by Achim Szepanski

Many of the catchy testimonies of critical sociologists, ranging from Richard Sennett to Elena Esposito, are that the future is always some distance from the present, protected from the here and now and not as an economic resource in the world Present in the markets should be traded. The economic use of the future in the present, which is often referred to as de-futurization, destroys the future as an open potential and as a space for possibilities. The constant reference to the future also brings forth a present that on the one hand is cut off from any narrative potential and on the other hand can no longer offer any form of security. However, there are also sociologists, such as Helga Nowotny, who oppose that the excessive orientation towards the future, which is thought to be separate from the present, does not destroy the present, but rather creates an unending present and a loss of time horizons. With Bifo Berardi she assumes that the current loss of the borders between past, present and future is not a normative, but a socio-economic question.

Lisa Adkins surprisingly draws attention to the sociological writings of Pierre Bourdieu in her book Time of Money to limit the Problem of Time, which assumes that the future is not characterized by possibilities that may or may not occur, and that are distinguished by a distance from the present, but rather that the future is always present in the here and now, although this is not experienced. ​Adkins refers to the illustration of this thesis on the football game in which an upcoming game situation is not easily possible, but is already present in the configuration of the game in the now.

​However, the inscription of the future into immediate presence is not simply given in and through practice, but is constituted in the relationship between habitus and the world. The social fields are only recognizable and permanent in their logic if there are agents who operate in them with their pre-reflexive dispositions and habits. These dispositions contain routines and habits that sustain the present, but also practical anticipations of the future, insofar as these are already inscribed as an objective potential or trace in the immediately given. Thus, the present economic field indicates a calculable future, because the agents in it operate with their routines, insofar as they constitute a basis for practical anticipations. For Bourdieu, however, this experience does not imply the rational calculus of neoclassical risk management because the practical anticipations of the future require more unconscious and collective habits and structures that can always overthrow the rational agent out of line. For Bourdieu, practice is not something that takes place in time, but it (like events) generates time, practice is temporalization.

​In industrial capitalism, and here it is not Bourdieu but Thompson, according to Adkins, that abstract working time was the unity upon which exchange was based, and therefore time was money. The rates of profit were related to the speed of production, and economic events were measured in units of time, that is, in abstract, quantitative, homogeneous, and reversible units of time. As a form of time, the time is exogenous to the practices and events, it is an external measurement of events defined as production rates, profit rates, working day times, etc. The economic events did not produce time, but took place in time. At this point Bourdieu misses specific characteristics of exogenous time, all-indications of which at the analysis of today's financial system again become interesting as far as the current financial practices refer to diffusion of hegemonial time, to a form of time, to events and Time to run away in a river.

In order to clarify her thesis, Adkins first points to a specific financial instrument, namely the curve of US government bond yields, which implies a relation between interest rates and the various maturities of the bonds. The curve is a benchmark for the future value of other forms of debt, such as mortgages, so it is considered a barometer for general economic developments and perspectives, yes, the collective access to the markets to the future. Their triumphal procession must be understood in the context of the end of Keynesianism and a series of new infrastructural measures in the 1970s that set in motion an expansive dynamic of lending and debt economics. Consider, for example, the promotion of financial expansion by the Fed, floating of the US dollar and interest rates, insurance of loans, the yielding capacity of new financial instruments, the division of the population into creditworthy and non-creditworthy groups, the replacement permanent wage contracts through contingent employment, income volatility, the emergence of new financial instruments / derivatives and new financial institutions.

​The expansion of the capacity of companies, households and governments to shoulder their credit debts requires a set of institutional arrangements. After the financial crisis of 2008, these infrastructures of the financial system were further expanded. Floating interest rates and the US dollar has renewed the relationship between time and money, more precisely between time and the profit outlook on government bonds. Time now becomes itself part of the new financial instruments and their operations and thus an event in itself. And digitized calculation today offers the possibility to calculate the relations between future time points in time. It generates new profit opportunities with regard to the calculation of temporal relationships, thus increasing the profitability of financial securities and other financial instruments.

This also indicates a transformation of the materiality of the collateral and derivatives. Insofar as discrete economic objects can be connected in time and measured over time, and thus new profit potentials can be created, the securities can be understood as a continuum of moments. The floating of prices and the volatility seen in trading practices today require the trading of temporalized securities that are not temporal in nature but are themselves temporal forms and therefore can be capitalized. Time itself now becomes the object of innovation and imagination and this is condensed into the statement that money is time. For Adkins, this is not about the commodification of the future, but about the transformation of time itself. In the derivatives markets, the financial objects themselves are now mutating into forms of time, indeed the time of these objects is constituted by the techniques and practices of financial markets, practices , which open the time of derivatives for innovative strategies for the creation of profits. Derivatives have their own time profiles, counterparts and futures that are open to their constant recalibration. Derivatives and collateral are themselves to be understood as forms of the time.

​In the second chapter of her book, Adkins discusses austerity policy as a political strategy that expands and expands the debt economy and, as a result, raises the productivity of populations to generate added value through the movements and flows of money. Specifically, this means cutting government spending at the expense of low-income populations and those who have no access to financial assets. The austerity policy thus includes a class-specific put option, which now affects the majority of populations, even in capitalist core countries, and which is also to be extended to questions of gender and race. This policy does not just favor the rich and the financial elites, but especially those who have or have access to the financial markets and assets on a large scale, be it mortgage contracts, loans and derivatives that are being traded on the financial markets.

​To understand this, Adkins comes back to the problem of the expansion of the financial system since the 1970s, which a) exploded financial institutions and instruments, b) is not employment-intensive, and c) is increasingly integrated into the daily lives of the populations becomes. Not only banks, hedge funds, and financial elites operate in the financial fields to gain speculative gains in asset trading, but increasingly the middle class and low-income layers in their everyday lives. Thus, everyday life must be designed and configured as a space for financial investment. Speculative rationality is now moving into everyday financial life.

​And so money is also transformed as a mediator or as a means of exchanging goods and as a measure of value, by itself as a specific commodity (capital as a commodity) is interchangeable with itself and generated in its specific movement financial surplus, for example in the form of insurance of credit debt. Income streams resulting from consumer credit, mortgages and other debts (and the contracts between households and the financial institutions that insure them) "link" households to operations in global financial markets. Now, when money itself acts as a commodity, at that point it loses its function as a measure of value and as a general equivalent, transforming itself into value, having new capacities and attributes, think of the transformation and consolidation of credit and bonds into the attributes prices and interest rates, whereby these attributes can be bundled into a multitude of variations and then traded, the possibilities of which are at least virtually endless.

​In the conceptual definition of derivatives Adkins remains confused when she writes, for example, that money here has taken on the characteristics of capital and capital that of money. At the same time she writes of money as capital as a specific commodity of capital. It therefore brings the terms commodity, money and capital into play without specifying a definition. But that should not interest us here, because we have dealt with the problem in detail elsewhere. We define derivatives as speculative capital, as opposed to John Milios (specific commodity) and Bryan / Rafferty (money).

​Adkins writes that derivatives are setting things in motion and that this should be seen in relation to consumer credit and mortgage contracts. And even flows of income stemming from other aspects of everyday life, such as student loans, bills for mobile phones, household bills for water and electricity, etc., would be fed into the new financial instruments as inputs and thus even unsuspecting households with their small incomes would be over certain chains are now dependent on derivatives trading in global financial markets. Randy Martin has described this as the financialization of everyday life. In doing so, the various forms of day to day credit are broken down to a few attributes with new financial instruments such as CDOs (securitization, bundling different types of loans) and then traded in a variety of combinations on the financial markets.

This type of indebtedness through everyday loans is in a special relationship to the wage, which is increasingly contingent in its various forms and defies the standardizations won by the unions. The wage work itself becomes uncertain, sporadic and unpredictable. In addition, real wages have stagnated in the last thirty years. Thus, many households can only secure their reproduction by increasing the debt. Under conditions of temporary and temporary employment contracts, austerity policies and stagnant wages, low and middle income households simply need to increase their debts today, thereby helping to expand and multiply the extraction of a surplus generated by money and finance. Increasing personal debt and dependence on specific financial risks is only a partial aspect of the financial regime of accumulation; moreover, households today are increasingly dependent on women's incomes and wages, no matter how volatile or precarious these incomes are.

​Women are increasingly being forced into and integrated into the post-Ford labor market, whether as wage labor in the area of ​​social welfare and care services, or even precariously paid work in the home. A new institutionalized model of adult work has replaced the old Fordist model of the family; the former is a model in which all adults should be tied to work and employment, or at least integrated into the constant search for new employment opportunities. For example, women are subject to multiple burdens - short-term employment or wage labor, housework and child rearing - and, when low wages require indebtedness, even generate a small investment in household and social reproduction. It was through these mechanisms that the family was re-invented and reorganized in post-Fordism, with a new staging of self-responsibility and the associated link to the financial system. While in Fordism the heterosexual family functioned as a place of male labor and consumer demand reproduction (plus welfare contributions), in post-Fordism the family transforms into a self sufficient economic unit and / or an area of ​​investment when the family to reproduce through private debts and operate through a set of economic responsibilities tied to the financial markets. Thus, even the family becomes a small business, as women redefine social reproduction as a kind of enterprise becomes imperative of employment be subjected. For post-Fordism, the feminization of survival is essential. And often enough, women's wages act as a sort of "leveraging" and "speculation" to gain access to insured forms of credit with banks and other lending institutions, to ensure the daily lives of households, especially with regard to financing benefits, previously taken over by the state or the capitalists.

​Wages are thus moved by serving as the basis for access to loans and mortgages for which regular payments have to be made. Wages, according to Adkins, are not to be understood here as a means for the exchange of goods, but rather as a commodity or as a form of money which is a value in itself. Again, we find the mixing of money, goods and capital at Adkins. At least it can be said that wages correlate with debt and can also generate a small capital x with the purchase of securities. Workers and employees now have to speculate themselves, albeit to a very limited extent, on their everyday money in order to get things moving. Not only are households increasingly dependent on women's wages, but also on what these wages can set in terms of borrowing potential. Households are thus literally driven into neoliberal risk production, and today this also applies to low and middle income households. This will make households dependent in a specifically asymmetric way on the fluctuations in the financial markets. Housing, Regeneration, Education and Health - areas of social reproduction for which the welfare state had contributed in Fordism are now becoming financialized, with households taking additional risks in securing their social reproduction through borrowing. A new topology of linking the population to the financial risk is thereby created. When it comes to justice issues, it is no longer just about focusing on the redistribution of income, but also about the distribution of financial risks.

The period of contractually settled debts of households and persons as well as the insured debt needs to be analyzed in detail in order to understand the integration of the population into the debt economy and the expansion of the potential of the population to be able to carry out a positive risk management. Again, this requires an understanding of the logic of speculation as a specific historical mode of accumulation and social organization. On the one hand it concerns the quantitative increase of the private debts in the capitalist core countries, on the other hand the future income streams, which result from the contractually regulated debts, and their connection to current accumulation strategies of the capital, ie to the productivity of the debts regarding the generation of surplus via money and finance. Potent lenders such as banks are now incorporating a structural balance of power, especially when it comes to their position within household debt crises, which as borrowers often have no choice but to go into debt. If Marx has labeled the workers wage slaves, debt must be understood as an asymmetrical relation in which the small debtors are debt slaves.

