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Innovations, Fragility and Complexity: Understanding the Power of Finance
Published online by Cambridge University Press: 22 May 2014
Abstract
This article examines financial innovation as a source of structural power of finance originally identified by Susan Strange. I build a synthesis based on complex network theory and the field of evolutionary finance which yields a conception of finance as a complex ecological habitat. On the one hand, the interaction between various entities inhabiting the financial system endows this complex habitat with a tangible degree of autonomy vis-à-vis politics, society and economy. On the other hand, the evolutionary process guiding this financial ecology is built on complexity and innovation and hence is fragile. The structural power of finance today, therefore, is necessarily twofold: it manifests the effects of the endeavours (intentional and otherwise) of financial agents; crucially, it also rests on the seemingly boundless ability of the financial system to adapt, change and evolve.
- Type
- Articles
- Information
- Government and Opposition , Volume 49 , Issue 3: The Power of Finance: Before and After the Great Financial Crash , July 2014 , pp. 542 - 568
- Copyright
- Copyright © Government and Opposition Ltd 2014
Footnotes
Anastasia Nesvetailova is Reader in International Political Economy at City University, London. Contact email: [email protected].
References
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