Financialization of hotel corporations in Spain

One of the cutting-edge topics being currently debated in social sciences is the impact of financialization on corporations and on different geographical contexts. Surprisingly enough, there have been very few studies that have explicitly dealt with this issue within tourism studies. In this paper, the issue of financialization within tourism is addressed through an analysis of hotel corporations. Taking a case-study approach, it is argued that Spanish hotel chains are increasingly becoming financialized since a minimization of the impact of global financial crisis on these corporations is urgently required. The argument is not that hotel corporations’ financialization is necessarily new, but rather that the impact of the global financial crisis has led to an intensification of this very process. Taking as case studies the three largest Spanish hotel corporations (Meliá Hotels International, NH Hoteles and Grupo Barceló), the current crisis-led hotel financialization is dealt through four interrelated spheres: (1) built environment (hotel buildings property becoming controlled by financial funds), (2) actors (emergence of new agents as a result of hotel corporations intertwining with financial corporations), (3) hotel profit extraction (reliance on the secondary circuit of capital), (4) financial engineering instruments (forms of fictitious capital that are new in the context of hotel corporations). The article shows how the process of financialization of hotel corporations illustrates broad trends of both financialization and capital accumulation. Specifically, the main findings are on one hand, that financialization not only fixes capital on the ground, but also creates liquidity. On the other hand, that the selling of property titles is an increasing profit niche with differentiated geographical locations. The last significant finding is that financialization helps to improve profitability of non-financia corporations such as hotel chains.     

Taming Foreign Exchange Derivatives Markets? Speculative Finance and Class Relations in Brazil

This article provides a critical interrogation of the Brazilian tax on foreign exchange derivatives deployed between 2011 and 2013. It analyses the drivers of the policy‐making process that led to implementation of the measure, locates it within the broader policy response regarding the management of cross‐border capital flows and speculative finance, and assesses its political economy significance in light of class dynamics. The author makes three arguments. First, this innovative policy tool must be interpreted in terms of the emergence of a specific form of state power allowing for the continuation of finance‐led strategies of accumulation, while mitigating some of their worst consequences. Second, this form of state power internalizes the subordinate positionality of Brazil in the global financial and monetary system. Third, while financialization processes have eroded the efficiency of a number of policy tools, this policy experiment demonstrates the possibility of regulating complex financial markets, provided that appropriate resources are dedicated to the task, and that there is the political will to do so. The article concludes by discussing theoretical implications, for how to theorize state and financialization, as well as political implications.     

How real estate became ‘just another asset class’: the financialization of the investment strategies of Dutch institutional investors

The managers of a growing wall of money are continuously searching for investment opportunities. The financialization literature describes how this mobile capital puts pressure on commodities, debt, public services and economic activities to transform into investable, tradable, financial products. Regarding real estate, these investigations show how opaque, local, non-standardized goods, highly depending on both local legislation and developments, have been transformed into liquid, globally traded financial assets. By analysing the real estate investment strategies of Dutch institutional investors since the 1980s, this paper shows how a quantitative framework increasingly provides the basis for institutional investors’ real estate investment strategies. Direct ownership of properties has been exchanged into shares of properties, that is, fictitious capital, creating an impetus for ‘objectified numbers’ to measure the performance of these indirect investments. As knowledge about real estate has been outsourced, Dutch institutional investors now perceive real estate increasingly as ‘just another asset class’, thereby increasing leverage and volatility. This paper not only shows how finance ‘financialized’ itself by adopting a quantitative investment perspective, but it also offers an empirical account on how investment properties are transformed into financial assets that put pressure on state agencies to mobilize urban planning to deliver more of such assets.     

Web3 and the entrepreneurial imaginary of the 2022 Lisbon Web Summit

This article discusses the entrepreneurial imaginary and the role of Web3 in the narratives of industry actors at the 2022 Lisbon Web Summit. This imaginary does not address the qualitative aspects of current crises but rather their potential for regenerating capital flows in the spirit of never letting a good crisis go to waste. The article argues that the wealth-tech nexus is symptomatic of the broader process of financialization of the economy and, in particular, of the growing role of private investment in the form of Venture Capital (VC), particularly illustrated by ‘unicorns’. While capital allocation in the digital economy, both from private and public sources, currently exceeds its realization, this entrepreneurial imaginary builds expectations towards Web3 and effectively drives the valuation process and investors’ returns, regardless of its future implementation.     

