Special Issue: Elites and Power after Financialization

Theory, Culture & Society

2017, Vol. 34(5–6) 103–126
Trade Associations, ! The Author(s) 2017
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DOI: 10.1177/0263276417717793

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Andrew Bowman
University of Edinburgh

Julie Froud
University of Manchester

Sukhdev Johal
Queen Mary, University of London

Karel Williams
University of Manchester

Abstract
This article introduces and develops the concept of trade narrative to understand
how business sectors defend against public disapproval and the threat of increased
regulation or removed subsidy. Trade narrative works by accumulating lists of bene-
fits and occluding costs, and is created by consultants for economic interests orga-
nized via trade associations. This represents an under-analysed ‘policy-based
evidence machine’, the aim of which is to format the discourses of the media and
political classes about the contribution of the sector in ways that frame political
choice about what is thinkable and doable. In doing so it supports elite power by
providing a relay for intra-elite communication. Using illustrations from privatized
railways, banking and pharmaceuticals in the UK and US, the argument explores how
the causal arrow runs in the opposite direction from that supposed in most discus-
sion of discourse-economy relations in the field of cultural economy.

Keywords
corporate business, economics, elite power, narrative, public policy, trade associ-
ation, trade narrative

Corresponding author: Andrew Bowman. Email: [email protected]

Extra material: http://theoryculturesociety.org/
104 Theory, Culture & Society 34(5–6)

Introduction
Political parties, however much they may be founded upon narrow
class interests and however evidently they may work against the
interests of the majority, love to . . . present themselves as co-operat-
ing with all the citizens of the state, and to proclaim that they are
fighting in the name of all for the good of all. (Robert Michels,
1911: 16)

The quotation from Michels is dated by his reference to mass, class-based

parties, but his claim still stands more than one hundred years later: in
democracies with universal franchises, the public discourses of political
justification work by invoking the general interest, identifying the public
good and claiming social benefits which often cover private advantage of
all kinds. Michels (1911: 16) called this the ‘philanthropic mask’, and this
article contributes to our understanding of how this process plays in
present-day capitalism in high-income countries. Here the role and
power of business has greatly increased, but elites are less socially homo-
geneous; public interest justifications are still necessary but increasingly
problematic where business enriches the few more reliably than it benefits
the many (Piketty, 2014).
This article considers how business, organized through sectoral trade
associations, now meets the demand for public interest justification by
producing ‘trade narratives’ about the social contribution of business,
especially in sectors like pharmaceuticals, finance and the privatized uti-
lities which face disapproval from consumers and the media, or are
threatened by unfavourable regulation and removal of public subsidy.
Trade associations typically commission outside expertise in a consult-
ancy firm to do the work of calculation; the resulting trade narrative
classically takes the form of a list of social benefits – big numbers on
jobs created, exports generated and taxes paid – which are directly attrib-
uted to private firms operating under the existing regulatory and con-
tractual regime. Within this narrative frame, it becomes easier to justify
the maintenance of that regime and, ideally, to frame political choice
about what is thinkable and doable as policy.
This interesting phenomenon has been neglected because political sci-
ence and cultural economy have had other preoccupations. Trade narra-
tive is a public form of communication which works through reports,
press releases and pamphlets, whereas political science has been more
concerned with business influence through lobbying behind closed
doors. In trade narrative, the causal arrow runs from the economy to
discourse with expert knowledge as a docile calculator on an hourly rate,
charged with serving the existing order. By way of contrast, in the per-
formativity and governmentality literatures on the economy, the causal
arrow runs in the opposite direction as the discourses of experts format
Bowman et al. 105

the economy and theory constitutes its object. This is so in Callon’s

(1998) performative economics, Mackenzie’s (2008a) description of
financial models as ‘an engine, not a camera’, and Miller’s (2001) concern
with calculative practices and ‘visibility’.
If we consider effects, trade narrative is part of an altogether messier
world of business story telling amidst uncertainty. Trade narrative imme-
diately creates a kind of halo effect around private business but the trade
calculations are intellectually vulnerable because they exaggerate by
ignoring costs and listing social benefits which are entirely attributed to
the agency of private firms with all the complications glossed over. The
political results are mixed. Many trade narratives work through an echo
effect to frame debate as politicians and regulators repeat contestable but
unchallenged trade claims about social benefits without recognizing that
this narrative is ‘economical with the actualité’ (Telegraph, 1999). Trade
narrative may therefore be important for intra-elite communication and
co-ordination, but the political results are not robust because trade cal-
culations of social benefits are almost certainly too technical to influence
most of the electorate.
Our article develops these arguments straightforwardly and is orga-
nized into four further sections. The next section explains how political
science and cultural economy have focused elsewhere so that there is little
discussion about the effects of what, in Boden and Epstein’s (2006)
terminology, we could call ‘policy-based evidence machines’. The third
section describes how economic interests format discourse by considering
the standard form of trade narrative; this lists social benefits to create a
halo effect around private interests which work through selection and
de-contextualization. This is illustrated with case material drawn from
privatized railways, pharmaceuticals, finance and defence in the United
States and United Kingdom. The fourth section considers political fram-
ing and shows how trade narratives are an important, but not necessarily
robust, means of intra-elite alignment through an echo effect as political
elites are enlisted to repeat trade claims and policy supports private
interests. The final section offers a conclusion which considers the impli-
cations for public debate.

