and the new world order it is meant to signify have prompted a wave of triumphalism around the world from those who, like French President Nicolas Sarkozy, bemoan the influences of ‘Anglo-Saxon capitalism’ and from neo-Marxists, who view the economic crisis as a harbinger of the resurgence of states over markets. A little over a decade ago, however, the late doyenne of international political economists, Susan Strange, wrote eloquently about the reasons why the state was in retreat, its structural power draining away in favour of markets. Have the intervening dozen years, with their recurrent crises in markets and corporate governance, demonstrated the need for a return of the state? This analysis of the G20 London communiqué, using criteria that Strange advanced, suggests that far from asserting a return of the state, the G20 signifies its persistent weakness and concludes that the G20 leaders, at least, sense a more complex network of power relationships, and that structural power rests in the network.

Keywords: Authority; Markets; Money and Finance; Global governance

Contributor(s): Donald Nordberg
Keywords: Authority, Markets, Money and Finance, Global governance, Strange-Influenced Works, 2010's
Source and Medium: Journal Article

Year of Publication: 2012

Revisiting Rival States: Beyond the Triangle?

Stopford, John. In International Business and Government Relations in the 21st Century, edited by Robert E. Grosse, 103-116. Cambridge: Emerald Group Publishing Ltd., 2005.

When Susan Strange and I looked into the relationships between firms and States during the late 1980s, we were primarily concerned to signal that the rivalry among States for control over the means of wealth creation had grown to the point where it had overtaken such traditional concerns as control over territory, to become the predominant driver of diplomacy. We argued that States had moved far from the days when suspicion of the multinationals' power had interfered with bargaining relationships, to a position where incentives were being showered on the firms to influence their decisions about where to invest. These were also the days when the UN was still struggling to complete a Code of Conduct for the MNEs (it never succeeded) and when trade talks within the General Agreement on Tariffs and Trade (GATT) were beginning to link trade relationships with the consequences of foreign direct investment (FDI). Under these seemingly benign conditions, attention could (usefully, we argued) be focused on all three sides of the triangle to gain greater understanding of the dynamics of the relationships and the conditions for competitiveness. We called this “new” diplomacy “triangular” to highlight these growing interrelationships. This was occurring in an era when bargaining power and opinion had swung toward favoring the notion that the MNE was essentially a benign force for economic development. Fears of corruption in the bargaining among executives and government officials had receded. So too had fears about the MNEs' undue interference in internal, domestic policy.

Keywords: Corporations; Trade; Money and Finance; Triangular Diplomacy; Transnational Corporations

Contributor(s): John Stopford and Editor: Robert E. Grosse
Keywords: Corporations, Trade, Money and Finance, Strange-Influenced Works, 2000's
Source and Medium: Book Chapter

Year of Publication: 2005

Dependency Today-Finance, Firms, Mafias and the State: A Review of Susan Strange's Work from a Developing Country Perspective

Leander, Anna. Third World Quarterly 22, no. 1 (2001): 115-128.

This is an analysis of how the global strategies of Multi-national Enterprises (MNE's) affect the power relationship between MNE's and states in the context of increasing trans-national economic integration.

Keywords: Money and Finance; Trade; Structural Power, Power; Economic Development

Contributor(s): Anna Leander
Keywords: Money and Finance, Trade, Structural Power, Power, Strange-Influenced Works, 2000's
Source and Medium: Journal Article

Year of Publication: 2001

Global Money and the Decline of State Power

Underhill, Geoffrey R.D. In Strange Power: Shaping the Parameters of International Relations and International Political Economy, edited by Thomas Lawton, James Rosenau, Amy C. Verdun, 115-135. London: Routledge, 2000.

