Bases teóricas

There are several sources of social power identified by the extensive work of Michael Mann and Susan Strange (Mann 1986, Strange 1988). But, to begin, what is power per se? Power needs to be differentiated from authority and legitimacy, despite these being power sources, and is manifested in an agent’s realised capability to affect specific outcomes, regardless of the intentions of others. This was described in Chapter One as the ‘ability to get someone to do that which they would otherwise choose not to do’, a rather crude definition loosely based on the definition below of Susan Strange. Power capability per se can be considered as a fluid concept, in an alienable (transferable) sense, or alternatively, as Allen noted, it can be considered to be amorphous in nature, with an inconsistent form that might evaporate (Allen 2003: 29). The FRWG/German and UK states have lost financial power between 1945 and 2007 but it is difficult to identify entities that have gained power or measure it (see 9.4 and 10.5). In this sense, power does not simply transfer from entity to entity. Consequently, there have been debates on the semantics and ontology in the discourse on power. In her work, Strange suggested that ‘power is simply the ability of a person or group of persons to affect outcomes so that their preferences take preference over the preferences of others’ (Strange 1996: 17). This is a comprehensive interpretation of the word power that encompasses all of the various modes, from violent coercion to subtle manipulation, which power can take, as well as allowing for a plethora of contexts for its exercise. A consideration of these different modes of power is often attributed to the seminal work of Max Weber (Allen 2003). More narrow definitions might be more appropriate depending on the objectives for particular studies. The investigation of inter-state national interest, for instance, in international relations, might benefit from a more narrow definition that reduces the notion of power to state political processes and capabilities. For the purposes of exploring the erosion of state financial sovereignty, central to this thesis, a broader definition of power and its specific forms and contexts is more appropriate. The thesis research aims to identify changing power relations that are manifested in actual capabilities, exercise and outcomes rather than

120

theoretical exercise. It is difficult, the thesis posits, to consider the power capabilities of an entity without observing its exercise.

A fundamental feature of the concept of power is its asymmetrical and social aspect. Strange and others have argued that in order to have any real meaning, power needs to be considered in a relational context (Strange 1996, Allen 2003). In this sense it is the exercise of power that becomes more important as opposed to the mere possession of a power capability. Power is all too often theorised in terms of a quantifiable alienable resource or capability that can be measured against others, and this, as Strange and Allen note, leads to substantial problems. Firstly, power is then viewed as zero-sum so that the loss of capability is matched by a corresponding increased capability of another entity or set of diffused and/or connected entities. Whilst this may be true in many cases, it cannot be applied to situations where power capability has been lost with no obvious beneficiary. Secondly, power resources may be misused or be subject to incompetent use. To combat this, Strange suggests adding the terms will and skill to our understanding of the utilisation of capability, derived from varying sources of social power, that focus on the exercise and impact of power rather than the mere possession of a power resource (Strange 1996). History is replete with examples of entities imbued with possession of (initially assumed) superior power, which are unable to secure outcomes in relation to other entities with assumed inferior resource capabilities. Thirdly this notion of power, in terms of the possession of resources, naturally leads to the unsafe prediction of outcomes based upon quantifiable techniques, a criticism directed at Weber (Allen 2003). Fourthly, in the international political economy discipline, the notion of power as possessed capability has historically led to the use of so-called ‘hegemonic stability theory’ which, Strange had posited, is a restrictive approach to global power relations, despite its wide use in the post-WW2 discourse (Strange 1996).

Hegemonic stability theory was introduced by Kindleberger in reference to economic woes experienced during the Great Depression, and is a relevant concept for state financial power. Kindleberger identified that a financial leader (or hegemon) would have provided stability to international money in the 1930s, a role that the US was reluctant to take prior to WW2 (Kindleberger 1973). Consequently, the political economy discourse on power in the 1970s and 1980s was focused on hegemonic power measured by their possession of capabilities. In the post-WW2 era many theorists pointed towards certain capabilities that enabled the US to discharge this role, especially the BW system, and any decline in these quantifiable

