Thursday, July 22, 2010

Charismatic Financialism

In the opening session of this year’s JWTC, Arjun Appadurai presented a paper which theorizes a way in which we might be able to uncover the “ghost in the machine” that animates the ubiquitous presence of technical market devices (from credit scores to complex options-pricing algorithms) as well as to identify a particular “speculative ethic” which infuses the subjectivity of economic actors across different registers of social action.

As a gloss (and at the risk of reduction), I would contextualize Arjun’s paper as an initial response to the growing and developing body of scholarship that takes up the constitution and implications of financial markets as an object of inquiry. Loosely organized under the sign of the social studies of finance, this field of study is largely influenced by the important work of Michel Callon and his interlocutors[1] and takes up, in a gesture to Weber, the relation between risk and uncertainty, choosing to focus on the ways in which technical devices and economic models mediate the relation. Crudely put, scholarship of this character situates technological devices as possessing “performative” power, in that the device or model “performs” the market. The issue for this work is not so much why or to what end the device responds or anticipates, but rather the ways in which the device is deployed in practice, and the peculiar socio-technical assemblages that cohere in the process. Importantly, this work has documented, often in granular detail, this performance, tracing the ways in which the model or device actually works in its situated practice, and producing consequences both intended and not.

While this gloss of a large body of work is indeed reductive, it does, I hope, signal the context in which I would place Arjun’s project. Both Arjun’s project and the extant scholarship on finance agree on financialization as a central diacritic of our times, which can be thought of as the ways in which finance pronounces itself in a more amplified manner and form to larger scales of social life relative to other historical formations (indeed, as Jean Comaroff noted in the second session on Tuesday, financialization itself is not new, just as globalization is not new). Simultaneously, Arjun’s project presumes an “age of risk”, gesturing to a Beckian concept of risk society, where risk is both immanent to and determinate of particular structures and institutions, and takes on a specific character in modernity. The technoscape of modernity, then, becomes a site where risk-objects and definitions are determined, often in highly normative terms (for example, interventions that occur in order to reduce harm to at-risk populations often produce violence in the name of harm-reduction). These technical devices in the financescape, then, can very well be (and often are described as) methodicalizing in their usage, producing routines and techniques of capital that seem to be external and commensurable. Yet, as Arjun is forcefully arguing, these devices might very well exist and circulate in such manners (in the Callonian sense), but say nothing about how the disposition of the financial actor might congeal into a socio-technical assemblage that is diametrically opposed to the spirit identified by Weber as necessary for capitalism. Said differently, the rationalizing and methodical devices make room for a type of actor that implodes the this-worldly asceticism of the Calvinist work-ethic.

The difference between the more “device oriented” accounts and the project articulated by Arjun can, and is, best expressed through Weberian frames. As Arjun points out, The Protestant Ethic reads like “a thriller” at times, as we follow Weber on the trail of the ethos which animates the dispositions and sensibilities of capital’s need for labor power and capital accumulation (Weber makes the strong point that markets and labor are not new in capitalism, but that the form of labor and logic of accumulation is what makes it different from earlier historical formations). I would even suggest that Arjun’s paper continues that spirit, as he takes us on a new thriller that seeks out the ethos, the spirit in the moment where finance is obscured, opaque, elided, and slippery as (again in a nod to the Comaroff’s presentation) culture is increasingly commodified, compounded by a dense technoscape of communicative and computational tools.

