Markets and Ideology in the City of London

Individuals working in the financial markets of the City of London are commonly believed to be exceptionally pro-market by British standards. The subject of this book is the nature of these pro-market views. How do these people perceive the financial markets in which they work? What factors lead them to think as they do? How do their experiences of financial markets affect their perceptions of the proper relationship, in general, between the state and the market?

This chapter examines the question ‘Do City people believe in the market?’. To what extent do individuals working in the City hold strong pro-market views? Nearly a hundred interviews¹ were carried out between mid-February and late-July 1985. Interviewees were asked questions about the issues of privatisation, progressive income tax and state policy on unemployment. Each of these issues explores the views of interviewees about the desirable relationship between the state and the market even though none is explicitly a question about markets. It will be argued in this introductory section that questions about the above issues (privatisation, progressive income taxation, unemployment policy) do tap interviewees’ views about the desirable balance between market processes and state intervention. Furthermore, data presented in the chapter will show how each topic is in effect treated by interviewees as a question about the role of markets as opposed to state intervention.

In chapter 2, data were presented to demonstrate that the interviewees do indeed believe in markets as indicated by their answers to questions about privatisation, income taxation and policies to deal with unemployment. In this chapter the subjective meaning for interviewees of this belief in markets is explored.² Understanding the subjective meaning of markets is critical for a grasp of what a belief in markets means to these individuals. The concepts of ‘markets’ and ‘financial markets’ are examined in sections 2 and 3 respectively. Sociologists have paid little attention to markets, other than labour markets, and consequently most of the conceptual discussion below refers to the writings of non-sociologists. Among sociologists only Weber has made any real contribution to our understanding of markets. Section 4 deals with a crucial feature of the work carried out by participants in financial markets, namely, how they go about assessing likely movements in the markets. Finally, our grasp of the subjective meaning of markets to (professional) participants can be strengthened by an analysis of the goals of participants and accordingly section 5 is devoted to this matter.

This chapter is an attempt at a tentative explanation of the strong commitment of City people to the market. The argument developed is that the influence of social class, although relevant and important, is not alone sufficient to explain the City belief in markets because City people from modest backgrounds do not seem significantly less pro-market than those from the more privileged backgrounds. Attention must also be paid to the following: beliefs about the market held by recruits prior to entry into the city; the effect of working in financial markets; and the ideologically closed character of City culture. Each of these factors plays a crucial role in constituting and reinforcing socio-political opinions, including views about the proper relationship between state and market.

In chapter 2 evidence was presented about the strong pro-market beliefs of interviewees. This chapter explores the major implication of these beliefs, namely the adherence of most interviewees to ideologies close to or consistent with Neo-liberalism. In order to demonstrate that Neo-liberal ideology plays this dominant role in the City, it is necessary first to discuss relevant theoretical concepts and certain issues of method.

The issue of the origins of strongly pro-market views has been raised on a number of occasions. This chapter takes up this issue again in relation to the question of how recruits to City firms are socialised into a City culture which is characterised above all by its enthusiasm for markets and its ideological homogeneity.

In this chapter, section 2 summarises the analyses and findings of the study. Sections 3 and 4 examine the bearing of this research on our understanding of the contemporary British ‘new right’, of which the phenomenon of ‘Thatcherism’ is the predominant element. Section 3 is a critique of one of the most influential analytical approaches to ‘Thatcherism’, namely the work of Stuart Hall. Section 4 presents a different, albeit (and like Hall’s perspective partial) view of the strategy of the Conservative government. Finally, section 5 discusses three significant implications of this study for future sociological research.