Usually, the time dimension of debt is based on borrowers' promise to make future payments, thus closing the door to an open future for borrowers who no longer have the ability to tap into the potential of time. Against the idea that debts are a destruction of time, the destruction of the possibilities in the present and the future, Adkins wants to point out that the debt is now more of a generative moment in time. This shifts the logic of debt repayment to the logic of possible payments, and the movement of payment dates and deadlines, which corresponds to a logic of probability, shifts to a logic of the possible. This logic binds the indebted subject to a time when the past, present and future are no longer in a fixed relation to one another; rather, time is now open to any kind of revision. This form of time Adkins calls 'speculative time'; it is tied to the logic of money and finance, and in particular to the process of loan securitization (CDO), which has created new ways of extracting profits for financial capital, including the capitalization of household income streams , The mass debt inherent in a new order of time, in which the productivity of the population in terms of the generation of surplus value - from the streams of everyday money - to be maximized. This reorganization of the social requires specific modes of practice, with the architecture of debts again requiring specific temporal rhythms, sequences, patterns, and sensations.

Debts, therefore, contain a temporal relation defined by time: they require a promise to pay at a time that has not yet been reached, that is, in the future, and that is the deferral of the present in favor of a contractually regulated future is known even before she enters. In terms of time, debt operates with a double movement: the promise to pay includes postponement and anticipation. It can be assumed that the economic survival of the majority of the population in the capitalist core countries today depends on the debt economy. Lazzarato noted a few years ago that increasingly larger parts of life are sucked into the debt economy, so that financial risks and financial costs ultimately end up throughout life. Against Lazzarato, however, Adkins argues that debts have a complexity that can not be reduced to the loss of (open) time and appropriation, that is, a dated time of repayments that a punctured and uniform subject demands, a subject that sanctions avoids repayments on time. The calendar time is external to the actions and is not affected by contexts, so it is not variable, although it has a massive effect on the contexts. According to Adkins and Frederici, the disciplinary action according to the time is strongly geared towards the female subject in the home and requires the connection to the time. It involves operating with temporal patterns and schedules, but this does not refer to any emptying or the conclusion of time, but to a temporal universe characterized by rhythms and breaks in the flow of uniformity.

​This changes once again with the financialization of debt or the existence of the calculus of securitized debt (consumer loans and mortgages). Securitization is the process of accumulating, bundling, and turning contractually secured debt into liquid assets that can be traded on the financial markets. Not only has this created new opportunities in the creation of the surplus for financial capital, it has also increased the possibilities of realizing returns hidden in mortgages and consumer credit. Thus, the "everyday" loans are drawn into the capital markets. And it also transforms the payment deadlines and plans of debt, which are now no longer uniform, regular and sequential but flexible, variable and adaptable. Repayment schedules can now be stretched, slowed, accelerated, reorganized and reset. Both the variable payment rooms for repayment and the calculation of the lending are not focused on a future end point, at which the debt is then finally repaid, but on the current and potential service of debt, i.e towards possible, future payments instead of repayments. Thus, loans, mortgages and other debts are subject to permanent adaptation and are also filled with options so that, for example, a period of high interest payments may be followed by exemption of payments for a particular period.

​Even long-term credit is no longer tied solely to the indexation of future and probable wage payments (based on known wages in the present); instead, wages and incomes are more related to potential and opportunities for future debt servicing. Instead of proceeding from the calculation of the probable projected by the present into the future, the calculus of the insured debts refers to the calculation of possible futures. The future does not unfold from a known present; rather, the present is rehabilitated by coming futures that may or may not come. At the same time, resources are transferred from the future to the present, from futures that have not yet occurred or will never occur. The statistical calculation of probability is replaced by the algorithmic ordering of the possible, from which new practices should be set in motion. Rouvory and Stiegler, in the context of the analysis of a new form of algorithmic governance and a post-current reality, have pointed out very early that today it is no longer a matter of calculating probability, but of considering in advance what probability is flees and thus makes possible the excess of the possible. The state also uses the new methods and techniques to model the possible, for example by means of software, risk management, biometric procedures and private consulting. These techniques allow for a new form of algorithmic governance and power that focuses on potential futures and acts through preemptive action. One now reads traces that lead from possible futures to the present.

​Debt productivity is based not only on the accumulation of profits that are just related to debt, especially interest paid in fixed blocks of future time, but in the accumulation of profits generated by trading debt in the future time itself works; constitutive are: contractually fixed income streams, their gains and losses on debts, and the "bets" on those gains and losses, that is, breaking down the credits on a few attributes and then bundling, pricing and trading those attributes within that through the risk rated tranches. This experimental treatment of debt is now itself a source of profit. Profits result in financial capital, including from derivatives trading, debt restructuring and auctions with loans, CDOs and CDS.

The time accompanying these financial operations is speculative, at least it has a speculative component. Adkins again refers to Bryan and Rafferty, authors who refer to derivatives as a form of money. But if derivatives must be realized in money, then they themselves are not money, but at best speculative capital or a specific commodity, that of money as capital. In any case, these financial instruments have liquidity and the potential for transfer that is not tied to the ownership of an underlying asset to which the derivative relates. In the same breath Adkins speaks again of the commodity properties of derivatives, even capital. Anyway, at any rate, she agrees that derivatives are not fictitious capital, but, as we would say, speculative capital that is material and real.

Speculative time is a time when the past, present and future are not in a pre-determined relation or linearity, but are processed in a continuum of movement, transformation and unfolding. The future can not only access the present, but also the past. The present and its relations to the past and future can again be subjected to a permanent reset within an action. Past and present can be pushed into the future and future and present in the past. The rivers of these non-chronological pasts, counterparts and futures, including their resettling and reorganization, and even their suspension, can easily serve to increase profits. The time of the insured debts and profits insists in a non-chronological and indeterminate movement of speculative time.

​At this time, and especially in the context of their economic productivity, accumulation must be done through debt (the changing schedules of debt of persons and households that can be delayed, accelerated and reorganized). The calendar-oriented time of repayment is now added to the calendar time of payment, which binds the subject to the non-determinate time of speculation. During this time, financial activities are mobilized and intensified; It is a time when past, present and future are in a continuous flow of revision. The financialized subject no longer whines about the emptiness of time, the loss of the future or the temporal orientation, but this subject is always ready to happily attack the re-calibrations of past, present and future plus their relations and stages among themselves. And this subject has not too little, but too much time, that of the event and the non-chronological flow of time.

​The time of the insured debt inscribes into the present the speculative time. This does not include a practice of temporalization, as Bourdieu still assumes, but a practice of speculation that seeks to maximize the capacity of the population to make possible payments across entire lifeworlds. For the process of securitization involves rewriting the social life of the populations, which is now integrated into the financial system and its risk production: the creditworthiness of sections of the population is added to the extended logic of paying for the possible.

​Adkins has been following the transformations in the financial system since the 1970s in the development of new financial instruments, the securitization of loans in particular, austerity policies, and the integration of the population into the financial circuits. From this she draws further conclusions: According to Bretton Woods, the financial markets have changed the relationship between time and money, and have set in motion a radical temporalization of securitization, whose profit opportunities are just in time. The policy of austerity will expand the debt economy, increase the productivity of the population in terms of generating surplus via the movements and flows of money. With regard to long-term financing strategies, the "everyday money" has been integrated into the financial circuits. Loans are becoming more and more necessary for parts of the population in order to survive economically. This leads to a restructuring of the class relations and the social total, to the everyday financial practices that are infected by speculative mechanisms. In particular, the reduction of wages drives households into debt economics, where they have to speculate on their reduced incomes.

​If both wage labor and the reproduction of life become increasingly precarious, then many workers and employees run the risk of slipping into sub-proletarian areas. The main role of wage labor, which takes place in productive production processes, is waning in the western core countries. This increases the proportion of those who have to do without regular pay in the context of precarious work. But for Adkins, even today, most wages have the same rationality as the new forms of financial instruments. Stagnation and the reduction of real wages are a characteristic of the post-Fordist era. Adkins quotes David Harvey as suggesting that the stagnation of real wages is the result of the dissolution of the social pact in Fordism, that is, a continuing attack on the organizations of the labor movement and a period of consolidation of the power of capital.

​However, in financialized post-Fordism, wages are characterized not only by their stagnation but also by their volatility and insecurity. The crisis of social reproduction is exacerbated by the dismantling of the welfare state (health, care, education, housing, etc.). These factors, combined with stagnating real wages, have widened the gap between real disposable income and what is needed for life. For the insecure wages today even the zero-hour contracts are exemplary, which no longer specify a specific working time and wage level and require a permanent willingness to work. Consider also the many forms of non-tariff treaties. At the same time, household debt service has increased: mortgages, loans and student loans have taken the form of insured loans, contracted debt transformed into assets by specific financial instruments and traded on the financial markets. Thus, the productivity of contracted debts becomes central to the process of accumulation via insured debt. The creation of the indebted consumer now serves as a »solution« for stagnating wages and has changed the wage employment relationship itself. Debt is also continuously measured and its rise is confirmed empirically today by rising income-debt ratios, with more focus on rising debt than on wages. Under the conditions of expanding debt, workers are being exploited not only by the wage-labor relationship, but also by their attachment to banks and other financial institutions via credit.

​If workers and employees have to borrow because of their usually too low wages (to secure their social reproduction), then they are, so to speak, trading their wages to gain access to money that can set something in motion, that is, they relate to qualities of money that is not yet available, but can release untapped potential. In the tendency, now even the worker can become a small investor subject who has access to assets (eg, insurance). Like derivatives from the underlying assets, wages can be separated to some extent from the labor force to serve as the basis for indebtedness excesses. To answer that, a new left-wing speculative policy must be envisaged that also looks into the rights and conditions of employees who need to use money to move money.

translated by Dejan Stojkovski

taken from:

by Achim Szepanski

The purchase and sale of money capital, be it in the form of shares, securities or derivatives, is carried out on so-called money or capital markets. It is important, however, not to overstate the concept of the market as a concrete universal, but rather to describe this type of structural-social space as a distribution of distributions, as a variety of different mechanisms of distribution, some of which are in their pricing systems converge, but in other price movements they are completely discontinuous and different. We will always presuppose this when using the term "market". If the money capital is self-setting, at the latest then it must be traded in very specific distribution networks; this trade, in contrast to that of industry's standard commodities, would be understood as a process of capitalizing money itself, making it seemingly possible from the outset, the differential accumulation of that particular form of money-capital from the recovery processes in industrial production to a certain degree or disconnect completely.

If an owner of money capital lends a certain amount of money after making an assessment of the so-called risk that evaluates the debtor's ability or inability to pay, credit money arises just as the contract is concluded, and this money turns out to be a form of duplication capitalist wealth. In fact, over the event of the credit relation a sum of money (with the potential of more) has doubled for a given interval, because on the one hand the borrowed sum, when used by the borrower to expand production processes, can set in motion new capital metamorphoses, on the other hand the lender can also regard his money capital as future surplus production, since, as finally fixed in the credit agreement, he can expect the repayment of the agreed loan amount plus its interest on the money loaned. What the time-indexing law has here is the temporary separation of the capitalist potency inherent in money capital from property, by lending the power of self-augmentation of capital for a particular period (and, at best, by another, without the creditor suffering damage himself, on the contrary, he himself can achieve a surplus of interest), whereby the money capital, which can, but need not, be the fruit of industrially organized exploitation, into the time-indexed, real power of disposal, passes into the possession of the borrower. Both the credit relationship and the issuance of stocks or bonds are accompanied by a duplication of money capital, the implications of which, as Lohoff / Trenkle emphasize in their book The Great Devaluation, have mostly been hidden in the traditional Marxist discussion. (Lohoff / Trenkle 2012: 121ff.) The lent money not only turns into the hands of the debtor in capital, as far as he acts as an acting or industrial capitalist but also on the part of the creditor capital is created, because it receives or substantiated for the lending of the money a legally codified claim to retransfer of a higher sum borrowed money, and thus this lent sum has, at least for a certain period, namely until the liquidation of the loan agreement, a double existence. (Ibid .: 128ff.) Something very strange actually happens: Because of the pure existence of the loan itself, the initial capital gains a double existence, because it is on the one hand in the real disposal of the borrower, but at the same time holds the lender a very special reflection of his Starting capital in his hands, fictional capital. Marx writes: "With the development of interest-bearing capital and the credit system, all capital appears to be doubling and tripling in places by the different ways in which the same capital or even the same claim for debt appears in different hands under different forms." - MEW 25: 488 ). But here it is not just a bill, but a real claim to at least doubled future value and this at once represents abstract capitalist wealth.

