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(Big) Society and (Market) Discipline: Social Investment and the Financialisation of Social Reproduction



The United Kingdom is at the forefront of a global movement to establish a social investment market. At the heart of social investment we find finance-and financialisation. Specifically, we find: a financial market (the social investment market); a series of financial institutions (Big Society Capital, for example); a financial instrument (the social impact bond); and a financial practice (social investing). Focusing on the UK, given its pioneering role, this paper first provides a brief history of social investment, tracing its development from the politics of the 'Third Way' to the social impact bond. It then maps the terrain of the social investment market, explaining the main institutions and actors, and the social impact bond. Finally, it proposes a framework for analysing the disciplinary logics of finance, which it uses to understand the promise or threat (depending on one's perspective) of social investment and the social investment market.
©  , , |:./-
  . () –
(Big) Society and (Market) Discipline:
Social Investment and the Financialisation
of Social Reproduction
David Harvie
School of Business, University of Leicester
The United Kingdom is at the forefront of a global movement to establish a social-
investment market. At the heart of social investment we nd nance – and nan-
cialisation. Specically, we nd: a nancial market (the social-investment market); a
series of nancial institutions (Big Society Capital, for example); a nancial instru-
ment (the social-impact bond); and a nancial practice (social investing). Focusing
on the UK, given its pioneering role, this paper rst provides a brief history of social
investment, tracing its development from the politics of the ‘Third Way’ to the social-
impact bond. It then maps the terrain of the social-investment market, explaining the
main institutions and actors, and the social-impact bond. Finally, it proposes a frame-
work for analysing the disciplinary logics of nance, which it uses to understand the
promise or threat (depending on one’s perspective) of social investment and the social
-investment market.
Big Society – discipline – nance – nancialisation – social investment – social-impact
bond – social reproduction
From its launch in November 2009, when he was still leader of the opposition,
UK prime minister David Cameron’s ‘Big Society’ burned very brightly, casting
its light – though perhaps more blinding than illuminating – over debates into
()   () 
  . () –
the deep ‘moral crisis’ aicting ‘Broken Britain. But ‘the light that burns twice
as bright burns half as long’. By early 2012 – around the time Steve Hilton, one
of its most zealous proponents, resigned as Cameron’s director of strategy –
the Big Society seemed to have burned itself out, ridiculed by the media, many
other politicians, and the anti-austerity protests that marked the early years of
Cameron’s premiership.
But just as it was becoming extinguished as discourse, the Big Society found
itself more rmly established as political economy. Hilton quit his job and
the country, in March 2012; April 2012 saw the launch of Big Society Capital.
Recognising that ‘[s]ocial sector organisations play a critical role in our com-
munities and in our society’, Big Society Capital’s mission is to ‘transform the
supply of capital to social organisations in the UK. We want to help ambitious
social enterprises grow and better evidence the value they are creating’. In
other words, Big Society Capital’s focus is the very activities and actors so em-
phasised in the discourse or ideology of the Big Society. In fact, both in its diag-
nosis of the problems facing Britain – social exclusion, poverty, ‘moral decline’,
economic stagnation, failing/inadequate services and opportunities for young
people – and in its prescription for addressing these problems – social ‘enter-
prise’, the harnessing and valuing of civic ethics and voluntary labour – there
appeared to be many similarities, at least in their respective rhetorics, between
the burned-out Big Society of David Cameron’s Hugo Young lecture and Big
Society Capital.
Although it has received some media attention, Big Society Capital has not
burned even half as brightly as its more discursive sibling. Yet, along with asso-
ciated institutions, practices and instruments, Big Society Capital has the po-
tential to transform the fabric of British society in a far more long-standing and
fundamental way. Its focus is indeed the socially-reproductive activities, many
of them involving ‘voluntary’, unwaged labour, that take place in communities
up and down the country, what it might term ‘social enterprise’. Big Society
Capital seeks to support such activities in a very specic way, namely through
social investment: its strapline is ‘transforming social investment’, while its twin
primary objectives are ‘to be a powerful force in transforming the social impact
investment market in the UK’ and ‘to champion the development of the social
Cameron introduced the concept in his Hugo Young lecture, delivered in London on
November 9: ‘Our alternative to big government is the big society. But we understand that
the big society is not just going to spring to life on its own: we need strong and concerted
government action to make it happen. We need to use the state to remake society.’
 The line is from Ridley Scott’s lm Blade Runner (Warner Bros., 1982).
 Big Society Capital 2012, p. 7.
 
  . () –
impact investment market through spreading knowledge, dening efective
approaches and informing government policy’.
At the heart of social investment we nd nance – and nancialisation.
Specically, we nd: a nancial market (the social-investment market); a series
of nancial institutions (Big Society Capital, for example); a nancial instru-
ment (the social-impact bond); and a nancial practice (social investing). To
understand social investment, then, we must understand nance and its logic.
The logic of nance is a disciplinary logic, a logic whereby the productive ac-
tivities of human beings – across sector, across space, even across time – are
made commensurable with one another, are pitted against one another in a
competitive struggle and are thereby disciplined. The promise or threat (de-
pending upon one’s perspective) of social investment (or social nance) is to
extend such a competitive, disciplinary logic into an entirely new, social realm.
In this paper I rst review the history of social investment, tracing its devel-
opment from the ‘Third Way’ and ‘social-investment state’ through to the na-
scent social-investment market and its key innovation, the social-impact bond.
Next I survey the terrain of the social market, as it currently exists in the UK,
identifying the key actors and institutions, and explaining the workings of the
social-impact bond. Finally I outline an analytical framework for understand-
ing the way in which nance’s disciplinary logic operates, before suggesting
how the social-investment market and the social-impact bond will extend this
disciplinary logic deeper into society, further into the realm of ‘the social’.
The paper’s focus is the United Kingdom. This is because the UK is pioneer-
ing the creation of the social-investment market: more than half of the 50-plus
social-impact bonds currently in operation are in the UK. But the movement
is global. The UK is not only leading the way in terms of numbers of proj-
ects; it also used its presidency of the G8 in 2013 to establish a Social Impact
Investment Taskforce, which in 2015 morphed into a Global Social Impact
Investment Steering Group, whose membership includes 13 countries plus the
EU. Lessons from the UK experience have global relevance; the analysis devel-
oped here should be of concern to an international audience.
1 A Brief History of Social Investment
1.1 From Welfare State to Social-investment State
We can trace the idea of social investment as far back as 1956. In The Future of
Socialism, academic and Labour Party politician Tony Crosland argued that,
 Big Society Capital 2012, p. 4.
()   () 
  . () –
‘[t]he right way, in the eld of social expenditure, is a generous, imaginative,
long-term programme of social investment’. Later, the idea was taken up by
Anthony Giddens, whose thinking played an indispensable role in the New
Labour project of the 1990s. Giddens was responding to the profound transfor-
mations that many Western economies underwent in the 1980s, spearheaded
by the United Kingdom (under successive governments of Margaret Thatcher)
and the United States (under Ronald Reagan). During this decade, and beyond,
governments initiated neoliberal programmes of privatising state industries,
state spending was cut – particularly in the area of social services – and many
state-provided services (in areas such as health and education) were sub-
jected to processes of marketisation. The state retreated from its earlier role
in ensuring social reproduction, while the ability of markets to better serve
human needs was celebrated. This shift in perspective was well characterised
by Thatcher’s declaration that ‘there is no such thing as society’ or Reagan’s
‘government is not the solution to our problem; government is the problem’.
Giddens’s response was to propose a ‘Third Way’, an alternative model be-
tween and beyond both the postwar welfare state and neoliberalism. This re-
quired that the Left ‘get comfortable with markets’ and that the welfare state
be reconstructed as a ‘social-investment state’. We can see Giddens’s inuence
at work in the reports of the Commission on Social Justice, established in 1992
by then Labour leader John Smith. In 1994, the Commission proposed a vision
of an ‘Investors’ Britain’, arguing that ‘it is through investment that economic
and social policy are inextricably linked’.
While, in Britain at least, the social-democratic Left was struggling to adjust
to neoliberalism’s apparent triumph, the deleterious efects of many neoliberal
policies were becoming clearer to other actors. Through the 1990s, the ,
for example, published a number of reports – New Orientations for Social Policy
(1994), Societal Cohesion and the Global Economy: What Does the Future Hold?
(1997), A Caring World (1999) – agging up some of these efects and attempt-
ing to address the role of the state in social reproduction. Central here was a
Crosland 1956, p. 148.
By social reproduction, I mean broadly the ability of individuals, households and communi-
ties to reproduce themselves and their livelihoods. Under the capitalist mode of production,
social reproduction has a dual character, pertaining to the (re)production of both life and
the commodity labour-power. Capital’s interest is in the reproduction of labour-power (with
the appropriate skill-sets, proclivities and so on); humans generally have diferent interests,
which exceed this narrow understanding. See Brown, Dowling, Harvie and Milburn 2013, es-
pecially pp. 77–81 and the references cited therein.
 Giddens 2000, pp. 34 and 52.
 Commission on Social Justice 1994, p. 97.
 
  . () –
deep reframing of the state’s role in the sphere of social reproduction. Social
expenditure, on education or health, say, is no longer understood as spending
on a consumption good that brings social benets, whether to individuals or
to society, in the present. Nor is it understood as redistribution, which might
weaken economic incentives and thus inhibit wealth generation. Instead so-
cial spending is conceived as investment, as spending that will yield a return,
whether economic or social, in the future. It is conceived of as a potential
driver of economic growth and development. The temporal element of such
spending is made far more explicit in this reframing. Moreover, any mention
of future return begs the questions of rate of return and the way rates of return
might be measured. For social-investment policy-makers these questions lay in
the future; I return to them later in the paper.
Thus, in this new regime social policy is understood as a productive fac-
tor, as investment for the future and not as social protection. Associated with
this, governments pursued so-called activation policies, whose objective has
been to increase the proportion of the working-age population in employ-
ment – here, though, the welfare-state goal of full employment is replaced by
employability. Such policies have included innovations in childcare as a social
investment, supposedly working on three levels: (i) mitigating the long-term
(potentially lifetime) efects of childhood poverty; (ii) enabling the ‘activation’
of parents, especially mothers; and (iii) preparing children for labour markets
of the future.
