MARIEKE DE GOEDE “How to Fight a Derivative”
November 21, 2011 1 Comment
The question of how to grasp, challenge, critique the mobile, abstract and invisible nature of speculative capital is as old as the futures markets themselves. In the late nineteenth century, when options and futures were standardised and first traded on a large scale within new Exchanges such as the Chicago Board of Trade, the mobile, invisible, future-oriented trading practices were likened to gambling, considered to be trading in wind, or cast as the work of the devil. As bread prices fluctuated while grain speculation proliferated, a diverse alignment of Marxist, nationalist and religious commentators condemned and challenged the speculative markets. “While a few men really buy and sell wheat [on the Exchanges],” one New England preacher wrote in 1888, “the majority of speculators buy and sell promises….The paper contracts of the various Exchanges…[involve] billions of dollars…This enormous sum of money does not represent any benefit conferred upon the community, but is absorbed by the fortunate speculators without any return whatever.” Debate on the political legitimacy of financial speculation and the morality of futures trading was rife.
Today, debate on the politics and legitimacy of speculative practices is more muted and more difficult. At least, the nineteenth-century political opponents of the Chicago futures markets had visible enemies, imposing brick buildings and classic façades to direct their anger against. Today, the question of how to protest against deterritorialised, abstract, virtual, circulating, speculative capital has become much more complicated. This is not just because of the emergence of electronic, automated, algorithmic global trading, in which the iconic trading floors of the large Exchanges have given way to computerized visualisations of price fluctuations and yield curves. It is also because the dividing line between the financial participants and the excluded, between the traders and the victims, has become much more difficult to draw. If at the root of the current credit crisis are the ways in which ordinary household debts including mortgage payments and credit card receivables have been turned into speculative investment vehicles for the global financial markets – as Paul Langley has shown and analysed his excellent The Everyday Life of Global Finance – then we are (nearly) all implicated in the making of disaster. To name but one example, the Dutch pension funds, which hold the future income streams of millions of ordinary citizens – including government employees and university lecturers – are amongst the wealthy investors in the world.
But as financial markets continue their search for what Andrew Leyshon and Nigel Thift have called ‘the capitalization of almost everything,’ challenging the legitimacy of speculative practices is all the more important. Occupy anchors its anger at the doorstep of the Exchanges, the Financial Districts, the Investment Banks. Does it matter that ‘finance capital’ – whatever it may be – does not necessarily reside behind those doors? In Amsterdam, Occupy has occupied the Beursplein, location of on the one hand the contemporary Euronext Exchange and on the other, the famous nineteenth century Beurs van Berlage, where financial trading has ceased long ago in favour of cultural activities and conferences. At Euronext, floor trading has also ceased, but it is still the base for a number of investment companies, brokers and related institutions such as the Dutch Securities Institute. However, Beursplein represents only a fragment of contemporary financial power – the real home of which is perhaps better found in the unspectacular trading rooms of the large banks in the Amsterdam south district, at the aforementioned pensions funds or – in the European context – in London, Paris, Frankfurt.
It is perhaps not the absence of the defined agenda and clear list of demands that is the most striking feature of Occupy. Its striking feature is its impossible promise to anchor and call to account speculative practice. Its stasis and occupation contradict the mobility and fluidity of contemporary speculation. Its ambition to stay, to extend its presence, to remain immobile, interrupts the constant drive to commodification and circulation of investment capital. With the same people in charge of ‘solving’ the crisis as have participated in bringing it about, and while the international bond markets hold European politics hostage, Occupy has hit the right target – even if the derivative is impossible to locate and the culprit banker does not necessary reside behind the occupied doorsteps.
Gambling is often dismissively characterized by most people as a vice, and looked upon as a diversion from life’s more serious aspects; for many of us here in New Jersey, including myself, the image associated with gambling is the chintzy, dilapidated downtown casinos of Atlantic City, a seedy netherworld that, while not completely forbidden, is enjoyed best if not visited all that frequently. Honorable, respectable individuals who decide to take a weekend off from the solemn, monotonous routine, and change things up a bit, who want to Live a little with a capital “L,” will take the occasional trips to these locales, blow off some steam, return home with a catchy new anecdote and, if all goes well, the occasional bragging rights that come attached to a big win. To make these trips the center of one’s life instead of a brief aside, it is implied, would be (among other things) impetuous, risky, careless, morally ambiguous, and foolish.
Too many people incorrectly view the nature of gambling through the narrow lens I describe above, and despite a long-overdue aperture adjustment in the wake of the recent economic crisis, most people are unwilling to confront a larger-scale truth about gambling. Gambling is more to human beings than a simple diversion; it is not a town or city one can occasionally visit freely, coming and going as they please but ultimately residing in a different reality. Instead one might try to look at things in a historical context. Consider that it was not only slaves who fought in the gladiatorial arena, but sometimes men of nobility betting on their ability to vanquish a foe, betting their very existence for fleeting glory; beyond mere monetary exchanges, this was a time that life itself was cast into the center of the table as a chip. Look further to the daring battles that have left marked and unmistakable impacts on the direction of civilization and it is no stretch to see the attempt to secure lands and natural resources for the winner as nothing more then a high-risk game, soldiers thrust forward with not much more consideration then dice tossed on a craps table. We as humans cannot separate gambling from who we are, from our condition both individually and collectively as a civilization, though it is easy to understand why we might try. It is much easier to go to sleep at night thinking the money squandered on a risky investment was a necessary risk different from putting it all on black; by acknowledging the constant decision to make “real-world” bets, one might also have to acknowledge the reality that other people’s lives could be irrevocably altered by the outcome of the game.
Most Americans have justifiably excoriated those who engaged in what is now commonly seen as craven, immoral attempts to profit off of other people’s lives through the investments that led to this very tangible economic crisis. This outrage is noble, but as the article above illustrates, it is usually temporary and without lasting impact. The 99% of the 1880s were united in their stand against speculation, but one-hundred thirty years later people still trade in options and futures. Surely there are countless men and women who rail against the largesse of the rich that have gone to a casino and, swept up in the party, lost more than they could afford, or perhaps even made a mistake so simple as choosing pension plan B instead of A, the one that followed a sounder, safer investment strategy. If we as a society are going to solve our addiction to gambling and risk, the winning battle will not be fought against corporate bigwigs in some sort of cultural war, but will occur in a much different way. Rather than fighting others, individuals must begin to recognize and acknowledge that in a world as connected as ours, one that relies on relationships being strengthened, not torn apart, to advance growth and technology, perhaps one by-one we will have to realize that as tempting as it is to play these games, we no longer live in a world where anyone emerges a winner. Only by recognizing the error of approaching matters with this attitude and making a conscious attempt to avoid this instinct can stop this seemingly endless cycle from continuing.
-TH