Introduction

What follows is a timeline of the global financial crisis 2007– 2008.

• • 9 August 2007: French International Banking Group BNP (Banque Nationale de Paris) Paribas becomes the first major bank to acknowledge the risk of exposure to sub-prime mortgage (issued at high interest rates to borrowers with low credit ratings) markets.

• • 14 September 2007: Having borrowed large sums of money to fund customers’ mortgages, British bank, Northern Rock, needs to pay off its debt by reselling those mortgages in the international capital markets. But, given that the demand had fallen, it faces a liquidity (cash flow) crisis and needs a Government loan, sparking fears that it would soon go bankrupt. Customers queue round the block to withdraw their savings, the first run on a British bank for 150 years. Adam Applegarth, Northern Rock's chief executive, later said that it was ‘the day the world changed’.

• • 17 February 2008: After the failure of two private takeover bids, Labour Chancellor of the Exchequer in the Gordon Brown Government, Alistair Darling, nationalizes Northern Rock, claiming it to be a temporary measure. It was nearly four years before it returned to the private sector.

• • 7 September 2008: The US Government bails out Fannie Mae and Freddie Mac – two huge firms that had guaranteed thousands of sub-prime mortgages.

• • 15 September 2008: Heavily exposed to the sub-prime mortgage market, the American bank Lehman Brothers files for bankruptcy, prompting worldwide financial panic.

This chapter examines Finland's decision to apply for NATO membership. It surveys both public discussion and elite opinion as well as the political decision-making process that led to the application in spring 2022. How was this decision made? And why? These two key questions are considered in detail because they reveal something exciting not only about Finland but also about decision-making on security policy and the dynamics of NATO enlargement in general.

These questions might elicit different answers, but the starting point is that the decision to seek membership of NATO was triggered by Russia's new demands on the European security order and its attack on Ukraine in February 2022. However, this explanation, in all its straightforwardness, is too simple. As well as this, a change had to take place in the minds of the people and the decision makers. Indeed, what is much more contested is how this change came about and who were the key actors in the process. Set against some top-down or even conspiratorial views of decision-making, the chapter describes the key stages of the decision-making process and reflects on the interpretation that the decision was crucially – although not exclusively – driven by public opinion (Forsberg 2024).

Before discussing what happened in 2022, the chapter gives some historical background on Finland's policy change. It starts by discussing Finland's neutrality policy during the Cold War.

Introduction

Scholarship on stages of capitalism posits that the liberal order is in crisis, which may lead to the configuration of a new order in the medium term (for example, Nölke, 2017; 2022; Lake et al, 2021; ). This is partially being triggered by the adoption of financial statecraft policiesby developing and emerging market economies (DEEs), which suffer the negative effects of the subordinated condition of their integration into the global financial order (GFO). International financial subordination (IFS) is an umbrella concept related to ‘an important set of process and relations that maintain DEEs in a subordinate position in the global monetary and financial system. In short, IFS is about unearthing why the structural power of finance takes a particularly violent form of expression in DEEs, and the implications thereof’ (Saad-Filho and Feil, 20231 Alami et al, 2023, p 1360).

As Alami states (, this volume), while IFS imposes real and identifiable constraints on policy making in DEEs, this does not necessarily mean that state agency and capacity are denied. In fact, IFS can serve as a powerful catalyst for institutional innovation and regulatory experimentation in these economies, potentially improving a country's position in global financial and monetary relations. DEEs are subordinated financially to different degrees, depending on, among other factors, the manner of their international financial integration in the global monetary and financial system, Chapter 2and a set of domestic institutions and policies implemented in each country.

Russia's full-scale invasion of Ukraine, its aggressive posture towards its neighbours and the challenge it poses to not only NATO but the whole rules-based system, have reinvigorated the Alliance. NATO is, alluding to a statement by French President Emmanuel Macron, far from brain dead (BBC 2019), and its role in providing security to its members and containing Russia is clearer than ever, although Trump's second presidency has created uncertainty concerning NATO's future. However, NATO's invigoration is most visible in Eastern and Northern Europe, where it directly encounters Russia in a rapidly changing operational environment. In Chapter 6, we discuss the Finnish and Swedish domestic dimension of these regional challenges, but the current situation must be related to a larger geopolitical context. Although the northern enlargement is not regarded as much more than a footnote in the Alliance's history, in which Russia's invasion of Ukraine renewed its focus on territorial defence, the extension of Article 5 to Finland and Sweden comes with important implications for the Alliance. From a NATO perspective, their accession both underlined NATO's commitment to its open door policy and sent a strong signal to Moscow that its attempts to undermine the rules-based European security order by force are counterproductive.