John Smith died in May 1994, ve months before his Commission on Social
Justice published its nal report. Tony Blair, his replacement as Labour leader,
was, of course, another ‘moderniser’ and, when elected in 1997, ‘New’ Labour,
under the leadership of Blair and chancellor Gordon Brown, began putting
this social-investment approach into practice. Numerous institutions and
schemes directed at children and young people – good investments for the fu-
ture – were launched: ‘Sure Start’; ‘New Deals for Young People’; ‘Connexions’;
the ‘Childcare Strategy’; and so on. Social exclusion and poverty were also ad-
dressed, but through education and work, with the emphasis being one of in-
tegrating people into labour markets, redistributing opportunities rather than
income. Groups that ‘missed out’ included ‘those who cannot work, those who
do not have children, asylum seekers and social movements tarred … with the
brush of past identity politics such as unions and the women’s movement’, that
is, groups and individuals deemed poor investments.
Esping-Anderson, Gallie, Hemerijck and Myles 2002, p. 9; quoted in Jenson 2006, p. 33.
 Jenson 2006, p. 37.
 Perkins, Nelms and Smyth 2004, p. 9.
()   () 
  . () –
The rationale common to these policies was summarised in 2000 by key
Blair advisor David Miliband: ‘Increasingly, social policy has economic im-
plications.… Work, welfare and family policy need to be mutually reinforcing
[because inequality is no longer merely a cost but has become] a constraint on
economic development’.
The transformation from welfare state to social-investment state has been
theorised in several competing ways. For Giddens, of course, it represents a
literal ‘third way’, an alternative to neoliberalism that does not involve ‘going
back’ to the Keynesian welfare state. Jane Jenson holds a similar view, as do
Morel et al., who posit an ‘after neoliberalism’ phase, and Perkins et al., who
suggest that the social-investment state takes us ‘beyond neoliberalism’. By
contrast, Perry Anderson has described the Third Way as merely ‘the best
ideological shell of neo-liberalism today’. Others have argued that the social-
investment approach represents not only a continuation of neoliberalism but
a development and deepening of it. Porter and Craig, for example, suggest that
the new regime is best described as one of ‘inclusive liberalism’, while Bob
Jessop theorises the shift as one from the welfare state to the ‘workfare state’.
I do not attempt to review these debates in any detail here. Suce it to say
that I believe the social-investment perspective represents a development and
deepening of neoliberalism, a view that will become apparent when I discuss
the social-investment market and the disciplinary logics of nance in the pa-
per’s nal substantive section.
1.2 From Social-investment State to Social-investment Market
In 2004, Matthew Pike, director of the Scarman Trust, ‘call[ed] for a government-
run Social Finance Investment programme that would use pension fund con-
tributions to nance public works while ofering a guaranteed 9 per cent return
and cutting income tax by 5p in the pound’. Financial Times columnist Kevin
Brown described the proposal as ‘plain batty’. Batty or not, a decade on such a
programme does not seem so far-fetched.
From 2000 onwards, we have seen the establishment of a panoply of ‘task
forces’, commissions and institutions, along with the publication or passing
of associated reports and, more recently, government White Papers and Acts,
whose purpose is to develop a social-investment market in the UK. These
 Quoted in Timmins 2001, p. 611.
 Jenson 2010; Morel, Palier and Palme 2012; Perkins, Nelms and Smyth 2004.
 Anderson 2000, p. 11.
 Porter and Craig 2004; Jessop 2002.
 Brown 2004.
 
  . () –
include, but are not limited to: the Social Investment Task Force (; es-
tablished in 2000); the social-investment group Bridges Community Ventures
(2002); the Community Development Finance Association (2002), along
with a series of Community Development Finance Institutions; The Financing
of Social Enterprises (Bank of England 2003); the Commission on Unclaimed
Assets (2005–7); Social Finance (UK) Ltd. (2007); Putting the Frontline First:
Smarter Government (White Paper, 2009); Growing the Social Investment Market
(Cabinet Oce, 2011); Open Services (White Paper, 2011); the Localism Act (2011);
the Public Services (Social Value) Act (2012); Big Society Capital (2012).
We can detect a remarkable continuity and consistency of ideas in this his-
tory, running from the Social Investment Task Force, through the Commission
on Dormant Assets, to Social Finance and Big Society Capital. Also worth
noting is that the various changes in government over the period have not re-
sulted in any signicant shifts in policy. The tropes – articulated in the Task
Force’s rst report, Enterprising Communities: Wealth beyond Welfare, for in-
stance, but repeated in the numerous reports, from various bodies, that have
followed – can be summarised as follows:
Neoliberal capitalism has resulted in enormous wealth creation. It has
also led to widening inequality and an increase in poverty. Poor people do
not lack entrepreneurial skills – and this is not the cause of their poverty.
What they lack is capital. Redistribution of wealth via the (welfare) state,
whether to poor individuals or poor communities, although understand-
able and possibly even necessary in some cases, will never solve such
problems and may even exacerbate them. What is instead needed is to
encourage and harness the poor’s entrepreneurial skill through nance/
Over its ten-year lifetime, the Task Force made a series of policy recommen-
dations. In its nal report it proposed ‘three specic initiatives that will help
dene the future of social investment in the UK’: (i) to create institutions
such as a social-investment bank, part of the infrastructure ‘necessary to cre-
ate a dynamic market in social investment’; (ii) to create new nancial tools
and instruments, such as the social-impact bond, to ‘deliver social change’; and
(iii) to use legislation such as a Community Reinvestment Act to ‘engage’ the
 The ‘pioneering force’ behind Bridges and one of its three executive directors is Michele
Giddens, daughter of Anthony (see Macalister 2003).
 Social Investment Task Force 2000, p. 4.
 Social Investment Task Force 2010, p. 2.
()   () 
  . () –
nancial sector to invest in disadvantaged areas. Within a year, similar propos-
als were being advanced from the very heart of government, with the Cabinet
Oce and the Treasury publishing a series of policy papers. Growing the Social
Investment Market: A Vision and Strategy (published in 2011), for example, ex-
pounds on familiar themes.
It contends that Britain faces a number of ‘very stubborn and expensive’
social problems (e.g. homelessness and ‘fractured communities’) which re-
quire ‘innovative solutions’. Such solutions are frequently provided by social
entrepreneurs and ‘the social ventures they lead’. These social ventures com-
bine ‘social mission with sustainable business models’ and ‘can do amazing
things’; they ‘generat[e] social value in a way that is nancially self-sustaining’;
not only is their power ‘central to creating a bigger, stronger society – a Big
Society’, but ‘social ventures are also making a big contribution to economic
growth in what remains a challenging economic and scal environment, and
can play an important role in helping to re-balance the economy’. However, ‘so-
cial ventures … are often held back by bureaucracy and an inecient nancial
market’; ‘the key to better capitalised social ventures, and therefore greater so-
cial value, is more and better social investment’.
The vision articulated here is ambitious. At its ‘heart … is nothing less than a
new “third pillar” of nance for social ventures, to sit alongside traditional giv-
ing and funds from the state’, with ‘the creation of a new “asset class” of social
investment to connect social ventures with mainstream capital’ and ‘around
£10 billion of new nance capacity’ being ‘unlocked’. If successful, there would
be important implications for three sets of actor.
First, for social ventures and the ‘social-venture sector’: individual social
ventures would have better access to nance, and the sector as a whole would
grow both in terms of size and, importantly, ‘dynamism’. In the words of the
Cabinet Oce’s paper, there would be higher ‘“churn” – more new entrants to
the market and more frequent changes among the “leader board” of the most
successful social ventures’. What is not made explicit here – at least not at this
point in the paper – is that ‘churn’ and ‘frequent changes among the “leader
board”’ involve not only new entrants but also exit. This is the sine qua non of
market competition, its role in incentivising and disciplining social actors. I re-
turn to this in section 3.2. With more and faster-growing social ventures, more
social value will be created for their users and customers, along with a greater
‘contribution’ to the economy. Second, for nancial investors of all types –
‘individual citizens’, high net-worth individuals and philanthropists, charitable
 Cabinet Oce 2011; with annual progress reports.
 Cabinet Oce 2011, pp. 11–15.
 
  . () –
foundations and nancial institutions – who will benet from new investment
opportunities, a ‘new class of investment products’. Third, for central and local
government and the public sector more generally, this vision will provide ‘new
opportunities for better procurement of goods and public services’.
We see here the way in which social investment might address three crises:
a crisis of social reproduction (more and more successful social ventures, cre-
ating more ‘social value’, i.e. responding to social problems); a crisis of capital
accumulation or economic growth (social ventures both ‘contributing’ to the
economy and becoming a source of nancial return for investors); and the ‘s-
cal crisis of the state’ (better procurement of public goods and services).
Growing the Social Investment Market’s ‘framework for action’ again echoes
many of the initiatives proposed by the Social Investment Task Force. These
include: the extension and development of ‘payment-by-results’ in the provi-
sion of public services (e.g. through the use of Social Impact Bonds); various
tax incentives to encourage social investment; support for social ventures to
improve their ‘investment readiness and business capability’; the development
of better measures of social return; the development of secondary markets in
social-investment assets; and, of course, a ‘big society bank’, whose ‘mission
will be to catalyse the growth of a sustainable social investment market, mak-
ing it easier for social ventures to access the nance and advice they need – at
all stages of their development’.
The social-investment vision is made quite clear in the paper’s nal chap-
ter. ‘Success will look like a bigger market … that works more eciently’. This
means the following: ‘an increase in the overall amount of social investment’;
‘the number of new social venture intermediaries and social ventures enter-
ing the market increases, contributing to an increase in the total number of
social ventures, while allowing for the failure and exit of some organisations
(emphasis added); social ventures provide a greater proportion of public
services, while accounting for a greater proportion of both  and employ-
ment; ‘better measurement systems’ allow for more accurate quantication of
social return and the rating of risk; nally, a necessity for operating in such
an environment, ‘more social ventures develop advanced skills in business
and nance’.
 Cabinet Oce 2011, pp. 17–18.
 O’Connor 1973.
 This argument is outlined in Dowling and Harvie 2014 and developed in Harvie and
Ogman 2019.
 Cabinet Oce 2011, pp. 29–35 and 37–44.
 Cabinet Oce 2011, pp. 47–8.