We also find a doubling in trading with fictitious capital. This happens, for example, quite specifically when a property owner buys property titles such as stocks, bonds or securities, purely for the purpose of making more out of his money. Contrary to the purchase of standard manufactured goods for either consumption or industrial use, the purchase of a title of ownership implies the specific use of the secondary use value of the money capital, ie. h., the buyer of the title of property uses the secondary or the meta-use value of his money sold in order to generate future returns, while the seller of the share, bond, etc. by no means excluded from the capitalization of the money, as in the sale For example, ordinary issuers of equities or bonds have real money for the sale of the title to them. (Lohoff / Trenkle 2012: 131f.). The sellers of the securities now find themselves able to apply this new money capital themselves as a cash-strapped demand by hiring labor and buying machinery, raw materials, supplies, etc. for the expansion of production, while at the same time buyers of property titles in the money markets act so-called fictitious capital. In addition to the amount of money received by the issuer, the so-called notional capital of the purchaser of the bonds or shares occurs. This type of business relationship by no means merely provides for the mere transfer of already existing money capital because it:
a) in the concrete disposal of a company as intensional negative value - capital - forms the basis for further profitable production processes, and
b) the buyer the share or bond with the aim of obtaining a surplus in the financial markets.

If a borrower turns not to a private person who could act as the owner of the money, but to a bank where he already holds a deposit of € 50,000, then there will be two if there is a loan agreement between the borrower and the bank property titles: the repayment claim of the private individual as a debtor to the bank and the repayment claim of the bank against the private individual as debtor. A direct loan between a private lender and the private borrower would have been written on the recording surface of the full capital body only as of the capital of € 50,000, while have been recorded by the intermediary appearance of a bank € 100,000. If more money capitalists now slip between the creditor and the debtor and thus insist on the credit relationship in iterative chainings with scheduled delivery deadlines and potentially constantly changing addresses (of claims), then an increase of the initial capital is created at each intermediate link. (Ibid .: 134) The multiplication of the fictitious capital or the title of second-order property is, of course, never identical with the productivity or increase of the material wealth, but which in the first place does not really matter in capitalism, because In the full capital corpus - and this with an all-pervasive, obsessive performativity - one first of all records the functions, parameters, variables, and configurations of the capital flows that constitute the continuous abstract wealth, and on that the creation of fictitious capital is direct and indirect Influence. However, the creation of fictitious capital, at least in terms of the form of credit money, does not lead to a doubling of initial capital, since the doubling eventually lapses as soon as the creditor's claim against the debtor ceases, either through the final realization of the creditor's monetary claims by the creditor-debtor or through his elimination from the credit chain, eg. B. by bankruptcy. In the case of the realization of the loan, the debtor repays the original amount of the loan plus interest, whereas in the case of devaluation the debtor proves insolvent and the creditor, therefore, has to write off his claims. (In the case of a stock corporation, the doubling of the money capital lasts as long as the company exists or until it repurchases the shares.) That this type of doubling by the creation of specific property titles represents only a limited increase in the money capital does not mean that it is here The level of money capital as a total complexion is something like a zero-sum game, which may simply be exhausted in the redistribution of existing funds. As long as a title (securities, shares, bonds, etc.) flows and is encoded in the distribution channels and networks, as long as it is neither 100% realized nor devalued, it increases its potential use as so-called productive capital just the same virtual wealth of a fictional capital and this as writing, whereby writing here always implies real wealth. According to Marx, capital is a so-called fictitious capital (we shall return to this provision), but as far as its function for total capital is concerned, its usefulness in terms of its usability differs from the so-called productive one Capital based on processes of production and exploitation in the »real economy« may nevertheless be the fictitious capital and again used to fuel the production of standard goods in industrial production. Even the state is able to provide "productive" financing of infrastructure, armaments and social benefits with government bonds, just as it can do so with tax revenues.

​Now, if more money transactions are constantly being linked to an existing series of transactions, or if the transactions are being transformed into securitized claims, the process of replicating cash flows in the form of quasi-postal procedures continues with the type of doubling of capital described above, so that with each new chain link a new fictitious capital arises. (See Lenger 2010: 196f./Lohoff/Trenkle 2012: 134f.) The integration of various money capitalists in the concatenation of money and payment flows, all of which include the relationship creditor-debtor, leads at least temporarily to the additive increase in the initial capital; money capital functions as a self-referential relation in these processes/streams whose code is profit / non-profit. Both current and code each have their own materiality - while the electricity is based on electricity, the code is stored as a script on hard drives, a script that also owns a virtualization, not with their coding, which today rather under the If the word "cyber" or "digitality" is to be understood, the circuit updating / virtualization (of the value) has always affected capitalist money or even credit money, because it can at least potentially and without regard to its digitization as securitize debt and then make its way through quasi-postal systems (Lenger) go, without that at certain points necessarily an addressee would be responsible, which breaks even in any financial crisis orbit. In this context, the fetish character of monetary capital u. a. in that money capital appears as a mere property of a thing, as a number or a script, or, in other words, the reciprocal relation of current and code appears purely as the rule of the code, or, to turn it again. The processes of the interaction between current and code produce new properties that appear purely as those of things /script/numbers (which they are, but not primarily). The digitization of money cannot, therefore, be equated with virtualization (which can theoretically also be analogous); on the contrary, virtualization defies any superficial fetishization, if one understands fictional capital not only as quantities but as vectors of the capital movements circulating current-virtual (and instantaneous) to at least potentially multiply to infinity. Although virtual circulation with its features of magnitude, flow, and code remains inscribed as a continuously updating variation in the digital processes (which process with discrete units readable as numbers), it is by no means equated with the latter the Z. Arthur Kroker, for example, who consequently sees capitalism disappearing into the simulation space of digital technologies. (See Kroker 2004) As a pure vector of circulation, fictitious / speculative capital means, and a rate constantly fluctuating in magnitude and direction (scalar magnitudes or differential vectors) and deterritorialization, and it is not surprising that the highly-paid research teams in finance work with scaling laws and power distributions to describe, for example, the volatility of prices and prices of securities to the analysis of abnormal probabilities and extreme events, but with less focus on factors such as profit maximization or asset optimization than on the fluid integration of all essential elements (including the actors) in money flows within and in networks, by the computer statistical Time series can be calculated in which, for example, the actors should behave analogously to the movement of securities prices and stock indices.

There is no question that credit is broadening the competition between capitalist companies with each other, which is far from affecting, as we will see, the division of profits into entrepreneurial profit and interest, and thus the division into functioning and interest-bearing capital. The borrower, when acting as the embodiment of the performing capital, has to direct his investments and projects per se to the future, which, however, the lenders finance only after an accurate analysis and evaluation of the profitability implied by these investments. And this procedure also means that in the future, the borrower treats returns and profits that are already available, and thus, within the loan relationship, payment entitlements and promises actually mutate into capitalized means of payment on both sides: Compared to a precisely fixed interval in advance, the debtor already has a sum of money to help him realize his business in the future, while the creditor arranges receivables which he already calculates as growing financial wealth (during the task assigned to him or her remains to generate additional money under conditions that have signed the two actants of the lending business as a fixed fact.) ​And finally, the quality of the debt always depends on the possibility of insolvency, because it appears non-stop that the risk is realized for the lender in a form that the borrower can not repay the borrowed money, so the careful examination of the Financial status of the borrower by the lender as well as the provision of collateral by the borrower today are the non plus ultra of the credited ability to work.

translated by Dejan Stojkovski

taken from:

by Achim Szepanski

​The 9/11 event gave the governments of the leading countries the unexpected opportunity to place security as an absolute priority of their policies. Increasing inequality in income and wealth distribution, the dismantling of the welfare state and the increasing dependence of households on loans have been drowned out by the security campaigns of the states, while at the same time there has been some softening in the consolidation of budgets, because more of them are in the institutions national security should be invested. This had to be followed by further cuts in the welfare state and further easing of households' access to credit. As mortgage lending increased to some low-income earners, the growth of bad debts inevitably increased.

​The so-called privatized Keynesianism by increasing the issuance of consumer credit led on the one hand to the fact that these loans were fed into the processes of securitization and the creation of synthetic derivatives (CDO), on the other hand, resources were freed up for the development of the security state. This expansion was then not only due to the need for an anti-terrorist war, but also to the so-called refugee problem, which was quickly accompanied by the militarization of the external borders and the tightening of asylum laws in Europe and the United States. Whereas, before the financial crisis, the projects of the governments of the leading countries were even more geared to supporting certain sections of the population in their quest to increase the value of their human capital, thus, after the financial crisis, the austerity policy intensified and the state turned on a massive scare against refugees.

​As a result of shareholder pressure and emerging globalization, large companies began to outsource parts of their activities as early as the 1980s (through subcontracts, temporary employment contracts, and foreign direct investment), but there was also an internal reorganization of companies. The company has been replaced by a modular organization that contains relatively autonomous components concentrated around projects with a limited period of time and is now giving birth to a precariat whose members have access to fixed-term jobs, with no prospect of social improvement. However, on the part of those affected, they quickly realized that flexibility and availability should become the basic conditions for further dreary employment.)

Feher comes at the end of the book a little more detail on the Share Economy and the fighting on their fronts to speak. In contrast to the classical liberals, who see the market as a neutral space where traders and customers freely execute their transactions, the reality is different, because the digital interfaces that are today called platforms control and monitor the work all at once new labor market and set the number of service providers. The drivers Uber allows to pick up passengers are under strict control and are forced to follow the platforms' algorithms. The routes they take are dictated by the GPS, while their efficiency, availability, and interaction with the passengers is the subject of constant assessments that determine how, when and where the driver is used.

The drivers do not act as employees but as private contractors. Far from offering an alternative to precarious work, platform service providers commute between conditions of wage labor and the risk of self-employment, as well as depriving the platforms of any social security contributions. For many theorists, the big platforms are nothing but interconnected commercial contracts between a "principal authority" that can sign contracts on behalf of the company and a multiplicity of agents that value the company's capital. The platforms thus multiply partnerships based on purely commercial encounters and offering services without regulated employment contracts. (However, a number of companies in various industries are still unable to produce without employing hired workers.) Providers of services using platform offerings are affected by the repression of wage labor, but also by those with their accompanying guarantees. Thus, they seem to represent the epitome of neoliberal subjects.

​Ultimately, however, they are not dependent on their own work, but on their involvement in a network of connections, meaning that the exploitation of their labor resources and their risk management depend on the credit that they must necessarily accumulate. Promoting their self-marketing skills requires constant positive feedback from customers, which are reflected in scores, likes, friends, and followers, and tweaking those ratings is the first thing to do. The accumulation of "reputational capital", which must necessarily include an efficient credit score, serves to gain the trust of banks and insurance companies. The sustainability of service providers' operations depends much more on sponsor approval than on the entrepreneurial ethos or human capital claimed by neoliberal ideologues.