Literatures with Other Objects

Quite remarkably, there is no substantial extant literature on trade nar-
rative. The task of this review section is to explain why this is so because
political science and cultural economy have been preoccupied with other
objects like lobbying and performativity and have therefore focused on
other kinds of power and influence (including elite power) which work in
ways very different from trade narrative. As we argue in our review, the
focus on the power of lobbying and performativity is not wrong but
ill-suited for this instance simply because it consigns trade narrative
106 Theory, Culture & Society 34(5–6)

to the edges of the field of the visible. There is a useful discussion of issues
cognate to trade narrative in the literatures on policy evaluation and on
business storytelling. But, as we will argue, these literatures leave us with
no clear model for thinking about the nature and efficacy of trade nar-
rative, which is the concern in subsequent sections of this article.
The analysis of lobbying in political science can be traced back to
Finer’s (1958) seminal work. But the current preoccupation owes much
to the way in which lobbying was foregrounded a generation ago from
the right by liberal economists like Krueger (1974) and Stigler (1971),
who believed that lobbying interferes with markets. From a very different
centre-left point of view, the power of business lobbying was highlighted
in the 2000s by radical and social democratic political scientists including
Crouch (2004) and Moran (2003), who were trying to understand the
polity that has replaced the Keynesian welfare state. While some pluralist
political scientists appear relaxed about it, there is widespread suspicion
about lobbying. This has been fed by a popular, progressive literature on
corporate lobbying which frames the activity as a subversion of the
formal democratic process because lobbyists can buy influence over deci-
sions from a corruptible political system (e.g. Lessig, 2011; Cave and
Rowell, 2014; Palast, 2004).
Much of the post-1970s liberal critique of lobbying derives from two
seminal articles by former World Bank chief economist Anne Krueger
(1974) and by Chicago economist George Stigler (1971), who criticized
‘rent seeking’ and ‘regulatory capture’ by special interest groups which
politically subvert efficient markets. Electoral disengagement meant that
political representatives had wide discretion to introduce regulations which
were not in the general interest (Stigler, 1971: 10–11) and business – or at
least big business – was well incentivized and resourced to seek influence.
Krueger (1974) argued that rent seeking could become a competitive
activity as business elites will attempt – legally and illegally – to influence
officials and elected politicians for special privileges and protections
(Krueger, 1974: 292–3). Stigler’s separate but related work on regulatory
capture argued that all business interests – from truckers to professional
groups – will use state regulation to create and maintain enclaves of priv-
ilege: applying the principle of rational choice, he argued that ‘every indus-
try or occupation that has enough political power to utilize the state will
seek to control entry’ of competitors by means such as quotas, tariffs and
price controls (1971: 4–6).
Politically, these concepts of rent seeking and regulatory capture con-
tributed to the ascendancy of public choice economics within policy-
making circles. They eroded the ‘idealistic view’ of state regulation in
the public interest (Stigler, 1971: 17) and propelled subsequent efforts to
roll back what Krueger termed ‘the proliferation of economic controls’ in
the post-war period (Krueger, 1974: 293). Intellectually, these concepts
framed much subsequent academic work on how sectoral business
Bowman et al. 107

interests seek political influence in high-income countries. They have

been employed extensively, and convincingly, in studies of how the finan-
cial sector used lobbying to obtain ‘light touch’ regulation prior to the
2008 global financial crisis and generous bailouts afterwards (e.g. Blau
et al., 2013; Young, 2012; Igan et al., 2009). Much of what happened
before and after the global financial crisis can be fitted into a framework
of regulatory capture.
More recently, from a quite different point of view, the preoccupation
with lobby power has been reinforced by radical and social democratic
political scientists concerned to understand the changes of governance
and government which have paradoxically granted business much more
political influence since the liberal turn in Britain and America. In a
history of the British polity, Moran (2003: 4–5) argues that ‘club gov-
ernment’ has been replaced by ‘hyper innovation’ and a new kind of
‘regulatory state’ which takes on more than it can manage in areas like
rail regulation and food safety. By implication, governance then becomes
increasingly dependent on business advice and consent. Crouch develops
a different argument about post-democracy and the retreat of the
Keynesian welfare state in Western high-income countries. After the
atrophy of mass parties and the decline of the organized working class,
elections become a ‘spectacle’ and ‘politics is really shaped in private by
interactions between elected governments and elites that overwhelmingly
represent business interests’ (Crouch, 2004: 4). A professional political
class is ‘linked to the rest of society more or less solely via business
lobbyists’ (Crouch, 2004: viii) and the key institution is ‘the global
firm’, which can lobby on its own behalf without requiring trade
associations.
Across this disparate body of work, the preoccupation is with lobby-
ing as a privileged form of business power. Lobbying is generally
understood as insider persuasion behind closed doors and about spe-
cialist technical issues, and this is very different from the public com-
munication about broad social benefits which concern us in this article.
This point emerges clearly from political science reference works and
scholarly studies. The Oxford Handbook of British Politics (Flinders
et al., 2009: 1–2) defines lobbying as attempting to modify public
policy ‘in specialist policy debates’; lobbying is part of a complex
‘insider politics process’ which seeks the consent of affected parties
and which grants access and influence in return for political support
and policy advice’. This is the definition of business power which is
operationalized in studies of lobbying at different political levels. Thus,
the standard scholarly account of EU lobbying by Coen and
Richardson (2009) focuses on the influence of 2600 special interest
groups which have Brussels offices. The focus is on their influence
over legislation in the pre-drafting stage which has contributed to the
emergence of ‘a European level policy making elite’, especially on
108 Theory, Culture & Society 34(5–6)

