Liberalisation and the political economy of financial bubbles

This paper criticises the tight association in the political economy literature of speculation with liberal forms of governance. Having emphasised liberalisation, it is argued, scholars who ascribe to such a view are too often left without an institutional account of speculative dynamics. The paper then sets out the foundation for a political economy of speculation; one which emphasises the various forms speculation has taken and how these are rooted within specific institutional structures. In order to do so, the paper develops a distinction between premodern and modern speculation and uses it in order to contrast British and American finance. This contrast then serves as a basis for challenging the idea that speculation emerges from liberal forms of governance.