The Finnish and Swedish memberships will potentially shape the Alliance's strategic role in Northern Europe in a number of ways, which we explore in three parts in this chapter.

Introduction

As explored in Chapter 2, postmodernity – as a conceptual category to explain the novelty of contemporary social processes – does not have the same explanatory power of liquid modernity. The liquefaction of older modern structures does not represent a unidirectional or irreversible process. As the solid structures of modernity remain part of the flows of liquid modernity, so too remains the opportunity for increased viscosities within such flows, facilitating transient or sustained periods of resolidification. There is a necessity to rely on some of the premises which underpinned notions of modernity as a way of advancing the incorporation of theorizing ‘race’ in the context of liquid modernity. For instance, the premise of be ‘modernity’ as a European project governed by rapid processes of change against Eurocentric indicators of ‘progress’ is useful in critical terms and is not accepted as a singular model of modernity to displace other parallel ‘modernities’. However, the canonical theorizing of modernity in the social sciences only provides this Eurocentric account (see Chapter 2 for a full discussion of modernity and postmodernity). This chapter will focus on what this means for some of the problematics concerning notions ‘postracialism’, whether this is desirable and what we will call the ‘multicultural project’. The ambivalence around engaging in any meaningful discussions about ‘race’ in the context of late modernity has been a prevalent feature of what could be called the meta end of the social science theorizing scale.

Introduction

In March 2022, Tory Cabinet Minister Michael Gove claimed that the ‘hostile environment’ approach to immigration rules was ‘invented under a Labour Home Secretary’. Gove repeatedly banged on the dispatch box as he said to MPs that he had ‘had it up to here with people trying to suggest this country is not generous’, as he trivialized and attempted to deny the hostile environment with the phrase, ‘all the stuff about hostile environments’. As Elaine McCallig explains, writing for Indy 100, Gove's tantrum was in response to comments from Labour MP Tanmanjeet Singh Dhesi who told the Commons that as with previous refugee crises, the Government's response to the Ukraine crisis, that followed the Russian invasion of that country the previous month, has been ‘quite frankly, been pathetic, revealing the true extent of the callousness within this government's hostile environment policy’.

When asked for comments about Gove's claim about the ‘invention’ of the hostile environment, Sarah Turnnidge, writing for Full Fact, points out that neither his Department, the Department for Levelling Up, Housing and Communities, nor Conservative Campaign Headquarters nor the Labour Party responded to the query.

There have been several other attempts to claim that the Labour Party invented the hostile environment, that, in fact, amount to little more than that certain Labour politicians have used the term in various different contexts.

Introduction

South Africa's financial system is both a source of innovation and social degradation within a context of extreme uneven development. This chapter analyzes the interplay of these two factors, and illustrates the insufficient role of the state in regulating finance and the havoc it is wreaking on its economic and social life. Given the extraordinary extent of unfettered financialization within South African finance and the state's capture by neoliberal economic ideology, the resulting institutional structure of the economy provides the state with neither the capability (or willingness) to tame finance domestically, nor to exercise any meaningful degree of financial statecraft abroad. Instead, we can observe the development of a socio-economic system that is fully subordinated (see ) to the imperatives of financial accumulation and thus subject to the whims of Petry and Nölke, Introduction, this volumefinancial investors, causing tremendous societal degradation in the process.

South African ‘settler-colonial’ capitalism was traditionally adjusted when successive modes of extra-economic oppression had the effect of raising the rate of capital accumulation, as Ben historic periodization of the race– class relationship illustrated. In its most recent manifestation, financial institutions have recorded the fastest growth and wield the most power, in an era following the discovery of diamonds and gold in the 1870s– 80s when a ‘minerals energy complex’ emerged. This entailed multinational corporate mining houses, smelters, petrochemical plants, refineries, and the Magubane's (2001) coal-reliant parastatal electricity company Eskom, which were financed in the postwar era through an innovative oligopolistic form of corporate structure (). Innes, 1984

