Depoliticizing space: The politics of governing global finance

This article argues that neoliberal state restructuring is best theorized by bringing two critical approaches into conversation: the spatial concepts of de/reterritorialization and rescaling, and the depoliticization thesis. The globalization of economic activities paradoxically requires the expansion of territorially-bounded regulatory infrastructures, which Brenner terms the dialectic of de- and reterritorialization. Yet this dynamic entails a serious governing dilemma, not explored by the spatial literature. By assuming greater political responsibility for an increasingly global, financialized form of capital accumulation, states risk devastating legitimacy crises if accumulation falters – a phenomenon identified by the depoliticization literature. States have responded to this dilemma by depoliticizing policy-making through the rescaling of political authority. By moving accountability mechanisms away from central government, policy-makers can insulate themselves from popular backlash in case an economic crisis demonstrates the failure of their reterritorialized regulatory infrastructure. This article will apply this hybrid approach to the case of Margaret Thatcher’s 1986 Financial Services Act. New archival evidence suggests that this policy represented a strategy to facilitate the Big Bang’s globalization of Britain’s financial sector through the creation of an unbiased, reterritorialized legal framework for the City of London. Yet political accountability for this regulatory system was rescaled to an obscure, quasi-governmental scale, so as to absorb any political backlash from future financial crises and insulate government legitimacy. This article thus contends that neoliberal state restructuring can be understood as the coalescence of two spatial governing strategies: reterritorializing to deterritorialize, and rescaling to depoliticize.