This collective work brings together 16 teacher-researchers affiliated with CEMS (CNRS-EHESS), whose object of study, both original and complex, focuses on the sociology of financial circuits, defined as “systems of financial action” or “sets of rules of law and accounting, distribution and collection of money in its monetary and non-monetary forms.” These circuits mobilize public and private operators linked by trust and combining technical, administrative, economic, accounting, and IT skills (assisted in particular by AI). The authors tackle the historical and geographical dimensions of this issue, focusing their analyses on the materiality of financial and extra-financial circuits, that is, on the practical conditions of their implementation. The research analyzes in particular the financialization of political institutions and the economic systems of territories (Unions, States, local authorities). Reading the book requires concentration and synthesis because of the heterogeneity of the concepts involved, the systems analyzed, and the case studies observed, but these efforts help convince the reader of the increasingly essential role played by finance in modern society.
The first part of the book, entitled “The Making of the Sovereign through Circuits,” uses the example of the birth of Swiss social welfare to show that the formation of a modern state is based on “its ability to levy taxes and to structure financing systems in a sustainable way.” This part is also devoted to the construction of the first European financial circuits under the supervision of the European Central Bank.
The second part focuses on “the making of public policy by financial circuits” and revisits the many French reforms of public aid and subsidies, and in particular, the French reforms of pension schemes in 1967 and 1983, which were made possible by the merging of unemployment insurance and pension systems. Another study focuses on “the greening of French energy policy, and on the action of the French Development Agency, which has been transformed by combining various forms of credit and free aid.
The way in which financial circuits create organizations and the way in which organizations create circuits is at the heart of Part 3 (The Making of Organizations by Circuits). The case studied is that of the Italian “Banking Foundations (FOB)” born from the reform of the Italian banking system, which created a capital link between them and the Italian banks. The FOBs then helped to create a new housing finance circuit. The study also analyzes “Culture Action Europe,” which shows that the origin of the funds that support it has important consequences on the functioning of the organization and the way it carries out its missions.
Part 4 (The infrapolitics of circuits) focuses on the consequences of the least visible circuits and addresses the unintentional sequences produced by changes in certain elements of the circuits on other circuits. It shows that in some situations, public policy may have been hampered by a lasting failure of IT and administrative infrastructures. The case of toxic loans taken out by local authorities due to “incremental changes” in bank and community financing circuits is also discussed. The last chapter uses the example of the pension funds of Belgian local authority officials and the budgets of these authorities to show that these two circuits are linked: personnel management policies and the statutes of agents interact in a deferred manner on pension policies and vice versa.
In conclusion, the authors synthesize the theoretical contributions to the public debate. They aim to do for macroeconomics what has been done for the links between the sociology of markets and microeconomics.
This project was conceived from a research program on financialization, an interdisciplinary field of research that sees macroeconomic and sociological work intersecting, focusing on particular systems or sites of power. The book aims to contribute “pragmatically” to the debates on the financing of the ecological transition and on “digital currencies.” One idea is to shift the focus from the volumes of money needed to the way in which the funds will be disbursed when the authorities do not always have the infrastructure or the technical skills to allow the money to be put into circulation for projects. Another idea is “to consider new taxes and new distribution channels and reorientations of flows.”
As for “digital currencies”, they change, compared to “fiat” currencies, the nature of the infrastructure and the organization of the circuit. They could make it possible, according to the authors, “to change the currency in order to ‘change the economic world and transform both the state and capitalism’.”
This book is at the crossroads of many disciplines, most of which fall under sociology and few under economics. The approach is the result of a highly documented, painstaking work. Admittedly, money is too serious a subject to be left to monetary economists alone, and “related” ideas bring freshness to classical thought. Nevertheless, several observations seem to be the egg of Columbus even if the historically observed ideas are explained and finely analyzed. The conceptual contribution remains more sociological than monetary. Changing money to change capitalism and therefore change life is a vast program!
Note prepared by Dominique Chesneau and Jean Jacques Pluchart