Crudely put, I take Arjun’s project as an inquiry that helps us to understand and explain the current ‘spirit’ of financialism and its speculative character, asking the question as to what are the cultural and social sensibilities, formations, beliefs, and imaginaries that enable finance to emerge as a central diacritic that is emblematic of our times? For Arjun, Weber’s deliberations on the relationship between risk and uncertainty is of crucial importance. Simply put, risk is the outcome of making uncertainty probable. In practice, that which is uncertain can be subjected to set of mediating rationalities, producing a set of possible outcomes which are calculable possibilities for agentive action. Largely expressed as a means and end relation in Weber (salvation is uncertain, therefore a commitment to a this-world asceticism of work makes probable one’s salvation), Arjun recapitulates the relation as a decisive and necessary element of financialization, where the means and ends are not couched in religious salvation, but in the accumulation of capital, or simply put, profit.[2] Arjun recapitulates the relation as a decisive and necessary element of finance, where, crucially, the processes by which uncertainty is turned into risk is the moment of intervention. In the financescape, these uncertainties are subjected to specific economic rationalities, mediated by technological devices, producing a set of possibilities that are projected onto screens. The distribution of possibilities is further mediated by concentrations of capital, as traders commit capital to certain possibilities that are assumed to maximize gain and accumulate profit. Clearly, this process opens up questions of structural power and the circulation of surplus capital, while also reminding us that the screen displaying the set of possibilities also screens out other possibilities for action, foreclosing and effacing the non-economic forms of possibilities.

Here, Arjun’s theorizations take us into the spaces of financial action, locating the tension between cultures in finance and cultures of finance. For Arjun, the “short selling bear” articulates a contrarian position where the relation between risk and uncertainty is pronounced in a strong fashion. That is to say, the “short sellers” (i.e., the financial actor who identifies and bets against the ‘efficiency’ of the market to distribute value) are “device skeptics” who are those “players who are not only contrarians but are actors who are willing to infuse their reading of uncertainties...into their reading of the timing of the downturn as measured on the screens that reflect risk.” The contrarian has identified in the most clear fashion a methodicality and disposition which is able to exploit uncertainty, narrowing the outcomes of action according to distributions as predicted by the models and computational devices of the technoscape.

To my thinking, the issue here seems to be just this tension between this culture in finance and to a larger culture of finance (if we agree that cultural forms are increasingly marked by finance in a more amplified manner). That is to say, the ways in which these dispositions, actions, methods and routines become more generalizable, mapping onto larger patterns of social action and decision-making processes. The short-seller possesses a particular charisma, articulating properties of an ideal type (in the Weberian sense) which percolate out into larger scales of social action.

I am inclined to include another ideal type of financial actor possessing a similar charismatic position in a culture in finance -- the proprietary trader. A proprietary trader is one who trades with the financial institution’s own money, and for the institution’s own account; in other words, the prop trader is not burdened with the social ties that ‘regular’ traders, whose primary purpose is to arrange buyers and sellers in space and time. To my thinking, the prop trader comes the closest to embodying homo economicus, the subject of neoliberal (or, in the Comaroff’s conceptualization, post-liberal) governmentality. The prop trader is the exceptional self, self-regulating and self-disciplining (proven by being ‘trusted’ with the firm’s own capital), deploying a technologically mediated market logic rationalized by an efficient market, making an endless series of choices under the sign of risk, where each choice can be self-actualizing, or, conversely, self-annihilating. The premise here is that the prop trader, in the early historical moment of formation, becomes the ideal model for a range of financial actors, and whose tactics become an ideal strategy for managers as it is deployed in wider and wider scales. Hedge funds and their managers come to mind, as do the now everyday practices of most risk-taking traders whose job is no longer defined through customer-oriented actions, but by an ability to manage risk profitably. The question that remains open for investigation, and to which Arjun’s theorizations prove invaluable, is whether or not this type of knowledge, in its ‘spirit’ form, circulates outward from a culture in finance, structuring, to a greater or lesser degree, larger social registers in the constitution of a culture of finance.

Jean Comaroff responded to Arjun’s paper, rightly pointing out that any account of finance must include some form of political economy, and I would agree strongly. One point of inflection, for example, might include a robust account of surplus capital, tracing its insertions and extractions, its formations and obstacles, as a way to express a larger structural logic that patterns some of the enablements. Such an account would also add further political dimensions, as one would be forced to interrogate what it means to live in a world where surplus capital is distributed in particular ways, rather than the obstacles and failures of the smooth flow of capital which dominate the current accounts of the current historical formation of the global economy (for example, the economic reorganizations occurring today -- I hesitate to call this a crisis, as it has a more permanent character -- are often mediated by accounts of excess and greed, or failure and incompetence, which tell us nothing about the way in which capital is structurally organized).