On their web pages, where providers and customers can connect, the platforms assign their users a specific set of continuously valued assets, which they must combine, move and manage as part of their "reputational capital". Some theoreticians in the management of "reputational capital" already see a major resource that the actors have to manage and cultivate in order to ascend or simply survive. Everyone will eventually have to run a Facebook hyper page that lists various referrals from friends, mentors, lenders, sponsors, customers, and service providers. These open, algorithmically designed portfolios, according to Feher, make it possible to express a person's attractiveness and trustworthiness, determine their reputational value, and thus demonstrate their ability to perform a task, line of credit, or partnership. The private asset managers must now speculate on their own "reputational capital" or follow the speculation of others on it.

For the Resistance, this means combining the social safeguards still enjoyed by wage laborers with the autonomy that users of platforms possess to develop new win-win strategies. Therefore, in the precarious battles, it is not enough simply to demand the status and safeguards of wage laborers, but to try to take over existing platforms or to found new ones in order to introduce new rules and games. In counter-speculation files, the conditions of valorization of assets and credit allocation (by governments) must be fundamentally changed. The early trade union movement has often argued that, because of the validity of the law on the tendency of the rate of profit to fall, the struggle for higher wages implies a moment beyond the safeguarding of the workers' costs of reproduction. And if Uber & Co's service providers go to court to acknowledge their activities as pay-based employment, the strategic concern is not primarily to sue for the status of wage-laborer, but the collapse. These brands and platforms, whose model is to attract independent contractors and generate returns from them. The battles of contingent platform workers are still in their infancy.

The new neo-liberal strategies, which rely on the integration of debtors into the financial circuits, allow increasingly nationality, race and flexibility to be considered as criteria for evaluation, thus opening the door to a new populism. The propaganda of the free movement of goods and capital, and to a conscience moment also of the people, which allegedly leads to a peaceful international community, assumed that it comes to hybridization of knowledge and skills to the successful competition under the observation of investors. Meanwhile, the governments propagandize no longer fear a world without borders. Instead, allegedly, border controls are being tightened daily due to terrorism and unbridled flows of refugees, economic patriotism is ramping up, and local people are being asked to recognize their national identity as a valuable part of their human capital. Without even the slightest effort to regulate monetary capital movements, governments are attempting to ignore the popularity of their policies (due to governance, which is mainly concerned with the stock market value of companies and thus an asset that markets can speculate on) by appealing to the fear of "migratory invasions" and increasingly to the restoration of trade protectionism. Governments' efforts to increase the per capita value of a nation's human capital serve to create governance that satisfies the interests of financial investors, who are concerned only with the usability of their assets. The own territory must be woven by the governments into a financially-friendly climate, in order to be able to spend government bonds for a not too high interest rate, and for that very reason also the austerity policy must be continued necessarily. At the same time, the productivity of their own populations must be mobilized by increasing flexibility, skills and availability, criteria that make a population financially attractive.

translate by Dejan Stojkovski

taken from:

​by Achim Szepanski

In the mid-1970s, Fordism, which consisted of class compromise, full employment, rising social security, and higher educational opportunities for youth from the working class, reached its limit, and now also women, migrants, and guest workers were more heavily involved in labor markets. At the same time, investors took advantage of the new financial opportunities made possible by the liberalization of currency trading, the liberalization of oil prices and the development of new derivative financial instruments. Conservative governments, Thatcher and Reagan, chose new priorities: the fight against inflation became more important than ensuring full employment, and supply policy was more important than Keynesian demand stimuli, which led to a stagnation of real wages and the gradual dismantling of the welfare state. Instead of tax increases or the printing of money, which serves to guarantee state financing, the system of state indebtedness has been forced and the private debt has been "democratized".
​
Debt became the new social-economic engine to set economic growth in motion, which in turn meant debt was now more tied to the fluctuations of the financial markets. Although the concept of self-responsibility has been preached ever more massively, it has become relatively clear to borrowers that the new concepts do not lead to financial independence, but rather generate potentially infinite dependence on the financial markets.Borrowers should no longer escape the spiral of debt in the future, but rather constantly create a kind of trust through their risk management with the lenders, so that they could again borrow. Supposedly, this was a win-win situation in so far as the consumer wishes of the many were fulfilled and at the same time the portfolios of the lenders were filled to their satisfaction. But as the latest financial crisis of 2008 showed, neither the promise to borrowers to at least finance the lifestyle of the middle classes through credit, nor the profit expectations of the lenders were fulfilled to their full satisfaction.

If credit functions as a new engine of capital accumulation and a social control and disciplining mechanism, then new forms of resistance need to be considered, with union struggles being able to be linked with debtors sharing common interests and, at the same time, the Submission to the strategies of the lenders to delegitimize. However, indebtedness can not be understood by the subaltern as a weapon, as long as they regard debt as a moral problem. In addition, debt should not be reduced solely to the asymmetric relationship between the lender and the borrower; in addition, the triangular relation between lenders, governments who finance their budgets through loans and citizens,

​After the financial crisis of 2008, it quickly became clear that there was a symmetrical inversion of the »roles«: taxpayers became lenders for systemically insolvent creditors. The austerity measures that hit the population finally made them the lender of last resort. However, the financial institutions immediately went on the offensive and spread their fear of the bad conditions of the accounts of their rescuers in their departments.And since that also affected the states, governments had nothing better to do than dramatically reduce resources for social programs and services. By making fiscal consolidation its main task for ensuring confidence in the financial markets, governments have not only shifted the transfer of funds to the rescue of the financial system, but made the taxpayer to a third player who should take over the refinancing of the banking system in the event of a crisis for all eternity. For the taxpayers themselves, this meant borrowing on the basis of cuts in social benefits, and precisely for those who were just saved by them. So, after the crisis, you quickly went back to the "normal" relationship between creditors and debtors.
​
The speculative attacks on financial investors from 2010 onwards, especially against countries in southern Europe, gave rise to new messages: austerity policy should no longer be a temporary cure stemming from exceptional circumstances; rather, it should be a constant of the state Government policy. In doing so, the social state is directly linked to the form of the debt-state. And if social debt is related to financial debt, then it depends on which debt governments give priority, and governments' answers to that are clear, because legality over financial investors is always paramount.

The various roles that citizens play in their credit - borrowers, lenders of last resort, social borrowers - should, according to Feher, become the subject of political appropriation by activists. As borrowers, activists should be concerned about non-fulfillment or transformation of their payments, as lenders of last resort they must engage in state debt policy and, as social borrowers, they can attack the policy that places their priority on financial investors and at the same time rely on a restructuring of the welfare state, are the illegitimate beneficiaries of the financial resources of the hard-working taxpayers. Conversely, neo-liberal policies assume that union members, some public officials, and above all the unemployed, are the illegitimate beneficiaries of the financial resources of the hard-working taxpayers. The neo-liberals are waging war for a new form of equality by attacking those who allegedly plunder ordinary taxpayers when they claim social rights. At the same time, they began early to empower citizens who were deprived of their social rights and services to lead a life without secure jobs and state benefits on their own responsibility.​ ​The task of the neo-liberal governments was to help citizens to help themselves. The denunciation of the unemployed went so far as to equate them with alcoholics and drug addicts who are unable to live a decent and orderly life.

​In Germany, this led consistently to the Hartz IV laws introduced by the Greens and the SPD, advocating the needy that they should be proud to no longer be dependent on state social benefits while being placed in precarious, underpaid or jobs which lay far below their qualifications. At the same time, they mobilized the unemployed and led them into state exercise and training programs that are often barely surpassed in meaninglessness, and prescribed working people's lifelong learning program. Even those who were totally deprived were told that they were capable of accepting the so-called self-enhancement, if they only had the necessary flexibility and willingness to work, i.e. beyond a substantial portfolio of knowledge and skills, they should agree to work as long as possible in conditions of maximum insecurity and for low pay, and that would encourage the necessary respect for one's own and recognition by others. In particular, social democratic governments in the 1990s, under the label of creativity and ownership, supported the transformation of large parts of the population into debtors who, through the credit card system and easier access to credit, were allowed to integrate into the financial system and surplus In order to create a reasonably "normal" life, not only the potential for employment but also one's own solvency had to be taken into account. Whether it was a short-term job, a mortgage loan, or taking part in any start-up initiative, it was about creating a new "investees" that worked around the clock, trusting and crediting for Investors and companies, that is, constantly looking for new projects. Therefore, he differs from the typical wage worker in Fordism, who lived from long-term employment contracts and state social benefits, but also from the original self-responsible entrepreneur of small capital x. If the investees are responsible for increasing their attractiveness in the markets themselves and are constantly testing their employment capacity and solvency, then governments must strive to invest in the education and training of their citizens, at least to repay their loans In addition, they should also be trained for future payment. At the same time, unemployment insurance must be transformed in such a way that the recipients of social benefits are permanently driven into return-to-work programs and made fit for credit. Social democratic governments in the 2000's need not only reduce capital and corporate taxes, deregulate labor markets and safeguard intellectual property rights, they also need to be financially attractive in order to make state territory attractive to financial investors Estimate the value (the credit potential) of one's own population. All of this applies to territories that are political areas and have been composed of terra and terror since Roman legal principles.

translated by Dejan Stojkovski

taken from:

by Achim Szepanski

​The restructuring of the taxing state towards the debt state has two consequences: On the one hand, institutional investors (pension funds, insurance companies and hedge funds) are always anxious to keep their investments safe in their investments such as government bonds, on the other hand allow the money flushed into the public purse funds certain governments to maintain state services, even though citizens were warned as early as the '90's that the welfare state was no longer sustainable and needed to be transformed. The combination of a growing government loan and a simultaneous reduction in taxes quickly led to growing deficits in government budgets during this period, which in turn worried lenders. The governments had no choice to use an increasing share of their debt repayment budgets, which further limited social services. As the growing deficits also increased interest rates on government bonds, an additional way had to be found to at least slow down this process. This was to encourage households to follow states in debt policy and to finance ever larger parts of the cost of reproduction by borrowing. Citizens should, as far as possible, go into debt themselves. Facilitating the conditions for private borrowing has thus become a means of keeping taxes low,

Even the financial crisis did not significantly change these states' policies. In addition, massive state deficit spending saved the banking system and deported costs to the populations by increasing austerity measures while still encouraging private debt. While government bond issuance should compensate for declining tax revenues, consumer credit has been used to limit the growth of the government deficit. Wolfgang Streeck speaks at this point of the transformation of the debt state in the consolidation state, but the consolidation is so far hardly successful, so that future generations can not be easily freed from the systems of debt. The bailouts of the big banks confirmed this once again. The "too big to fail" policy continues to focus on private investors, leading to three trends: lowering capital and corporate taxes, disrupting social programs and public services and making labor markets more flexible.

​The governments of the developed countries still prefer one policy of increasing the economic attractiveness of their territories, which operates under the heading of compulsory property, whereby private lenders can buy and sell government bonds in the secondary markets at any time, so that the pressure on governments, in contrast to the selective pressure that voters all four years of participating in the elections are a continuous one. While opinion polls are always oriented towards the next elections in their polls, investors' "moods" are the object of permanent evaluation, or to be more precise, permanent anticipation. The slightest sign of market skepticism can affect the capacity of governments to issue more government bonds and thus also limit the resources of politicians to be re-elected.

