Contested de/centralisation: NASDAQ, the national market system, and the politics of ‘the market for markets’

Through an institutional analysis of US capital market structure in the 1970s, this paper traces how centralisation and decentralisation became politicised as competing organisational principles in financial markets. I analyse how the creation of NASDAQ’s (National Association of Securities Dealers Automated Quotation system’s) decentralised system of market makers challenged the Securities and Exchange Commission’s (SEC’s) proposed ‘Central Market System’, examining debates between industry leaders, regulators and market engineers over market organisation. Rather than representing a stable characteristic of traditional finance, centralisation was a politically contested ideal that faced resistance from those advocating for competitive, fragmented and networked market structures. By examining how de/centralisation functioned as a political and technical concept in these earlier debates, this paper demonstrates that traditional finance contained multiple politically contested forms of centralisation, fragmentation and decentralisation.