Turning financial markets inside out: Polanyi, performativity and disembeddedness

In light of the spread of markets across the globe and deeper into daily life, thispaper argues for a more robust analysis and application of Karl Polanyi’s conception of(dis)embedded markets coupled with the performativity thesis authored mainly by MichelCallon. It suggests that while disembeddedness as a concept is necessary for an analysisof contemporary financial markets that are increasingly self-referential, it is not sufficient.Despite the suggestion of a gulf between Polanyian and Callonian economics, there areimportant similarities in the two frameworks. The similarities are considered along withthe considerable difference, all in an attempt to develop a more robust methodologicalframework for analyzing financial markets. Performativity, it is argued, can help fill thegaps in Polanyi’s embeddedness framework, albeit only when that concept’s tendencyto produce aspatial and apolitical arguments are taken seriously. The paper uses anabbreviated case study of the development of US financial derivative markets in the 1970sand 1980s to argue that markets must be considered in light of both their institutional andgeographic entanglements as well as their (dis)embeddedness in systems of calculativenessand mathematical modeling. Specifically the paper analyzes the tension between thederivative origin story authored by Donald MacKenzie, which focuses on neoclassicalpricing models like the Black–Scholes–Merton option pricing formula, and my ownempirical research, which suggests the urban-economic geography of Chicago played akey role in the development of these instruments

Derivatives, Market Liquidity, and Infrastructural Finance

Since the 1970s global finance has developed a progressively systemic character, which became exceptionally legible following the collapse of Lehman Brothers in September of 2008. 15 years after the financial turned capitalist crisis that followed that system collapse, how are we to make sense of the ongoing dependence of society and economy on this network of financial markets? Reflecting mainly on the Anglo-American context, but with an eye on the global scale, this chapter argues that infrastructure is an important way to theorize the inability and unwillingness of capitalist states and civil societies to meaningfully reduce the influence of the financial sector. Focused on financial derivatives, the chapter argues that particularly in their liquid, marketized form, derivatives enable new connections across space and time, Despite considerable political resistance, the maintenance of this liquid form, has become an infrastructural or technical matter, but this technicity obscures derivatives’ political economic contradictions, especially as they relate to socio-economic inequality. Capitalist states have begun to treat derivative markets, and the broader financial market system, as something that must be protected from breakdown, or illiquidity, and immediately repaired in a crisis. Extending the argument on (il)liquidity and building upon the classic argument for infrastructural inversion, I suggest that financial markets are in a constant state of breakdown and thus in need of perpetual maintenance and repair. This perspective offers possibilities for politicizing finance, by exposing the overdetermination of socio-economic inequality in the original design of financial market infrastructure as well as providing analytical opportunities for rethinking the de-financialization of the basic commodities necessary for everyday life

Speculative boundaries: Chicago and the regulatory history of US financial derivative markets

This paper considers the history of governance and speculation on US derivative markets from their emergence in the middle of the 19th century through their incursion into finance in the late 20th century. It explores the importance of derivatives’ extended ancestry in agricultural markets before analyzing their entanglement with financial markets, which came much later in the 1970s and 1980s. The paper is particularly concerned with the institutional inheritance of a set of legal–regulatory boundaries that prioritized price making and the speculative trading that was necessary to produce a consistent flow of prices. This governance system for derivatives is set in contrast with the governance of securities markets, which during the 1930s became subject to more strict government oversight, particularly with regard to speculative trading. The legal boundaries between these two markets began to deteriorate in the 1970s when the Chicago derivative exchanges applied the speculative logic of agricultural derivative markets to financial instruments. The implications of this are twofold. First the paper argues that market mechanisms and market regulation are analytically inseparable, and ought to be studied as such. Second, employing this approach, the paper argues that US financial derivative markets are originally ‘derivative’ not of New York and the finance sector, but of Chicago and the agricultural sector. </jats:p