technical standard setting and regulatory issues like light bulb efficiency
or car emissions (Coen and Richardson, 2009: 347).
Lobbying over technicalities does matter: for example, concessions to
industry lobbyists have allowed high levels of diesel vehicle emissions
which are the major contributor to the pollution of outdoor city air
that, according to official calculations, causes more than 40,000 prema-
ture deaths in the UK every year (Royal College of Physicians, 2016: 3).
But the focus on lobbying in political science encourages narrow ways of
thinking about influence in terms of the intentionality of corporate
actors; in doing so it neglects more recent concern with how knowledges
format the world and possibilities of action which are represented in the
newer cultural economy literature on the performativity of economics. If
we are considering trade narrative, this cultural economy literature
appears relevant because trade narrative is produced by specialist con-
sultants and much of it uses economic categories. But the issue here is
that cultural economy since Callon has tended to represent (economic)
expertise as an active and evolving theoretical framework always ready to
constitute new economic orders or market arrangements; in this respect,
cultural economy shares key active knowledge assumptions with the ear-
lier literature on governmentality. The problem is that, in trade narrative,
expertise figures rather differently as the docile servant.
Callon set a new agenda for study of the economy-discourse relation
when he argued economics ‘performs, shapes and formats the economy,
rather than observing how it functions’ (1998: 30), because economics
enacts the reality it describes by influencing economic actors who are the
ultimate object of economic theory (2006: 5). In the science and technol-
ogy studies-influenced literature on finance by authors like Mackenzie
(2004), Mackenzie and Millo (2003), Callon (1998, 2007) and Beunza and
Garud (2007), the technical discourse of financial economics constitutes
the economy (or at least particular markets within it) as the mathematical
models and theories of the former shape behaviours among market par-
ticipants who then perform the latter. The performative relationship
between discourse and its object can ‘misfire’ (Callon, 2010) or become
counter-performative (Mackenzie, 2004), but the underlying basis for
such research is a causal arrow running from discourse to the economy.
An example of this approach is Beunza and Garud’s (2007) work on
stock analysts following Amazon.com, which, in their view, ultimately
shaped markets by guiding the behaviour of market participants – the
large portfolio managers who were the clients of the analysts.
As Beunza and Garud argue, calculative frames were unstable: both
subject to critique from rivals, and hostage to events which rendered
them untenable (in this case, the dotcom crash). Callon uses the term
agencement1 to describe the co-evolutionary relation between discourse
and its object, and the issue for economic theory is less its truth
value than whether it can create a stable agencement (2006: 16).
Bowman et al. 109

This arrangement of discourse and materialities is tied together and

broken apart by events, as elaborated in Mackenzie’s path-breaking
work on derivative markets, which argued that the theory itself changes
the object to which it refers (Mackenzie, 2004: 306). During its wide-
spread adoption from the mid-1970s to 1987, the Black-Scholes option
pricing equation created the worldly conditions for its own verification
(Mackenzie and Millo, 2003). However, the formula also encouraged
behaviours which eventually undermined the conditions of its verisimili-
tude, a process Mackenzie calls ‘counter-performativity’, as the adoption
of the theory weakens ‘the preconditions of its own empirical validity’
(Mackenzie, 2004: 306). This is continued by Mackenzie’s subsequent
work on the post-2007 financial crash, where causal significance is
attached to cross-default assumptions on mortgage securities which
had been carried over from corporate bonds (Mackenzie, 2008b).
In a second category, the earlier, Foucauldian-inspired literature –
exemplified by, for example, Miller (1990, 2001; Miller and O’Leary,
1987), Mitchell (1991, 1998) and Ferguson (1990) – pays more overt
attention to the operation of political interests in the discursive format-
ting of economic life. However, this literature also describes a causal
process in which predominantly expert discourses – in these instances,
management accountants and development planners – bring their objects
into being. Miller and O’Leary (1987), for example, take the accounting
innovation of standard costing and budgeting in the early 20th century as
a ‘calculative technology’ which facilitated increased management super-
vision, subjecting the workforce to ‘a continual process of judgement’
(Miller and O’Leary, 1987: 242). Expert discourse in fields like account-
ancy or state planning, argued Miller and Rose (1990: 7), is not simply a
conveyor of meaning but an ‘intellectual technology’ which constitutes
political objects. Moreover, Mitchell’s (2002) work on economic devel-
opment interventions in Egypt raises broader issues about how the idea
of ‘the economy’ as a politically manageable, autonomous realm in social
life relates to the mid-20th-century advent of macro-economic modelling
techniques and aggregated national economic statistics (1998: 89–91).
Mitchell captures the political outcomes of economic expertise, which
include the unintended and perverse, as in the opening chapter of his
Rule of Experts. But again, the founding assumption is that the causal
arrow runs from discourse to the economy, because none of the elements
and relationships described within the economy pre-exist representation
(Mitchell, 1998: 92).
Matters are altogether more complicated if we consider cultural econ-
omy analyses of non-expert, multi-author discourses on the economy,
which present a messier world of circularity and infelicity where there
are no clear arrows and more hucksters than experts. The relevant work
here includes studies of unstable narrative framings and the storytelling
of giant firms under pressure for shareholder value (Froud et al., 2006)
110 Theory, Culture & Society 34(5–6)