Importantly, an invocation of a Weberian frame strongly signals a turn to culture and resituates the terms in a different register to the economic. The economic grammar used to describe and orient finance remains opaque and external to cultural forms and sensibilities, and a gesture to develop a new grammar of the economy seems an important political move. As long as economics and finance continues to describe and define itself on its own terms, the fewer openings for intervention become possible. The distinction is in keeping with the spirit of Weber’s work, in that it is an attempt to locate and describe the rise of ‘financialization’, but beyond its economistic, technological, or functionalist accounts. In trying to uncover this ‘spirit’ which enables the logic of finance to smoothly circulate, it is very much a cultural conversation, as it realizes that change will not emerge within the concentrated sites of power, where uncertainty is pathologically transformed to risk, but rather in those spaces where finance plays, perhaps, a reduced role, and where uncertainty is filled not with risk, but the possibility for something different.

Robert Wosnitzer

New York University

Department of Media, Culture, and Communication

[1] For a full set of all the referenced work in Arjun’s paper, as well as this work mentioned, email me directly here.

[2] Frank Knight, an early translator of Weber, wrote the seminal economic text on risk, titled “Risk, Uncertainty, and Profit” (1929).

Afropolis Metabolis

Sharad Chari at JWTC

After Arjun Appadurai's reflections on the Geists and ghosts driving big finance, this afternoon's session revolved around the assets of the urban poor. Sharad Chari argues that subalternity can itself be an asset: when people "refuse to be ruined, while surrounded by processes of ruination," for example residents in Durban's South acting up against the toxic industries that pollute their livelihoods. Biopolitics are here turned into techniques of struggle and protest. But, one might ask through John and Jean Comaroff's discussion on the contemporary self, what if making an asset of ones own wastedness is not (only) a progressive tool as Chari suggests, but describes a dramatic new relationship in which people literally mine their own bodies as assets, or else brand themselves as waste or as waste worker and their space as waste land, as the Comaroffs described for the post-industrial American town of Youngstown? And how can we interrogate space itself as an asset - succinctly articulated by Ricardo Cardoso: "Can the subaltern produce space?"

Edgar Pieterse turned the question of assets of the urban poor into one of politics: sustainable city- making for the future. Crucial to this project, Pieterse argues, is a better understanding of everyday cityness in the global South, including the variegated sets of knowledge, experience, and capability of the urban poor. Pieterse suggests imagining cities in their metabolic flows. This means thinking the sociality of a city through both its human and non-human relations (i.e. understanding the life cycle of a bridge as part of social relations). It also entails stretching the understanding of urban infrastructures towards the various social, communicative, often provisional infrastructures that the urban poor build in the absence of functioning material infrastructures (de Boeck 2002, Simone 2004). In such visions of the city, rationalities of urban survival and urban politics extend beyond the cognitive to include the diversity of affective rationalities of everyday life.

Surprisingly under-discussed remained the question of uncertainty and risk. What assets do the urban poor create, use, or strive for in conditions where uncertainty is a permanent feature of urban life? And how can uncertainty become a resource itself to make things happen (Simone 2010)? This brings the assets of the urban poor close to the taste for uncertainty and speculation at Wall Street. We would then have to look at the assets of the speculators on Wall Street and the urban entrepreneurs who struggle for everyday survival in downtown Dakar or Luanda in one and the same laboratory of self creation in precarious times.