()   () 
  . () –
Much of this vision is already being realised. The social-investment bank
(‘big society bank’) is, of course, Big Society Capital, while already more than
30 social-impact bonds have been launched in the UK (with a similar number
elsewhere). I will survey this nascent social-investment landscape in the next
section. Before that, however, it is worth emphasising the role of the state in
the creation of social-investment institutions. As other scholars have argued,
under neoliberalism, the role of the state is not diminished, but transformed
and its activity is essential for not only the maintenance of markets, but also
their extension and creation. As the Social Investment Task Force insisted:
‘Government, at all levels, must play an active, enabling role.’
2 Mapping the Social-investment Market
2.1 Actors and Institutions
Over the past decade, the British state has put in place ‘many essential ele-
ments of government support that underpin a functioning market’. Three of
these elements, all established in 2012, are: the Social Outcomes Fund, a £20m
‘top-up’ fund managed by the Cabinet Oce, which is designed to nancially
support ‘innovative new [payment-by-results] projects’ that would otherwise
not proceed; the Investment and Contract Readiness Fund, a £10m fund run
by the Oce for Civil Society, intended to help ‘social ventures to build their
capacity to be able to receive investment and bid for public service contracts’;
and, most important, the social-investment bank, Big Society Capital, which
was set up with funding from the four so-called Merlin banks, each contrib-
uting £50 million, and at least £248 million recovered from dormant bank
accounts.   Big Society Capital has a dual mission. First, to ‘champion’ so-
cial investment, increasing awareness of and condence in social investing,
promoting best practice and improving links between the social-investment
and mainstream nancial markets. Second, to act as an investor, nancially
supporting ‘social investment nancial intermediaries’ (discussed below) and
 See, for example, Martin 2002, or Mirowski 2013.
 Social Investment Task Force 2000, p. 4.
 Cabinet Oce 2014.
 <http://blogs.cabineto>.
 <>; last accessed 22 January 2016.
 <>; last accessed 8 January 2016.
 Three other elements, the Open Services White Paper (2011), the Localism Act (2011) and the
Public Services (Social Value) Act (2012) are discussed in Dowling and Harvie 2014.
 
  . () –
‘efectively and eciently channel[ling] appropriate and afordable capital to
the social sector’.
The other body that has played an important role in championing social
investment and the social-investment market is Social Finance, set up in 2007
‘to understand the funding shortfall faced by the social sector’ and ‘to help
build a social investment market in the UK. Since then it claims to have ‘pio-
neered the Social Investment Bank, Social Impact Bonds, Development Impact
Bonds, the application of Jam Jar Accounts, and the Care and Wellbeing Fund’.
With a staf of almost 60, Social Finance continues to publish reports, organise
events and ofer bespoke and specialist advice to actors and potential actors in
the social-investment market.
Sitting below the social-investment market-builders and champions, there
are four principal actors in the social-investment market proper: charities
and social enterprises; commissioning bodies; nancial investors; and, social-
investment nancial intermediaries.
First, there are the charities and other social enterprises, which are ‘work-
ing hard to deal with some of the most challenging issues in the UK – such
as youth unemployment, nancial exclusion and homelessness’. These so-
cial enterprises deliver services and, if the model operates as it is supposed
to, do so in an innovative way. They may employ or utilise both waged and
unwaged/voluntary labour; of course, they also interact with service users.
The dominant discourse on social investment – certainly that propagated by
its enthusiasts in the Cabinet Oce, Social Finance, Big Society Capital and
elsewhere – has it that the social sector is ‘inadequately capitalised’, that a ‘-
nance “gap” [holds] the frontline social sector back from operating as ecient-
ly as comparable mainstream businesses’. Big Society Capital, for example,
cites Social Enterprise UK survey gures showing that ‘45% of start-up and
new frontline social enterprises cited lack of and/or poor access to afordable
nance as their top barrier in setting up, while 44% of established frontline
social enterprises cited it as their top barrier to sustainability and growth’.
This dominant narrative is partly questioned, however, by the Alternative
Commission on Social Investment, which suggests that, ‘[t]here is little, if any,
 <>; last accessed 30 June 2015.
 <>, last accessed 30 May 2013;
<>, last accessed 30 June 2015. Social
Finance UK now has sister organisations: Social Finance US, Social Finance Israel, and the
more general Social Finance Global.
 <>; last accessed 30 June 2015.
 Big Society Capital, n.d., p. 22.
 Ibid.
()   () 
  . () –
evidence of a generic social sector problem with access[; that m]ost social sec-
tor organisations aren’t interested in nance … [; and that t]hose who do want
loans are relatively successful in getting ofers of nance from banks, even
Second, there are the commissioning bodies. These include central and
local government and the ‘public sector’, more generally. Under the traditional
welfare-state model, such bodies would also deliver these services, nancing
them through the usual scal tools available to the state – tax revenue and
public-sector borrowing. In the social-investment market model, the commis-
sioning bodies’ role is that of identifying priority areas of intervention, specify-
ing target outcomes and metrics, and paying by results. Commissioning bodies
are most important where a social-impact bond () is the tool selected – and
we will discuss their role in the next section, which focuses on the .
Third, there are nancial investors, which supply capital, usually in the ex-
pectation of receiving a nancial return. Big Society Capital distinguishes ve
types of investor. First, government, which, to date, has been the largest source
of capital for the social-investment market, providing roughly two-thirds of
all funding for intermediaries (see below), in the form of both grants and re-
payable loans. Second, trusts and foundations, which have provided roughly
12% of funding, typically investing sums ‘between £200,000 and £5m on a long
term, patient basis where social impact and transformational change are the
key returns alongside some nancial return. Third, individual retail investors,
which ‘will invest small amounts of money (between £10 and £50,000) into 
regulated and authorised social banks’. These investors are looking for ‘security
of capital …, competitive rates, easy access to funds and a clearly articulated
and reported social impact’ (my emphasis). Fourth, wealthy individuals, who
have supplied approximately 7% of funding. According to Big Society Capital,
‘[k]ey requirements for such investors are nancial returns linked to invest-
ment/social-impact risk, some access to funds, engagement and a direct, per-
sonal link with the social impact being delivered’. Finally, mainstream banks
and commercial institutions, who have also supplied around 7% of funding.
Such institutions’ entry into the social-investment market has thus far been
‘tentative’; the ‘bulk’ of their funding has been through their corporate social-
responsibility programmes and is ‘dwarfed by their mainstream and commer-
cial activities’.
The fourth actor in the social-investment market is the so-called social-
investment nancial intermediary (). As their name suggests, s play
 Alternative Commission on Social Investment 2015, p. 19; emphasis in original.
 Big Society Capital, n.d., pp. 19–20.
 
  . () –
various intermediary roles between the other three sets of actor, which include:
creating and raising investment for funds that provide loans or invest equity in
the social sector; managing funds on behalf of others; designing and structur-
ing nancial instruments that, for example, enable social-sector organisations
to deliver public services under payment-by-results contracts; providing plat-
forms and exchanges that directly connect investors and social-sector organ-
isations; and, supporting social-sector organisations to develop their business
models and skills so that they can take on new types of investment.
In 2013, Big Society Capital listed 129 s in its directory of intermediaries,
of which the majority appeared to ofer ‘business advice and support’. Three
years later, this number had fallen to 15.  One organisation no longer listed is
Bethnal Green Ventures, which is, in reality, a venture-capital organisation. At
the time of writing (July 2017), Big Society Capital was categorising interme-
diaries into ten diferent types, including: social-venture funds, social banks,
charity-bond vehicles and, of course, social-impact bonds. We learn from
this that, as might be expected in a nascent sector, the denition of social or
impact investment is shifting and is being rened. However, the twin goals of
dened and measurable social impact and nancial returns for investors, remain
core to the social-investment project. The key innovation here is the social-
impact bond.
2.2 Instrument: The Social-investment Bond
The world’s rst social-impact bond () was launched in 2010, to nance
a £5-million probation scheme in Peterborough (a small city 120km north of
London). By 2017, 77 SIBs had been commissioned globally, with a further
35 at the design stage. Of the existing projects, 32 are in the United Kingdom,
with investment totalling approximately £36 million. The majority of these
UK projects are designed to support ‘workforce development’, ‘youth engage-
ment’ or tackle homelessness amongst so-called s, young people not in
 <nding-the-right-investment/>; last accessed 2 May
 <>;last accessed 19
January 2016.
 <
invest>; last accessed 18 July 2017.
 Social-impact bonds had been heralded in the December 2009 White Paper Putting the
Frontline First: Smarter Government, in which the then Labour government stated it
would pilot them as ‘a new way of funding the third sector to provide services’. The Labour
justice minister Jack Straw was responsible for the Peterborough .
()   () 
  . () –
employment, education or training.  Tellingly, a project targeted at people
with mental-health problems is designed to ‘help them nd and maintain a
new job’. 
A conventional bond pays a xed coupon (except in the case of default).
A social-impact bond is diferent: the return to social investors, the bond’s
holders, is not xed, but depends upon the performance of the social enter-
prise that their investment is nancing. In this sense a  is a derivative, a
nancial asset in which cash-ows are dependent upon – are derived from –
some underlying index or other metric. In fact, the  is a form of outcomes-
based contract or payments-by-results () contract. Social Finance explains:
A  is a nancial mechanism in which investors pay for a set of in-
terventions to improve a social outcome that is of nancial interest to
a government commissioner. If the social outcome improves, the gov-
ernment commissioner repays the investors for their initial investment
plus a return for the nancial risks they took. If the social outcomes do
not improve above an agreed threshold, the investors stand to lose their
Referred to here are the three separate actors described in the previous sec-
tion as constituting the social-investment market proper: rst, a commission-
er, who denes the desired social outcomes and makes payments if these are
achieved; second, a delivery agency – the social enterprise – which designs
and implements the programme(s) to achieve these desired social outcomes,
but which bears no nancial risk; and third, nancial investor(s), who fund the
project, receive a nancial return if it is successful and bear at least some of the
risk if it is not. We also observe in this passage the logic underlying the social-
investment vision, whereby the tool (the ) is designed with the intention
of aligning the interests of each of these three actors. The UK government’s
Centre for Social Impact Bonds provides a complementary denition, empha-
sising, rst, the legal separation between commissioner, delivery agency and
 Instiglio, ‘Impact Bonds Worldwide’, available at: <
-worldwide/>; last accessed 25 July 2017.
 GOV.UK 2015; last accessed 25 July 2017.
 Putting the gures in context, in 2016–17, public expenditure totalled £771 billion, with
perhaps one third of this being welfare spending; the total value of nancial assets was
almost £30 trillion. See GOV.UK 2017a, Oce for National Statistics 2016; last accessed
25 July 2017.
 See Harvie, Lightfoot, Lilley and Weir, forthcoming.