Abstract Content

Keywords: Global governance; Globalization; Money and finance; Authority; Markets; States

Contributor(s): Geoffrey R.D. Underhill, Editor: Thomas Lawton, Editor: James Rosenau and Editor: Amy C. Verdun
Keywords: Global governance, Globalization, Money and finance, Authority, Markets, Strange-Influenced Works, 2000's
Source and Medium: Book Chapter

Year of Publication: 2000

Money and Power in World Politics

Cohen, Benjamin J. In Strange Power: Shaping the Parameters of International Relations and International Political Economy, edited by Thomas Lawton, James Rosenau, Amy C. Verdun, 91-114. London: Routledge, 2000.

Keywords: Global governance; Money and Finance

Contributor(s): Benjamin J. Cohen, Editor: Thomas Lawton, Editor: James Rosenau and Editor: Amy C. Verdun
Keywords: Global governance, Money and Finance, Strange-Influenced Works, 2000's
Source and Medium: Book Chapter

Year of Publication: 2000

Money Power: Shaping the Global Financial System

Verdun, Amy C. In Strange Power: Shaping the Parameters of International Relations and International Political Economy, edited by Thomas Lawton, James Rosenau, Amy C. Verdun, 99-112. London: Routledge, 2000.

Keywords: Structural Power, Power; Money and Finance; Political Economy; International Relations

Contributor(s): Amy C. Verdun, Editor: Thomas Lawton, Editor: James Rosenau and Editor: Amy C. Verdun
Keywords: Structural Power, Power, Money and Finance, Political Economy, Strange-Influenced Works, 2000's
Source and Medium: Book Chapter

Year of Publication: 2000

Still an Extraordinary Power, but for How Much Longer? The United States in World Finance

Helleiner, Eric. In Strange Power: Shaping the Parameters of International Relations and International Political Economy, edited by Thomas Lawton, James Rosenau, Amy C. Verdun, 251-270. London: Routledge, 2000.

Keywords: Structural Power, Power; Money and Finance; United States

Contributor(s): Eric Helleiner, Editor: Thomas Lawton, Editor: James Rosenau and Editor: Amy C. Verdun
Keywords: Structural Power, Power, Money and Finance, United States, Strange-Influenced Works, 2000's
Source and Medium: Book Chapter

Year of Publication: 2000

Strange Power: Shaping the Parameters of International Relations and International Political Economy

Lawton, Thomas, James Rosenau, Amy C. Verdun, editors. London: Routledge, 2000.

Focusing on the contribution of Susan Strange to the study of international political economy, this collection forms a unique perspective on the global economy whilst providing tools for the reader to better understand that economic system. The book examines Susan Strange's structural power theories, whilst adding the perspective of the contributor. The combination of approaches and experience provides a multifaceted analysis of international relations and international political economy.

Keywords: Structural Power, Power; Money and Finance; Production; Knowledge; Authority; Markets; Political Economy

Contributor(s): Editor: Thomas Lawton, Editor: James Rosenau and Editor: Amy C. Verdun
Keywords: Structural Power, Power, Money and Finance, Production, Knowledge, Authority, Strange-Influenced Works, 2000's
Source and Medium: Edited Volume

Year of Publication: 2000

Mad Money

Strange, Susan. Manchester: Manchester University Press, 1998.

In this sequel to Casino Capitalism (1986) Strange returns to a concentration on the financial structure. Her final book finds Strange once again emphasising the need to recognise the problems of instability in the global financial sector. Arguing that the system itself needed to be reformed, she once again refused to accept that the current upheavals were inevitable or unavoidable.

Keywords: Money and Finance

Contributor(s): Susan Strange
Keywords: Money and Finance, 1990's
Source and Medium: Book

Year of Publication: 1998

The New World of Debt

Strange, Susan. New Left Review 230, July/August (1998): 91-114.

An extract from Mad Money (1998) in which Strange focuses on the problems of international indebtedness in the 1990s including the Mexican, Brazilian and Asian debt crises and a discussion of central and Eastern European issues. She suggests that the key problem has not been the indebtedness of poor states itself, but the sorts of credit historically extended and the timidity of the solutions to the problems that have arisen. Noting the missed opportunity of a new Marshall Plan for Eastern Europe, she notes not only is there little agreement on the causes of problems but also little consensus about 'what is to be done'.

