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The Wealth Effect: How the Great Expectations of the Middle Class Have Changed the Politics of Banking Crises

9 April @ 1:00 pm - 2:00 pm

The rising wealth of middle class households and voters has transformed the politics of banking crises. At this event, Jeffrey Chwieroth will explain how mass political demand has contributed to rising financial fragility and political instability and discontent in contemporary democracies.

In their new book, The Wealth Effect: How the Great Expectations of the Middle Class Have Changed the Politics of Banking Crises, Jeffrey Chwieroth and Andrew Walter (University of Melbourne) use extensive historical and contemporary evidence to demonstrate that the politics of major banking crises have been transformed by the “wealth effect”: rising middle class wealth has generated “great expectations” regarding government responsibilities for the protection of this wealth. They show that crisis policy interventions have become more extensive and costly – and their political aftermaths far more fraught – because of democratic governance, not in spite of it.

Using data from a large number of democracies over two centuries, and detailed longitudinal studies of Brazil, the United Kingdom and the United States, the book breaks new ground in exploring the consequences of the emergence of mass political demand for financial stabilization.

The Henry Jackson Society is delighted to invite you to join Jeffrey Chwieroth for an in-depth discussion about how the great expectations of the middle class have changed the politics of banking crises.



Jeffrey Chwieroth is a Professor of International Policial Economy in the Department of International Relations at the London School of Economics. At LSE he is also a research associate of the Systemic Risk Centre. He has been awarded a Discovery Grant from the Australian Research Council, as well as an AXA Award from the AXA Research Fund.



Nikita Malik is the Director of the Centre on Radicalisation and Terrorism (CRT) at the Henry Jackson Society. She is an internationally recognised expert on countering violent extremism, terrorism, and hate-based violence, with a focus on youth deradicalisation. In her role, she has worked with key policy makers and government departments in the UK and globally. A key component of Nikita’s work focuses on the propagation of extremist material online, including on social media platforms and the Darknet. Her research has put forward a number of solutions to foster engagement between UK government policymakers and technology companies.






On the 9th of April, the Henry Jackson Society welcomed Prof. Jeffrey Chwieroth for a discussion on how the rising wealth of middle class households and voters has transformed the politics of banking crises. The event was moderated by HJS’ Nikita Malik.

The talk began with a short introduction by Nikita Malik of Prof. Chwieroth and his book “The Wealth Effect”. Jeffrey Chiewroth started his presentation by speaking about his work and its’ extend and explaining his motivation behind it. For him it is a story of many people from the middle class that have become increasingly wealthy over the past three decades. Chwieroth showed new ways of connection between the increasing wealth and the financial systems. In his talk he wants to show how the transformation has been and how it effects individuals now more than ever in their way of thinking about financial crises.

He started his argumentation by giving a quote from the New York Times from 1873 and the view in the US and other countries around the world on financial crisis. It says that governments should bear no responsibility nor should they provide any protection for depositors. By that he took a look at economic history and jumps to 1984, where he calls attention to the changed view of the media on how to deal with crises like that.

Chwieroth then went over to the development of private wealth per capita over the last 150 years to focus then on the aftermaths of recent crises as the one from 2007 till 2009 in policies and politics. In order to prevent another great depression and wealth destruction extensive interventions were undertaken.

Pointing on his book title, he explained then on the term “The Wealth Effect”, explaining in four points how it comes together and the struggles contemporary democracies are going through regarding bailouts. Then he went over to show the origins of great expectations which, according to “The Wealth Effect”, produce great disappointment, since delays and inequities are virtually inevitable.

He then moved on to his research techniques on measuring policy responses and how they have been coded, categorizing 112 systemic crises from “pure market purposes” to “pure socialization responses”.

Chiewroth finished his talk by answering the question of why great expectations become great disappointments, factoring governments and voters into it.

The discussion finished with a round of questions from the audience.


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21-24 Millbank
Westminster, SW1P 4RS United Kingdom


Henry Jackson Society
+44 (0) 20 7340 4520


Jeffrey Chwieroth 


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