 Social Finance 2014, p. 2.
 
  . () –
investor, and second, the dependency on social outcomes of nancial returns,
with the investor also assuming the nancial risk of non-delivery of these
Clearly the outcome’s metric, which determines the relationship between a
project’s social outcome(s) and the associated payment to investors, is key. This
may take several forms including: comparison of ‘cohort performance’ vis-à-vis
a control group; per capita tarifs; fee for service; and, payment-by-results with
minimum service standards being specied by the commissioner.
Three examples will help illustrate the structure of s.
The Peterborough , launched in 2010, was commissioned by the Ministry
of Justice and designed by Social Finance. The (probation) service provider
was a purpose-created body called One Service, formed of a consortium of
criminal-justice and prisoner charities, including St Giles’ Trust, the Ormiston
Trust and . There were 17 investors, all charitable foundations, who to-
gether contributed £5 million. Outcome payments – for which the Ministry of
Justice and the Big Lottery Fund were liable – were dependent upon specic
reductions in rates of recidivism of the Peterborough ex-prisoners relevant to
comparable cohorts elsewhere in the country. The project involved three phas-
es, each involving up to 1,000 ex-prisoners. For each phase a positive nancial
return was dependent upon the reofending rate of the Peterborough cohort
falling by 10% or more relative to the comparator cohorts; if there was no such
fall for any cohort (i.e. no phase-specic payment was triggered) then investors
would receive an outcome payment if the reofending rate of the three cohorts
evaluated as a whole fell by 7.5% or more.
This  has not been an unqualied success. At the end of its rst phase,
reofending rates had fallen by 8.4%, insucient to trigger the pay-out to bond
holders. Although the second phase proceeded, the planned third phase was
cancelled by the Ministry of Justice, with the scheme ending in June 2015.
According to the nal project evaluation, not published until July 2017, overall
reofending rates across the two cohorts (phases) fell by 9%, greater than the
7.5% threshold. Investors thus received an outcome payment equal to their ini-
tial investment plus a dividend return equivalent to a per annum return of just
over 3% over the period of their investment. Despite the project’s success in
reducing recidivism and generating a nancial return for investors, it has not
 Centre for Social Impact Bonds 2013.
 For an assessment of the Peterborough , see Disley, Rubin, Scraggs, Burrowes and
Culley 2011 or Harvie and Ogman 2019.
 Sharman 2016; accessed 22 January 2016.
 GOV.UK 2017b; <
press-release-PB-July-2017.pdf>; last accessed 6 August 2017.
()   () 
  . () –
resulted in reduced state spending. As early as 2011, one report predicted the
 would not be ‘likely to result in substantial cashable savings to the Ministry
of Justice or other government departments’. Given this, the government cre-
ated new ‘outcome funds’ – one was the Social Outcomes Fund, mentioned
in section 2.1 above – from which to pay investors, thus contributing to an in-
crease in state spending. The nal report makes no mention of savings.
The Peterborough  has now been rebadged as a ‘pilot’. Results from the
rst cohort were spun as ‘encouraging’, with the then Justice Secretary, Chris
Grayling, claiming that ‘these through-the-gate pilots are getting results’, while
for Rob Owen, chief executive of St Giles’ Trust, ‘[i]t’s almost two ngers to
the doomsayers’. Social Finance suggested ‘the project was not shut down be-
cause of problems with the  model, but because it had demonstrated its
The Essex , launched in April 2013, was the rst  commissioned by a
local authority, Essex County Council. The bond funds a £3.1-million scheme to
‘help 380 vulnerable 11–16 year-olds on the edge of care or custody to stay safely
at home with their families’; it uses an intervention called Multi-Systemic
Therapy, provided by the children’s charity Action for Children. Investors in-
clude Big Society Capital and Bridges Ventures, with their investment chan-
nelled via a special-purpose vehicle, Children’s Support Services Ltd. The
key outcomes metric is ‘the saving in aggregate care placement days for each
[Multi-Systemic Therapy] cohort, benchmarked against a historical compari-
son group’. The project will operate for ve years, with outcomes payments,
which will be capped at £7m, extending into the eighth year. According to the
Centre for Social Impact Bonds, ‘[t]he  could see investors earn 8–12% annu-
al interest on their investment’, while the total saving to Essex County Council
(net of outcome payments) could be £10.3m over the project’s timeframe.
The Department for Work and Pensions () has been an enthusiastic
commissioner of social-impact bonds. The ten distinct s (spread across ten
locations in England, Wales and Scotland) commissioned by its Innovation
 Disley, Rubin, Scraggs, Burrowes and Culley 2011, p. 8.
 Ogman 2016; Harvie and Ogman 2019.
 Quoted in Birkwood 2014; Ainsworth 2014; last accessed 30 May 2015.
 <>; last ac-
cessed 30 May 2015.
 <
uncil+Social+Impact+Bond_7+Nov+2013/356b2c4b-4228-4ea7-a349-c331f53a653d>; last
accessed 30 May 2015.
 <>;
last accessed 30 May 2015.
 
  . () –
Fund involve a more complex set of metrics than either the Peterborough or
Essex s. This is a more far-reaching set of pilots, adopting three alterna-
tive investor models (single investor, multiple investor and intermediary) and
involving a range of contracting bodies (service providers). Launched in the
summer of 2011, with the rst round of projects going live in April 2012 and the
second six months later, the pilot is expected to last three years, to draw on
£10m of external investment and to target 17,000 ‘disadvantaged young people
and those at risk of disadvantage’.
In terms of payments and the underlying metrics, a total of 25 proxy out-
comes has been dened, each with associated maximum payment. For exam-
ple, in Round 1 of the project, for children in years 10 and 11 (14–16 year-olds),
‘improved behaviour at school’ or the halting of ‘persistent truancy’ yield maxi-
mum payments of £800 and £1300, respectively. In Round 2, loosely equivalent
‘proxy outcomes’ for 14 and 15 year-olds include ‘improved attitude to school’
(£700), ‘improved attendance at school’ (£1,400) and ‘improved behaviour
at school’ (£1,300). For slightly older youths, ‘completion of rst  Level 3
training/vocational qualications’ yields a payment of £3,300 in Round 1 or
£5,100 in Round 2; ‘entry into rst employment including a training element
(e.g. an apprenticeship or work-based learning)’ yields £2,600 (Round 1) or
£5,500 (Round 2). Maximum payments per participant (i.e. per young per-
son assisted) are capped at £8,200 (Round 1) and £11,700 (Round 2). These
s are designed such that bidders ‘pick and mix’ from the list of proxy out-
comes; bidders ‘also proposed the payments they expected for each proxy out-
come, up to the maximum amount set by the . What is interesting about
this scheme is that the onus of innovation is on the delivery bodies (not the
commissioning government department), whilst the upfront nancial risk is
borne by the investors.
Having illustrated the structure of the social-impact bond with the three
examples above, I now turn my attention – in the nal substantive section –
to the nancial-disciplinary logic that s threaten to bring to bear on the
socially-reproductive labour that they are intended to fund.
 <
fund>; last accessed 30 May 2015.
 It is not clear what the rationale is for the two separate ‘rounds’ with apparently quite
diferent payments.
()   () 
  . () –
3 Finance, Social Finance and Social Discipline
3.1 Finance: A Technology of Power
Social investment is a nancial practice; the social-impact bond is a nan-
cial instrument. So, to understand the logic of the  we need to understand
the logic of nance. According to mainstream economics, nance performs a
number of basic functions. These include: (1) making payments to facilitate the
exchange of assets, goods and services; (2) providing resources to fund large-
scale projects or enterprises; (3) transferring resources from surplus agents
(e.g. savers) to decit agents (e.g. borrowers); (4) managing risk; (5) provid-
ing price information required for the coordination of decentralised decision-
making; and (6) creating incentives to perform well, that is, in the stakeholder’s
Social nance, and the  in particular, performs several of these functions.
Recall Social Finance’s denition, quoted in section 2.2, above. A  is a mech-
anism through which ‘investors [who are surplus agents] pay for a set of in-
terventions’ and thus both fund a (relatively) large-scale project or enterprise
and transfer resources to those (decit) agents, whose income is insucient to
pay for the project, whether this decit agent is understood as the government
commissioning-body, the service provider or the end-user (or all three).
We can also see how the  is designed to facilitate the management of risk.
In particular it allows the state, as commissioner of social services, to reduce
its exposure to the risk that any given intervention will not be efective – and
thus results in higher state spending. This risk is instead borne by the investors
who nance these services through their purchase of the . As we saw above,
however, in the case of the Peterborough , investors will receive a nancial
payment in spite of the project’s failure to produce savings to the state. One
would expect investors to manage their own exposure to risk by investing in
a number of alternative SIBs, along with traditional nancial assets, adopting
well-known strategies of portfolio diversication. In fact, the G8’s taskforce is
attempting to boost social investment by claiming that it ofers traditional or
mainstream investors the ‘benets of improved diversication’: ‘there is a pros-
pect that the performance of some impact assets will have lower correlation or
be totally uncorrelated with other assets’.
 To be clear, here, as in the previous section, the terms ‘social investment’ and ‘social in-
vesting’ are understood as practices that take place in the context of the social-investment
market. The meaning has therefore shifted away from social investment as a framework
for conceptualising and, to an extent, justifying state expenditure, as in section 1.1.
 Crane and Bodie 1996.
 Social Impact Investment Taskforce 2014, pp. 40–41 and 20.
 
  . () –
We should recognise both the political-economic context in which social
investment is being promoted, and that the political decisions to ‘make’ a
social-investment market as a response to social problems are just that – po-
litical (and ideological). The very existence of vast surpluses, held by a rela-
tively small number of ‘surplus agents’, which social investment’s boosters seek
to harness, is a result of four decades of neoliberalism. And, of course, it is
those four decades of neoliberal policies that have been a primary cause of so
many social problems that need tackling – a point recognised by many of those
scholars and policy-advisors advocating a social-investment perspective, dis-
cussed in section 1.1. But it is not my intention here to explore these questions.
Suce it to say that we can understand social investment – and the attempts
to make a social-investment market – as very much going with the grain of
so-called philanthrocapitalism or venture philanthropy, along with other
nancial-market mechanisms (micronance, development-impact bonds, car-
bon trading, for example) directed at a broad crisis of social reproduction.
