review of states, banks and crisis: emerging finance capitalism in mexico and turkey, by ali riza...

8/13/2019 Review of States, Banks and Crisis: Emerging Finance Capitalism in Mexico and Turkey, by Ali Riza Gungen

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examples of modern architecture in the interior of Turkey which deservecoverage in architectural historiographies are excluded from this text.Most importantly, the works of women architects are still in need offurther research and recognition.

With its rich and original material and language that engages variousdimensions of cultural and social life, Modern Architectures in History:Turkey is an enjoyable read for those interested in the built environ-ment and urbanism. It is also a timely contribution, as a right to thecity movement has emerged in Turkey, drawing the interest of crowdsto architectural and urban issues. In addition to students and scholarsof architecture, urban design, architectural and urban history, sociologyand cultural history, all environmentally conscious individuals will sig-

nificantly benefit from this book.

zge Sade MeteBellevue College

University of Washington

192 Book Reviews

Thomas Marois. State, Banks and Crisis: Emerging Finance Capitalism inMexico and Turkey. Cheltenham: Edward Elgar, 2012, xi + 263 pages.1

Neoliberal dogma has a Midas formula; it suggests that markets left ontheir own will turn everything into gold. The panacea for deeply rootedeconomic and social problems has been based on approaches favoringminimal state intervention and financial liberalization. As the 2007-

2009 international financial crisis and the ensuing Eurozone crisis haveshown, however, neoliberalism (and financialization as its prominentfeature) have in fact aggravated the economic situation in many advancedcapitalist countries and the periphery of Europe. Thomas Marois timelybook looks at the picture from the perspective of the developing coun-tries of Mexico and Turkey, known also as the emerging markets. Itprovides compelling details from the stories of the financial sector anddevelopment, recent responses to the crisis, restructuring of the bank-ing sector in the neoliberal era, postwar economic development, and the

neoliberal turn in the late 1970s and the early 1980s.

1 Published in Turkish as Thomas Marois, Devletler, Bankalar ve Kriz: Meksika ve Trkiyede Ykselen Mali

Kapitalizm(Ankara: Notabene Yaynlar, 2013).


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Marois starts by arguing that neoliberalism took a more aggressiveform in the 1990s. In this finance-led form of capital accumulation,financial capital expanded its power in determining the terrain uponwhich state managers and governments formulate policy packages. In thefirst chapter, Marois underlines the need to provide a detailed accountof this transformation in middle-income, emerging economies. He con-tends that the relations between the banking sector and the state shouldbe analyzed for a critical account of the emergence of these latecomercountries as they try to catch up with the advanced capitalist countries.Introducing the concept of emerging finance capitalism, the book sug-gests that the current phase of accumulation in Mexico and Turkey canbest be characterized in political and economic terms by highlighting the

fusion of the interests of the domestic and foreign financial capital inthe state apparatus as the institutionalized priorities and the overarch-ing social logic guiding the actions of state managers and governmentelites, often to the detriment of labor (p. 10). Growth in both countriescould be characterized as export-led and debt-dependent. While theirfinancial systems remained bank based, the importance of non-bank fi-nancial institutions and sources of funds are increasing.

The second chapter gives the reader a brief critique of the dichoto-

mous and ideal-typical understanding prevalent in the Varieties ofCapitalism approach and points out the way to overcome problems inthe literature; a structural and historical analysis of the developmentof the relations between financial institutions and the states financialapparatus. The study is based, within this perspective, on four basicpremises: (i) Capitalist states are social formations ( laPoulantzas)and are best understood as social forms assumed by struggles whichthen turn into institutionalized power relations paving the ground for

a social logic revealed in the forms of intervention by the state; (ii)Banks are social relations as well ( laHilferding). The ways financialinstitutions act are shaped historically and the banks are embedded ina web of relations comprising their relationships with multiple actors,including customers, other banks, and states financial apparatuses, aswell as international financial institutions such as the InternationalMonetary Fund; (iii) Labor is vital to emerging finance capitalism asit creates value and staff costs critical for many financial institutions.Because of legal regulations, the working classes also allocate part of

their income as tax, by the use of which states attempt to socializefinancial risks; (iv) Crises are constitutive of emerging finance capital-ism. They have not only shown the unsustainable features of idealizedneoliberalism in Mexico and Turkey but have also been used by finan-

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cial capital and state managers for initiation of deeper transformationswithin the economy.

Before elaborating the neoliberal turn and then further restructuringof the banking sector in the last couple of decades, Marois explicates itspostwar development and the consolidation of capitalism in Mexico andTurkey in comparative terms. The third chapter summarizes the state-led strategies of development in the postwar era and their exhaustion inrelation to the international political and economic changes in the after-math of the collapse of the Bretton Woods monetary order.

The fourth and fifth chapters enable the reader to develop a fruit-ful understanding of the neoliberal reforms and the close relationshipbetween the restructuring of states and banks and rise of neoliberal ide-

alism. These chapters explain the uneven character and pace of the re-forms in Mexico and Turkey respectively, revealing the commitment ofstate managers and policy makers to financial liberalization. The 1982bank nationalization in Mexico gave way to a state-authored financialtransformation. The privatization, a decade later, can be interpreted asfinancial capital buying not only the banks but also a new phase of ac-cumulation in which financial actors and owners of money capital arepromised handsome returns. The process of liberalization in Turkey

also enabled private banks to increase their profits significantly, quadru-pling their return on assets in two decades (p. 113). The speculative be-havior of financial capital was reinforced thanks to public debt rolloverproblems and a lax regulatory framework.

