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 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. 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.
Department of Media, Culture, and Communication