But because voters cannot be completely ignored, politicians - living caskets - point to the exorbitant costs of applying to social programs, refugees and public infrastructures, and ignore the question of falling taxes on capital and deregulation of markets,

The advocates of a left-wing policy, which rely on the restoration of democracy and national and state sovereignty, point in this context again and again that the growing xenophobia is a result of deregulated financial markets, globalization and not least the un-elected supranational bureaucracies, The citizens would feel powerless and abandoned to the state, and in order to reduce the xenophobic mood among the citizens, it would be necessary for particular to restore state sovereignty and control over households and budgets. This kind of propaganda for a sovereign nation-state has always had difficulties to set itself apart from right-wing populist positions, the free flow of goods, capital, but especially from migrants to their countries. Since their phobia of foreigners is more coherent than left-wing populism, which desperately seeks to separate between xenophobia and protectionism directed against parasitic financial capital, ethnocultural nationalists can far more effectively enforce their border-closure policy.

But because voters can not be completely ignored, politicians - living caskets - point to the exorbitant costs of applying to social programs, refugees and public infrastructures, and ignore the question of falling taxes on capital and deregulation of markets ,

The advocates of a left-wing policy, which rely on the restoration of democracy and national and state sovereignty, point in this context again and again that the growing xenophobia is a result of deregulated financial markets, globalization and not least the un-elected supranational bureaucracies. The citizens would feel powerless and abandoned to the state, and in order to reduce the xenophobic mood among the citizens, it would be necessary in particular to restore state sovereignty and control over households and budgets. This kind of propaganda for a sovereign nation-state has always had difficulties to set itself apart from right-wing populist positions, the free flow of goods, capital, but especially from migrants to their countries. Since their phobia of foreigners is more coherent than left-wing populism, which desperately seeks to separate between xenophobia and protectionism directed against parasitic financial capital, ethno-cultural nationalists can far more effectively enforce their border-closure policy.

​Wagenknecht and Co. are trying to counter this by saying that stricter border controls are in the interests of local workers and employees, as this would prevent the influx of cheap labor, while at the same time referencing capitalist globalization as a source of refugee flows. However, this argument reinforces the impulsive policies of the rightists, who are quite capable of accepting criticism of imperialism for its protectionist and isolationist perspectives. However, protectionist ambitions are repeatedly disappointed, as the financial investors who trade government bonds are themselves exempting the efforts of newly elected governments to regulate capital flows and strengthen the control of credit institutions. anticipate and speculate on the prices of government bonds, yes, even countries can drift into ruin. Governments elected to restore state sovereignty are being penalized by the financial markets and, in the end, are themselves strengthening restrictive measures against the people.

An alternative to this rather helpless policy is to challenge the pre-emptive power of financial capital and its crediting strategies by attempting to occupy the functions and timelines of the financial markets themselves. To do so, one must break with a policy that seeks to create a safe haven in the state against the attacks of financial capital by relying on well-tried policies such as elections, demonstrations and similar actions. At this point, Feher points to movements such as 15-M and Occupy, who wanted to give their exit a vote with their occupations of public spaces, but also of banks, although for various reasons, these movements were doomed to failure.

Interesting in this context is the debt strikes that have emerged from the Occupy movement, initiatives by Rolling Jubilee and Debt Collectivein 2012 and 2014 were set in motion. Above all, these campaigns involved massive student borrowing through borrowing, with activities related to financial assistance and the elimination of individual debt and the mobilization of a larger number of indebted students to initiate political activity conduct. The student loans track a larger proportion of students today for the rest of their lives. In contrast to companies, students in the US can not declare themselves personally insolvent. The student loans whose repayment is uncertain (here mentioning the future precarious employment as well as the devaluation of the university degrees), They are bundled into loans and securitized and are rather poor investments in the eyes of the portfolio holders. Crowdfunding was the reason why the above initiatives tried to generate funds to buy these declining collateral. These were then burned in a symbolic act.

translated by Dejan Stojkovski

taken from:

by Achim Szepanski

​Nothing exemplifies the constitution of the market and motivations today more than speculation. The drive to permanently generate this type of derivative bet, which has marked the Euro-American financial markets since the 1970s, would never have been able to circulate in these vast dimensions unless there was a specific derivative framework: a real social entity whose realness is felt and known because it conditions, frames, orientates and channels the motivated actions of the actors.

​The question is how did we arrive at this collective belief in this type of totality, which is seen as a template for the creation of specific markets. How does the financial field produce and reproduce the collective agents? And how does what market actors do create a totality called market? Standardizing and formalizing stakeholder practices is one of the key strategies in the markets they use to totalize themselves.
​
The stronger a market is institutionalized, the more visible it becomes in public. Traders can compete, assimilate, and quickly respond to the volatilities of bid-ask spreads and price fluctuations in this space of operations, which the market itself is, because it has ever adopted the market as a (naturalized) totality have assumed. The traders see an analogy between what they do and a professional athlete who, if he plays the game, must accept the totality of the game and have to rely on his deeply inscribed sensibilities to play the game well.

​How can the derivatives market be problematized? How to estimate the contingent transactions carried out by the actors, the completion of which is predicted by the collective assumption of the existence of a market which produces the transactions by means of these realizations? The dynamic recalibration of derivatives requires a socialized subjectivity, which consists in the belief of market participants that there is a totality called market, even if it is only accepted as an abstract space for calculations that stimulates their motivations and even traverses their bodies. The derivatives markets have no tradition, they are the result of historically singular inventions whose existence can not be separated from the provision of liquidity.
​
A derivatives market must shape and use its own principles of formation. It must now be clarified how the ritual, which is inscribed in the social relations of buying and selling, performatively objectifies the derivatives market. This performativity is necessarily prospective in sending bid and ask prices (which uses liquidity), but retrospectively in the execution of a trade (which uses the counterparties and the new price movements). Therefore, the market and its determination must be understood both as a system / totality and as a work / practice of reflexive actors. A market is a specific social space designed for specific modes of actor practices, ie behaviors (the use of speculative capital,

The burning question here is why economic determinations entail, at least for a time, markets that are regular and rational, but only in part, insofar as rationality is repeatedly replaced by periods of heightened (irrational) volatility, sometimes so high that that liquidity evaporates and the systemic mistakes of the markets emerge with all consequence. So why are the regularities of the markets so often irregular? (It is also important to point out here that the market is not an object category but a set of social relations.) Ignoring this, as in the prevailing economic theory, the naturalization of the market, so far relational categories as Object categories are treated, a kind of ontological error.

After all, there is a form of performativity in and with which every market participant imagines the market, like all others. The technologies used in the financial system, from high-frequency trading to learning algorithms to mathematical models, have the effect of obscuring the market-ridden social, which serves the reproduction of markets, and at the same time the sensitivity of market participants to increase their ability to make an objective and quantifying assessment of their behavior. The objective character of technology becomes a simulacrum for the autonomous and objective nature of the market. The technology connects the actors in such a way that they understand the technology itself as the epicenter of their social life. Mostly it is then assumed that you have no choice but to sit for hours in front of the screen on which the charts, curves and trades flicker. Overall, this is an anonymous socialization. And this involves an existential performativity, the attribution of a very specific socialization, ie a mutually expected repertoire of beliefs, desires and strategic judgments that affect the market and behavior of market participants, especially with regard to counterparties whose self-representation needs nothing more than that electronic trace of a trade on a screen. Market participants assume that these structures are reciprocal and recursive insofar as the others would shape their behavior in the same way as theirs, no matter how anonymous the others are, even with the fact that the transaction that appears on the screen is computer generated. It is simply assumed that the trading programs reflect the intentional intentions of actors. The trading programs and ideas of their programmers, like the traders' views, have a general and standardized utility value that traders use to create exchange values ​​and profit.

​It has often been stated that market participants reiterate and personalize the market and also describe market movements through a series of metaphors, but what is crucial here is simply that there is a discrepancy between an abstract, anti-social agency and an everyday one Space of traders in which the transactions and their benefits are to be maximized, here the social totality called market is assumed. It is about how concrete financial relations in all their social specificity produce and reproduce a social imaginary totality. This is the market as a means for the rational, utility-maximizing agent. But such a market has never existed because the actors have to adopt intelligent and institutionally coordinated concepts and dispositions in order to be able to survive in the markets at all. The markets are organized on a systemic level, they are necessarily more and different than the sum of their individual parts. One can not grasp the systemic characteristics of the markets by merely analyzing the actions taking place on the market. It is not true that the individual actions of the actors are unimportant, but precisely because they produce a different dimension of social reality, they presuppose a certain socio-economic structure of the market and the imagination about it. 

​The speculative ethos is fueled by those who, as competitors and entrepreneurs, sometimes even creatively counter the uncertainty and transform it into risk to make a profit. It preserves its logic, practicability, and coherence from the fact that the culture of financialization determines the speculative character that consciously and often enthusiastically makes bets in order to capitalize and symbolically be more than just a star to many. For derivatives traders, the speculative ethos releases an impulse that directs all their immersion and sensitivity towards the market. The ethos mediates between speculation as an abstract principle of derivative markets and speculation as a practical matter for participation (as an exchangeable sensibility).

Machines, models, laws and the positions within the companies, ie the techno-economic assemblage determine the machines of the trading and convey the expressions of the trader's speculative impulses. This assemblage, in its self-referential function of channeling and limiting the impulses of the traders, first makes the centrality of the ethos recognizable. Derivative speculation represents a new way of dealing with uncertainty that calls for an ethos to assess and valorise speculation.

A high level of speculation is always related to the profitability of volatility, as long as the uncertainty in the markets does not allow liquidity to evaporate. Speculation is not afraid of a god, but of the absence of buyers. The participation of market players, bets against each other, and the definition of competence and competitive success that can be measured by the quantifiable measure of money, all overstate what LiPuma calls the speculative ethos.

The concept of ethos also refers to sensibilities and dispositions that are deeply embedded in people, that are definitely part of their being and behaviors, that eventually they are inseparable from this being. The ethos by no means elicits a certain kind of behavior in a mechanistic manner; rather, it is a collectively held and collectively circulating attitude that presses for economic actions that exert gravitational pressure on the agents, but which are always the subject of various influences. To a certain extent, the speculative ethos is also a lifestyle that expresses certain dispositions and qualities in order to act in a certain way. just by communicating the relationship between the structures of the financial field and the possibilities of an event. With the collective advocacy, it uses itself,

Speculation has two time-related signatures relating to risk: there is an intra-temporal dimension that consistently maps risk to product creation, movement, and marketing, and there is an inter-temporal dimension to continuity the systemic conditions necessary for logistics, production and markets. Speculation can exist in both time registers, which in turn correspond to two spatial registers: that of risk, which affects the entire social life from work to play, and that of the competitively organized risk on the derivative markets themselves. If so, the risk a central position, then there must be a speculative ethos.

​Derivative speculation, based on the abstraction of risk, represents a new stage of insecurity that calls for an ethos that assesses and valorizes speculation: to the point where risk appears necessary, objective, and impersonal. For traders, speculation lies at the intersection of a culture of hard work, mathematically calculated risk and return rates, the ability to price nuanced derivatives, and the willingness to take extremely risky risk betting. The traders leverage enormous pools of nomadic, opportunistic and speculative capital. Interestingly, the speculative ethos often hides behind itself, inasmuch as the assumption of derivatives markets is widely used as rationally regulated and calculating machines, thus forgetting that trading in derivative markets is a practice in the most elemental sense of the word. It is always a collective excess of trust in the game as well as the belief of market participants, it would be at every single transaction for the possibility of their lives. Speculation, on the other hand, is more about collective rather than individual behavior, in that monetary risks are taken up by individuals only insofar as they presuppose that others do as well and that there are always counterparties that respond to certain offers from specific actors,

Today, on the one hand, commodity relations and conditions of reproduction (houses, health, education, etc.) are becoming increasingly financialized, on the other hand, the rise of derivatives markets and the forms of abstraction, logic and motivations that they generate. Houses were transformed into financial assets before the financial crisis of 2008, yes to underlyings. The speculative ethos transformed itself into a new class of assets as the owners learned that their homes themselves became bridges, transforming the status of what we are now into what we will be in the future.

