Legitimation Trials: The Limits of Liberal Government and the Federal Reserve’s Quest for Embedded Autonomy

Julian Jürgenmeyer

Liberal visions of society rest on a series of distinctions that divide the world into differentiated spheres, such as the state and the economy or the private and the public. Actually existing governmental practices, however, constantly undermine the boundaries thus drawn. Focusing on the Federal Reserve, this project investigates how governmental agencies seek to legitimate their embeddedness in the economy. In response to attacks that they are either captured by private interests or smuggle political considerations into an otherwise apolitical economy, agencies develop autonomization strategies to present themselves as neutral guardians of the public interest. Based on archival and interview data, the project reconstructs such strategies and their consequences in representative episodes in the Fed’s history, including its invention of macroeconomic central banking in the 1920s and its actions in response to the Great Financial Crisis. The project pays particular attention to banking supervision, a practice occurring at the interface of the state and the economy that has been all but ignored in existing scholarship. The project thus contributes to the social studies of central banking and more general sociological research on expertise, bureaucratic autonomy, and state transformations. It will result in several journal articles and a book manuscript.