Mass investment, mutual funds, pension funds and the politics of economic restructuring

by Harmes, Adam.

While capitalist economies have long been characterized by mass production and mass consumption, the nse of mass investment appears to be new phenornenon. Also new has been the related growth of institutional investors such as mutual funds and pension fùnds as an increasing nurnber of investors have delegated control over their portfolios to professional fund managers. However, despite their increasing prominence within the contemporary financial system, the collective impact of institutional investors and mass investment more generally has received little attention among scholars. This neglect reflects the ontologies of neoclassical and neoManrist approaches which theorize investon, respectively, as acting either autonomously as individuals or collectively as the hancial fraction of the capitaiist class. In both cases, there have ken few attempts to make any distinction between different types of investors. The cend assumption of this dissertation is that sucb a distinction is necessary to develop a more complete understanding of ment developments in the institutional smictws of the global economy and in the relationship between financial capital and labour. In examining these questions, it employs a critical theory methodology, and original research and analysis, to make two interrelated arguments. nie fmt is that the rise of munial funds and pension bds is serving to rnake the financial meets less efficient in ways that explain a number of negative trends such as: currency crises; pressures on States to pursue excessively tight macroeconomic policies; and pressures on firms to restructure and do wnsize. The second argument is thatthe rise of mass investrnent and the delegation of control to professional fimd managers is serving to reconfigure the relationship between financial capital and labour by increasing the power of the former in both coercive and consensual ways. Investigated specifically is the way that the nse of mass investment and the related emergenceof an investment culture may be serving to incorporate some elements of labour into a class alliance led by financial capital. The dissertation concludes with a discussion of policy implications as well as implications for the long-tenn nistainability of the prevailing institutionai structures of the emerging world order.