Forced to Concede: Permanent Restructuring and Labour's Place in the North American Auto Industry

Abstract: The stunning decline of Ford, General Motors and Chrysler over the past decade has rendered the once “Big Three” US automakers a vulnerable “Detroit Three”. In their attempts to return to profitability, the Detroit Three have undertaken a series of “turnarounds” aimed at renewing their competitive edge. Through this corporate restructuring agenda, 250,000 assembly jobs in North America have been lost, upwards of 50 auto plants have been closed, wages and benefits for new hires have been cut substantially and once strong, independent auto unions have been thoroughly overwhelmed. Permanent restructuring, then, represents a crisis strategy on the part of the corporate elite to continually intensify the demands placed on labour in the hopes of creating new conditions for capital accumulation. Working within labour geography, this paper documents the “regional race to the bottom” in the North American auto industry while reminding labour geographers that capitalist restructuring is a powerful constraint on labour agency.     

Disaster Financialization: Earthquakes,Cashflows and Shifting Household Economies in Nepal

The political economy literature on post-disaster reconstruction tends to contrast ‘disaster capitalism’ narratives denouncing the predatory character of neoliberal rebuilding, and ‘building back better’ policies supporting market-driven reconstruction. This article seeks to provide a more nuanced account, developing the concept of ‘disaster financialization’ through a case study of household-level changes experienced through processes of post-earthquake reconstruction in Nepal. The concept of disaster financialization describes not only the integration of disaster-affected households into the cash-based logic of reconstruction instituted by donors and government authorities, but also the financialization of their lives, social relations and subjectivities. It is a transitive process involving a shift into financialized mechanisms of disaster prevention, adaptation and recovery. Analysing contrasting experiences across three earthquake-affected districts in Nepal, this study proposes disaster financialization as an integrative term through which to understand the simultaneous acceleration of monetization, the leveraging of cash incentives by donors and government to ‘build back better’, and the flurry of financial transactions associated with reconstruction processes. While some aspects of disaster financialization have had negative social impacts, such as debt-related anxieties and a breakdown of voluntary labour exchanges hurting the most vulnerable, the process has taken on variegated forms, with equally variegated effects, reflecting household characteristics and interactions with financial institutions.     

The Political Economy of Class Compromise: Trade Unions,Capital–Labour Relations and Development in North East Brazil1

Abstract: This article investigates how capital–labour relations (encompassing processes of class formation, representation, struggle and compromise) impact on emerging regions’ developmental trajectories. It does so because much of development studies portray labour simply as an input (human capital) subordinate to more fundamental processes such as capital investment and accumulation. The paper draws on and extends insights gained from the “new working class studies” and global commodity chains literatures in order to examine evolving capital–labour relations—from relatively militant struggles to class compromise—in an emerging sector of North East Brazilian export horticulture. It identifies sources of workers’ structural and associational power and uses these to explain significant gains achieved by the region's rural trade union during the formation of the export horticulture sector. It then asks, why, despite continuing structural power, the region's trade union has entered into a class compromise with the leading employers via (a) reducing its militancy and its strategy of striking against employers to win concessions, and (b) shifting its objectives in terms of concessions sought. It speculates on the impacts of these changing class relations on the region's developmental trajectory.     

Extracting Value from the City: Neoliberalism and Urban Redevelopment

How do states make the built environment more flexible and responsive to the investment criteria of real estate capital? Spatial policies, such as urban renewal funding for slum clearance or contemporary financial incentives, depend on discursive practices that stigmatize properties targeted for demolition and redevelopment. These policies and practices have become increasingly neoliberalized. They have further distanced themselves from those “long turnover” parts of the city where redevelopment needs are great but where the probability of private investment and value extraction is slight. They have become more entwined in global financial markets seeking short–term returns from subsidized property investments. They have shifted their emphasis from compromised use values (embodied in the paternalistic notion of “blight”) to diminished exchange values (embodied in the notion of “obsolescence”). I argue that obsolescence has become a neoliberal alibi for creative destruction and, therefore, an important component in contemporary processes of spatialized capital accumulation.     