Introduction

The analysis and critique of modernity is a central theme in social theory. In the writings of major contemporary theorists (see the works of Habermas, 1985; Giddens, 1990, 1991; Touraine, 1995), the claim that we are living in unprecedented times, or that we are undergoing processes of major transformational social change, has been powerfully explored in some detail. These major social transformations associated with modernity have been generated by a range of processes – namely, the global expansion of capitalism, new technoscientific discoveries (for example, digitalization and the internet revolution) and the advent of globalization (for example, ongoing mobilities of goods, people and services) to most areas and regions of the world. Such processes are referred to in the sociological literature – though suggestive of the sociological fiction and subsequent collapse of the Western stadial model of development – as ‘post-industrialism’, ‘postmodernism’ or ‘post-capitalism’ (Elliott, 2013: 46). Recent social theorists (see, for instance, Beck, 1998, 1999, 2009; and Lash, 1992 (with Friedman), 1995 (with Featherstone and Robertson), 1996 (with Szerszynski and Wynne) and 1999) have instead chosen to refer to these contemporary social processes as constituting a new type of social system: that of late modernity (Giddens, 1991), second modernity (Beck, 1992) or reflexive modernization (Lash et al, 1994). In this latter intellectual tradition – what could be called late modernism – there is another important sociologist who has had wide reaching social, cultural and political significance: Zygmunt Bauman. Despite having an expansive career – writing on topics of class, socialism and Marxian social theory (see, for instance, Bauman, 1957, 1964, 1972, 1976) – Bauman did not receive sociological recognition until the publication of his now-renowned book Modernity and the Holocaust (1989a).

In the Introduction, I argued that, while hostility and austerity are dealt with in separate chapters of the book for analytical clarity, they are not mutually exclusive, especially if we widen each beyond their restricted associations with the racist ‘hostile environment’ and a specific economic policy, respectively. In the chapters, I have concentrated on how hostility impacted those it was aimed at, as did austerity affect its targets. Hostility, however, as in the ‘hostile environment’, is also austere; and austerity is itself inherently hostile. The two are interrelated. While this has been demonstrated throughout sometimes implicitly, in the first half of the Conclusion I provide some explicit and clear-cut examples of ways in which the hostile environment inevitably led to austerity and of how austerity hit at those at whom the hostile environment was aimed. With respect to the former, I analyse the hostile environment's impact on the Windrush generation, and at two examples of the dire conditions in detention centres. As far as austerity affecting those targeted with the hostile environment is concerned, I focus on the Grenfell Tower fire and at the upsurge in racism, witnessed by increased inequality and hate crime, specifically on the link between major cuts in welfare payments and this rapid rise. This is, as I argue, exacerbated by the constraints on antiracist and community organizing, also the results of austerity. This again reinforces the reality of the interconnection between hostility and austerity. In the second half of the Conclusion, I explore what might be done immediately to make the UK less austere and hostile for the working class in general and for minority ethnic communities and other racialized people.

Introduction

On 6 September 2022, Liz Truss was elected Tory Party leader and hence Prime Minister by the Tory Party membership, having defeated future Prime Minister Rishi Sunak. She immediately appointed hard-line anti-immigration advocate, Suella Braverman, as Home Secretary. Braverman was soon to reveal her cruel stance on the treatment of refugees and people seeking asylum. In the Independent on 5 October 2022, the last day of what was to be Truss's first and only Tory Party Conference as Prime Minister, Tom Peck wrote: ‘Arguably the most horrifying moment of the entire rolling horror show was when Suella Braverman spoke in a fringe event of her “dream”.’ It was this: ‘I want to see a Telegraph front page, by Christmas, of the first deportation flight to Rwanda. That's my dream, that's my obsession.’ Peck parodies the implications of Braverman's ‘viciousness’:

On 19 October 2022, after just six weeks in the job, Braverman resigned as Home Secretary. According to Rajeev Syal, writing for the Guardian, reports claimed that this followed a furious 90-minute row with Truss and her new Chancellor, Jeremy Hunt.

