Research – What?

In short, I am interested in how we make the banks work for ‘us’. By ‘us’ I mean society as a whole, and over the long term.

In order to do this I need to understand what banks are for, which means I need to understand what money is, and to understand money I need to understand debt & how different manipulations of debt can produce socially useful or socially damaging affects.

For the much longer-winded academic explanation of my PhD, see below.

Research Proposal Summary (adapted from ESRC application)

This research project will examine the re-conceptualisation of “social utility” in the UK banking system through an analysis of the debt-credit relation, with specific emphasis on current attempts to increase social utility by non-governmental actors.

In 2009, Lord Turner, Chairman of the Financial Services Authority, indicated his belief that some areas of banking have been at best ‘socially useless’ and that others have been damaging to the real economy. Recent studies have drawn attention to a social utility deficit, linking the rise of banking and finance with a rise in inequality over the past 30 years (Langley 2011, Wilkinson and Pickett 2010). The re-conceptualisation of social utility is taking place within a wider public debate around the reform of the banking system, with many non-governmental organisations and policy institutes focusing on the effect that the financial crisis has had on public finances and society, highlighting the changing nature of our conceptions of social utility in relation to banking.

The definition of social utility needs contemporary conceptualization work. At present, there are at least two working definitions used – both related to the relationship between bank lending and either businesses or individuals. This research seeks to go beyond these limited definitions to explore more fundamental questions regarding the nature of debt and its relation to social utility. Debt allows the opening up of space to situate social utility in banking – money is debt – therefore examining the ways in which the credit-debt relation has been manipulated to produce socially useless/socially damaging outcomes will create insights into how different manipulations of the credit-debt relation could produce outcomes with increased social utility.

A recent study on the nature of debt and money by David Graeber (2010) challenges the reductionist economic theory of money and debt as neutral and apolitical, and this project will seek to expand on Graebers work to form a counter-critique, using a strong theoretical grounding of debt ‘as it has been’ to then examine ‘what it could be’ through an empirical study of current debates and projects around debt with my collaborative organisation ‘The Finance Innovation Lab’.

The central question of the research is: how is social utility being conceptualised and debated in relation to the UK banking sector?

Subsidiary questions will be used to guide the research and data gathering process:

• Defining social utility

How is social utility currently defined, measured and evaluated? What is the relationship between banking and society? How have interest bearing loans altered this relationship?

• Banking and crises

What can we learn from the recent financial crisis about the changing public conceptions of the social utility of banking? How can different banking practices be assessed and contrasted to understand which are socially useful/beneficial and which are socially damaging?

• Investigating the changing nature of social utility         

How are non-governmental organisations approaching the social utility deficit in banking? What can approaches to reform and redesign inform us about the potential for increased social utility in the banking sector?

Contribution to Research

This study will create new knowledge of the current and potential social utility of the banking system in the UK through:

a) an examination of the competing theories as to the utility and purpose of the credit-debt relation and,

b) a case study examining the approach of the Finance Innovation Lab to the contemporary re-conceptualization of social utility and demands for increased social utility in the banking sector.

The main contribution of this research is to go beyond mainstream understandings and proposals for banking sector change to provide a clear and up to date account of the social usefulness of banking. This knowledge will be of importance to all those with a stake in the reform of the financial system, but especially to practitioners seeking clarity on where change is necessary or needed.

A key objective of the study is to compare and contrast socially useful practices such as retail and commercial banking, with socially damaging practices, such as speculative financialised risk-taking. The research, via the case study, offers a measurable way to break down these different practices to make explicit those elements that may be socially damaging and how these practices could be reformed to better serve the interests of society.

I have 3.5 years to answer these questions as best I can. Wish me luck!