Keywords: Money and Finance

Contributor(s): Susan Strange
Keywords: Money and Finance, 1990's
Source and Medium: Journal Article

Year of Publication: 1998

What Theory? The Theory in Mad Money (CSGR Working Paper No. 18/98)

Strange, Susan. Coventry: University of Warwick/Centre for the Study of Globalisation and Regionalisation, 1998.

In this, her final piece of writing, Strange reprise arguments from Rival States, Rival Firms: Competition for world market shares (with John M. Stopford and John S. Henley, 1991) and The Retreat of the State. The Diffusion of Power in the World Economy (1996) to argue that the disciplines of International Relations and International Economics fail to understand contemporary globalisation. Where IR scholars have missed the structural shifts in the global system away from state-centric power with the emergence of new non-state authority, economists have missed the role of the state in promoting these changes, and misunderstand the working of global markets, discounting, or not even recognising the political relations between firms, what Strange refers to as the new diplomacy. In this last piece Strange revisits the criticisms she has levelled at much of mainstream International Studies literature and remains as angry as ever at the myopia of many of her contemporaries, leading to a failure to recognise the real problems of the 'global casino', not least of all issues of finance and technology.

Keywords: Authority; Markets; Money and Finance; States; Theory; Technology; Authority vs Markets

Contributor(s): Susan Strange
Keywords: Authority, Markets, Money and Finance, States, Theory, 1990's
Source and Medium: Working Paper

Year of Publication: 1998

Who are EU? Ambiguities in the Concept of Competitiveness

Strange, Susan. Journal of Common Market Studies 36, no. 1 (1998): 101-114.

Building on the argument of Robert Reich that the location of economic activity (in a state) was more important for its competitiveness than the ownership of companies (whose production was carried out abroad), Strange suggests that unless European policy recognises the importance of society based competitiveness rather than firm-based competitiveness, Europe's economic problems cannot be overcome. Strange then discusses European trade policy (which needs to be more predictable), investment policy (which should be more open), European Monetary Union (which while stabilising may have little effect on inward investment from non-European investors), and welfare issues (which need to continue to cushion technological-unemployment). Strange concludes that while states (and the European Union) cannot directly intervene in markets successfully, they can act as 'good landlords' to encourage the location of activities on their territory, and by doing so gain the benefits which Reich suggests are possible.

Keywords: Europe; Money and Finance; Production; Trade; European Integration

Contributor(s): Susan Strange
Keywords: Europe, Money and Finance, Production, Trade, 1990's
Source and Medium: Journal Article

Year of Publication: 1998

Territory, State, Authority and Economy: A New Realist Ontology of Global Political Economy

Strange, Susan. In The New Realism: Perspectives on Multilateralism and World Order, edited by Robert W. Cox, 3-19. Basingstoke: Macmillan Press/United Nations University Press, 1997.

Strange argues that the global economy is in the midst of a transition; the close incidence of political authority, economic activity and geographical territory no longer holds. This has been caused by two main groups of factors: firstly changes derived from science and technology; and secondly structural changes within the global finance structure. Authority has shifted, or is shifting, from states to other actors in the international political economy. She disputes Rosenau's hypothesis of the emergence of a second world of turbulent complexity, disturbing the old world of international relations, instead arguing that it is all the same world, just more complex! Reprinted in: Authority and Markets: Susan Strange’s Writings on International Political Economy. Roger Tooze and Christopher May, editors. Basingstoke: Palgrave Macmillan, 2002.

Keywords: Authority; Knowledge; Markets; Money and Finance; States; Authority vs Markets; Technology

Contributor(s): Susan Strange and Editor: Robert W. Cox
Keywords: Authority, Knowledge, Markets, Money and Finance, States, 1990's
Source and Medium: Book Chapter

Year of Publication: 1997