Week 11- Class Discussion

This week’s readings threw up many questions on the shifts or new forms of capitalism, particularly its speculative form, and the creation of new instruments which feed into this system. The central question that structured much of the discussion was whether there has been a fundamental shift in the core concepts of capitalism.

The emergence of the specualtive market since the 80s highlights the fact that we have moved from the Marxian approach of dialectical materialism to a point where the material basis of value creation has become marginal. This of course has been greatly enabled by newer forms of technology that render materiality obsolete. At the same time, the speculative nature and ‘hype’ that enables it to persist seems to have varying effects on materiality, as evident from the DÁvella reading on Argentina and our discussion on the value of land and gold in India. Anthropological attention to these shifts and developments has thus been on account of the recognition that while speculation is premised on dematerialisation and intangibility, it still foregrounds the problem of abstraction or materiality/immateriality of value, and the social registers within which they operate.

Some of the issues raised in our discussion on speculative finance was the role of faith and belief that actors depend on to function in the system. Both Miyazaki’s arbitrageurs and Rajan’s genomic capitalists ultimately root their practices in an element of faith, even if, as in the case of the arbitrageurs, they recognise it as illusory. With Rajan’s genomic capitalists, the element of faith works with a temporal aspect because they are selling a vision, while not really making anything, of a product in the future. In fact, temporality was a crucial aspect of the speculative turn that capitalism had taken given its emphasis on linking the past, present, and future accumulation of value and resources.

The discussion on faith and temporality brought us to the question of ‘casino capitalism’ in which capitalists are no longer dealing with rational decision making but the ability to create hype, and subsequently value. This seemed similar to Marx’s concept of ‘fictitious capitalism’.

The transition from ‘commodity capitalism’ to ‘casino capitalism’ is paralleled by the transition to a 'risk society', where there is a shift from fixed structures and returns to calculated risks, not just in economic but personal life as well. In fact, risk seems to the fundamental trope of modern life.

Apart from temporality, questions over the role of knowledge as being crucial to success in the market were also raised. While most actors believe in the efficient market hypothesis and the assumption that knowledge is freely available (hence the efficiency), the fact is that knowledge too is an elusive commodity and access to it is rooted in structures of power.

An important point that Maurer’s article raised was the fact that law and regulation were constantly 'catching up' with developments of the financial market. This highlighted for the class the dynamic nature of the market which is also a product of many actors/actions, thus making it difficult to predict or explain.

In the context of law and regulation, there was also a brief discussion on the ethics of speculative finance. With examples from the recent recession, it was observed that the culture of the financial market was to push traders to take more and more risk to garner larger profits. Skirting the boundaries of legality had thus become normalised and the lines between legal- illegal and licit-illicit blurred.

We also discussed Maurer’s complex tracing of the history of property, from materiality to abstraction. In this narrative, the role of the corporation and subsequent separation of management from owners was highlighted to show the emergence of a new form of capitalism. We no longer have a clearly identifiable proprietor who is both accountable for the enterprise and the bearer of profits and loss. Instead we have a nameless- faceless corporation where there is no single individual who can be held liable. In this context, the case of Union Carbide and the inability to hold anyone person accountable was highlighted. Further, the 'owner' or risk takers incurs the loss while the manager (control) reaps the profit. In fact, the class acknowledged that we live in a time where everyone is a capitalist given that we are all invested in corporations. Even holding a bank account implies that we are part of the system thus demonstrating the extent of the hegemony of capitalism. As a result of this, the traditional Marxist distinction between owners and workers has been replaced and mobilisation/revolution seems extremely unlikely when it is counter-productive not to support the system. Another paradox of the system raised in class was the nature of credit scores in the US where scores were proportionate to level of debt incurred and not the ability to pay debt back as witnessed in the subprime fiasco.

While we are left with many unanswered questions, what we do take away from this collection of readings is the role of anthropological enquiry in the field of finance. The anthropological intent at one level is to understand how actors relate to and re-create these systems of abstraction, as shown by Miyazaki and the case of the arbitrageurs. On a much larger level, as shown by Maurer and Rajan, we must also seek to unpack the system itself; its transitions and the role of knowledge, ethics, subjectivity and dispositions that accompany it.

-Keya and Savitha