I wish instead to focus on the fth and sixth functions of nance, those con-
cerning information and incentives – or discipline.
Crane and Bodie do not use the word ‘discipline’ in their elaboration of the
functions of nance. Robert Bliss is more candid. For Bliss the two key compo-
nents of market discipline are ‘monitoring’ and ‘inuence’, which loosely cor-
respond to Crane and Bodie’s fth and sixth functions, respectively. Market
participants (i.e. investors) monitor the actions of rms and their managers.
They exert inuence when they act on the information gained from these
monitoring activities. Such inuence – or discipline – may be ex-post, when
they ‘punish’ rms whose actions they disapprove of, by withdrawing liquidity
or selling shares, say, or ex-ante, when the threat of such adverse consequences
induces managers to perform in a way consistent with investors’ interests to
begin with. Market discipline is, of course, a solution to the principal-agent
problem that arises with the separation of ownership of the corporation and
its management. For Bliss it is a good thing, and there should be more of it.
 Too many books, articles and op-eds have been written boosting ‘philanthrocapitalism’;
one good critique is McGoey 2015. Roy 2010 and Bateman 2010 both provide trenchant
critiques of micronance. See Böhm and Dahbi (eds.) 2009 for the problems with carbon
 Bliss 2004.
 A peculiarity of the social-investment market is that its ideological proponents believe
the solution (market discipline) to be so powerful that they are willing to create the prob-
lem (separation of ownership and control). For such proponents, the decision-making
ability of the state, its ability to weigh up competing uses for scarce resource – that is to
say, commensurate – is inferior to that of private capital, via market mechanisms.
()   () 
  . () –
What is rarely made explicit in mainstream discussions of market discipline
is that investors’ pressure on managers must be translated into pressure on
workers – and the ‘natural’ environment, communities and so on. This is what
bosses do!
Market discipline as understood by scholars such as Bliss is just one aspect
of the competition and discipline that happens in the capitalist mode of pro-
duction. Let us now lay out the various levels on which individual capitals (or
‘bits’ of capital in general) compete, always bearing in mind that such competi-
tion between capitals always translates into competition amongst workers. Or,
more generally, competition amongst capitals must be understood as a com-
petition to see which capitals are best at exploiting their workers and/or ap-
propriating value by externalising costs onto citizens, consumers or ‘nature’.
First, and most obviously, capital(ist)s compete in the product market.
Cadbury’s, Mars and Nestlé compete in the market for chocolate and confec-
tionary, for instance; Apple competes with Samsung in the market for smart-
phones, tablets and so on; British Gas (owned by Centrica), , E.On, nPower,
PowerGen, Scottish Power and  compete (or arguably, do not compete) in
the market for electricity and gas. With economic globalisation, driven by in-
stitutions such as / and various free-trade agreements, such compe-
tition has, of course, expanded in its geographical reach, and thus intensied.
Since the advent of the joint-stock company and the development of ex-
changes upon which stock in such companies might be traded, capital(ist)s
also compete in the capital market. Cadbury’s, for example, is now part of
Mondelēz International, whose shares are traded on a number of stock mar-
kets. Indeed Mondelēz’s share price is displayed prominently on the homepage
of its website: this and other characteristics of the website suggest investors,
and not the sweet-toothed, are the target visitors. All of the companies
mentioned above are publicly listed, their shares bought and sold by nan-
cial investors. Such investors, as investors, have no interest in confectionary
or mobile-computing devices or gas and electricity. Their primary concern,
frequently their only concern, is maximising return on investment, subject to
acceptable levels of risk; they are only interested in the nal consumer product
 See Moore 2015, who theorises capitalist development as a history of exploitation on the
one hand and appropriation of nature on the other.
 The joint-stock company has also facilitated the pooling of resources necessary for the
funding of large-scale projects: ‘The world would still be without railways if it had had to
wait until accumulation had got a few individual capitals far enough to be adequate for
the construction of a railway. Centralisation, however, accomplished this in the twinkling
of an eye, by means of joint-stock companies.’ (Marx 1976, p. 780.)
 
  . () –
in as much as it inuences risk and return. Investors then will constantly as-
sess the likely protability of alternative corporations – and adjust their own
portfolios (of shares) in accordance with these on-going assessments.
Simplifying only a little, the price of shares in a corporation considered
more protable than the average (i.e. to ofer a higher rate of return – whether
via dividends or equity-price appreciation) is likely to rise; the price of shares
in a corporation considered less protable than this market norm is likely to
fall. For underperforming corporations – those ofering a rate of return below
the market norm, for given level of risk – there is the threat that ‘activist inves-
tors’ will seek changes in the way the corporation is run and/or its senior man-
agement. There is also the threat that declining share price will invite hostile
take-over, with new owners seeking to improve performance, usually via some
form of restructuring. This is exactly the market discipline discussed by Bliss
in his account.
We see through this mechanism how nance creates incentives for corpora-
tions (diferent capitals) to act in stakeholders’ interests, where stakeholders
are equated with shareholders. This disciplinary function of nance is depen-
dent upon good information. It is in investors’ interests to monitor the cor-
porations (and the business environment in which they are operating) whose
shares are included – or might be included – in their portfolio. In Bliss’s discus-
sion, market participants act on the information obtained from their monitor-
ing of rms, and thus inuence asset prices. But we can also understand asset
prices and other nancial information themselves signalling to other market
actors in a feedback loop. The prices of nancial assets inform all participants
what aggregate beliefs or opinions are. This is the sense in which we can un-
derstand, as Hayek explains, ‘the price system as … a mechanism for commu-
nicating information’. Hayek, of course, and capitalist markets, go further.
Markets, including nancial markets, not only produce the price information
 Typically, investors make a trade-of between risk and return, demanding a higher
expected rate of return for more-risky investments.
 The pursuit of maximal returns, to the exclusion of all other considerations, is one result
of the ‘shareholder value revolution’ of the 1970s and ’80s, itself one facet of the neoliberal
shift. Although social-movement campaigners have attempted to force corporations to
behave in a more ‘socially responsible’ manner, the ‘shareholder value’ perspective has
been so dominant that even some philanthropic trusts solely consider nancial perfor-
mance when deciding where to invest their wealth. According to McGoey, for example,
‘for years, with the exception of tobacco companies, the [Gates Foundation] chose to in-
vest in companies ofering strong nancial returns regardless of negative health efects’
(McGoey 2015, p. 173). Until 2014, such investments included Coca-Cola, McDonalds and
even  Group, ‘a leader in the for-prot prison industry’.
 Hayek 1945, p. 526.
()   () 
  . () –
that aids decentralised decision-making, they also produce an ‘impersonal
compulsion’, which ‘confronts those who depend for their incomes on the mar-
ket with the alternative of imitating the more successful or losing some or all
of their income’. The nancial markets thus channel capital towards the most
productive – read, most exploitative – uses.
As with competition in the product market, economic globalisation, and
particularly nancial globalisation, has led to more intense nancial- and
capital-market competition. Regulatory changes adopted by most advanced
capitalist economies in the 1970s and ’80s – and imposed on many Third World
countries as part of the Washington consensus – mean there are now few
barriers to ‘foreigners’ trading in shares of ‘British’ companies and even own-
ing majority stakes in them. Margaret Thatcher’s governments are, of course,
(in)famous for their privatisation programmes – which is why 90% of house-
holds in Britain now purchase energy from one of the ‘Big Six’ utilities men-
tioned above, rather than two publicly-owned, monopoly utilities. But of these
corporations, three (, nPower and E.On) are owned by ‘foreign’ capitals –
and this is only possible because of Thatcher’s abolition, in 1979, of exchange
controls. According to her memoirs, of all her activities in her rst year in of-
ce, this is the one she took ‘greatest personal pleasure in’.
We must also mention the explosive expansion in derivatives trad-
ing over a similar period. Financial derivatives may be associated – or
derived – from all manner of underlying assets, including: equity; corporate, gov-
ernment or consumer debt; interest rates; currencies; commodities, like wheat,
petroleum, copper; ‘baskets’ of equity or debt, such as share indices or – now
infamously – bundles of mortgages; interest rates; even ‘natural’ events, such
as inclement weather. In 2016, at least $6.1-trillion worth of derivatives were
traded every day, with the entire value of annual global output turning over in
the nancial markets in less than two weeks.
 Hayek 1978, p. 189.
 Thatcher 1993, p. 44, cited in Herold 2002, p. 8. As Herold deduces, Thatcher was quite
aware of the importance of this act: ‘But not every capitalist had my condence in capi-
talism. I remember a meeting in Opposition with City experts who were clearly taken
aback at my desire to free their market. “Steady on!”, I was told. Clearly, a world without
exchange controls in which markets rather than governments determined the movement
of capital left them distinctly uneasy.
 Figures are from the Bank for International Settlements ( 2016a, 2016b), which report
daily over-the-counter () turnover in foreign-exchange derivatives markets of $3.4
trillion (plus $1.6 trillion of spot transactions) and  trading in interest-rate derivatives
of $2.7 trillion. According to the , global  in 2016 was $75.2 trillion ( 2017).
 
  . () –
Derivatives are clearly important. But as Dick Bryan and Michael Raferty
argue in Capitalism with Derivatives, it is less the case that derivatives are
important by virtue of their large volume; rather their volume is large be-
cause they are important. Opening up the ‘black box’ of derivatives, Bryan and
Raferty seek to ‘explain the social role of derivatives … [with] the emphasis …
squarely in the sphere of class relations and, especially, competition between
capitals.’ Derivatives, it turns out, ‘go to the heart of calculation and com-
petition within a capitalist economy’. For Bryan and Raferty, the ‘system of
derivatives’ – i.e. the millions of various contracts taken as a whole – in com-
bination, perform two key functions: binding and blending. Binding refers to
derivatives’ role of ‘binding’ the future to the present. For example, a futures
contract sets in the present the price for the exchange of some commodity
three months’ hence (say). Blending is the process by which derivatives ‘es-
tablish pricing relationships that readily convert between (… “commensurate”)
diferent forms of asset. Derivatives blend diferent forms of capital into a sin-
gle unit of measure.’