​The question is why at a certain moment in the history of capitalism the speculative ethos became mainstream. The subjects are presented here as the embodiment of a self-fulfilling prophecy through new means that evaluate and valorise the subject. The speculative ethos constantly induces and promotes confidence in the markets. The speculative ethos that traders perform is the product of the embodiment of a field, notes LiPuma with Bourdieu, that is, the introduction of market structures into strategies and practices. The subject of speculation oscillates constantly between the statistical calculation of the sciences, the transcendental quality of a species of financial instruments, and the regularity that market participants produce by immersing themselves in the market itself. So it looks with the risk, which initially appears as a statistical calculation, for example, in a portfolio at-risk. The mathematical calculation defines the level of speculation in a portfolio to predict the maximum cost of losses. The risk is thus an important characteristic of certain financial instruments. This transcendental view has its equivalent in assuming that finance can control and quantify the risk through formal equations. To think that quantitative measurement encompasses the speculative fully, however, would mean moving from the model of reality to the reality of the model. 

For this it is necessary to deconstruct the semiotic hierarchy present in the speculative transactions. Every speculative bet begins with a character or an instance. It's about how the difference in the derivatives makes a difference. You can not identify and manage the risk by looking at a singular event, you have to type in the event or sign. To make a calculation, actors must accept the character with Peirce as the "indexicol icon" of a type. And the relation between character and type must be transparent, so that, for example, a currency swap can be parsed with a mathematical model created for swaps. In addition, the mathematical derivation of the pricing of derivatives requires the idea of ​​an efficient market as a totality. The provision of a closed, safe and efficient space called market separates the forms of risk from their generative contexts, so that, for example, political events that influence derivative price movements can be treated and mixed with other market-oriented risks. This type of de-contextualization allows actors to bundle incommensurate risks and to price them out, which LiPuma analyzes in several sections as an abstract risk. If one assumes an efficient totality, then one can assume that all instances of the price models are "indexicals icons" of a type. A derivative, such as a currency swap, can model the projected volatility on the basis that the future volatility reproduces the past volatility of the relationality contained in the derivative (eg Dollar.Euro). The technology of risk is based on leverage and convexity; the object of speculation is the volatility function of abstract risk.

For LiPuma, the logic of speculation is three-dimensional. The first dimension concerns the social ontology within which each instance occupies a place given by the totality. Second, this logic shows that the agents can identify a risk position. The uncertainty is transformed into a risk, and at the same time the worldly sources of risk are identified, which aggregates various risks.

​The Trinity Event, type, and totality constitute moments of objectification, which in turn is generated to accelerate the processes of circulation. If there is an anchor in speculative capital, then it is the celebration of risk, measured in terms of the volatility of the derivative in terms of values ​​at risk. In terms of subjectivization, LiPuma refers to the habitus theory of Pierre Bourdieu and notes that the more symbolic capital needed for recognition in a particular field, the more specific work is needed to shape the career. The work transforms to the epicenter of the self. This is furthered by a view that equates the company with self-production. In the financial industry, a new regime of work has definitely been created in recent decades. There is a stream of work moving from production to circulation towards a speculative, short-term, morally indifferent and economistic labor regime.

The habitus refers to a reality in which the agents who inhabit a social field necessarily take on certain dispositions, sensibilities, value hierarchies, and generative schemata of thought through participation in the field. The agents embody the habit of the field in a manner determined by the simultaneity and incorporation of the cognitive and the physical. The financial companies are in a quasi-schizophrenic status; on the one hand they need collaboration, on the other hand they need competition and internally.
​
LiPuma speaks of a completely monetized subjectivity. It is about the evolution of a specific socioeconomic mode of work whose cutting edge, embodied in the derivative trader, lies in the creation and valorisation of a subjectivity based on the permanent acquisition of money. The important question here is how cultural and economic conditions create a specific structure of desire, with which money stands as a generative symbol of all other ambitions. How does the digit of money lead to an indexical icon that determines the self-esteem and self-image of a person, or how does it become the psychological trophy of a winning team? so that generating money becomes the sole motivation for work? The actors' desire for money and the belief that money is the ultimate, if not the only, object of desire that overrides all other motivations, seems rational, because the social history of finance is both desire (greed) and interpretation (animal spirits) naturalized and normalized. For those for whom the money is solely for their self, there is never enough money. What derivative finance has done is simply to valorize this mode of subjectivity by linking it to the liquidity of the market and speculation as a social good. There are three phases to the integration of habitus, namely the separation of agents from normal life, a tradition based on the embodiment of a new ensemble of ideas and dispositions, and the introduction of actors in new knowledge systems. The lifetime of employees now becomes part of the company and determines the desires and happiness of individuals. It is an unquestioned loyalty to the company and subordinated to the scheduling into a will, always be achievable, the smartphone as an "iron link" works that ties you to the job. At the same time, employees are barracked in their banks by, for example, creating in-house restaurants where they are isolated so that they only interact with each other. Company car services, which are sold as a privilege but at the same time serve to extend working hours, channel the geography of life. Friends outside the banks are replaced by those who operate within the banks. Most banks now block access to social media for their employees. The message here is that actors can only gain full monetization of their subjectivity if they stay away from social environments that might disturb their work.
​
Added to this is the creation of competition, which aims at nothing more than the production of profit, which reinforces the fixation on money as the sole measure of the value of self. The relentless focus on money normalizes and naturalizes this fixation. Here LiPuma sees a ritual embodied. Finance maintains the worldview that in the sphere of circulation all persons, like the assets themselves, are contingent and disposable. So people from the higher levels are constantly shifting, from banks to hedge funds, from governments to banks, etc. LiPuma describes the financial field as a Venn diagram made up of a set of circles of different sizes, Kriese, which are inherently permeable and overlap extensively.

In the financial organizations themselves, opposites prevail, so it may well be that the traders of a house bet against products that the brokers have sold to the clients of their house. Traders again see the quants as nerds who lack any spirit to trade. There is a volatility in these relationships themselves, the tension between a personification of a mathematical model known only to the rational agent, and the real-time trader, who collects information that the mathematical model does not hold, and who is hypersensitive to that Intensity and the magnitude of the wave movements of prices and volatility.

The financial field and the jobs in particular are institutionally related to the compression of time, as far as the deals are fabricated, carried out and realized under high pressure.

For those who are fully integrated into finance, completing one deadline at a time results in the clock and calendar appearing as an enemy, and once again exemplifying the compression of time. Companies program their employees to accept the speed of transactions without question, as an index of the value of work and of trust and subordination to the company. The temporal structure of the financial workplace guarantees that the players hardly have any free time, nor even their success, no matter what the quality of their performance. The central moment here lies in the exploitation of momentum, immediately followed by the liquidation of the momentum. This is not contradicted by the theories of animal spirits,​

translated by Dejan Stojkovski

taken from:

by Achim Szepanski

LiPuma examines in a further section the various institutions of speculative capital. The first area is commercial and investment banks speculating on the derivatives markets. These companies have in-house hedge funds that speculate on corporate capital, that is, shareholder capital, using leveraged strategies to increase shareholder value. Other players include the independent hedge funds, which benefit from the decline in long-term strategies and rising volatility in the capital markets. A relatively new player is the financial departments of large multinational corporations that are growing faster than the industrial departments and even speculating as non-banks in the money and capital markets. Then there are the companies supported by the US state, we Fannie Mae and Freddie Mac. They have huge sums of money, some of which they invest in their own hedge funds to accelerate the accumulation of their speculative capital.

(Chesnais characterizes the financialization with eight points of view: 1) The multiplication of capital as intellectual property. 2) Higher capital concentration. 3) Financialization of non-financial multinationals. 4) The duplication of the credit system by the shadow banking system. 5) The automation of financial capital in relative independence from the material conditions. 6) the valorisation of the money capital which he alone attaches to the notional capital, in relative independence from the industrial production. 7) The bonding of social life through money fetishism. 8) The subordination of work to the financial system.)

​Social life has become increasingly globalized in recent decades, fragmented and decentralized without the involvement of the state. Today the global order is like a derivative market, it is omnivorous insofar as it encompasses all possible forms of economy, with the circulation of financial capital as the hegemonic dimension. And speculative capital is the spearhead of global markets. On a superficial level, the circulating financial capital decouples entirely from production, but at a structural level, it also digs deeper and deeper into the processes of production and triggers crisis processes, creating a new way of producing wealth and circulate, through a transnational insurance machinery, which constantly redesigns the design and distribution of risks implemented in the circulation of capital. And this by means of a mathematical, statistical, digital apparatus and a specific form of knowledge that amounts to equating mathematics and economic reality. As a result, the financial models liquidate the point that separates the mathematical space as a platonic-ideal sphere from the social space. This is important insofar as the analysis of derivatives can not be separated from the production of knowledge and its circulation; indeed, in economic theory an objectification takes place which constructs the relational social objects as naturally occurring objects. 

​In order to discuss the social aspects of the financial markets, LiPuma examines the social and social institutions embodied in the dispositions of financial market players, such as hedge funds, the implicit socialities of derivatives themselves, and the social structure of trading practices. These are all objectifications of the social. The objectifications are present in socio-economic structures, which in turn are shaped by the financial markets: the derivative, the market, the logic of speculative capital, the financialization of households through debt, the emergence of risks as a social mediation, the existence of new forms temporality, an increasingly abstract form of structural violence, the dominance of circulation over production. The financial markets use all these structures, to monetize images, information, currencies and assets of all kinds. The social, organized by the socio-economic structures, is institutionally implemented in the competition of the actors. This competition refers to social status, conceptions of work, initiation rites, sensitivities and self - identity, fairness and images of emerging markets, speculative ethos, the way of life that is determined by finance, trust in others Mathematics and finally the immersion of a derivative logic naturalizing the history and the social. The more successfully speculative logic is inoculated into the habitus of market participants, the more they represent an unquestionable ensemble of points of view, generative schemas and dispositions,

​Finally, the financial markets are held together by asocial instrumental rationality. This is again based on the logic of abstract risk, which has crystallized in one number, that of the derivative price. The affirmative knowledge of the financial markets is condensed in the assumptions about the rational agents, in the unification of the information and the idea of the seclusion of a perfect market. For LIPuma, it is the "efficient market hypothesis," which basically represents what he calls "illusio," insofar as it serves as a prerequisite for scholastic analysis and as a breakpoint in the game in the financial markets. The Illusio refers less to theoretical inconsistencies than to certain forms of misjudgment.

​So LiPuma sees a structural similarity between the financial trader and the poker player, which consists in a socially generated greed, which counts only the money, and there is never a limit to the desire to continue to acquire money because this itself the means is to keep the game going. This socio-specific form of greed, which dominates the behaviors and thinking of market participants, is entirely based on the acquisition of money. There is a performative creation of the financialized subject through the permanent repetition of the act of acquiring money, driven by a deep-seated, unconscious compulsion, the appearance of which takes the form of an antisocial drive in the day-to-day practices of financial actors.

