CRITICAL INSTITUTIONALISM AND FINANCIAL GLOBALIZATION: A COMPARATIVE ANALYSIS OF AMERICAN AND CONTINENTAL FINANCE

The globalization of financial markets is essentially an Americanization of financial institutions: institutional structures and speculative dynamism unique to Ameri-can finance is rapidly displacing other financial systems. Critical institutional analysis is used to construct Weberian ideal types of the institutional structures of American and Continental financial systems. Critical institutionalism embraces the theoretical power of macro-level analysis, maintains concern for social justice but incorporates detailed analysis of meso-level institutions and organizational struc-tures. Seven institutional structures are analyzed: 1) the extensiveness of finan-cial market participation; 2) the structure of financial intermediation; 3) the rela-tive dominance of primary and secondary financial markets; 4) the relative orien-tation of participants to investment and speculation; 5) the predominance of debt versus equity securities; 6) the organizational form of the financial securities markets; and 7) the form of financial accounting. Together, these institutional patterns support the essentially speculative character of contemporary American finance and fuel stock market powered restructuring of industry. The article ex-amines how Germany’s financial structure prevented, deflected or delayed Ameri-can-style downsizing and deindustrialization in the late 20th century and ends by considering how critical institutionalism can identify important, winnable battle-grounds for labor movement and anti-globalization activists who seek to shape the future of global capitalism.