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Giles E. M. Gasper, Svein H. Gullbekk (Hg.): Money and the Church in Medieval Europe (1000-1200). Practice, Morality and Thought (Carsten Woll)

In recent debates about inequality, many have pointed to the predominant position of the finance. This article highlights that structural power, not lobbying resources, are key to explaining variations across countries. It examines finance-government negotiations over national bank rescue schemes during the recent financial crisis. Given the structural power of finance, the variation in bank bailouts across countries cannot be explained by lobbying differences. Instead of observing organized interest intermediation, we can see that disorganization was crucial for the financial industry to get off the hook and let the government carry the burden of stabilizing the economy. Put differently, structural power is strongest when finance remains collectively inactive. In contrast to traditional accounts of the lobbying influence of finance, the comparison highlights that the lack of organization can have crucial redistributive consequences.

The rise in inequality has been explained with reference to organized groups and the lobbying of the financial sector. This article argues that the image of politics as organized combat is contradicted by empirical evidence on lobbying in the United States, and does not travel well to Europe. The power of finance does not operate through organized political influence. Rather, politics in the interest of capital unfolds as a structural feature of advanced economies over time. Tellingly, at the height of the financial crisis, one of the most promising strategies of institutions seeking government support was not organizing for combat, but collective inaction. Our challenge, then, is to explain how the power of finance has built up and is playing out in creating inequality. A more structural, less agency-focused perspective highlights how the rise of finance has been supported by actors that few would accuse of being finance-friendly, such as the European center-left parties and consumers. Reconceptualizing the power of finance has important implications for political solutions to rising inequality.

The rise in inequality has been explained with reference to organized groups and the lobbying of the financial sector. This article argues that the image of politics as orga­nized combat is contradicted by empirical evidence on lobbying in the United States, and does not travel well to Europe. The power of finance does not operate through organized political influence. Rather, politics in the interest of capital unfolds as a struc­tural feature of advanced economies over time. Tellingly, at the height of the financial crisis, one of the most promising strategies of institutions seeking government support was not organizing for combat, but collective inaction. Our challenge, then, is to explain how the power of finance has built up and is playing out in creating inequality. A more structural, less agency-focused perspective highlights how the rise of finance has been supported by actors that few would accuse of being finance-friendly, such as the Eu­ropean center-left parties and consumers. Reconceptualizing the power of finance has important implications for political solutions to rising inequality.

The rise in inequality has been explained with reference to organized groups and the lobbying of the financial sector. This article argues that the image of politics as orga­nized combat is contradicted by empirical evidence on lobbying in the United States, and does not travel well to Europe. The power of finance does not operate through organized political influence. Rather, politics in the interest of capital unfolds as a struc­tural feature of advanced economies over time. Tellingly, at the height of the financial crisis, one of the most promising strategies of institutions seeking government support was not organizing for combat, but collective inaction. Our challenge, then, is to explain how the power of finance has built up and is playing out in creating inequality. A more structural, less agency-focused perspective highlights how the rise of finance has been supported by actors that few would accuse of being finance-friendly, such as the Eu­ropean center-left parties and consumers. Reconceptualizing the power of finance has important implications for political solutions to rising inequality.

Comparing bank rescue schemes in France and Germany during the banking crisis of 2008–9, this article argues that collective inaction is a little-studied aspect in the exercise of power in business–government relations. Contrary to studies that focus on lobbying, structural power or the influence of beliefs, the comparison highlights that governments depend on contributions from the financial industry during crisis management. In the negotiations to design bank support schemes, some countries, such as France, succeeded in engaging their financial sector collectively. Such public–private burden-sharing arrangements alleviate the public budget and increase mutual surveillance between banks during government support. In other countries, such as Germany, a collectively organized industry response failed, which forced the government to design an entirely public support scheme. The German government reacted to this perceived imbalance by imposing tighter banking regulation to avoid a repetition of the impotence it experienced in 2008.

There is much to commend in Hacker and Pierson's (2011) analysis of a growing bias in US politics in favor of the wealthiest parts of society. However, the image of "politics as organized combat" draws our attention into the wrong direction. There is increasing evidence that organized groups are less pivotal in US politics than is generally assumed. Moreover, the insights on group politics do not travel well to Europe, where we find fundamentally different forms of political organization. Explaining rising inequalities in Europe requires understanding the structural features of finance capitalism rather than just political interactions.

There is much to commend in Hacker and Pierson's (2011) analysis of a growing bias in US politics in favor of the wealthiest parts of society. However, the image of "politics as organized combat" draws our attention into the wrong direction. There is increasing evidence that organized groups are less pivotal in US politics than is generally assumed. Moreover, the insights on group politics do not travel well to Europe, where we find fundamentally different forms of political organization. Explaining rising inequalities in Europe requires understanding the structural features of finance capitalism rather than just political interactions.