SAGE Journal Articles

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Nesvetailova, A. & Palan, R. (2013). Minsky in the shadows: Securitization, ponzi finance, and the crisis of Northern Rock. Review of Radical Political Economics, 45, 349-368.

Summary: One of the many lingering questions posed by the continuing meltdown of global finance concerns the role of securitization and the so-called shadow banking system in amplifying the scope of the crisis. As the crisis has revealed, a crucial function of many shadow financial units such as special purpose vehicles (SPVs) has been to make complex debt structures marketable and liquid. To what extent can the financial malaise of 2007 be attributed to the widespread use of such schemes? And how can this problem be conceptualized in contemporary political economy? In this paper we address these questions, examining the case of Northern Rock and its offshore SPV structure, Granite Master Trust. Drawing on the financial instability framework of Hyman Minsky, we find that the collapse of Northern Rock was caused by a confluence of two institutional trends in modern finance. First, it is the tendency of financial firms to exploit the regulatory gap by relying on financial innovation; second, it is the spread of the Ponzi culture as the defining mode of financing for today’s economic units. In this, the crisis of Northern Rock is symptomatic of a wider problem of today’s financial system where the process of securitization and liquefying debt structures is facilitated through the shadow financial system and often involves illicit practices, as well as outright fraud

Questions to Consider:

  1. What role did lack of securitization play in the banking crisis of 2007/2008?
     
  2. How has the spread of ‘Ponzi Culture” caused problems in the economy? What are some ways that ‘Ponzi Culture’ could be addressed?
     
  3. How has the modern political economy led to international problems in the area of finance?
     

Morris, R. G. & Higgins, G. E. (2009). Neutralizing potential and self-reported digital piracy: A multitheoretical exploration among college undergraduates. Criminal Justice Review, 34(2), 173-195. 

Summary: This study explores retrospective (self-reported) and prospective (willingness to engage) participation in digital piracy via a multitheoretical approach relying on self-control, social learning, microanomie, and techniques of neutralization. Using more complete measures of digital piracy than in previous studies (illegal music, software, and movie downloading), data were collected from undergraduate students from multiple universities (n = 585). Modest support was found for neutralization theory when controlling for other theoretical variables. Modest support was also established for social learning theory. It is clear that there is an underexplored cross-theoretical dynamic in explaining self-reported piracy and willingness to engage in digital piracy. Suggestions for policy and future research are presented and limitations are accounted for.

Questions to Consider:

  1. What is digital piracy and what are the costs of this type of crime?
     
  2. Which theoretical models found support within this study and how did they explain digital piracy?
     
  3. How did the sample used in this study limit the generalizability of the findings?