or studies of the formation of stock market bubbles through processes of

‘rhetorical fabrication’ (Thrift, 1997, 2001). Here we have discussion of
issues cognate to sectoral trade narrative but conducted on the assump-
tion that everything proceeds smoothly until numbers which are beyond
the storyteller’s control undermine the plausibility of the narrative.
Again, this does not engage with trade narrative where, as we will
argue, the arithmetic is such that the numbers are always positive and
corroborating.
Since the advent of shareholder value, individual public companies
have had to produce stories for investors and try to enlist analysts and
journalists as co-authors. Froud et al. argue the result is a giant firm
‘narrative of strategic purpose’, combining both words and symbolic
actions with a performative intent (2006: 122–33). However, the plausi-
bility of the narrative depends on supportive financial numbers when
management has limited capacity to manage the financial numbers;
these represent the ‘obdurate externals’ to the narrative (Froud et al.,
2006: 100). If the financial numbers corroborate the narrative of man-
agement purpose and capacity, as in GE under Jack Welch, the markets
and media suspend disbelief. When, more usually, the firm is struggling
to produce the financial numbers, as in Ford under Jac Nasser, the
results are messy and often include the departure of the storytelling CEO.
There is a similar emphasis on storytelling and its limits in the work of
cultural economy authors like Thrift (2001) on how a phenomenon like the
new economy is talked into existence, or Frank’s analysis of the rise of
‘market populism’ (2002: xiv). Neither is centred on sheltered coteries of
experts. Thrift’s ‘cultural circuit of capital’ is about ‘the link-up of a series
of institutions to produce and disseminate business knowledge’, and it
comprises business school academics, finance gurus and management con-
sultants (Thrift, 2005: 95) who provided the ‘rhetorical push’ for the
dotcom boom (Thrift, 2001: 414–16). In parallel, governments and cor-
porate executives not only talked-up but embodied the ‘new economy’
through policies and management strategies, creating ‘a taken-for-granted
world which . . . assumes the new economy’s assumptions’ (Thrift, 2001:
418). But all this only talks up the value of dotcom stocks before the
inevitable crash because prices are hugely ahead of earnings. Here
again, the numbers are the obdurate, uncontrollable externals which
change so that they make the taken-for-granted unbelievable.
For all its emphasis on the formatting of the world, many different
kinds of cultural economy recognize the intrusion of awkward events and
contradictory evidence as a kind of limit on fabrication. Interestingly, a
rather different position is taken by some authors in the policy evaluation
literature where evidence is manipulable and empirics do not get in the
way of a good story. Boden and Epstein’s (2006: 226) argument about the
government machine was that the routines of ‘evidence based policy
making’ delivered little social benefit but benefited the political classes
Bowman et al. 111

as ‘government, in its broadest sense, seeks to capture the knowledge

producing processes to the point where this type of ‘‘research’’ might
best be described as ‘‘policy based evidence’’’. Their pejorative descrip-
tion most obviously fits the agenda-managing efforts of government
departments like health and education in the UK when faced with the
task of justifying a succession of ill-conceived and poorly executed initia-
tives and reorganizations like commissioning in the health service. But it
does raise interesting questions about whether the policy-based evidence
machine is much larger and includes trade associations and consultancies
that feed government and the media in ways that benefit private interests;
and, if so, how does it manage the empirical dimension of narrative and
with what effects?

Trade Narrative and the Halo Effect

If trade narrative is a neglected object, it is quite another thing to argue
that this is an important adjunct to the power of business in present-
day capitalism. To make that larger point, this section considers how
trade narrative is produced to create a kind of halo effect whereby all
the private firms operating in a sector like pharmaceuticals or finance
make a measured and positive social contribution to the public good;
the subsequent section considers the effects of trade narrative which can
interpellate elite political subjects and thereby establish a fallible power.
Our starting point is that some (but not all) trade associations commis-
sion narratives about how the sector serves the public interest. These
are produced by enlisting consultants whose calculation takes a stand-
ard arithmetical form because it adds up the positives (and only posi-
tives) to produce large aggregate totals of social benefits like exports,
jobs and such like, sometimes supplemented with economic modelling
of benefits. We would add that criticism is met with restatement of the
numbers, not reflection on the limits of the benefits calculation, so that
this knowledge is politically edifying rather than intellectually
interesting.
All trade associations provide direct membership services of one sort
or another as recompense for the membership subscription which indi-
vidual firms pay. Such membership services can include insurance, col-
lective promotion through trade fairs or advertising campaigns, as well as
issue-by-issue lobbying on regulations relevant to the trade. And these
services are the sole activity of many or most trade associations like the
UK-based National Federation of Roofing Contractors or the Carpet
Foundation. But, in Davis’s Bourdieusian terminology, some trade asso-
ciations also have a different kind of promotional role as intermediaries
engaged in the exertion of ‘discursive and symbolic influence’ for eco-
nomic interests (2013: 9). These trade associations which engage in this
supplementary promotional activity typically operate in sectors which
112 Theory, Culture & Society 34(5–6)

are exposed to political pressure because profit opportunities depend on a

contestable regulatory regime or state subsidy. Examples of such associ-
ations include, for example, in the UK the Association of Train
Operating Companies (ATOC) and the Association of the British
Pharmaceutical Industry (ABPI), which must respectively defend the
privilege of state subsidy for privatized rail operators and the regime
of intellectual property rights which grants the patents that shield drug
companies. In the United States, examples include the Center for Capital
Market Competitiveness (CCMC) and the Financial Services
Roundtable (FSR), which have resisted pressures for far-reaching re-
regulation in the wake of the 2008 financial crisis; or the National
Defense Industrial Association (NDIA), whose narrative defends the
contractors who benefit from state military spending.
Some of these trade associations are under pressure from social critics;
others are more comfortably placed. But the immediately interesting
point is that the trade narrative typically downplays explicitly partisan
political argument in favour of piling up empirics about broad social
contribution. Especially in the United States, some trade associations
use free enterprise rhetoric: thus, the Center for Capital Market
Competitiveness (2015) combats the reformist pressures in the wake of
the financial crisis with ‘ten truths about the financial system’ which
include the claim that ‘overregulation stifles innovation’. But, altogether
more typical is the arms industry’s National Defense Industrial
Association’s (2015) approach of highlighting ‘[t]he contribution that
the aerospace and defense (A&D) sector makes to American economic
success’. Trade narrative thus aims to be an indirect form of persuasion:
the decisive consideration is the empirical size of the contribution, not the
inherent virtue of private enterprise and free markets; this focus is useful
because many of the firms in sectors under pressure do not operate in
competitive markets, instead enjoying the benefits of various kinds of
monopoly.
The work of measuring social contribution is typically done by outside
consultants. This is partly a matter of practicality. Trade associations
usually have a limited in-house research capacity when their own staff
economists only monitor sales, exports and such like; they generally lack
the expertise for technical exercises like economic modelling. Hence trade
narratives either draw on, or are jointly authored with, consultancy firms
of various kinds. In the UK, the major consultancies producing trade
narratives include Oxford Economics, McKinsey & Company, and the
Boston Consulting Group, as well as the consulting arms of the big
accountancy firms like KPMG and PWC. Firms like KPMG have
worked on trade narratives for many different sectors and thus have an
organizational knowledge of what is required and can easily provide a
variant product to the next sector that comes along. In this context, trade
narrative could be considered a routine or practice.
Bowman et al. 113

The relation between trade association and research consultancy is

ambiguous in much the same way as in the case of the relation between
the public company and its auditor; the consultancy is both a hired hand
who delivers what the client wants and an independent source of author-
ity for the veracity of the numbers. The consultants offer expertise as
docile calculators at the service of business needs on an hourly rate.
Thus, Oxera’s website promises knowledge and technique at the service
of the client: ‘benefit from our deep sector knowledge, combined with our
unrivalled economics skills, tailored to your business need’. But consult-
ancy names and logos also feature prominently in the trade’s reports and
glossy pamphlets because the explicit crediting of research to external
experts buttresses the authority of claims which could otherwise be dis-
missed as special pleading. The Association of Train Operating
Companies (ATOC) 2013 report about ‘how franchising helped trans-
form railways into a success story’ presented ‘original research’ based on
‘data collated and analysed by KPMG’.
Across many different sectors, trade narrative then takes a generic
form because social ‘contribution’ and ‘value’ is demonstrated by attach-
ing big numbers to a list of good things which are attributed to private
action. The question is usually the same and is often in the title of the
report; the answer is a list of big numbers which dominate the executive
summary. Thus, Oxera (2014) for the Rail Delivery Group asks ‘What is
the contribution of rail to the UK economy?’; the Association of the British
Pharmaceutical Industry (2014) reports on ‘Delivering value to the UK:
the contribution of the pharma industry to patients, the NHS and the econ-
omy’; and the British Banking Association (2014) on ‘The benefits of
banking’ outlines how, although the sector ‘made mistakes in the last
decade’, through taxes ‘[banks] contribute billions of pounds a year to
our public services, paying the salaries of nurses, teachers and other vital
workers’.
The Association of the British Pharmaceutical Industry (ABPI) (2014)
has an eye-catching opening page graphic which gives ‘our value in num-
bers’. Six big figures emphasize the technology base and the trade con-
tribution, with £11.5 million invested in the UK per day on research and
development, a trade surplus of £3 billion, and responsibility for one-
eighth of the ‘world’s most popular prescription medicines’ (ABPI, 2014).
In the same way, pushing at the spending limitations imposed by the 2011
Budget Control Act, the National Defense Industrial Association sug-
gests the defence industry contributes 5 per cent of US manufacturing
output and makes the ‘highest net positive contribution to this country’s
trade balance of any economic sector’ (National Defense Industrial
Association, 2015: 1).
This contribution is occasionally calculated by economic modelling.
Thus, the Rail Delivery Group commissioned Oxera consulting to pro-
vide ‘an independent assessment of the contribution of the GB rail
114 Theory, Culture & Society 34(5–6)

industry to the UK economy’ (Oxera, 2014). Oxera did so by economic

modelling which produced the bottom-line claim that, since privatiza-
tion, the ‘change in industry model . . . may have provided benefits of
up to £7.2 billion in 2013’. More usually, the calculation is arithmetical
and the method is adding up numbers which have a positive value. The
categories must be varied sector by sector because research expenditure is
a relevant activity-specific measure in pharma but not train operating.
But there is also much emphasis on what might be called generic aggre-
gates like exports and jobs which can be treated as indisputably good
things. The end result is a list of big numbers often summed up as finan-
cial values quoted in millions of pounds and/or benchmarked against
national income. There are sometimes half-hearted attempts to translate
such abstractions into specifics which could figure in popular political
debate, as when the British Bankers Association claims that its members
contribute enough in tax revenue to pay 1,130,725 nurses (BBA, 2014).
This accentuation of the positive is reinforced by a causal trope: pri-
vate initiative is relentlessly identified as the cause of all the good things
summed in the big numbers. The case for the status quo has to be aggres-
sive in a sector like rail. Here there is cause for public concern when
direct and indirect state subsidy rose in the 2000s to levels higher than
during public ownership (Bowman et al., 2013a) and franchisees have
walked away when faced with insufficient profits (McCartney and Stittle,
2011). In the Association of Train Operating Companies (ATOC) 2013
report, the strategy is not to mention such embarrassments but fore-
ground successes which are all attributed to rail franchising:

The franchising model has enabled train companies to generate sig-

nificant financial returns for the Government, played a crucial role
in delivering unprecedented growth in journey numbers, and pro-
vided passengers with improved services and better value. (ATOC,
2013: 29; emphasis added)

If trade narratives are taken at face value, in each sector they create a
kind of halo effect around private firms. For the message of trade nar-
rative is always the same: the pursuit of private profit under the present
regulatory and contractual regime produces a large stream of social bene-
fits which have been carefully added up by independent researchers. The
sometimes explicit conclusion is that, as in the Association of the British
Pharmaceutical Industry’s argument, the sector is a national ‘asset’ which
should be ‘nurtured’ by appropriate regulation (ABPI, 2014: 2). It is
ironic that some of this uses the techniques of economics, or more com-
monly invokes the prestige of economics, even though such presentations
can be read as highly political. The intellectual problem is that trade
narrative rests on multiple decisions, which always have the effect of
flattering the contribution of the firms within a sector. The flattering
Bowman et al. 115

effect is produced by three devices routinely used by consultants to pro-

duce the list of big number benefits: first, an arithmetic which adds bene-
fits without subtracting related costs; second, de-contextualization which
accentuates the positive; third, assertion of doubtful causal connections
without qualification or hesitation.

Addition without subtraction

Academic economists disagree about how to measure costs and benefits;
they also debate whether established techniques of cost benefit analysis
are relevant to large projects with long-run consequences (Ackerman and
Heinzerling, 2004). But most would agree that costs as well as benefits
should be included in any social calculus of business impact. In trade
narrative, the consultants instead produce benefits-and-no-costs analysis,
which is inadequate in all sectors and positively egregious in finance,
where the socialization of losses has imposed huge social costs.
Engelen et al. (2011) discussed the inadequacy of the trade narrative
around the benefits of finance before and after the great financial crisis
which led to recession after 2008. Strikingly, six years after the 2008
crisis, the consultancy firm Oxford Economics (2013: 2–3) is still provid-
ing annual updates on the ‘contribution’ of London financial services to
gross value added (net output). These calculations do not recognize that,
for example, because of a finance-induced recession, overall national
output in the UK is substantially lower than would have been expected
from the long-term trend before financial crisis; or acknowledge that a
variety of widely-cited studies by Haldane (2010) and others provide
widely accepted measures of that output loss.

Decontextualization to accentuate the positive

For example, in the pharmaceutical industry’s trade narrative, the key
decontextualized factoid is spending on research and development. This
is decontextualized because big pharma companies have frequently spent
more money on marketing than research and development. And further-
more, despite endless reorganization, most research and development
does not produce fundamental innovation but imitative drugs, while
big pharma also avoids developing products in therapeutic areas, like
antibiotics, where there are limited prospects of recovering development
costs (Froud et al., 2006: 149–223). While this kind of supplementary
information could be read in many ways, it is clearly the case that any
overview should include the overall composition of costs and would also
consider marketing and research and development expenditures side by
side, because high expenditure on both is the defining characteristic of the
traditional blockbuster pharmaceutical business model. Marketing spend
does not figure at all in the pharma trade narrative simply because it
would complicate the story.
116 Theory, Culture & Society 34(5–6)

Assertion of doubtful causal connection

The consultants engaged by the rail industry attribute the increase in
passenger numbers to the marketing and pricing policies of the private
train operators; but many other researchers (and the train operating
companies themselves) recognize the importance of GDP growth and
fluctuation as the key driver. If yield management by train operators
did boost passenger numbers, that also produced discontent about
cheap fares for advanced tickets at inconvenient times (Bowman et al.,
2013a: 121–7). Furthermore, pricing and marketing are unlikely to be the
sole or main driver of passenger numbers because gross domestic product
(GDP) growth, employment patterns and inner city house prices are all
likely to exert a large influence over passenger numbers. Most of this is
entirely outside the control of the operators. The train operating com-
panies privately conceded that GDP drives passenger numbers when they
successfully lobbied government for franchise contract terms; this is
because their subsidy was linked to GDP growth (Bowman et al.,
2013b: 10).
McCloskey (1985) argued that economics discourse is partly rhetorical
in ways which involve unjustified assumptions and leaps in argument
towards assertion. But trade narrative carries this to an extreme. There
is no one correct answer to the question of how to represent complex
sectors of the economy, but all the intellectually interesting mess is con-
jured away in trade narrative. Thus, trade narrative works by turning
each sector into a different Potemkin village presenting an agreeable
prospect of social achievements produced by the private sector. It is,
however, pointless to lament the intellectual deficiencies of trade narra-
tive calculation and attribution, when the key questions are about polit-
ical effects.

Political Justification and the Echo Effect

This section turns to analyse the political effects of trade narrative,
arguing that it works through an echo effect as the political classes
(elected and official) and regulators often repeat facts, assertions and
assumptions culled from trade narrative as the ready-made public inter-
est justification for decisions and regulatory stance. If we set this in the
context of financialization, trade narrative has a new and important role
in intra-elite communication because it connects and aligns corporate
business and finance with senior politicians, civil servants and regulators;
these are the decision-makers in centralized and hierarchical national
political systems, but they are beyond direct business control and for-
mally responsible for serving the public interest. The caveat is that trade
narrative probably has very little influence on ordinary citizens; so, the
operation of the elite relay depends on a post-democratic disengagement
which is threatened by any kind of insurgent populism.
Bowman et al. 117

Giant corporations and financial elites face a recurrent problem about

how to manage sovereign political power. This has been addressed via
different mechanisms and institutions in various forms of industrial and
financial capitalism, which also transform the field of elite action. The
connection between finance and business elites was in many ways
strengthened by financialization. Financial deregulation after the late
1980s in the UK and USA gave finance a leading role and opened new
opportunities for organized money in the form of fund investment to
press its distinctive priorities on corporate business: managers of stock
market listed companies were directly subject to shareholder value
demands, while private equity spread the arbitrage of limited liability
and other practices of controlling subsidiaries so as to maximize returns
for the parent (Erturk et al., 2008: 1–43). But, the connection of business
and finance with political elites was weakened because employers’ asso-
ciations lost a political role in the UK and USA with the end of the
formal and informal corporatism that had co-opted business organiza-
tions and elite business leaders into political processes (Mizruchi, 2013).
If financialization gave business and financial elites a much larger
sphere of action in the UK and USA, the end of high-level political
conversation that was a feature of corporatism also created new prob-
lems for business about how to manage government, which operates
ostensibly around notions of the public interest and social good. And
this problem had to be solved because structural reform in countries like
the UK and USA had become a politically-sponsored attempt at market
creation which did not remove the state from whole sectors, but rather
reconfigured its role. This new state role included setting regulatory
frameworks which engineer the market especially in the privatized utili-
ties with natural monopoly, and subsequently, justifying various forms of
outsourcing. The new role included the provision of various forms of
direct or indirect subsidy in sectors of foundational importance; hence, in
the UK and other high-income countries, we have financial support for
infrastructure or deposit guarantees for the banks to safeguard provision
of welfare-critical goods and services. In this context, the sectoral trade
association gains a new role as storyteller to government and wider soci-
ety, with trade narrative supplying a high-minded public justification of
subsidies and protection through claims of social contribution. This work
cannot easily be done by a multi-sector employers’ organization because
the post-1979 assault on the social settlement in the name of competition
is like house breaking; sectors must be tackled one at a time, and cor-
porate interests must subsequently be defended sector by sector. As
Mizruchi (2013) argues, big business may have lost a broad view of the
social interest; we would add that in politically exposed sectors it can still
hire consultants to make a sectoral argument about social contribution.
The first index of successful trade narrative is therefore an echo effect,
when the speeches of senior politicians and regulators repeat trade claims
118 Theory, Culture & Society 34(5–6)

about sectoral achievement and social contribution. As British transport

ministers routinely do in relation to the rail sector (see, for example,
Department for Transport, 2013). Politicians of the centre-right and
centre-left benefit because a listing of the social benefits delivered usefully
rebuts the charge that public policy serves private interests; regulators
benefit because it removes the suspicion they have been captured. The
echo benefits the sector because it makes undoing existing institutional
and regulatory regimes more unthinkable and encourages policy changes
which are conciliatory rather than challenging. The most notorious
example of this kind of echo effect can be found in the relation between
the finance sector and key government and regulatory figures in the US
and UK pre-crisis years. Central bankers and leading politicians across
the major advanced economies adopted the trade narrative of the major
banks about the benefits of light-touch regulation amid claims that finan-
cial innovation spread risk and a larger financial sector contributed to
national prosperity (Engelen et al., 2011: 132–46).
Most important among these figures was Alan Greenspan. As chair of
the Federal Reserve, he pushed for the 1999 repeal of the post-depression
Glass Steagall Act and subsequently took up the cause of assuaging
concerns about the increasing size and complexity of the financial
sector. In 2003, for example, Greenspan lauded the success of the bur-
geoning trade in over-the-counter derivatives, which ‘could not have been
achieved were it not for counterparties’ substantial freedom from regu-
latory constraints’ (Greenspan, 2003). These complex new derivatives, so
heavily implicated in the subsequent crash of 2008, were said to be
‘underpinning the enhanced resilience of our largest financial intermedi-
aries’ by unbundling and redistributing risk (Greenspan, 2003). Two
years later, Greenspan noted how credit derivatives had ‘contributed to
the stability of the banking system’, while mounting concerns about the
expansion of the shadow banking system were unfounded because
‘unregulated and less heavily regulated entities generally are subject to
more-effective market discipline than banks’ (Greenspan, 2005). In May
2007, just before the onset of the crisis, Greenspan’s successor, Ben
Bernanke, took exactly the same line.

The increasing sophistication and depth of financial markets pro-

mote economic growth by allocating capital where it can be most
productive. And the dispersion of risk more broadly across the
financial system has, thus far, increased the resilience of the
system and the economy to shocks. (Bernanke, 2007)

With minor variations, these claims and assertions by central bankers

were reported in media articles and incorporated in political speeches on
both sides of the Atlantic. Gordon Brown’s 2006 and 2007 Mansion
House speeches are notorious for the way in which a finance minister
Bowman et al. 119

read back the finance sector’s pre-crisis trade narrative factoids to an

audience of the bankers who had paid to have them produced. As with
the trade association reports, Brown starts with the big numbers on
contribution to the UK by noting in 2007 that ‘40 per cent of the
world’s foreign equities are traded here, more than New York’ (Brown,
2007), and claiming in 2006 that ‘[f]inancial services are now 7 per cent of
our economy . . . A larger share of our economy than they are in any
other major economy’ (Brown, 2006). The speeches laud the ‘remarkable
achievements’ of ‘an era that history will record as the beginning of a new
golden age for the City of London’ (Brown, 2007). Such repetition of
claims and assertions promoted a redefinition of the UK financial sector
which was represented less as a humble service industry and more as a
national engine of growth in its own right, with a legitimate claim for
special legislative treatment (Davis, 2013: 180–8) because ‘the City’ was a
national asset which needed nurturing. Brown’s speeches end predictably
with lists of finance-friendly legislation introduced or in the pipeline.
Thus in 2007 the priority is ‘maintaining a competitive tax regime’
with the lowest corporation tax in the G8 (Brown, 2007), while in 2006
the commitment is to continuing tight fiscal and monetary policy and ‘a
predictable and light touch regulatory environment’, confirmed by
the rejection of any Sarbanes-Oxley style tightening of company law
(Brown, 2006).
Such efforts continued post-crisis but with limited modifications of
established trade narrative to take account of events. When the assertions
about the benefits of financial innovation were discredited by events post-
2008, finance in the UK fought a rear-guard action by reiterating claims
about social contribution. If the finance sector was still socially valuable
as a job creator and taxpayer, it was implied that policy-makers should
not pursue the objective of shrinking the financial sector and restraining
its operations.
The first UK restatement of this social contribution came in the 2009
Bischoff Report (HM Treasury, 2009) where the claims about contribu-
tion were jointly signed-off by a senior banker and the then Labour
Chancellor, Alastair Darling. In the UK, this positive social contribution
argument has since been pushed by new cheerleaders for finance like
Boris Johnson when Mayor of London; and the social value of finance
narrative has subsequently been explicitly endorsed by Bank of England
Governor Mark Carney (Bank of England, 2013). In the UK, regulators
and senior office-holding politicians are all now publicly orthodox in an
echo effect way about finance’s social achievements. In the United States,
where regulatory reform has been considerably more ambitious, groups
such as the Financial Services Roundtable, representative of the 100
largest financial services companies, have responded more fiercely by
criticizing the ‘aggressive posture’ of state agencies; such actions are
deemed undesirable because they reduce consumer choice and limit
120 Theory, Culture & Society 34(5–6)

access to finance for low-income citizens (Financial Services Roundtable,

2014).
The outcome in UK finance shows how trade narratives about social
contribution can be restated with modest revisions, even after massive
crisis. Occasionally, as in the global pharmaceutical industry in the late
1990s or UK finance after 2008, trade narratives are damaged by devas-
tating criticism or discrediting events which are accessible and intelligible
to the public. In pharmaceuticals, the trade narrative was shredded by
NGOs like Médecins Sans Frontières and Oxfam in late 1990s campaign-
ing on the issue of the high costs of anti-retroviral medication to treat
HIV-AIDS. The problems in finance involved damaging events including
costly bail-outs of the banking system after 2008, which produced out-
rage amongst the many who did not understand credit default swaps but
could see that finance had privatized gains and was now socializing its
losses. The trade’s response to criticism is invariably conservative: as in
the Bischoff Report, the supporting statistics are updated and the old
narrative is restated with limited variation, on the basis or hope that the
echo effect can be re-established.
The effects of trade narrative on citizen opinion are unclear but the
presumption is that the political effects on the opinions of ordinary citi-
zens are weak and may often be negligible. It is not difficult for trade
associations to place stories, especially in the quality press and broadcast
media whose business coverage is much less sceptical and adversarial
than their political coverage. Sector specialist journalists are dependent
on the trade for continuing access to stories ahead of rivals and, more
generally, business pages are filled by the ‘churnalism’ of copying out
press releases. According to a UK content analysis by Lewis et al. (2008:
10), 41 per cent of press articles and 52 per cent of broadcast news items
in 2006 relied on press releases in an agenda-setting role or as the basis
for most of the article. But the effects on newspapers readers and citizens
are much more uncertain. Trade narratives add claims about social con-
tribution which circulate in a field of blooming, buzzing confusion about
business and ‘the economy’. Most UK citizens have a limited under-
standing of basic economic concepts and measures: for example, in a
YouGov opinion poll, 60 per cent of UK respondents could not
choose the correct definition of GDP from a short list (Inman, 2015).
They are much less likely to remember or weigh claims about pharma-
ceutical industry research expenditures or passenger numbers on the
railways.
Trade narratives do not appear to suppress citizen hostility, especially
to sectors whose profits depend on public subsidy. This hostility is
encouraged by media scapegoating of business villains like the ‘scumbag
millionaires’ in finance; and it is sustained by the enduring appeal of
back-to-the-future policy ideas, like rail renationalization which, accord-
ing to polls, is consistently supported by a majority of the UK population
Bowman et al. 121

(YouGov, 2013). But such manifest public hostility in the UK has had
limited political effects. The decline of mass parties and traditional forms
of political participation in many high-income countries, as charted by
political scientists like Mair (2013) and Crouch (2004), has resulted in a
post-democratic disengagement between the electorate and the profes-
sional political classes of centre-left and centre-right which reinforces
their unresponsiveness to public opinion. However, this could easily
change if insurgent populism threatens their political franchises.

The Public Debate of Alternatives?

Our understanding of the diverse forms of elite power changes with each
new capitalist conjuncture and as new knowledges shift the field of the
visible. The argument of this article has been that existing knowledges
have largely ignored trade narrative, which serves as an important relay
of intra-elite communication between business and financial elites and
the senior politicians and elected officials who can use a public interest
justification for giving business what it wants in contestable sectors like
pharmaceuticals and finance. This is a contribution to elite studies which,
as Mills argued, should include ‘the framings and practices through
which elite power is exercised’.
Such framing was an important part of classical mid-20th century elite
studies. When Wright Mills tried to explain how the United States had
committed to the Cold War without democratic discussion or consent, he
opposed Dahlian pluralism by invoking elite power which he credited
with the power to abolish resistance through ‘authority’ and ‘manipula-
tion’. The elite exercised power from ‘the command posts of modern
society’ (Mills, 1956: 27) in the business, political and military bureau-
cracy, while the media produced the discursive formatting that abolished
electoral choices. Indeed, Mills claimed that ‘the structural clue to the
power elite today . . . is the decline of politics as genuine and public debate
of alternative decisions’ (Mills, 1956: 274). His explanation of this pro-
cess was of its time: for Mills, mid-century America was a ‘mass society’
where individuals received ‘propaganda’ from ‘centralized points of con-
trol’ in the media (Mills, 1956: 304–5).
This kind of Millsian explanation is obsolete in financialized capital-
ism, which has fewer command posts and more diverse elites; and it is
also, quite rightly, epistemologically and ontologically unacceptable to
present-day social scientists. But the question about the framings and
practices through which elite power is exercised remains important
even if the outcome is now much less assured. Through halo and echo
effects, trade narratives may be important in intra-elite communication
between financial, business and political groups, but they are almost
certainly much less effective in any kind of top-down framing of electoral
choice. With the rise of populism of the left and right in many
122 Theory, Culture & Society 34(5–6)

high-income countries, and after the Brexit vote in the UK, the question
must be whether and how, in the next conjuncture, comfortable intra-
elite understandings of what is thinkable and doable are disrupted by
popular discontents. In thinking about that interference we will need to
go forward using all the resources of cultural economy; as Gond et al.
(2015) have argued, Callon proposes one of five available concepts of
performativity and maybe, as with post-democracy, we will need to draw
on other concepts.

Note
1. A material and linguistic becoming, the evolving fit between discourse and its
object, which is commonly – but problematically – translated to ‘assemblage’
in English language literature (Phillips, 2006)

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Andrew Bowman is a Lecturer in the Centre of African Studies,

University of Edinburgh.

Julie Froud is a Professor at Alliance Manchester Business School,

University of Manchester.

Sukhdev Johal is a Professor at the Management School, Queen Mary,

University of London.

Karel Williams is a Professor at Alliance Manchester Business School,

University of Manchester.

This article is part of the Theory, Culture & Society special issue on
‘Elites and Power after Financialization’, edited by Aeron Davis and
Karel Williams.