THE POLITICAL ECONOMY OF WORKER PENSION FUNDS

Increasing concentration of economic power within the corporate sector, as well as the extent of corporate control by a few financial institutions such as commercial banks, have been subjects of intense scrutiny and debate in recent years. However, the role of private and public worker retirement trusts in providing power for institutional investors has not been adequately addressed. Pension fund assets, which were relatively inconsequential prior to 1960, and their investment in and share of total corporate equities minor, have grown to over $l410 billion by the end of 1977. In their analysis of and interest in public and private pension trusts, scholars, employers and even employees have tended to emphasize narrow economic issues such as investment performance. It is the central argument of this article that workers’ funds have become a major source of capital in the American economy, and as such have been used to help create and/or sustain practices that adversely impinge on workers themselves. It is argued that pension assets have contributed to: 1) the increasing power of financial institutions; 2) growth of corporate profits that only minimally benefit some pension plan participants; 3)capital shortages for 'socially useful’ investments; and 4)support of corporate enterprises that refuse basic worker demands including unionization itself. The study further suggests that the rapidly growing pension assets have the potential to serve‘the public interest’ as well as the needs of workers. Threat of withdrawal of funds from selected money managers and corporations, and utilization of share–holder voting rights to influence corporate policies can be potent weapons for organized labor. Since this is an exploratory analysis, the aim of the article is to gather, present and clarify basic information on worker pension trusts and to propose alternative avenues for future research in this critical area.     

Competing imaginaries: Crypto-utopianism and the material forces of Bitcoin mining

Drawing on Marx's theory of history, this article argues that the competition and capital accumulation inherent in the production of Bitcoin (i.e. ‘mining’) are at odds with the narrative discourses that position Bitcoin as a revolutionary technology capable of subverting traditional power structures. Through an analysis of the evolution of Bitcoin mining, the article demonstrates how the material conditions of its production have shifted over time, leading to the concentration of mining power among a few large corporate entities and a concomitant erosion of the decentralized ethos that underpinned the early Bitcoin community. The article also argues that this shift is not simply a result of the ‘natural’ evolution of the technology, but also the outcome of specific social and economic forces that encourage the accumulation of capital over Bitcoin's democratic and decentralized potentialities. Overall, the article suggests that the narrative discourses surrounding Bitcoin need to be understood in relation to the material forces that shape its production and circulation, and that a more nuanced analysis of the interplay between material and discursive factors is necessary to fully grasp the dynamics of the cryptocurrency ecosystem.     

Accumulation by dispossession and hazardscape production in post-corporate gold mining in Itogon,Philippines

This study investigates the experience of a gold mining community two decades after corporate mining activities ceased and were replaced by informal subcontract small-scale mining in Itogon, Philippines. Drawing on David Harvey’s accumulation by dispossession and Daanish Mustafa’s hazardscape, we consider the lasting effects, from 1903, of dispossession upon the establishment of the first commercial mines in the Philippines as experienced by traditional miners in Itogon. Despite the closure of mining operations, mineral lands remain privately owned, resulting in the persistence of legal land dispossession among local small-scale gold miners. Mining activities still continue as small-scale miners are able to access abandoned mines through subcontract mining. Subcontract mining has changed the source of capital that funds mining activities from mining corporation to rent-seeking small-scale mining financiers, but the new economic relations still benefit from the capitalist logic of low natural resources and labour value. We argue that the production of hazardscapes is a consequence of accumulation by dispossession through (1) processes of expropriation of mineral lands and the consequent creation of free labour among local miners; (2) the externalisation environmental cost as an accumulation strategy that results in the production of socionatural hazards; and (3) exploitation of those who labour and who are made to work in precarious work environment while contributing to the production of hazardscapes.     

