Sailing a Ship through Stormy Waters Requires a Compass

Whereas many scholars have concluded that neoliberalism as well as deregulation was among the key causes of the financial crisis of 2008, much less work has been done on particular reforms and the specific political rhetoric which justified them. This is a comparative study of the political justification of financial deregulation, examining two spectacular cases: the repeal of Glass-Steagall in 1999 and the passing of the Commodity Futures Modernization Act in 2000. There was a widespread, outspoken uncertainty about the consequences of financial deregulation in the 1990s public debates. Building upon Mark Blyth’s seminal work on economic ideas, this article traces the free market ideas and rhetoric that were invoked to reduce this uncertainty about financial derivatives and deregulation, thereby serving as an enabling factor for deregulation.