EQE Measurements in Mid-Infrared Superlattice Structures

LEDs which emit in the mid-infrared have low efficiency. This limits their applications in military infrared systems as well as potential uses in gas sensing. These problems are the impetus for EIRE, which stands for Efficient InfraRed Emitters. EIRE seeks to solve the efficiency problems through the use of III-V superlattices as an emission material. My part in this project was to measure the External Quantum Efficiency (EQE) of the superlattice structures we grew, which is key in developing more efficient devices. This was done using photoluminescence, where the superlattice is excited by a laser beam and the emitted light measured. The EQE values measured for these structures corresponded to an Internal Quantum Efficiency (IQE) of nearly 40%, which is impressive for mid-IR emitters. Making these measurements involved learning to use vacuum and cryogenic equipment as well as troubleshoot optical setups. I also helped write python programs to control the experimental setup and analyze the data. The data I helped collect will go towards growing more efficient superlattice structures in the future

Digital Weberianism: Bureaucracy, Information, and the Techno-rationality of Neoliberal Capitalism

The social infrastructures that constitute both public and private administration are increasingly entangled with digital data, big data, and algorithms. While some argue that these technologies have blown apart the strictures of bureaucratic order, we see more subtle changes at work. We suggest that far from a radical rupture, in today's digitising society, there are strong traces of the logic and techniques of Max Weber's bureau; a foundational concept in his account of the symbiotic relationship between modernity, capitalism and social order

Digital Weberianism: Bureaucracy, Information, and the Techno-rationality of Neoliberal Capitalism

The social infrastructures that constitute both public and private administration are increasingly entangled with digital code, big data, and algorithms. While some argue these technologies have blown apart the strictures of bureaucratic order, we see more subtle changes at work. We suggest that far from a radical rupture, in today’s digitizing society, there are strong traces of the logic and techniques of Max Weber’s bureau; a foundational concept in his account of the symbiotic relationship between modernity, capitalism, and social order. We suggest the manner through which these techniques have shaped contemporary systems of social administration helps explain the remarkable legitimacy digital governance has acquired. We do this by exploring how digital technologies draw from, and give new substance to, the three key principles of Weber’s theory of the bureau—efficiency, objectivity, and rationality. We argue that neoliberalism, or the widespread economization of politics, has conditioned the digital versions of these principles, not least by subordinating social ends to technical means. At the same time we argue that digitalism engenders the privatization of authority, not least through its “elective affinity” with market logics

Re-assembling knowledge production with(out) the university

As an introduction to the themed issue, this paper interrogates the idea of university unbundling through a critical reading of Ronald Coase’s theory of transaction costs. Coase, who was initially interested in the structure of firms, later applied his transaction cost theory more broadly to anything that might be defined as ‘welfare’. Not unlike other abstract economic theories, in the age of market discipline, Coase’s ideas have been widely employed to discipline the provision of public goods with market forces. Read through Coase, the main effect of the unbundling discourse has been to rationalize the university—to make it subject to a logic of efficiency as an end, and ultimately we suspect, to do damage to universities as important institutions for the cultivation of democratic values and socio-economic justice. After a brief summary of the other six papers included in the issue, the paper concludes with a discussion of the possibility of maintaining a public university in light of the neoliberal discourse of unbundling

Economic Geography and the Financial Crisis: Full Steam Ahead?

This article considers whether the growing theoretical and methodological diversity or pluralistic nature of economic geographycontributes to its lack of engagement outside the discipline and academy. Although we are enthusiastic about the vibrancy thispluralism brings, we also speculate that it contributes to the discipline’s tendency to fall short of significantly impacting keydebates in the social sciences. In particular, we consider the disciplinary challenges to influencing mainstream debates overfinancialization and the recent financial crisis and the recurring lament that economic geography “misses the boat” by failingto significantly impact key scholarly and policy issues. Specifically, we suggest that methodological and theoretical diversity,local contextualization, and relational analysis, all of which we support as vital to the discipline, make it difficult to isolate adisciplinary core. We conclude that pluralism produces a vibrant discipline with unique explanatory power but that it also hasimportant impacts on the design, execution, and influence of geographers’ research outside the discipline