Equality‐led Development and the Demand‐ and Supply‐side Effects

This contribution to the Forum Debate on global development focuses on the dimension of functional income distribution between labour and capital and its demand‐side and supply‐side effects. The article summarizes recent literature that has sought to explain the reasons behind the global fall in the labour share. It then discusses the demand‐side effects of the declining wage share on growth, based on the post‐Keynesian/post‐Kaleckian literature. The author presents an alternative policy scenario for the G20 based on a mix of increasing wage share and public investment, before discussing the supply‐side effects of rising inequality. The article concludes with some policy implications for equality‐led development.     

Financial Globalization,Local Debt Markets and New State Financial Activism in Middle-income Countries

Since the global financial crisis of 2008–09, there has been a renewed interest in the role of the state in processes of financial development and globalization. This article explores new forms of state economic activity via the development of debt capital markets in Southeast Asia, specifically Indonesia and Malaysia. It suggests that the expanding profile of various state-controlled entities in local capital markets constitutes a new form of state financial activism responsive to (upper) middle-class consumption preferences such as modern infrastructure, urban housing and low-risk investments. This activism highlights state agency and complicates the propositions of the emergent literature on state capitalism and financial de-risking that focuses on increasingly close alignment of the interests of states and international portfolio investors. Accordingly, the authors caution against unilinear conceptions of the state in which activism is primarily geared towards accommodating the preferences of international investors. The article posits that states are actively trying to establish new market logics for the benefit of their domestic middle classes via the development of domestic capital markets, and that the emergent role of middle-income country (upper) middle classes as financial consumers reconfigures processes of state-managed financialization.     

Refusing to be Toured: Work,Tourism, and the Productivity of “Life” in the Colombian Amazon

Starting from the contention that exercising a “right to tour” is predicated on the work of producing tourability, I examine how tourability itself is a contested process involving relations of land and labour. Examining the current “resource boom” of ecotourism in the Colombian Amazon, I use an analysis of work and capital accumulation to unravel a seemingly small act of refusal by the community of Nazaret that has barred tourists’ entry to their land. I argue that this act of refusal opens up space for critically examining the relationships of land and labour, especially through the production of “life”, in the accumulation of tourable places in contemporary global capitalism. Engaging literature on both tourism studies and land politics in the Amazon region, I contribute to the scholarship on tourism and work while examining how Indigenous landscapes are being made productive towards the ends of capitalism.     

The Regulatory State and Turkish Banking Reforms in the Age of Post‐Washington Consensus

The new era of the Post‐Washington Consensus (PWC), promoted under the auspices of International Financial Institutions such as the International Monetary Fund and the World Bank, centres on the need to develop sound financial regulation and strong regulatory institutions, especially in the realm of banking and finance in post‐financial crisis developing countries. This article uses an examination of the Turkish banking sector experience with the PWC in the aftermath of the 2001 financial crisis to show its considerable strengths and weaknesses. The authors argue that the emergent regulatory state in the bank‐based financial system has a narrow focus on strengthening prudential regulation, whilst ignoring the increased ‘financialization’ of the Turkish economy. They identify the positive features of the new era of the PWC in terms of prudential regulation, which has become much more robust in its ability to withstand external shocks. At the same time, however, the article highlights some of the limitations of the new era which resemble the limitations of the PWC. These include the distributional impact of the regulatory reforms within the banking sector, and notably the emergence of foreign banks as the major beneficiaries of this process; weaknesses in promoting productive bank intermediation that finance the real economy and economic growth, leading to poverty reduction via growth of employment whilst stimulating financialization within the economy; and finally, the exclusive focus on prudential regulation, whilst ignoring regulatory costs, consumer protection and competition regulation.     

Dealing with the banks: populism and the public interest in the global financial crisis

Political protest in Europe and the problematic politics surrounding bank recapitalization in the US have raised growing concerns about the rise of populist politics. Populist politics is problematic in its search for simplistic solutions to complex problems, its disdain for institutions and its political ambiguity. Nonetheless, the rise of populist mobilization also points to genuine concerns about the functioning of democracy. The politics of financial regulation has been dominated by a narrow, utilitarian and technocratic mode of policy-making that has tried to limit public debate, favouring an expert discourse which privileges questions of efficiency over questions of distribution. This article explores the distributional issues at stake in banking recapitalization (particularly questions about the returns governments receive for their investment) and regulation (through an exploration of the financialization literature). It argues that, while populist appeals to 'the people' are too ambiguous to be helpful, given the complexity of the interests at stake in financial regulation, there is a need for a wider and more democratic debate about financial regulation that pays greater attention to distributional issues. Populist mobilization can create pressure for debate, even if it presents few solutions. As a result, we should be wary of moves to shift too much regulation to the international level where populist mobilization is less effective.     

