Retail, shopping mall y la sociedad de consumo.

The above stylised history of the governance of the stagflation crisis does not serve simply as a historical background against which the analysis of financial transformation can be framed. Instead, the discrete regulatory changes that will be analysed in this thesis constituted one aspect of British policy-makers’ broader

response to the global profitability crisis and its national manifestations. Financial de- and reregulations during this period served as elements of a strategy to manage both the dominating imperatives of a system of social wealth mired in deep crisis, and the legitimacy imperatives arising from a population that was unwilling to sacrifice its tangible needs and demands in the name of national competitiveness.

The first deregulation analysed in this thesis is the 1971 CCC measures. This was largely the brainchild of the Bank, which pursued this policy for a variety of reasons – both political and technical. Yet CCC’s embrace by the Treasury must be understood through the lens of crisis governance. Following the 1967 devaluation, and subsequent contractionary measures, demands by both cash-strapped companies and persons for access to credit placed increasing strain on the British banking system and threatened to further increase inflation. In this context, CCC appeared to constitute a mechanism to extend palliative credit to the industrial export sector, while enforcing financial discipline upon persons – ultimately to improve the balance of payments – and all depoliticised by the cold, rational hand of marketised interest rates. The political support for this policy, as such, cannot be separated from the broader attempt – pursued by both the Wilson and Heath governments – to discipline the British economy in line with global market averages in the aftermath of a series of currency crises, without provoking electoral backlash.

The second policy examined in this thesis is the abolition of exchange controls. This policy was bi-partisan, as it was pursued by both the Callaghan and Thatcher administrations. This deregulation must be understood in the context of the second phase of the British stagflation crisis, as outlined in this chapter. After 1976, the rising price of the pound aided the government in the battle against

inflation, yet threatened to decimate the already unprofitable industrial exporting sector, with politically unacceptable results for employment and living standards. The dismantling of exchange controls, carried out between 1977 and 1979, constituted a palliative measure to bring some relief to exporters by encouraging a depreciation of the pound and thus artificially boosting their competitiveness. Yet in the aftermath of the collapse of Bretton Woods, such an overtly beggar-thy- neighbour policy had the potential to spook financial markets, and thus cause a mass exodus of investment out of sterling. As such, this deregulation was publicly justified by laissez-faire rhetoric that sought to convince markets that this was an ideologically motivated policy. In this sense, exchange control abolition cannot be understood in separation from both the Callaghan and Thatcher governments’ attempts to reconcile the disciplining effects of the strong pound with the need to extend some form of palliation to the most economically and politically sensitive constituencies.

The third deregulation analysed in the coming chapters is the Big Bang. This monumental transformation of the LSE formally took place in 1986, yet it had been gestating for a number of years. The evidence provided in this thesis demonstrates that this policy was intimately connected to the Thatcher government’s MTFS scheme. As a sort of policy straitjacket, MTFS was designed to allow the government to discipline domestic social relations in line with global averages in a depoliticised manner, without being forced to fold under the pressure of popular resistance. However, as discussed above, this monetary tightening was quickly abandoned in the face of a terrible recession. Nevertheless, in order to preserve any semblance of this policy framework, it was crucial that the government demonstrate

that it could hit the monetary policy objectives set out in MTFS. The key mechanism through which the Thatcher administration was pursuing this was the sale of government debt on the LSE – a mechanism that was severely threatened by the RPC’s court case against the LSE. Thus, in order to maintain the perceived coherence of MTFS, the government exempted the LSE from the RPC case in July 1983 – an event that began the countdown to the Big Bang. This deregulation, as such, constituted an attempt to rescue the government’s crisis governing strategy of depoliticised discipline, in spite of the weakening of policy-makers’ resolve and the consequent resort to palliative monetary policy.

The final regulatory change covered by this thesis is, in some respects, the odd one out. Passed in 1986, and deliberated upon from 1982, the FSA lies almost completely outside of the historical timeframe examined in this chapter. This is because, unlike the other three changes, the FSA was not part of a crisis governing statecraft strategy; in fact the British and world economies were already on a cyclical upswing by the time the policy was passed. Rather, this regulatory change should be understood as a strategy to retroactively impart some coherence upon the crisis-era deregulations that had preceded it. The Big Bang had opened up the LSE to global financial actors, and had contributed to a much more fragile and volatile form of British capital accumulation. The FSA was a reregulation that attempted to institute a clear and effective legal framework for the City’s securities industry. Yet this presented a dilemma for the Thatcher government: while this reregulation was necessary to ensure global capital that the City was a safe place to do business, the increasing state responsibility for the financial sector could undermine the government’s legitimacy if there was a serious financial crisis – a likely prospect.

The FSA was consequently recrafted in a depoliticised manner, whereby a ‘lightning conductor’ agency was inserted between the government and the City, so as to insulate the government from City scandals and insulate the City from political meddling. Thus, while not directly a statecraft strategy of crisis governance – neither palliative nor disciplining – the FSA attempted to tie a bow on the preceding decade and a half of financial deregulations and protect governing legitimacy from any political fallout from the new dynamic of financialised growth.