From derivatives’ binding and blending attributes stem a number of ar-
guments. Of most relevance here is that ‘[d]erivatives have taken the logic
of capital beyond the bottom line (annual prot rates) and into the details
of each phase of production and distribution’. In other words, the vast sys-
tem of derivatives permits the commensuration of diferent ‘bits’ or ‘pieces’ of
capital – across sectors, across space and across time – and thus results in an
intensication of competition between these bits of capital and a sharper
focus on the human labour that (re)produces each bit of capital. By intensify-
ing the process of competition, derivatives intensify the pressures on managers
to maximise the extraction of surplus-value and upon workers to produce this
surplus-value. In short, nancial derivatives multiply or intensify – or apply
leverage to – nance’s disciplinary function.
Sotiropoulos, Milios and Lapatsioras develop a framework that to an extent
converges with Bryan and Raferty’s. For Sotiropoulos et al. nance and -
nancialisation must be understood as ‘a technology of power, which facilitates
and organizes the reproduction of capitalist power relations’. As in Bryan and
Raferty’s approach, derivatives turn out to be crucial to this organisational and
 Bryan and Raferty 2006.
 Bryan and Raferty 2006, p. 5.
 Bryan and Raferty 2006, p. 9.
 Bryan and Raferty 2006, p. 12
 Bryan and Raferty 2006, p. 96.
 Sotiropoulos, Milios and Lapatsioras 2013.
 Sotiropoulos, Milios and Lapatsioras 2013, p. 179.
()   () 
  . () –
disciplinary function of nance: what derivatives make possible is the com-
mensuration of diferent concrete risks, where such risks include various con-
crete manifestations of class struggle. Although there are diferences between
Sotiropoulos et al.’s analysis and Bryan and Raferty’s, I do not think they are
relevant for my argument here. Both sets of authors share an understanding
that nance is productive, that its social function (for capital) is to make com-
mensurable heterogeneous concrete human labour – or, equivalently, make
commensurable the various risks that diferent workers will refuse the con-
crete labour demanded of them by their managers – and thus to intensify the
competitive pressures on these heterogeneous workers.
3.2 Social Finance and Social Discipline
Let us now explore how such nancial discipline might play out in the social-
investment market. Recall the ve types of investor distinguished by Big Society
Capital (see section 2.1, above). For the government, to date the largest inves-
tor, a ‘key consideration [… is …] payment by results, while trusts and foun-
dations (providing 12% of funding) ‘are increasingly looking for standardised
ways of assessing their investment against the social impact they return’. The
implications are clear. The rate of return on (social) investment will be used
as the standardised way of measuring social impact – because this is how the
 is designed, such that there is a direct link between social impact and -
nancial return. This metric will then be used to judge and compare alternative
projects or social enterprises. A probation scheme in Peterborough, say, can be
evaluated against one in Liverpool, but also against a programme working with
disadvantaged young people in the West Midlands and a project that seeks to
help rough sleepers in London. Indeed, projects that work to reduce recidi-
vism amongst teenage detainees at New York’s Rikers Island or to ‘provide ser-
vices to strengthen 400 families’ in New South Wales can also be evaluated in
this way.
A successful social enterprise – that is, one that meets or beats the criteria
set out in the associated  contract and which thus delivers a nancial re-
turn to its investors – will be rewarded with the opportunity to develop further
projects (thus generating further nancial returns for investors). A failing so-
cial enterprise will be allowed to exit. In this way, the labour – both waged
 In particular concerning whether or not derivatives can be understood as money; see also
Sotiropoulos and Lapatsioras 2014.
 The Liverpool probation scheme is a hypothetical example, the others are not.
 Recall the quotation – in section 1.1, above – from the Cabinet Oce’s 2011 paper, Growing
the Social Investment Market: the goal is ‘an increase in the total number of social ven-
tures, while allowing for the failure and exit of some organisations’.
 
  . () –
and unwaged – underpinning social enterprises that deliver a wide variety of
services across society will be made commensurable, will be made to compete
and will thus be disciplined.
The vision and the implications go further. In its typology of potential so-
cial investors, Big Society Capital also includes individual retail investors,
seeking ‘competitive rates [of return]’, wealthy individuals, for whom a ‘key
requirement’ is ‘nancial returns linked to investment/social impact risk’,
and mainstream banks and commercial nancial institutions. The G8’s Social
Impact Investment Taskforce, as also mentioned above, discusses the merits
of social-investment assets, in terms of their nancial performance and their
riskiness vis-à-vis traditional assets, in particular suggesting their potential
role in diversifying a portfolio. The social-nance visionaries wish to make
social-investment assets mainstream. Indeed there is some evidence of this:
Goldman Sachs was one of the leading investors in the Rikers Island probation
project, for instance.
Another part of the vision is a secondary market for social-investment as-
sets. The authors of Growing the Social Investment Market called for the pilot-
ing of a ‘social stock exchange’, suggesting the lack of such a market ‘can deter
investors. It can also hinder redeployment of capital to areas where it can most
eciently generate social and nancial return. Two other enthusiasts pre-
dicted that, ‘[a]s the social investment market grows, it is likely that a second-
ary market for s may emerge ofering primary investors liquidity and exit
and secondary investors, such as pension funds, a potentially attractive asset
class within a diversied (and socially aware) portfolio.’
The realisation of these two additional elements of the social-investment
vision – widespread take-up of social-investment instruments amongst tra-
ditional investors and the emergence of a liquid secondary market – would
greatly facilitate the social-disciplinary power of nance. The involvement of
traditional investors would sharpen the focus on nancial returns, also bridg-
ing the binary divide between socially-reproductive activities and tradition-
ally productive activities – that is, making commensurable activities in the two
spheres. An active secondary market would extend the scope for both ‘moni-
toring’ and ‘inuence’ – Bliss’s two components of market discipline, discussed
in section 3.1. The ability to sell a bond it considered to be underperforming
 Delevingne 2014.
 Cabinet Oce 2011, pp. 59 and 34.
 Nicholls and Tomkinson 2013, p. 42. A Social Stock Exchange was, in fact, launched in 2013,
but no s have yet been traded on this secondary market (<http://socialstockexchange
.com/membership/benets-of-membership/>; last accessed 10 February 2016).
()   () 
  . () –
would give an investor (and other potential investors) the incentive to moni-
tor more closely and more continuously the activities of the service provider.
Financial investors do not care whether they trade cocoa futures, the
Argentinian peso or some index linked to the 100. They seek only
the greatest risk-adjusted return. By their trading actions, the performance
of those top 100 companies is compared to the performance of the entire
Argentinian economy and to that of cocoa farmers everywhere. The implica-
tion for workers across the planet is brutal: their performance is being made
commensurable. In global ‘capitalism with derivatives’, the performance of a
Detroit car-worker can be compared not only with that of his neighbour on
the production line, or even with her counterpart in Alabama or South Korea,
but also with garment workers in Morocco, cofee-growers in Kenya, program-
mers in Bangalore, lecturers working for Kaplan and cleaners on the London
Underground. Competition and discipline are intensied, as is, of course,
class struggle.
The social-investment market model has the potential to extend this com-
petitive/disciplinary logic into the sphere of ‘the social’. The probation ocer
in Peterborough or New York, the youth-support worker in Liverpool, the vol-
unteer helping homeless people in London, the social worker in New South
Wales: their ‘performance’ will be integrated into this system of measure, com-
mensuration, competition and discipline.
Conclusion: The Way of the Future?
The key argument developed in this paper is that the social-investment mar-
ket threatens – or promises, depending on one’s perspective – to extend the
disciplinary logic of nance into the sphere of social reproduction, in particu-
lar into the domain of state ‘welfare’ spending concerned with the reproduc-
tion of that unique commodity, labour-power. The key instrument deployed
here is the social-impact bond: purportedly designed to align the interests of
social-service providers, state commissioners of social services and nancial
investors, the  model has the potential to bring to bear on service providers
nance’s power to organise social relations.
 The ability to sell in a secondary market a  before the project’s completion would allow
investors to short the welfare state, i.e. to seek to prot from the failure of social-welfare
programmes. I am grateful to Dick Bryan for suggesting this phrase to me.
 As I noted above, even philanthropists such as the Gates Foundation do not seem to care
much where they invest – the only consideration is maximising returns.
 
  . () –
Above, I have suggested that nance (and nancialisation) make com-
mensurable heterogeneous concrete labours, across time, across sectors and
across space. Such commensurability facilitates the intensication of compe-
tition between the workers who perform these concrete labours: it is thus a
tool of capital in its class struggle with workers. My argument concerning the
 model is that it applies this ‘technology of power’ in the social sphere, the
sphere of social reproduction. The  model makes commensurable the la-
bour of the probation ocer in Peterborough, the youth worker in Liverpool,
the homeless-shelter volunteer in London. Thus these heterogeneous sub-
jects – both waged and unwaged – are put into competition with each other.
But not only with each other: also with other productive subjects across the
planet – the auto worker in Ulsan, South Korea, the cleaner on the London
Underground, the academic precariously employed by Kaplan.
As such, and referring back to a debate touched upon very briey at the
end of section 1.1, the social-investment market model is part of a develop-
ment and deepening of neoliberal capitalism. In this sense, it can be under-
stood alongside other neoliberal projects in the UK, to make commensurable
and nancialise the activities of university workers, for instance. The social-
investment market model thus epitomises a nancialisation of the welfare
state or a nancialisation of social reproduction – where nancialisation is
understood as a technology of power.
When compared with the magnitude of both state welfare spending and
overall private investment, the social-investment market is, at present, tiny.
There is, as yet, no secondary market for social-impact bonds, whilst investors
in s have mostly been charitable trusts and foundations. But the promot-
ers of the model are ambitious. In March 2016 Rob Wilson, then minister for
civil society, expressed his hope and expectation that the  market would be
‘worth more than 1 billion pounds by the end of this Parliament. The growth of
s will continue into the next Parliament and will become the norm for the
way many public services are funded’. In his response to the Peterborough
 results, Ronald Cohen, a key gure in the development of the social-
investment market, claimed with characteristic hubris: ‘it is the way of the
future’. The Economist was more cautious: in its report on the Peterborough
 On this see, for example, De Angelis and Harvie 2009; McGettigan 2015.
 See Dowling 2016, and also Cooper, Graham and Himick 2016, who argue that the London
Homelessness  produces a ‘securitization of the homeless’.
 Wilson 2016. Unfortunately for Rob Wilson, ‘this Parliament’ ended early with Theresa
May’s snap election of June 2017, in which he lost his seat …
 <
July-2017.pdf>; last accessed 6 August 2017.