To further understand the social, it is important to consider the extraordinary gap between the economic models needed to model the market and the justifications for using those models. It is at this point the paradox to note that the financial economy, on the one hand, requires the investment and thus confirms the dependence on a set of financial models that are there to determine the risk (models that systematically embrace the forces of social insecurity) On the other hand, a performativity is needed, which is the prerequisite for the success of the models and the continuation of the markets. Thus the actions of the isolated agents are intrinsically collective. Trading in derivatives and speculation on their future value, Assuming that the agents recognize the unpredictable abstract risk are only possible for the agents themselves if they themselves take certain dispositions which in turn are related to plural forms of rationality (the maximization of profit, competitive dynamics, self-esteem, the speculative ethos, and even a certain nationalism). These dispositions, which convey every purchase and sale of derivatives and, moreover, the past with the future, are based on the relation between the organization of these dispositions, which are constitutive of the agent's habitus, and the structure of the possibilities constitutive of the financial field is at any time. The financial field and the specific markets need the cognitive and generative schemes, which the agents implement in their attempts to capture the field and the markets. The markets have a performative dimension for LiPuma that supports their inherent ritual embodied in social practices. The derivatives are thus to be understood as relational objects that function within the social imaginary of the markets. They exist only insofar as they are objectified in the practices of the agents and can also be interpreted as such.

LiPuma always strives to analyze a thoroughly monetized subjectivity based on the permanent acquisition of money throughout the text. This is peculiar to the relation between the markets and the market participants who are willing to play the speculative game. What really motivates traders to invest in the game is more complex than the neoclassical definition of an agent that maximizes its utility, or the popular notion of anthropologically-based greed.

​LiPuma is constantly taking up the subject of »liquidity«. Liquidity is more than just a metaphor for the monetary fluidity of the market, but rather concerns the capacity of the economy to circulate capital, ie the free-flowing circulation of money-capital is a necessary condition for the existence of the economy in the twenty-first century. Constitutive to this economy today is the circulation of speculative capital, as well as the use of new information technologies to shape and accelerate capital flows, and ultimately to advance the technologically supported production of knowledge, which market participants act speculatively and globally in their decisions, inform around the clock. Liquidity is often used as a synonym for social relations, which allow the agents to construct the collective enterprise that is the market: a market that always holds the counterparty for a contractor, a market that is homogenous and permanently provides the volatility that will allow the re-calibrations to occur necessarily for the continuation of the market. There is a necessary connection between the contingent and often unpredictable financial events and the construction of the market as a totality. The derivatives markets are necessarily dependent on liquidity.

​In contrast to traditional goods such as houses and other products, derivatives have no intrinsic value, they also have no ordinary utility value. For LiPuma, they are a zero-sum bet on extrinsic income between competing parties. It is imperative that market participants rely on the liquidity available in the markets and the pricing mechanism based on non-arbitrage. In the last financial crisis, liquidity on the credit markets has almost completely evaporated within a short time. The financial institutions hoarded the capital instead of investing, fearing that their counterparties might already be insolvent and hence the pricing of derivatives could be inefficient. Even the market makers were taken by the fear that the next financial event could already indicate the insolvency of the competitors. Market participants quickly lost confidence in each other and eventually in the markets themselves. First, deleveraging of mortgage credit and related derivatives took place in the US. Lenders suffered from the accelerating accumulation of non-performing assets that made their balance sheets almost meaningless, affecting a whole range of financial institutions, from hedge funds and insurance companies to government-sponsored organizations to mutual funds, their mortgage-backed derivatives quickly lost value. The specter of bankruptcy was swift and deep insecurity took control of the financial agents and their institutions. The financial institutions did not go bankrupt because of lack of assets and lack of capital, but because of a lack of liquidity. It was and should be remembered, the invention of liquidity-based derivatives that turned even houses into financial assets.

​Securization is a synthetic form of circulation that occurs through instruments based on calculating, controlling and capitalizing issues and variables such as interest rates, bankruptcies, currency risks and derivative prices. Derivatives are not anchored in production, but are grounded in circulation - in and through the flows of money, which in turn are related to liquidity. In the sphere of production, money is considered the general equivalent that measures the value of commodities, in the world of the circulation of derivatives that are realized in money, money is entirely self-reliant, with not only derivatives circulating self-referentially, but itself even the underlying is transformed into an abstract relation. As all market participants use a similar range of models,

Speculative capital has the effect of creating markets with rising volatility and higher risks. At the same time, the circulation of speculative capital achieves a degree of autonomy characterized by the invention of derivative instruments, the abstraction and transformation of uncertainty into quantifiable risks, and the proliferation of speculative capital itself. These processes are accelerating complexity and increasing connectivity, leaving financial institutions increasingly interdependent, although this is largely invisible. This "quantum interdependence," in which the fate of the individual is tied to the fate of the collective, is also a result of the trader's demand for ever greater liquidity. And this liquidity, in turn, allows for greater leverage, with the cost of lending based on the borrower's perception of how easy and efficient it can be to lend or compensate for default in the event of default. If the lenders have a positive confidence in liquidity in the markets, then the costs of leveraging the transactions fall, while at the same time increasing the potential for speculative capital. And connectivity, based on the collective trust of market participants in the smooth functioning of markets, will also increase. Today, 90% of the derivatives are traded on unregulated OCT markets, which means that they are not standardized products. 
​
In terms of time, circulatory capital perpetuates the treadmill effect. What can be rational in the short term for traders may be irrational and destructive from a systemic point of view. The structural dynamics of securitization chains are well known in other texts, resulting in the need to constantly increase the leverage of the portfolios by providing the money to finance the longer-dated higher interest rate CDO's by borrowing short-term funds with low interest rates. This was possible during the last financial crisis, because two cycles of leverage were interrelated: the homeowners leveraged their homes as financial assets and the managers their portfolios, whereby the two markets sewn together drove through the directional dynamics in a mutually fueled instability. If every high achieved in the various financial markets represents a new plateau from which speculative capital seeks to exclude the possibility of falling profits, then precisely this leads to the crisis as a systemic error, although it is repeatedly asserted by the various insurance companies that there would be no systemic errors.

LiPuma names three factors that were key to the financial crisis: Securitization strategies were inherently tied to a period of euphoria, from mortgage lending to derivatives. Since all systems in which humans are involved are intrinsically social, the potential for mistakes that the system contains can not be reduced to individual actions or dispositions of the agents. After all, the present capital economy is tied to the treadmill effect insofar as the pressure created by competition in the financial markets push capital ever closer to its own abyss. It also creates socially collective dispositions that direct the behavior of each actor in a particular direction.

The central argument elaborated by LiPuma in the section on the temporality of speculative capital is that the derivatives markets themselves are self-referencing a temporal progression that drives the abstract risk to a level where even small market turmoil is driven can lead to a systematic collapse. The tendency to instability, which induces the crisis, thus also builds on the temporal dynamics of the markets. There is directional momentum suggesting the increasing complexity and instability of the markets that LiPuma is trying to explain with the treadmill effect. Thus, the problem of time, namely the discrepancy between the abstract time and the time of the agents, must be addressed, times that are substantially different.

Some times indicate in particular the social in the financial markets. First of all, the historical trajectors should be mentioned, since financial economics have changed dramatically in their structures since the 1970s, when it comes to the invention of new financial products, structures and forms of speculative capital, which in turn is perceived by the actors as a speculative ethos be internalized. For LiPuma, the crucial feature here is the historic rise of circulatory capital as a coevolution of speculative capital, hedge funds and other genuinely speculative investments, and derivatives driven by abstract risk. On a granular level, this evolution involves a new form of temporality that extends beyond finance and its influence. There is a temporal dynamic in the financial markets pointing towards entropy, which indicates that crises are inherent in derivatives markets. However, the simple linear models still used by quantitative analysts can barely capture the complex and abstractities of financial markets.

After all, it is the temporality of the abstract risks that underpin and drive the financial markets. In order to generate profits in zero-sum game between two contractors (the profit of one is the loss of the other, on a microeconomic level), the direction of volatility dictated by abstract risk must be anticipated. Building on the consensus of market participants and the direction of volatility, which is influenced by certain components of the abstract risk, the profits generated in the markets depend on the prices being recalibrated in the desired direction. The actors give themselves to a narrative that tells that it is the derivatives themselves that would pay off. The derivative is identified as the agent, who makes the pricing and thus the social circumstances of the recalibration of price movements are hidden. In addition, it is ignored that the constant recalibration of the derivative takes place in the face of a flow of uncertain economic and political events. This temporal contingency can only be nullified if one assumes, so to speak, a completely pure arbitrage, but which is currently excluded from the models.

In addition to volatility or price fluctuations, time is one of the important variables that designs and defines the derivative contract. With their design, the derivative contracts are within a predefined temporal parenthesis. The financial economy reduces the temporality in the financial markets to an abstract and formal time, which is assumed to be reversible, secure, and a transhistorical logic of maximizing utility. However, this is in sharp contrast to the current practices of financial market players, which are constantly overwriting and discounting the temporality of mathematical models. Finally, LiPuma points to the temporality of jobs in financial companies. It needs to be analyzed as part of the investigation of the financial condition of the agents.

Derivative markets are inherently so fragile that their volatility often rises dramatically. Their cycles move with increasing levels of leverage (growing risks), complexity and instability. Derivatives markets are driven internally by the so-called treadmill effect, which also means that they become more and more unstable at the end of a cycle; they self-referentially create a temporal increase with increasing levels of abstract risk until the time when even small turbulences can create a systemic breakdown.

The more financial markets realize extremely high profits, the more speculative capital flows into the markets, thus fueling intense competition between financial firms, which in turn drives market participants' incentives to increase leverage. LiPuma calls this the pathological, progressive impulse of modern derivatives markets. The treadmill effect and its regulation lie at the center of the economy and the culture of financial circulation.

In October 1987, when equity markets, especially in Asia, were in free fall, LiPuma sees the treadmill effect in all its effects for the first time. He traces this effect closely on the basis of the Asian crisis: from portfolio insurance policies concluded to hedge (through options) the fall in stock prices to the collapse of liquidity in the markets (a mass of sell orders meets no demand more). The short positions should compensate for the losses on the stock markets. But as more and more futures contracts were sold, the treadmill effect began. The buyers insisted on a reduced price of the derivatives and thus increased the risk, and they hedged their long-term long-term contracts themselves by selling underlying shares. This in turn lowered security prices and initiated a new round of dynamic hedging. As stock trading subsided, stock index futures became unreadable or calculable, leaving futures contracts that were at the heart of dynamic hedging with no specific value. In such a case, restoring liquidity to the markets can only be achieved through external, that is, not market-initiated interventions.

The lure of derivatives trading is the promise that their return is much higher than that on government bonds or on investment in productive capital. As a result, more and more participants are entering the markets, increasing both the demand for derivatives and volatility through the introduction of extremely mobile speculative capital, euphemistically referred to as fast or hot money.

In these processes, copying successful strategies and ideas is a common pattern of market participants' behavior, turning a few lucrative trades into crowded trades. For individuals in the marketplace, short-term and competitive trading is perfectly rational, often copying simply the shareholder positions of such companies as Citigroup or Goldman Sachs, or high yields such as the hedge funds Green-light Capital or Citadel Mandatory Investment Group.

For the banks and financial institutions of large corporations, shareholder value is reflected in their companies' stock prices, with trajectories of those prices being recorded in quarterly reports and conferences. The decisive metric variable for the increase in shareholder value is the accelerating growth of the Revenues. This affects both the amount of assets managed by a fund manager and the rate of return of a portfolio. LiPuma sees three key characteristics for the structure of the incentive structures implicit in these processes: they are short-term, competitive, and completely saturated in monetary terms. Everything is centered around the short-term organized competition between participants in the financial field.