NATO enlargement has been a politically contested subject, since it has been seen as bringing stability as well as instability. Enlargement has been a thorny issue within the Alliance itself, as not all countries have been equally enthusiastic about the decisions to invite new members. Moreover, NATO enlargement has often been a dividing issue domestically when countries have pondered whether joining NATO or supporting NATO enlargement would be a wise policy choice for them. Finally, NATO enlargement has been a hot topic in relation to the Alliance's and its members’ relations with third parties, particularly Russia. While Russia has not been able to prevent NATO from enlarging, as NATO has regarded the decisions concerning military alignment as a right of sovereign states in accordance with the Organization for Security and Co-operation in Europe (OSCE) principles, this has led to questions over what are legitimate rules concerning alliance enlargements within a shared security regime.

At the same time, NATO enlargement has been a puzzle for researchers aiming to explain why and how it has taken place and considering the consequences and normative principles of NATO enlargement. There is little scholarly consensus, but researchers and foreign policy pundits have been as divided in their interpretations and policy recommendations as decision makers and politicians. Scholars of international relations and diplomatic history disagree over the primary motivations and key dynamics of NATO enlargements as well as the effects (see, for example, Ball 1998; McGwire 1998; Kupchan 2000; Rauchhaus 2000).

Introduction

An enduring fact of international political economy (IPE) is the profound inequalities between less developed and richer, more powerful economies. There only exist few historical cases where economies have ‘graduated’ from the periphery to the core of the world economy, that is, achieved rates of capital accumulation, labour productivity growth, technological development, and structural change that enabled a significant degree of economic ‘catch-up’ with advanced capitalist economies. This suggests that there are powerful centrifugal forces at play, which significantly constrain the developmental prospects of developing and emerging economies and contribute to reproducing enduring lines of inequalities between a small group of advanced capitalist economies and the rest of the world. There is of course a long and rich tradition of writings dedicated to explaining this structural phenomenon (with the aim of ultimately abolishing it), from Latin American structuralism and dependency theory to various strands of developmentalism and Third World Marxism(s). International financial subordination (IFS), as a concept and research agenda, sits within these research efforts. It focuses on questions of money and finance, and their substantive role in perpetuating abiding lines of division between a handful of wealthy capitalist economies and the spaces of the world economy successively referred to as the colonies, the peripheries, the Third World, and the Global South. How do the operations of capitalist money and finance keep reproducing deeply unequal power relations across the world market, and continue to penalize economic and political actors in developing and emerging economies?

Introduction

Mark Blyth has provided a very useful, concise and succinct analyses of the history of austerity. Focusing on philosophers John Locke and David Hume and economist Adam Smith, he begins with its classical origins in the 17th century. Blyth sums up his discussion of the three by noting that none of them make an argument for austerity: Locke sets up liberalism to limit the power of the state at all costs; Hume sees no point in the state because the merchant class is the productive class to whom the money should flow; and Smith sees a role for the state but struggles to find it. In so doing, with their pathological fear of government debt, and the pre-condition of ‘parsimony, frugality, morality’, they produced austerity by default.

Liberal economists built on the work of Locke, Hume and Smith in the 19th century. David Ricardo was on the side of ‘can't live with the state’ and instead favoured a highly competitive economy of small firms producing a very low average rate of profit. The state should police private property but not attempt to redistribute it. In Ricardo's words, even if ‘the condition of the laborers is most wretched’, the state should take no action to compensate them. John Stuart Mill, on the other hand, tried, in his On Liberty, to find a middle road between the claims of the masses and the protection of individual rights, and his Principles of Political Economy spelt out what he thought was legitimate state activity.

Introduction

As noted in Chapter 7, by 2022, inflation, higher taxes and low wage growth meant that workers in the UK had seen their living standards decline at the fastest rate in the post-war period. Starting in June 2022, during Johnson's second premiership and continuing in Liz Truss's brief period in office (6 September to 25 October 2022), a series of strikes took place in the UK, as workers walked out over pay, conditions and threatened redundancies. Paul Nowak, the General Secretary of the Trades Union Congress (TUC), recognizing the Tory Government's decision to go for fiscal austerity, said that instead of recognizing the huge pressure households were under, the Government had chosen to make millions poorer by holding down public sector pay: ‘It is little surprise that workers are having to take strike action to defend their living standards. They have been pushed to breaking point.’1 In May, members of the Rail, Maritime and Transport Union (RMT) at Network Rail and 15 train operators had announced the launching of a campaign of industrial action.2 RMT General Secretary Mick Lynch, who was to become a central figure in workers’ fightback against fiscal and industrial austerity, said when the decision to go ahead with the first strike was confirmed: