Support-Bargaining, Money-Bargaining and Financial Support-Bargaining

This chapter provides a basic account of support-bargaining and money-bargaining, oriented to the understanding of the arguments regarding financial crises. It introduces the idea of financial support-bargaining as a type of support-bargaining specifically concerned with financial matters. Support-bargaining rests on the idea that people feel insecure and require the support of their associates for their psychological well-being. Intellectual support-bargaining involves the formation of theories about societies. The theories form frames of reference that dictate what their users see as important and shape their interpretations. Support-bargaining depends heavily on information. Money constitutes an alternative and supplementary bargaining counter to support. Money-bargaining involves time disparities between expenditures and revenues, accommodated through budgeting and the use of credit. Budgets are linked together by bargaining chains that contract in times of crisis. Communal interests are accommodated through government budgets. Support-bargaining and money-bargaining are heavily interlinked across a wide range of activities, to the extent that neither can function to any significant effect without the other. Financial support-bargaining determines the course of financial affairs and is an essential part of the generation of financial crises. It generates the rapid escalation of asset prices characteristic of financial crises.