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The following is a transcript of a talk given by Prof. Lisa Adkins at the launch of Risking Together: How Finance Is Dominating Everyday Life in Australia by Dick Bryan and Mike Rafferty on 29 June 2018.

Photo of Prof. Lisa Atkins by Andy Roberts

First of all I’d like to congratulate Dick and Mike on their wonderful achievement and say that it is a great honour for me to be involved in the launch of the book.

What makes Risking Together such a great book?

It brings together Dick Bryan’s and Mike Rafferty’s work on finance and society that many of us have had the pleasure of hearing about in papers and presentations over recent years. But Risking Together is more than just a gathering of this recent work. It presents a compelling argument about how finance is implicated in major social changes that have taken place in Australia over the past 30 to 40 years. As this suggests, one of the many virtues of this book is that it is as much a work of sociology as it is of political economy. But unlike most sociological accounts, Bryan and Rafferty place finance at the very heart of social change. In fact, they argue that to understand the ways in which Australian society has changed we need to ‘think like finance’. In other words, to understand society now we need to understand the dynamics and operations of finance.

So what happens when we think in this way? Bryan and Rafferty chart how in Australia there has been a systematic shift of risk. We have seen risk shift from employers, the state and financial institutions to households. One well-known account of this shift concerns how the state and employers have gradually withdrawn from various forms of collective protection and provision. This includes the provision of stable and lifelong wages for many male workers, protections against unemployment and ill health, and provisions for retirement. This withdrawal means that responsibilities for these risks and life events now fall onto populations. This account of risk shifting is therefore one that foregrounds a process of individual responsibilisation.

But Bryan and Rafferty are not content with this account of risk shifting. They prise open this process and show that at its core is a shift of financial risk. This is a shift which amounts to everyday people becoming increasingly exposed to financial risk and the embedding of financial ways of thinking in everyday life such that we are routinely called upon to calculate and make decisions about financial risks. So, for instance, when we select what kinds of assets to have in a superannuation portfolio, a fixed or variable mortgage rate, a particular set of health insurance options, or a specific kind of mobile phone contract, we are making decisions about financial risks and the management of those risks.

Cover of Risking Together

These routine and everyday decisions about financial risk are very often understood to amount to a process of financialisation or the financialisation of daily life. But Bryan and Rafferty show how this process is not simply a matter of the incorporation of financial modes of calculation into everyday lives. They demonstrate how it also directly incorporates households into global financial markets. This incorporation takes place via the everyday contracted payments households make to manage risk and uncertainty, and to secure their existence. This includes contracted mortgage payments, income protection payments, phone bill payments, and internet service provider payments. These regular (or ‘locked in’) payments don’t simply repay debts or secure services but are inputs to financial products that are traded on finance markets. They are, in particular, critical inputs to financial securities.

What Bryan and Rafferty show is how through their engagement with these financial products, households participate in a co-production of securities with finance capital and hence how households are central to the profitability of finance. Via contracted payments households serve, in other words, as an asset base for finance capital. Whether we see it or not, our households have become critical to both the stability and profitability of the financial system. What’s really exciting about Risking Together is how Bryan and Rafferty are able – via analysis of HILDA and ABS data – to pinpoint the precise value of contracted payments from households for securitisers across income quintiles in Australia. And this is one of the really valuable and compelling aspects of Risking Together: its empirical underpinnings. The empirical analysis is hugely significant because it allows Bryan and Rafferty to show how securitisers have maximised household payments (or achieved a ‘mass production’ of household payments) by reaching into the households of middle Australia. Middle Australian households are then the driving force of the profitability of finance. The flip side of this is that ordinary Australian households have become the most exposed to financial risk.

What Risking Together does, then, is to show how the household is at the very centre of financial capitalism. It places the household as a critically important object of study. In so doing Risking Together does what all good social science books should do, namely, open up a clear research agenda. For in identifying the household as critical to financial capitalism it asks us to consider:

  • class: not as a process of the distribution of income and/or jobs but as a process of the distribution of risk

  • financialisation: not in terms of a process of responibilisation or a process which makes rich people richer and dispossesses the poor but as a process which enrols whole populations into the workings of finance

  • the household: not in terms of the reproduction of labour power or in terms of divisions of labour but as an asset base for finance capital which anchors the financial system.

Most of all, this book compels all social scientists (and not just political economists or economists) to ‘think like finance’. This is Risking Together’s provocation and main challenge.

Prof. Lisa Adkins is Head of the School of Social and Political Sciences at the University of Sydney.

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