The Power of Collective Purse Strings

The Power of Collective Purse Strings offers a sharp analysis of how banks, acting not as isolated firms but as a unified financial community, wield enormous power over corporations and states. Davita Silfen Glasberg demonstrates how “collective purse strings” allow banks to define what counts as crisis and to dictate terms for recovery or liquidation. Through comparative case studies—including the bankruptcy of W. T. Grant, the Chrysler bailout, Cleveland’s default, and Mexico’s foreign debt crisis—Glasberg shows how financial institutions’ collective actions shape economic outcomes and political realities. By tracing lending consortia, institutional stockholding, and interlocking directorates, the book details how structural unity empowers banks to discipline corporate managers, labor unions, and governments alike. This study reframes crises as socially constructed events, not inevitable economic downturns, emphasizing that financial institutions’ decisions can create crises where none objectively exist. Glasberg’s account extends beyond corporate boardrooms into state politics, showing how municipalities and even nations become subject to the same logic of bank hegemony. Combining political economy, sociology, and historical case analysis, The Power of Collective Purse Strings illuminates the mechanisms of financial dominance and the constraints they impose on democratic decision-making. It is essential reading for scholars of political economy, finance, labor relations, and state theory, and for anyone concerned with the intersection of corporate power and public policy. This title is part of UC Press's Voices Revived program, which commemorates University of California Press’s mission to seek out and cultivate the brightest minds and give them voice, reach, and impact. Drawing on a backlist dating to 1893, Voices Revived makes high-quality, peer-reviewed scholarship accessible once again using print-on-demand technology. This title was originally published in 1989.