()   () 
  . () –
project, it notes the ‘complexity of evaluating [s’] success’ and concludes
they ‘are unlikely to spread far’.
The question of the measurement of social outcomes or impact – although
essential to a robust  contract – is, in my opinion, a side issue, for two rea-
sons. First, the proponents of the social-investment market are devoting con-
siderable energy to developing techniques for evaluating outcomes. Second,
and more important, the metrics used in project evaluation do not have to be
‘sensible’ or ‘rational’ in order for the  model to function as a technology of
power. We know this – many of us have direct experience of it – from the prolif-
erating measures and metrics deployed to make the higher-education market
‘work’, measures that seem irrational, counter-productive, or simply stupid.
Similarly with increasing marketisation of school education and health care in
the UK. In this sense, I agree with William Davies’s argument that neoliberal-
ism has become both ‘punitive’ and ‘incredible’.
The future of the social-investment market will not be determined by ra-
tional debate on the model’s merits and demerits as a way of addressing so-
cial problems. Rather it will be determined on the terrain of class struggle.
Understanding the  model as a technology designed to impose nancial-
market discipline on actors within the sphere of social reproduction – and
thus as a means of waging class war from above – is therefore essential if we
are to successfully intervene in this class struggle from below.
I am grateful to Historical Materialism’s editors and to two anonymous referees
for generous and constructive comments on an earlier draft of this paper, and
to Dick Bryan and Mike Raferty for helpful discussions and encouragement.
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... All rights reserved. neoliberal governance further into the heart of contemporary social care (Sinclair et al, 2014;Dowling & Harvie, 2014;Smyth, 2019;Mitropoulos & Bryan, 2015;Dowling, 2017;Cooper et al., 2016;Harvie, 2019). The codification of social and socio-political relations into financial practices has always been an undergirding logic of finance, financial markets and the act of investment (Knorr Cetina & Bruegger, 2002;Knorr Cetina, 2003;Allen & McGoun, 2001). ...
... This raises questions regarding the effectiveness of SIBs. Critical commentary contends that the private-public blending is an instance of an ongoing neoliberal project which might problematically impinge upon the successful delivery of SIBs' social outcomes (Warner, 2013;Cooper et al., 2016;Harvie, 2019;Lilley et al., forthcoming); yet policy documents instead continue to emphasise the ease of using private funding for public purposes, eliding somewhat the question of whether the social outcomes are desirable or even achievable: ...
... Welfare provision in the UK has undergone profound changes since the 1980s, being reformulated from state-based care towards market discipline under the auspices of neoliberalism. The turn towards social investment appears to be part of this wider transformation (Dowling & Harvie, 2014;Harvie, 2019), with SIBs representing the most recent attempt (e.g. Cooper et al., 2016;Harvie & Ogman, 2019). ...
The social turn in finance has brought with it a raft of innovations in finance and investment. For some this is a positive development that positions finance as a means for achieving positive social change. However, the notion that such innovation offers a softer or more benign finance is debated. In this paper we examine one recent innovation, social impact bonds (SIBs), and through a case study, we evaluate policy documents, press releases, interim reports and interviews with 4 key stakeholders in a recent UK SIB. In doing so, we contend that the case SIB embedded modalities of neoliberal governance further into contemporary social care and social relations. We argue that social investment is thus based around a model of inclusive neoliberalism and that the apparent innovations in social investment further embed finance and extractive logic deeper into social life. We conclude by suggesting that the practise of social investment will do nothing to resolve the social problems that they are designed to tackle.
... As an instrument constituency, these actors play a central role in keeping the instrument alive (Béland and Howlett 2016;Voss and Simons 2014). The importance of Cohen in particular in the development of social investment in the UKand globallyis profound (Harvie 2019). Over the next 20 years Cohen and the SITF consciously constructed (and reconstructed) key allegiances and networks (Cassanovas 2016), adapting the political framing of social investment in order to fit shifts in wider political philosophy and ideology (Harvie 2019;Mitropolous and Bryan 2015). ...
... The importance of Cohen in particular in the development of social investment in the UKand globallyis profound (Harvie 2019). Over the next 20 years Cohen and the SITF consciously constructed (and reconstructed) key allegiances and networks (Cassanovas 2016), adapting the political framing of social investment in order to fit shifts in wider political philosophy and ideology (Harvie 2019;Mitropolous and Bryan 2015). The key achievements of the UK SITF and, later, the G8 SITF owe much to their actions (McHugh et al. 2013;Morley 2015;Nicholls 2010). ...
... The development of social investment in the UK is not simply a story of political actors seeking to constrain radical action and favour the status quo (Pierson 2000). Despite the success of the SITF instrument constituency in terms of perpetuating its policy instruments the co-opting of policymakers required fluidity in the meanings of social investment across radical agendas under different governments (Harvie 2019). Subsequently, this pragmatism in terms of perpetuating policy instruments designed for social impact has generated some criticism of the SITF for 'selling out' (Cassanovas 2016). ...
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Proponents of policy instruments often have to justify them to shifting political masters. This article explores the evolution of social investment, both as a policy solution and a set of policy instruments, during a period characterized by political turbulence. Discourse analysis of texts produced by an instrument constituency shows how a constant set of policy instruments are framed as a changing solution to different political problems. This helps us develop the concept of dynamic persistence, which elaborates how the instrument constituency was able to maintain support for their policy instruments by realigning them to different ideological principles.
... Government and other SII market actors have tended to provide somewhat boosterist accounts of the benefits of SIB and there is now a burgeoning interest amongst academic communities concerning the role of the state in facilitating SIB expansion and questions regarding their effectiveness and value for money (Edmiston et al, 2017;Wiggan, 2018;Tan et al, 2019). Critical accounts have situated the SII turn as an attempt to manage tensions arising from austerity and fracturing societies while opening up new opportunities for capital accumulation (Dowling, 2017;Dowling and Harvie, 2014;Whitfield, 2017;Harvie, 2017). Such accounts call to mind Harvey's notion of the 'temporal-spatial' fix (cited in Arrighi, 2006: 202; see also Sokol, 2013;509) where contradictions within the process of capital accumulation are responded to by expansion of capital into new territory and through temporal shifts in investment. ...
... Such practices permit a thoroughgoing de-localisation process to occur, as immoveable sites of capital investment becomes transformed into liquid tradeable commodities, enabling a temporal and spatial re-allocation of risk and profit as the originator of credit realises the (anticipated) future returns of the income stream in the present, while dispensing with future risk of default, by trading this on to other parties (Breger Bush, 2016;Martin et al, 2008: 121;Martin, 2013: 90). The more activities that can be commodified, unbundled into incomes streams, repackaged and traded then the greater the scope for de-territorialisation to expand accumulation and grow financial market opportunities, while also disciplining market actors to prioritise returns on investment (Davis and Kim, 2015: 207;Bryan and Rafferty, 2015: 320;Harvie, 2017). ...
... The Department for Work and Pensions (DWP) has been involved in the highest number of SIB launched (14) in the UK to date (Social Finance, 2017a). This may reflect the links drawn by Ministers between resolving unemployment and forging a stronger (Big) society and the positioning of the SIB as a mechanism to help realise this through using the resources of investors and their focus on securing returns to fund and the operation of specialist voluntary and community service providers (Wiggan, 2018;Harvie, 2017). ...
Government and other Social Impact Investment (SII) market actors have provided somewhat boosterist accounts of the benefits of Social Impact Bonds (SIB) and there is a burgeoning interest amongst academic communities concerning the role of the state in facilitating SIB expansion and their effectiveness and value for money (Edmiston et al, 2017; Wiggan, 2018; Tan et al, 2019). Critical accounts have situated the SIB turn as an attempt to manage tensions arising from austerity and fracturing societies while opening up new opportunities for capital accumulation (Dowling, 2017; Dowling and Harvie, 2014; Whitfield, 2017; Harvie, 2017). Such accounts call to mind Harvey’s notion of the ‘temporal-spatial’ fix (cited in Arrighi, 2006: 202; see also Sokol, 2013; 509) where contradictions within the process of capital accumulation are resolved through expansion of capital into new territory and temporal shifts in investment. The logic being, that as new spaces are opened up and developed, opportunities for investment and production are renewed (Arrighi, 2006: 202-205). The purpose of this chapter is to contribute to the discussion around SII and SIB through an analysis of the ‘Innovation Fund’ (IF) SIB and the Youth Engagement Fund (YEF) SIB commissioned by the UK Department for Work and Pensions (DWP) (DWP, 2017; DWP, n.d.) to improve youth employability. The aim is three fold. First, to identify how we can understand the turn to SII as a distinct process of extensive financialisation (Fine, 2011; 2014 and Fine and Saad-Filho, 2016). Second, to unpack how the operation of the SIB forges new financial chains of value (Sokol, 2015) that transform geographically rooted (‘problem’) populations and welfare delivery into investable products, linked to mobile financial market actors. Consequently, while sites and populations of investment remain bounded by the territoriality of the local and national state, the SIB helps investors to transcend these and avoid entanglement in programme delivery in a specific locality. Finally, the chapter considers the temporality of value creation and realisation associated with the SIB and how this facilitates appropriation of public resources for finance capital (see also Harvie and Ogman 2019).
... There is now a growing critical literature on SIBs (see, e.g., Harvie, 2019;Harvie & Ogman, 2019). Rather than attempting to summarize that literature we draw out the extent to which SIBs can be situated in a world dominated by a social derivative logic . ...
... By means of SIBs traded in the social-investment market, the productive performance, the labor, of a probation officer, say, might be measured against that of a youth worker-or indeed against that of their "clients." And since there is no firewall between "social" investments and other financial markets, then the labor, both waged and voluntary, of such "social" workers can be integrated into the world of "capitalism with derivatives" (Bryan & Rafferty, 2006;Harvie, 2019). ...
... In this scenario, SIBs touch upon multiple crises: social reproduction, capital accumulation, and the state and capitalism (Dowling & Harvie, 2014;Harvie, 2019;Harvie & Ogman, 2019). A consensus regarding the acceptance of radical social service reforms is gained through a diffused rhetoric strategy rooted in austerity issues, with the state being statically narrated as costly, inefficient, and over-interventionist (Joy & Shields, 2018). ...
