Project: "Finance and the Far Right"

There is mounting evidence that the Global Financial Crisis (GFC) at least aggravated, if not fundamentally facilitated, the surge of far-right vote shares in Western societies. However, we know little about the mechanisms which link finance, the GFC and the demise of democratic stability.

This project intends to fill this gap in two steps. First, it explores what I call the financial regimes of the far right. This part of the project is based on a fuzzy-set inspired database of policy intentions of the far-right parties in the realms of financial regulation, financial transaction taxes, corporate governance, takeover regulation, credit and capital market policies in nine Western economies (US, UK, Switzerland, Netherlands, Germany, Austria, France, Greece, and Italy).

The database finds that far right approaches to financial-market policy differ considerably. Readers of the financial news may have already realised this: Giorgia Meloni's financial-market project differs markedly from Donald Trump's. However, the database allows us to systematically map out concrete differences in financial-market policies across the countries under observation.

This part of the project argues that, in line with Karl Polanyi’s insight that fascism emerged in part from an investor strike--where owners of capital withheld investment in productive activity--we have witnessed a new kind of investor strike since the 1990s. In this context, financial nationalism has re-emerged, but its manifestations diverge more markedly than they did in the interwar period.

With the rise of asset manager capitalism, institutional capital pools--such as mutual funds, hedge funds, private equity, and venture capital--have become increasingly dominant in contemporary capitalism (Braun 2022). On the one hand, institutional capital pools have made productive sectors of the economy more accessible to financial investment. On the other hand, under asset manager capitalism, instruments such as private equity (PE) and mergers and acquisitions (M&A) are often driven by short-term financial returns, relying heavily on financial engineering, cost-cutting, and layoffs. As a result, this form of capitalism tends to undermine long-term productive investment. Consequently, economic growth has slowed across much of the developed world. At the same time, PE generates a highly visible “winners” and “losers” within global financial capitalism. While the asset and wealth management industries remain concentrated in economies such as the US, UK, and Switzerland, PE firms extract rents from countries like France, Italy, Germany, and Austria--fuelling perceptions among local populations that domestic firms are increasingly surrendered to foreign control.

As the pie of global economic productivity declines, some far right parties (in the US, UK, Switzerland--I call them asset manager globalists) double down on financial market deregulation and implement new policies which decidedly support PE and asset management. These parties have also attempted to implement new rules for capital repatriation (e.g., Trump's territorial tax system) to further concentrate the benefits of global asset management activities in their economies. At the same time, other far right parties have devised intricate plans to shield domestic firms from foreign takeovers through multiple vote shares of owners of family firms--this is the case in all Continental European far right parties I investigated.

I find that we can discern two Continental far-right financial approaches: the credit-market cyclers (far-right parties in Italy, Greece and France) and the capital-market cyclers (far-right parties in Germany, Austria and the Netherlands). The former seek to cycle savings through state-controlled banks into industry and intend to incentivise savers to buy sovereign bonds to solve the fiscal crisis. The latter seek to build a more competitive capital market by channelling savings into ETFs which are then supposed to be invested (more or less exclusively) in domestic firms.

This project argues that the “asset-manager” investor strike which emerged since the 1990s shapes and divides far-right approaches to financial-market governance. While far-right parties across all three country groups seek to reconfigure access to economic rents in ways that favour domestic actors, their strategies differ significantly. The varieties stem from the structural constraints imposed by the investor strike, which limits the policy space available to each party. For the Italian and Greek far right, adopting a liberal, asset-manager-driven model would be illogical, as their economies have been among the primary losers in the global financial order. In contrast, for figures like Donald Trump and Nigel Farage, it is rational to deepen the integration and deregulation of global financial markets, as the US and UK are positioned to expand access to financial rents through continued dominance in these sectors.

The second element of the larger project of analysing the relationship of finance and the far right will explore the emergence of new coalitions between financial market actors and the far right.