Christine Hentschel

Institute for Cultural Inquiry (ICI), Berlin

Identity and Property in Precarious Times

John and Jean Comaroff with Eric Worby, JWTC

Jean and John Comaroff’s session on ‘Identity and Property in Precarious Times’ took a different look at themes that had also preoccupied the first day of the workshop. How do we study the forms of subjectivity associated with economic action at the present time, and what does doing so teach us about the larger trends that are shaping the future? Arjun Appadurai came at these issues on Monday through a return to Weber in light of Callon, leading to a call for work on the kinds of ethos inspiring how various actors (traders, for instance) animate the instruments or devices of contemporary markets. The Comaroffs’ intervention was to lay out the terms for an immanent critique of what they called the emerging identity economy. How are we to understand a world where (some) people make a living by owning and selling their culture? What configurations of justice and recognition emerge around this activity? What kinds of social entities congeal through it? How does the commodification of culture relate to other historical iterations of self-possession?

The Comaroffs’ approach to these questions started from a (Foucault-inspired) sketch of continuities and disjunctures between the logic of classical liberalism and a present moment they variously termed post- and neo-liberal. According to this narrative, the world at present is witnessing the involution of categories, distinctions and relationships that once marked the constitution of civil society through acts of exchange among self-possessed individuals: free subjects who exteriorized their selves in forms of property produced by work, protected by law, and circulated in markets. Most importantly for their argument, neo-liberalism sees the narrowing--to the point of collapse--of any residual gap between the self and the forms of property on which self-realization in the liberal world depends. With this comes the collapse of the idea of a social world mediated by acts of labour, and into the resulting space step subjects like the South Africans and others whom the Comaroffs cite as (self-consciously) possessing and selling not labour, but identity itself.

This is the basis for what they call Ethnicity Inc., the object of their recent book by that title. Increasingly naturalized modes of belonging (genetic ones, particularly) become the means of membership in legal corporations that control the rights to exploit and profit from heritage, indigenous knowledge, ancestral land, and other such ethnic properties. (Things that in more modernist times were seen as the very antitheses of the logic of the commodity form.) The result is a new configuration of self, culture, and social being--including new forms of harm and exclusion the Comaroffs identified particularly with life in the waste ecologies of the formerly industrial zones of the world (both North and South).

The early round of responses focused mostly on the way the Comaroffs traced the genealogy of Ethnicity Inc. Several participants asked how the emergence of the identity economy would look if narrated specifically from the South. How would the story of ethnic tourism look if one saw precedents in Fanon’s account of the black subject rendered dependent on white recognition, for instance? Would the communitarian dimensions of cultural property look different if one started, not with the logic of Lockean liberalism, but the history of the constitution of property in the colonial world? From a different angle, what is occluded by moving from classical liberalism to its neoliberal involution without thinking through the impact of the first ‘post-liberal’ era: that of 20th century state capitalism?

In answering these challenges, as well as subsequent questions on the status of high theory in the contemporary moment, the Comaroffs insisted that their project is to understand a world that more and more understands itself in terms of the intertwining of property and identity. Thinking through the logic of the subject-as-commodity is motivated not by traditional theory, then, but rather as a way of engaging the terms of thought in the neoliberal age.

Myself I find that a deeply compelling argument on the interplay of method, theory and history. But it seems to me that hard work still lies ahead to discern, in a rigorous way, exactly where developments cross the line from continuity to epochal difference. One participant pointed out the affinities between Ethnicity Inc. and the central tenet of post-workerism: the idea that we have shifted from a condition where the isolable and measurable industry of factory workers manufactured valuable things, to one where value stems from our ineffably subjective contributions to an economy of images, attachments and desires. Without a doubt this illuminates some aspects of an ongoing shift, but it also draws its force from a strangely artisanal account of what industrial labour was even at its height in the Fordist economy. What if one sustains instead the idea that even classically proletarian subjects never survived by commodifying their labour or its products (both of which belonged instead to the capital employing them) but instead by selling the time in which they exercised their own subjective capacities for action? If subjectivity is time, and time is the most important form of property that industrial labour constituted and alienated, then the lines between industrial and identity economies begin to seem less radically distinct than implied by a contrast between the selling of labour and culture.

Hylton White

Wits University