Sociologist Marlène Benquet’s work, the result of ten years of research, aims to define how a “second finance” is constructed—a novel mode of capital accumulation by financial actors fully aware of their “value,” but with political consequences that favor the development of a libertarian-type regime through authoritarian capitalism. One of the main characteristics of this second finance is its detachment from the market driven by traditional financial actors, who collect savings, such as banks, insurance companies, pension funds, and household savings. In short, the market considered as the only way to invest in listed companies.
Second-tier finance develops outside the market but without truly severing ties with it, through over-the-counter transactions. This allows it to be less regulated while retaining considerable freedom to invest in unlisted assets. Consequently, it enables the transformation of assets previously considered ineligible (real estate, unlisted companies, infrastructure, derivative financial products, pension funds) into assets.
Second-tier finance develops outside of traditional markets. Its purpose is therefore not to promote competition. It encourages privatization in order to seize control of certain sectors, such as healthcare. The accelerated concentration of clinics since the early 2000s is a clear example. Marlène Benquet also points out that numerous examples support this argument, citing a window of opportunity created by the Commission for the Liberation of Growth (2008), which specifically encouraged third-party investors to acquire stakes in pharmacies: “A Health Europe Directive, driven by the European Union, which also encouraged third-party investment, particularly from financial players, in pharmacy capital, has created assets in the healthcare sector that previously escaped financialization. These assets have become highly profitable and are guaranteed by the State, since payment, pricing, usage, and profits are all guaranteed by the national health insurance system.”
The workings of this mechanism are perfectly adjusted. Continuing the demonstration leads to an inescapable conclusion: (1) no competition, (2) a quasi-rent-seeking situation, (3) a level of service guaranteed by the State. Zero risk, maximum profit.
The book is based on genuine fieldwork conducted using an indisputable research methodology (some sixty interviews with financial players, who were “more accessible than expected,” and access to archival material comprising 2,600 documents). This on-site , in-vivo observation of financial players in their daily lives is transcribed in a rich verbatim style from the very first chapters.
The conclusion—which appears to be the author’s true motivation—reveals a kind of unwritten strategy employed by this secondary financial sector, paving the way (or perhaps even providing a mediated platform?) for an authoritarian libertarian ideology widely shared abroad and in France. The actors (agents of normalization), described as conservatives, are explicitly mentioned by the author when establishing a link between these “extreme” political alternatives and their economic influence.
Sociologist Marlène Benquet is a research director at the CNRS and a member of the Interdisciplinary Research Institute in Social Sciences (IRISSO). Her work focuses on mass retail and the world of international finance.
Alain BRUNET