Friday, October 25, 2013

Derivitive as creating ontologies

I'm reading the fascinating account of derivatives by Edward LiPuma and Benjamin Lee, Financial Derivatives and the Globalization of Risk, in which the authors describe derivatives as a particularly powerful form of fiction, one that allows financial analysts to abstract risk and value from the sociohistorical events that make them up, and so to create the very measurements of risk that they allege to be accurate accounts of the underlying world:

“[F]inancial derivatives also shape a new means of grasping historical events, in that they presuppose that the market can reimagine and reduce sociohistorical processes, no matter how seemingly incommensurable or complex, to terms of abstract, quantifiable, and hence manageable risk.[…] The financial derivative thus has an underlying categorical structure based on its ability to ontologize real-time event structures. The social fiction made real is that aculturally derived technologies of understanding—especially the development of particular differential equations for modeling time-bracketing transactions—permit (post)moderns to parse any event structure into its naturally occurring components, to abstract these components from the event structure and from their temporal flows, and to assign a calculable and quantified value to these components, thereby allowing agents to entertain the expectation that they can predict and manage future events (135).
Derivatives thus act as a kind of critical theory, asserting abstract, disconnected versions of the social world which are nevertheless interconnected in the financial sphere. Like certain kinds of postmodern fiction, they assert misidentified truths about the world that become their own predictions of the future, substituting socially constructed versions of connectedness for actual connections.

I'm not sure how accurate this analogy is. But it certainly seems at work in Cosmopolis.

Saturday, October 19, 2013

Of neoliberalism and subjectivity

On the first page of their influential volume, Do Economists Make Markets, the sociologists Donald MacKenzie, Fabian Munesa and Lucia Siu describe the eminent economist Jeffrey Sachs, who served as an advisor to Bolivia in the 1980s, famously implementing "shock therapy," in which the Bolivian government spent much of its remaining reserves of foreign cash to remove pesos from circulation. He also eliminated government subsidies, removed import tariffs, and linked the Bolivian economy to the U.S. dollar, all in the name of enabling Bolivia to pay back its debt to the IMF. In short, Sachs implemented what has come to be called a neoliberal agenda. As MacKenzie et. al. observe, though, Sachs himself later questioned his application of purely academic theories to the specific case of Bolivia:
Later, Sachs was to muse on his meager understanding of the country to whose leaders he gave his crucial advice. It was only in a conversation a couple of years after his 1986 visit that he realized that Bolivia's physical geography was a fundamental feature of its economic situation, not merely an incidental fact. "Of course I knew that Bolivia was landlocked and mountainous.... Yet I had not reflected on how these conditions were key geographical factors, perhaps the overriding factors, in Bolivia's chronic poverty.... Almost all the international commentary and academic economic writing about Bolivia neglected this very basic point. It bothered me greatly that the most basic and central features of economic reality could be overlooked by academic economists spinning their theories from thousands of miles away" (Sachs 2005, p. 105) (1).
It strikes me that this conflict--between a universally-applicable solution for Bolivia, despite its mountains, and an "on the ground" solution in tune with Bolivia's specific situation--is also the conflict at work in Cosmopolis. In wanting to believe himself a universal subject, in desiring to transcend the earth, Eric Packer is acting just like Sachs. The very notion of a one-size-fits-all solution seems bound to Packer's singular identity. It is thus that the problem of subjectivity--the anti-Cartesian assertion about partial selves, and identifiable in Butler, Lacan, and Foucault--returns to haunt the Latourian/Callonian notion that all actors act in relation to a series of actants. Partial subjectivity, ill-fitting universal solutions--these are cut from the same philosophical cloth. It's quite possible, actually, that neoliberalism and old liberalism have something in common this way.

(Their point, of course, is about economics as a science intervening in the objects it observes: "economics is at work within economies in a way that is at odds with the widespread conception of science as an activity whose sole purpose is to observe and study, that is to 'know' the world" (2).