Week 11- Financial markets, speculative capital, and risk

Week 11: Financial markets, speculative capital, and risk

This week’s readings revolve around new practices in financial markets such as speculation, risk, insurance, bio-capital, and how they have redefined the core constructs of capitalism.

We start with Maurer’s article and how he traces the evolution of what property has come to mean, in the current financial market and economy. As the name of his article suggests, conceptions of property began with ideas of Locke and Hegel, which while slightly different (the role of will), define property as that which exists as ‘things in themselves’ - there was an emphasis on the tangibles that constituted property. Through the historical account since then, Maurer traces how this conception was critiqued in various ways, resulting in a complete materialisation of property. This materialisation has reached a point where the need for ‘seeability’ has been replaced by complete intangibility.

In the course of this historical account, Maurer also traces the role of the joint stock corporation and the securitisation of ‘property’. This is the juncture of separation between control and ownership, and the ironic situation where stockholders are reduced to a ‘wage earners’ although they are ‘owners’ and risk takers. Profit ultimately accrues to the corporation, which is actually the manager of the risk. It is with the nature of securitisation and financial markets that risk and insurance come to replace rights and property.

An interesting point that Maurer highlights is how both Smith and Marx recognise the fetishism that operates within capitalism; while Smith sought to free capitalism from fetishised objects, Marx sought its destruction.

DÁvella's article offers a counter-narrative to Maurer’s claims of property becoming increasingly intangible. As a result of the turbulent economic history of Argentina, DÁvella is showing us quotidian practices that are drawn upon by actors to cobble together investments that are grounded in a need for re-materialisation.  He argues for understanding an ecology of investment by which he means the emergent web of relationships between person and thing, and thing with thing. In other words, it is important to document why gold, silver, bricks and dollar were objects in which people chose to invest. Also, it is necessary to understand the relationship between dollars and pesos, dollars and bricks, and dollars (in Argentina) and dollars (in the US) too. In the process of recreating the ecology of investment, Maurer also draws our attention to the asymmetries of circulation, of money held in banks and as cash.

Like D’Avella, Miyazaki also a highlights a case of how actors or participants are making meaning of the economy and their role in it. He shows us how Japanese arbitrageurs see themselves as distinct from speculators and hedgers (which is also the textbook understanding). It appears that arbitrageurs are involved in what are basically speculative practices, and this is precisely why they require the textbook definition of their role for a sense of difference, authentication and legitimacy. These arbitrageurs claim to work towards market efficiency and weed out ‘anomalies’; and yet, it is based on these anomalies that they make their profits.  They seem to have a ‘self-closing propensity’ where they are seeking to rule out the very conditions necessary for them to survive, and make profits. Given this situation, there is need for them to believe the textbook definition of arbitrage to introduce ambivalence into their role in the market (without which they would collapse). Miyazaki makes an interesting claim when he says this is a case where actors seek to confirm to ideal types.

 Sunder Rajan offers us, through a case study of life-sciences in the United States and India, an instance of the speculative turn that capitalism has taken. Genomics works on the same premise as speculation- with the future potential for illness or risk. In trying to understand contemporary capitalism, he traces the creation of the sovereign consumer and experimental subjects in the genomic project, in USA and India respectively. This mirrors unequal global power relations and the bio-political trajectory that capitalism has enabled.

Finally, Gustav Peebles’ article addresses the question of how anthropology has dealt with credit and debt in different societies. He argues that anthropological exploration should not be limited by either moralistic or economic aspects of credit and debt. He advocates the need to examine how the credit/debt nexus produce social ties, allegiances, enmities, and hostilities, rather than making normative Maussian pronouncements concerning credit as liberating and debt as debilitating.

To this end, he reviews various anthropological texts which have engaged with credit and debt outside of its moralistic connotations, such as Strathern who shows that debtors are not necessarily needy; rather, new needs maybe created to promote the need for new debts.

Peebles’ emphasises the need to focus on social, spatial and temporal boundaries which credit and debt relations construct. He relies on Munn’s notions of time-space to demonstrate how credit and debt relations configure people’s past, present and future. He also highlights the need for examining the intertwining of credit/debt and bodies whether it is through Chu’s work on the transnational flow of Chinese migrants and the debt slavery into which they enter or Munn’s idea of bodies with credit moving through space-time and bodies in debt constricted within the same realm.

The question that these collections of readings raise for us is whether these new faces of capitalism are fundamentally different? For 

e

g. Is the creation of the experimental subject that Rajan writes about, any different from what primitive accumulation does for the supply of labour? Can we draw a parallel to Anna Tsing in terms of how capitalism is tapping into an already existing reserve (unemployed mill workers as potential experimental subjects)?

While Maurer’s emphasis on the intangible form of property is valid, it seems limited to speculative capitalism. Consideration of real-estate would perhaps indicate a clear tangibility to the  discourse on property. Even though it maybe argued that speculation often determines value of real estate, the Argentinian case demonstrates that value might actually lie in the concreteness of ‘bricks’- clearly tangible.

Finally, we were also wondering whether actors outside of the speculative markets might also function on contradictions, or recognition of contradictions, similar to the arbitrageurs in Miyazaki's article?

Keya and Savitha