121

capabilities was often used as an explanation of increasing instability through US hegemonic loss. It was for this reason that Strange was keen to distinguish between structural and relational power in her work. Structural power referred to the operation of systems, where an entity (or entities) has established powers through tradition and the general modus operandi of procedures, whereas relational power derives from the social power that is derived from sources in a specific relational context. Whilst the US authorities, as Strange argued, could be demonstrated to have lost certain relational power capabilities (including financial) in the post-BW era, its structural power was (and is) still decisive in many specific outcomes (Strange 1990). The hegemonic entity does not need to utilise any relevant (relational) power capability in its possession, in order to achieve desired outcomes, since the threat of its use is usually sufficient. State financial power, as discussed in this study, is exercised through the use of both relational and structural power. In the 1950s for example, the UK state exercised relational financial power in their discussions with the banks, and successfully persuaded them to enact credit restrictions (see 10.5). The UK state operation of special deposits in the 1970s, in contrast (see 10.7), provides an example of exercise of their structural power. We need to distinguish between power exercised and the possession of capability (in the form of resources) that can be mobilised in order to exercise this power. Allen notes the importance of distinguishing between ‘power over others’ and the ‘power to act’ in association with others, as separate forms of the exercise of power (Allen 2003: 51). Whilst the former involves a leverage of one entity over another, the latter exercise of power is associational, in the sense that collective action enables the empowerment of those participating in the process. Allen posited the impact of geography on the exercise of power, a consideration that he views as neglected by all but a few of the historic power theorists (Allen 2003: 7). Allen cites Foucault and Deleuze as exceptions to this rule.

Many theorists have appeared to view the operation of power as geographically neutral, in the sense that the exercise of power remains static regardless of distance. Mann had identified that power was exercised through overlapping and intersecting networks, recognising the fluidity of power, but did not seem to consider the implication of distance on the exercise of power itself (Mann 1986). As Allen puts it ‘power relations extended over space and time through the networks seem to remain relatively untouched by the experience’ (Allen 2003: 60). Foucault, alternatively, was concerned with the ‘immanence’ of power that operates on (and through) people/entities, and is derived from almost anything, that then finds definition

122

in its impact (Foucault 1982). I.e. it is the manifestation of power that defines the activity as power per se. This emphasises the exercise of power whilst, simultaneously, rejecting notions of power based upon (quantitative) possessed capabilities from clearly defined sources. In this approach, there is less concern with asking which entity has the power, but a greater emphasis is placed on the techniques and practices of its exercise instead, where random factors can be at work. If it can usually be demonstrated that certain entities wield power in a reasonably consistent fashion, this at least gives the appearance of possessed capabilities. Foucault had provided important insights on the geographical implications of power exercise. The specific techniques of power exercise will necessarily vary according to space, which suggests it is not sufficient to view the operation of power as consistent through a given spatial network. The political process, in similar types of institution, is also likely to be different simply because the social relation dynamic is different. The geographical location of agents is an important aspect in the exercise of power.

In terms of the research focus on finance, as a source of power, these considerations of power mentioned above are important to clarify. It is necessary to ascertain (in line with Foucault), which people or entities actually discharge the capability to control the issue of modern money, and manage its overall circulation processes, rather than just possess the theoretical capability. This necessary empirical work, in the study, may reveal or contradict the popular conception (or professional opinion) of the operation of financial power. So, it is this actual exercise of social power (sourced from the control of financial resources) that is significant and is the approach adopted for the thesis. It is acknowledged, in line with Foucault, that confluences of several factors normally exist in the formation of general social outcomes, derived from a multiplicity of direct or indirect power sources (of a primary or secondary nature), and these power sources are often interdependent. The thesis makes no attempt to compare and contrast the varying social power sources (see 12.5), since this presents epistemological and ontological challenges. At times, symbolic power (Parson’s phrase), the threat of action, is sufficient for entities to wield power (Parsons 1963: 243). It is not necessary to separate between symbolic power and other types, like violence or associational, (see Arendt) for thesis purposes (Arendt 1970: 53). Financial power is regarded as a primary power source (see 1.4) that is often exercised in conjunction with other powers and influences depending on context. The particular motives, established outcomes or objectives of entities that exercise social power are not the particular focus of study for the thesis (see 12.5 and 12.6), despite the interest these enquiries may engender.

123