Abstract

In this lecture I redefine the financial crisis as a crisis of governance rather than as a primarily economic one conforming to the typical state-by-state framing of macroeconomics. I begin with a brief account of the mismatch between the geographical activities of major financial actors, on the one hand, and the geographical scope of state regulators, on the other. I then address three geographical dimensions of the mismatch and their consequences for territorial politics at different scales: what I term “low geopolitics” or the increased importance of economic matters involving non-state actors (credit-rating agencies, large law firms, producer-service organizations, etc.) often beyond the regulatory competence of particular states or international organizations for world politics; the increased political tensions between so-called world cities, on the one hand, and their surrounding hinterlands, on the other, particularly when national government fiscal and monetary policies favor the biggest cities over the rest of their territories; and the difficulties of “devolution” to local and regional governments when expenditures are devolved but revenue-raising and regulatory powers are not. I wish to question two developing narratives about territorial politics in the aftermath of the financial crisis: that which sees an “inevitable” return to a state-based world of finance and associated regulation and that which sees a decline in the possibilities of political devolution as a result of the crisis.