The sixth and seventh chapters complete the story by providing in-formation on up-to-date changes in and structure of the banking sec-tor and regulatory framework, as well as discussing the consolidationand costs of emerging finance capitalism in Mexico and Turkey. In both

countries, public debt continues to be a vital source of profitability for fi-nancial capital. In both countries, banks have lent increasing amounts ofmoney to individuals as consumer credit. The share of commissions andfees in bank profits has expanded rapidly in the last decade, as did creditbefore the 2007-2009 financial crisis. Foreign bank entry and the con-trol of financial assets by foreign-affiliated financial actors have reachedunprecedented levels in the last phase of emerging finance capitalism. Inboth Turkey and Mexico to day, the banking sectors are highly concen-trated and centralized with relatively more concentration in Mexico. As

of 2007, the four largest firms in the Mexican banking sector are con-trolled by foreign giants and provide 69 percent of private sector loansand 79 percent of mortgages (p. 144). In Turkey, state-banks continueto rank at the top of the banking sector, but their share in the control

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of assets has been in steady decline over the last decade. As of 2009, thefive largest Turkish banks controlled 62 percent of total assets (p. 183).In Turkey, banking sector seems to have become stronger and remainedprofitable. As in Mexico and many other emerging economies, however,this alleged success seems to rest on the continued transfer of wealthfrom the working classes to financial capital.

Overall, Marois claim that the new phase of capital accumulation inMexico and Turkey reflects the institutionalized priorities of financialcapital and has been shaped through the restructuring of the financialapparatuses of the respective states as well as their relations with thebank-based financial sector in the neoliberal era is supported by meticu-lous research. The book makes two major arguments: The first insist-

ently underlines the fact that labor should be integrated into the analy-sis of the restructuring of banks. Although cutting staff costs was onlyone element in the multi-faceted process of restructuring of banks inemerging finance capitalism, it was an important one, as evidenced inthe declining number of branches and employees. In both Mexico andTurkey, fewer bank workers had to deal with more and more moneyand financial operations throughout the process. This has contributedto the profitability of banks. Although operational costs seem to remain

negligible when compared with the leveraged operations of banks, thepersistent attempt to assign more jobs to fewer bank workers should betaken into consideration.

The second argument derives from the critical portrayal of the logicof finance capitalism. As Marois emphasizes, the profitable operation ofa bank rests on the establishment of the debtor-creditor relationship insuch a way that the owners of financial capital expropriate part of thefuture income of the debtor. This expropriation takes place under the

banner of the mobilization of savings and efficient allocation of mon-etary sources. The creditors, in our case the banks, discipline the debtorsvia the interest-bearing asset symbolizing the claim of the creditor uponthe future revenue of states, corporations or individuals. The profitableoperation and expansion of banks are based on the overarching logic offinance, which embraces both particular individuals and society at large.Bank bail-outs and restructurings are reflections of this.

According to Marois, studies on finance and development should notgive up searching for radical and democratic alternatives. Indeed, Mar-

ois provides the reader with hints of a democratized social economy inwhich credit relations are organized around the notion of labor money.Taking labor time as the unit of accounting and shaping credit relationsaccordingly would also mean the creation of a non-exploitative material

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basis upon which credit relations could function. It would also mean anew mode of distribution in which the banks responsible for the alloca-tion of labor money would serve social purposes and not profit-orientedspeculative activity. For Marois, studies of finance and developmentshould not limit themselves to problem-solving but use a critical under-standing to nourish the search for radical alternatives.

In conclusion, the authors meticulous research and sharp criticalperspective give us a well-drawn picture of the two developing countriesand the current phase of capital accumulation in emerging markets.Students and scholars in the relatively underdeveloped fields of study offinancialization in emerging markets, market orientation in bank-basedfinancial systems, and the restructuring of states financial apparatuses

to strengthen the financial sector in response to crises will find usefulinsights and critical arguments worth questioning and discussing in thisrigorous work.

Ali Rza GngenOndokuz Mays University

Bure elik. Technology and National Identity in Turkey: MobileCommunications and the Evolution of a Post-Ottoman Nation.London: I. B. Tauris, 2011. 224 pages.

Bure eliks study examines the cultural practices of cellular telephonyin Turkey during the 2000s. The objective of the study is to offer one

explanation as to why and how cellular telephony has become an objectof collective attachment in a developing country such as Turkey. elikrightly points out that much of the pre-existing academic literature inthe social sciences treats mobile phones as either a status symbol or asan instrumental tool facilitating inter-personal communication. She ar-gues that these approaches overlook the culture of cellular telephonyand questions of how the cell phone is imagined and fantasized, how itmoves people, why one wants to make or receive a call, and what kindsof affectivities or emotionalities this concept produces (p. 7). Her study

proposes that there is an important element of attachment in the cul-ture of cellular telephony which cannot be explained by symbolic or in-strumentalist perspectives on the subject. For elik, the cell phone im-presses, affects, moves and gathers bodies in particular ways that incur

196 Book Reviews

review of states, banks and crisis: emerging finance capitalism in mexico and turkey, by ali riza...

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