Regulating Investment Abroad: The Political Economy of the Regionalization of Singaporean Firms

This paper attempts to understand the regionalization of national firms from Singapore within the methodological construct of the regulationist perspective. It aims to demonstrate the usefulness of some concepts in the regulationist perspective for explaining restructuring processes in developing countries, and to evaluate critically the role of some of these concepts—such as regimes of accumulation and modes of social regulation—in illuminating the internationalization of capital through transnational corporations and their associated foreign direct investment. In particular, the paper argues that Singapore's export-led regime of accumulation manifests inherent contradictions in its dependence on foreign capital, the domination of the domestic economy by state-owned enterprises, and the relative underdevelopment of indigenous entrepreneurship. While this accumulation process was embedded in an earlier set of social and institutional mechanisms, its contradictions and tensions were not appropriately regulated and contained. When Singapore experienced two major external economic crises in the mid-1970s and 1985, these shocks and their internal tensions triggered a continuous process of economic restructuring regulated by a distinct combination of social and institutional mechanisms, or "fixes." One such institutional fix in recent years has been the promotion of the regionalization of Singaporean firms through the social regulation of local labor markets and the state-led establishment of institutions to facilitate the regionalization drive.     

Introduction: Reconsidering Futurism

The financial crisis hit Italy harder than many other Eurozone countries. In part this was due to the fact that the crisis came upon a system that was weakened by years of sub-par economic growth. One of the several endogenous factors that explain the stagnation of the Italian economy is the weak corporate governance in the industrial sector and parts of the financial one. A framework that was designed to maintain stability in the ownership of companies and of certain types of banking institution ultimately led to an inefficient allocation of capital and to a lack of investment, which contributed to the loss of competitiveness of Italian firms in a fast globalizing marketplace.     

Serious chemistry on set: the molecular structure of film investment in China

ABSTRACT

Using the case of the Mainland Chinese film industry, this paper argues that the competing features that attract commercial capital investment and drive state centralization create a molecular structure of national film investment, or the division of investment in the film industry into several interdependent centers. A combination of regulations, institutions, the built environment and access to capital leads to a distributed investment of strategic assets linked by bonds of complementarity. Beijing dominates in the area of state-supported production. Shanghai outperforms other cities in terms of foreign direct investment. Qingdao has attracted domestic Chinese private investment and entrepreneurship. Unlike the capital agglomeration seen in countries like the United States where film investment is driven centrally by financial considerations, the Chinese national film industry is strategically divided into several centers that rely more dominantly on political or financial resources. While this paper focuses on China, understanding the molecular structure of the Chinese film industry helps us understand both developed and developing countries that are characterized by robust state oversight and strong commercial media sectors.     

Unravelling Washington's Judgement Calls: The Cases of the Malaysian and Chilean Capital Controls

While the option of constraining cross-border financial flows to emerging markets (capital controls) has taken a backseat in the official policy debates about strengthening the global financial architecture, the International Monetary Fund (IMF) has ceded that certain temporary measures to limit the inflow of hot money may be beneficial in achieving some breathing space for governments. In this sense, capital controls are only to be used as a means to reach the larger end, namely, the proper (neoliberal) management of financial liberalisation. Indeed, by sanctioning a particular type of capital control it is engaging in a political judgement call, which is based upon certain material interests, as opposed to mere economic logic. This becomes evident when we juxtapose two different types of capital controls: the Chilean unremunerated reserve requirement, which was endorsed by the Fund, and, conversely, the IMF's rejection of the Malaysian currency control. I suggest that the IMF's opposition to Malaysian controls stems from its perception that capital restraint on outflows threatens the imperative of free capital mobility, which benefits both the US and transnational financial capitals.