... In these studies, SIBs were accordingly viewed as a form of boundary shift, a reform that altered the character of the service because of differences in the goals pursued by the financers of the interventions, that is, public benefits in the traditional welfare and profits in the case of SIB investors (McHugh et al., 2013;Roy et al., 2017;Ryan & Young, 2018;Sinclair et al., 2014). Dowling (Kish & Leroy, 2015), securitising the poor (Cooper et al., 2016;Lilley et al., 2019;Myers & Goddard, 2018), leading to the financialisation of social reproduction (Harvie, 2019), and transforming people "into process components and outcome indicators" (Sinclair et al., 2019 (Herrera et al., 2010;Scott, 2008). practitioners", and especially professors Mildred Warner and Alec Fraser for their comments. ...
This study reviews all the academic contributions to research on social impact bonds (SIBs). It responds to the need for clarification across and within the various perspectives used in the literature. The goal was to assess the approaches used in extant studies and to offer directions for future studies. A bibliometric analysis was performed, and a framework was developed in which the contributions were positioned according to two criteria: (a) a distinction on the basis of research approaches and perspectives on SIBs and (b) an analysis of content according to a protocol that includes key questions corresponding with the most pressing issues in this area.
... Scholars have measured the goals and success of the Big Society in several ways. It has been seen as (1) a principally rhetorical attempt to justify a neoliberalising agenda (North 2011;Tam 2011;Byrne et al. 2012;Corbett and Walker 2013); (2) a relatively well-intentioned programme which lacked the political capital to succeed within and without the Conservative Party (Sage 2012;Heppell 2013;Kerr and Hayton 2015;Hayton 2016); (3) an attempt to emulate New Labour's 'Third Way' modernisation programme (Levitas 2012;Dommett 2015); and (4) a semi-coherent policy platform which has had material social effects (Dowling and Harvie 2014;Lister 2015;Harvie 2019). ...
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Critique of “neoliberalism” is generally thought of as a preoccupation of the political Left. Here it will be argued that the British Right has also been developing a distinctive critique of neoliberalism and its failure, whether they thought about it in these precise terms or not. This represented an attempt by Conservative intellectuals to grapple with the enduring legacy of Thatcherism in the party. The objectives of this paper are threefold. Firstly, it will examine the contours of a distinctively Conservative description of neoliberal society by drawing on the work of Jesse Norman. Secondly, it will explain and contextualise their account of neoliberal economic failure and a possible avenue to its rehabilitation. And, thirdly, it will explain why this rehabilitation was itself a failure through a critique of Norman’s attempts to read Hayek through Burke. It concludes by observing that what civic forms of conservatism fail to offer is a thoroughgoing examination of functions that markets are unable to perform.
Movements for racial and Indigenous justice are targeting rapidly expanding budget allocations for prisons and police. In Australia, Indigenous Communities are seeking to redirect public money from the criminal justice system to Indigenous-controlled services and infrastructure through ‘justice reinvestment’. This article explores the possibilities and tensions of justice reinvestment as a strategy for exercising Indigenous self-determination in a marketised policy landscape. Focusing on the case of Just Reinvest NSW and the Maranguka initiative in Bourke, we compare justice reinvestment to neoliberal ideas of social investment, exemplified by social impact bonds (SIBs). We identify three tools of marketisation in SIBs – liability budgeting, pricing evidence, and devolution to non-state providers – and analyse how these are being engaged, and contested, by Indigenous Communities through justice reinvestment. While incomplete, we discuss how Indigenous-run justice reinvestment initiatives are creatively using these tools against the settler-colonial, carceral state to claim fiscal resources, develop bureaucratic capacity, and institute territorial governance. We argue that justice reinvestment demonstrates the potential to repurpose the tools of marketisation to create alternative ‘hybrid’ spaces of governance that contest both the state and the market.
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In 2018, academies accounted for 72% of all English secondary schools, compared to 6% in 2009 (National Audit Office, 2018). English academy schooling conforms to marketizing trends in international education reform, but Conservative politicians have also attempted to promote particular moral values. This article analyses the tensions between neoliberalism and neoconservatism and applies this analysis to a concrete debate taking place within the Conservative Party in the 2000s and 2010s. It uses arguments made by an illustrative group of Conservative politicians to explore and analyse the tension between these two reform trends. The aim of this article is twofold. Firstly, it will present the key arguments which were marshalled by a selection of thinkers affiliated with the Conservative Party in favour of educational reform. It will do this by analysing Conservative articulations of the failure of state education; the role of the consumer and the relationship between democracy and the market. Secondly, it will explore the degree to which marketizing and traditionalist impulses in education reform should be considered complimentary or contradictory. I will conclude by arguing that the parent-consumer functions as a vanishing mediator between neoliberal and neoconservative ideological positions.
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Despite having been around for a decade now, Social Impact Bonds (SIBs) – payment by result contracts funding social programmes – are still a niche instrument. Constituting but a fraction of the overall impact investment sector, they were expected to grow much faster and augur a new model of pursuing social policy objectives. Whilst this has not yet occurred, they nevertheless continue to benefit from a great degree of political support and academic interest. But outside of the practitioner-focused literature, the scholarship investigating SIBs has largely identified financialisation and the erosion of social solidarity as the main dynamics underpinning this development. This article argues that it is important to also attend to SIBs as expressions of transformations occurring within the design and pursuit of social policy objectives. By looking at SIBs as a form of governance of social risks, the article argues that SIBs nurture their own forms of social solidarity. Based on three distinguishing tenets of SIBs, three types of solidarities are emphasised: inter-temporal, cross-sectoral and risk-insurance solidarities. Whilst these can spur social inclusion, innovation and collaboration, the article discusses how they can also be spurious and can come undone.
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This chapter highlights the value assumptions underscoring the recent and contested emergence of debt-based financing for the conservation of 'standing natures' in situ. In the aftermath of the United Nations Framework Convention on Climate Change (UNFCCC) Paris climate agreement of late 2015, there has been a noticeable proliferation of policy publications and reports espousing the benefits of leveraging debt-based finance and impact investing for the conservation of so-called natural capitals. The chapter examines how new measures of the health and improvement of natures in situ are becoming a focus for financial concerns in 'impact investing'. It introduces the concept and practice of impact investing and traces developments in the field of impact investing for the conservation, restoration and rehabilitation of terrestrial ecosystems. The chapter explores the innovations we are seeing today that seek to create conserved natures in situ as an asset class for impact investing, and sets them within a broader turn towards impact investing in social and development contexts. In doing so the chapter identifies the value-making mechanisms proposed and in place for translating projected natural capital quantities into financially leverageable forms of value.
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This paper examines the recent phenomenon of social impact bonds (SIBs). Social impact bonds are an attempt to marketize/financialize certain contemporary, intractable “social problems”, such as homelessness and criminal recidivism. SIBs rely on a vast array of accounting technologies including budgets, future cash flows, discounting, performance measurement and auditing. As such, they represent a potentially powerful and problematic use of accounting to enact government policy. This paper contains a case study of the most recent in a series of SIBs, the London Homelessness SIB, focusing on St Mungo's, a London-based charitable foundation that was one of two service providers (charities) funded by the SIB. The case study is intended to enable a critical reflection on the rationalities that underpin the SIB. For this purpose, the paper draws upon Michel Foucault's work on biopolitics and neoliberalism. The SIB is thoroughly neoliberal in that it is constructed upon an assumption that there is no such thing as a social problem, only individuals who fail. The SIB transforms all participants in the bond, except perhaps the homeless themselves, into entrepreneurs. The homeless are instead “failed entrepreneurs” who become securitized into the potential future cash flows of investors.
The article analyses the UK government's plans to create a social investment market. The Big Society as political economy is understood as a response to three aspects of a multi-faceted, global crisis: a crisis of capital accumulation; a crisis of social reproduction; and, a fiscal crisis of the state. While the neoliberal state is retreating from the sphere of social reproduction, further off-loading the costs of social reproduction onto the unwaged realms of the home and the community, it is simultaneously engaging in efforts to enable this terrain of social reproduction to be harnessed for profit. Key to this process are specific government policies, the creation of new financial institutions and instruments and the introduction of the metric of 'social value'. Policies ostensibly aimed at resolving the crisis in ways that empower local communities actually foster further financialisation and a deepening of capitalist disciplinary logics into the social fabric. Even before the economic crisis, a growing number of companies were starting to take seriously the need to put values at the heart of their business model. These included some of the best-known and most profitable firms in the world. Like philanthropy, this is something that needs to be central to the new form of capitalism that will emerge from the crisis. Michael Bishop and Philip Green (2010), The Road from Ruin
This article pries open the black box of the social impact bond (SIB), the novel financial instrument at the heart of social investment. We discover that concrete information is currently limited and our method is thus more speculative. We address the obfuscation of the nomenclature of the instrument and explore the mechanics of SIBs to suggest that they are not simple bonds but rather also bear properties akin to those associated with derivative contracts. We speculate on possible developments of the market in these bonds by considering the history of some previous financial innovations, namely, collateralized debt obligations (CDOs) underpinned by microfinance loans and the short-lived policy analysis market. Our discussion leads us to reevaluate Goodhart’s law and the ways in which it operates in relation to SIBs. We conclude by suggesting that SIBs' inherent indifference to the underlying state of the world renders them ultimately unlikely to delivery improvements in public services.
What are the links between things as diverse as the prices of pork bellies, interest rates, and corporate stock? They are all being translated into risk and priced through the system of derivative markets. Financial derivatives are now the largest form of financial transaction in the world, and they are transforming in pervasive ways the lived experience of capitalist economies. Financial derivatives are anchoring the global financial system and challenging the conventional understanding of ownership, money and capital. These challenges are examined in this book, providing a significant reinterpretation of contemporary capitalism that will be of interest to both social scientists and conventional finance scholars.
This paper provides an analysis of the financialisation of the British welfare state. In a continuation of neo-liberal privatisation and labour market activation, the financialised welfare state pursues a policy of welfare retrenchment, while engaging in forms of social engineering aimed at producing self-responsibilised individuals and communities who are financially literate, ‘investment-ready’ and economically productive. New financial instruments such as social impact bonds are deployed to these ends, both to ‘solve social problems’ and enable cost saving. Through the use of such financial instruments, the implementation of regulatory infrastructures and tax incentives, the financialised welfare state becomes a vehicle for the transfer of wealth from the public to private investors, while subjecting the domain of social policy to the vicissitudes of global financial markets. This paper offers a critique of these developments, situating the case of Britain within the broader global context and with regard to the implications for understanding the current political economy of the welfare state.