Organized Combat or Structural Advantage? The Politics of Inequality and the Winner-Take-All Economy in the United Kingdom

Abstract

Since 1970 the United Kingdom, like the United States, has developed a “winner-take-all” political economy characterized by widening inequality and spectacular income growth at the top of the distribution. However, Britain’s centralized executive branch and relatively insulated policymaking process are less amenable to the kind of “organized combat” that Hacker and Pierson describe for the United States. Britain’s winner-take-all politics is better explained by the rise of political ideas favoring unfettered markets that, over time, produce a self-perpetuating structural advantage for the richest. That advantage is, in turn, justified and sustained by reference to the same ideas. Inequality growth in the United Kingdom has been primarily driven by the financialization of the economy that began under the Thatcher government and continued under New Labour. The survival of pro-finance policies through the financial crisis provides further evidence that lobbying by a weakened City of London was less decisive in shaping policy than the financial sector’s continuing structural advantage and the tenacity of its supporting political consensus.

When Polanyi met Farage: Market fundamentalism, economic nationalism, and Britain’s exit from the European Union

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Brexit, the City and the Contingent Power of Finance

“…The literature on varieties of capitalism would predict that the UK will defend its national business model by protecting and promoting the interests of one of its largest and most competitive sectors (Fioretos 2010, Howarth andQuaglia 2016). Similarly, the literature on business power would predict that the City will exert significant influence in the UK policy process, given the dependency of the British state on financial services and the formidable lobbying capacity of the industry (Bell and Hindmoor 2015, Hopkin and Shaw 2016, Thompson 2017a. Furthermore, a distinctive feature of the UK business model has historically been the institutionalised relationship between British state and the City of London (Baker 1999, Moran 1991, 2009.…”

Central banking and the infrastructural power of finance: the case of ECB support for repo and securitization markets

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