Today, lucrative dealings in the markets immediately attract huge flows of capital, with rising demand causing sellers to lose returns if certain market participants look for the same position. It is a feature of the financial markets that there is a time compression that makes the acceleration of trades thin the margins and returns of a company. The traders' response to this is that they increase their leverage, which in turn requires the bulk of traders to respond with the same strategies. An important point of the treadmill effect is simply that the progression of the market requires that market participants constantly increase their risk appetite. Unforeseen risks and problems can therefore lead to gigantic swings in volatility, that rock each other. These swings in volatility are exaggerated when high-leverage hedge funds rely on long-term paper such as mortgage loans, but they have quick money to invest at short notice.

What in this context can be rational for the actors in the short term becomes a problem for the market as a whole. Financial crises are not simply consequences of accidental outbursts, as Nicholas Taleb has assumed with his "Black Swans," but they are the result of a structural tension / disruption that is inherent in financial markets. At the same time external news can accelerate the crisis processes. The duration of the decline in liquidity, in turn, corresponds to the structural vulnerability of the markets, to which the highly leveraged derivative positions, which are particularly prone to accelerated liquidation, contribute.

Central to the temporal dynamics in the financial markets is the category of risk, because this is the essence of the specific form of betting, which articulates for the speculative capital with the derivatives. And this creates a social field characterized by the need for market participants to incorporate the risk structure into their habits. The systemic risk is then indicated in the loss of confidence in the solvency of the counter-parties and is realized as a mutual restriction of liquidity. A movement is set in motion, with which the realization of a certain level of profitability becomes the basic level of the time frame to which reference will be made in the future. No matter what happens in the markets, the systemic dimension of the risk, which is related to the market as a whole can trigger a crisis. This is the modus operandi of finance and derivatives, inasmuch as the risk is at the same time a concrete speculative and a socially generated activity that saturates the market with its systemic cohesion. The fall in prices of derivatives during a crisis is by no means due to a wrong price issue, rather the price of the specific risk expresses the temporality of the systemic risk. The wrong pricing indicates the internal structural condition of the markets powered by the treadmill effect. In doing so, two necessary tendencies, namely the need to increase risk and the need to keep the integrity of the market together are opposed. These two opposing tendencies produce an intrinsic-structural tension that is sui generis social and at the same time lies in the logic of speculative capital itself. This immanent logic does not mean that the market must follow a linear logic and collapse systemically, but it does justify the possibility of crisis processes inherent in the financial markets.
​
Structurally, the temporality of financial flows focuses on short-term, indeed on the short-term, that is just possible. This is also reflected in the permanent search for speculative capital for new arbitrage opportunities, a situation in which opposing positions neutralize the risks or the time lag between the start of the derivative position and the expiration date. These mechanisms set in motion the directionality and compression of time, whether in terms of derivative positions or the attempt to exploit speculative capital as optimally as possible.

It must, therefore, be stated that time itself constitutes a form of abstract risk. Or, to put it another way, time is a ubiquitous form of risk that applies to each type of derivative. In production, actors minimize externally generated risks by extending time horizons. By contrast, an inverse set of risk conditions determines the circulation. Since each derivative has an expiration date and the time period involved does not have an external referent, time is both a source and a quantifiable dimension of the risk. For speculative capital, minimizing risk means compressing or neutralizing the effects of time, and this includes factors such as volatility, market instability, and the emergence of contingent events. But this compression of time also has a qualitative effect: speculative capital generates an end in itself via the means of connectivity, the derivative; the derivative serves as a source of profits and one's own reproduction. The resulting culture and economics of finance bring forth new social forms such as abstract risk, new technologies such as the derivation of derivatives through mathematical models and new self-referential contractual arrangements. Factors such as self-referentiality, the compression of time and the monetization of risk generate the derivative markets whose construction of time maintains no necessary relation to the markets of underlying or about the temporality of the institutions, including the financial institutions. Speculative capital, through the means of connectivity, the derivative, generates an end in itself; the derivative serves as a source of profits and one's own reproduction. 
​
There are two different perspectives in financial theory on how to handle the future; firstly, an economic model that asserts that the uncertainty in the financial markets themselves has no future, since financial theory possesses the adequate tools and technology for effectively managing the future, and translating a future that is initially considered uncertain into a probabilistic model that effectively deals with quantified risks. The second view concerns the practical handling of the future by the agents in the financial markets. This concept is based on the habitus of the actors. Traders constantly override prices and conditions set out in the contracts in their practices, renegotiate and recalibrate the price,

The first concept, shifting the focus away from uncertainty to risk, has changed the infrastructure of theoretical knowledge over the last 40 years. Creating a speculative ethos that encourages stakeholders and institutions to take high risks is consistent with the assumption that there is some certainty about the future of the markets. The viewpoint inscribed in the economic models is that the temporality of derivative instruments is subject to scientific scrutiny because the derivatives have exact expiration dates and it is possible to predict fluctuating volatility.

The idea that the derivatives are immune to contingencies eliminates the historical and the social. However, it is the financial crises that repeatedly show that the derivatives markets are in environments of uncertainty. Uncertainty is a distilled and multivariable form, as opposed to risk as a measurable variable. But it is dismissed that the market model constructed by financial theory is identical to the model that the actors use in their practice, and that the model allows the actors to know and anticipate the future because the model is the risk mathematically correct. It is believed that there is a true price and there will always be antagonists in the markets that buy derivatives. For LiPuma, however, there is an extraordinary discrepancy between the abstract assumptions of financial theory regarding security in the markets and traders' experiences that are quite real in the face of great uncertainty in the markets. There is therefore a confused mixture between the model that designs economic reality and the reality of the economic model. Moreover, the universe of probabilities and their relationships is itself an unknown probability. and the reality of the economic model. Moreover, the universe of probabilities and their relationships is itself an unknown probability. and the reality of the economic model. Moreover, the universe of probabilities and their relationships is itself an unknown probability.

When examining the social aspects of the financial markets, the following crucial question arises: how can a market reproduce itself through the act of replicating the derivative? The analyzes of the financial markets forget too quickly that the market is not a simple setting in which the actors execute certain transactions, but a means or a framework through which the transactions of the actors are made possible. Common financial theories presuppose a market that by its nature has an ontological integrity that transcends space and time. Ayache has challenged this orthodox view of the market. For ayache, contingent events are continuously processed in the derivatives markets, which, due to their contingency, fall into the probabilistic models, which constitute the financial mathematics of the derivatives are not accessible. The derivatives markets are therefore themselves part of the derivative pricing theory, which neglect the traditional financial theories criminally.

With the standard mathematical methods, the singular financial events can not be recorded, but only interpreted later. Derivatives traders only need probabilistic models to go beyond them. Unlike the markets hypostatized by financial theory, current markets are constantly recalibrating prices. In fact, there is no price than the spread between ask and bid. This spread must be continuously adjusted if the markets even exist and want to remain liquid: the market price is the input in every conceivable price model and not the output. Traders are continually overwriting the market in ways that models can not capture. And this "rewriting the market" is anchored in the habitus of traders, which is the inscription of the constituent that structures the constituent. By referring to Bergson, Ayache can say that the reality of the contingent event is the reality of the market.

translate by Dejan Stojkovski

taken from:

In the last decade, debt has become a trend in academic research and in political debate, as well as the object of many elucubrations and absurd statements. Publications, analyses and, unfortunately, recipes – charlatans’ favorites – have multiplied. This new interest in the subject has been triggered obviously by the US 2007-2008 financial crisis, which originated from private debts and then spread to sovereign debts causing a dramatic downturn. However, as strange as it may seem, economists were not the ones to start the debate and to occupy the center stage. We have discovered that debt is a cross-cutting topic, relevant to all social sciences, from anthropology to ethnology, from economics to politics, to philosophy. The most engaging and stimulating contributions come from the fields of philosophy and anthropology. The common denominator of the majority of relevant studies is to understand  debt as the potential leverage for a new critique of capitalism. They are all limited in their research by this “prejudice”. The conclusions that this debate draws are predictable and trivial. They do not add anything to the understanding of present capitalism’s modus operandi nor to the retracing of the governmentality that comes with it. In most cases, they make it more difficult to understand the nature and the purpose of debt in modern economies. Nonetheless, we cannot avoid to consider these analyses, which often aspire to advance an updated version of Marxian critique.

taken from:

by Sotiropoulos / Lapatsioras

The rise of finance makes capitalist exploitation more effective but heavier reliant on market liquidity. When the last evaporates, the whole setting quickly disintegrates. In other words, the demand for more discipline within capitalist power relations makes the economic milieu more vulnerable and fragile. Financial instability in our contemporary societies is the unavoidable trade-off. In times of distress, the valuation of risk changes (for many reasons related to class struggle), the prices of assets collateral go down, market participants cut credit lines and / or raise margin requirements to defend against counterparty risk when most needed, and virtually the entire process price down.
​
pdf here ​

taken from:

by Achim Szepanski

​Here we present in three parts a preliminary report to the book The Speculative Capital , which contains the first comprehensive study of a new form of capital that dominates the economies of the 21st century. In this report, we often refer to LiPuma's book The Social Life of Financial Derivatives: Markets, Risk, and Time, an important text for understanding the current capital economy.
​
that is, the structures of the financial field are implemented in the agents' cognitive and generative schemata, which they need to be able to participate in the game of "playing" in the financial field. The real dynamics of the financial economy are based on the relation between the structure of agents' dispositions and the structure of the financial field and the markets themselves, which in turn are the result of a series of competitive determinations.

For LiPuma, there are three prerequisites for studying social issues in finance: an ontological premise, with the very study of the financial crisis showing that the Marxist and neoclassical theories, which both privilege the sphere of production, have themselves fallen into crisis. Connected with the centrality of production is a definite conception of totality, which today is replaced by the circulation and reproduction of capital markets, which relate the objectivity of totality and the performativity of agents to one another.

The second premise is epistemological: the categories lose their dialectic in favor of categories that represent a distributed economic field. The derivatives marked by spreads are relational spaces that allow simultaneous movements in different directions. These movements through time spaces appear in terms of time as the interval or times of evaluation characterized by speed, volatility and utilization. This mobile configuration replaces the usual immobile configurations of points and positions, agents versus structures. If you look at the economy from the perspective of spread or spread, then there is no harsh opposition between production and circulation, material wealth, and financial assets. Investment and speculation, because all concepts are mutually conditional dimensions of capital. This type of dissemination includes a specific implementation of the social, which in turn mobilizes a ritual to turn uncertainty into safety. After all, it is about an inherent understanding of the sciences, insofar as the analysis of the financial markets must be related to the methods and practices of the agents constructing such markets.

The derivative is not a thing held like a book in the hands, rather it is essentially relational, rather, it is a relation of relations. First, the relative volatility of the derivative relative to the volatility of the underlying must be mentioned in order to identify the derivative. The key to replicating the derivative, in turn, is its size and the speed of volatility. In a way, according to LiPuma, bet on the relation and play a tango with time. In a derivative contract, two contractors "bet" on what will happen to an underlying asset in the future, such as exchange rates or interest rates between dollars and euros. This bet is valid for a specific period of time, which is clearly defined in the contract.

For LiPuma, the derivatives markets are historically determined and at the same time arbitrary means of capital, with which the value is attributed a risk, whereby the derivatives markets somehow separate the circulation from production and simultaneously generate new modes of interdependence and connectivity. This refers above all to the fact that derivatives are not limited by the structures of production and are not dependent on them. Derivatives are sui generi's speculative capital-a form of capital that manages the fabric of nomadic and opportunistic capital that circulates on its own markets in a self-referential manner. The design of a derivative contract has no need in the first place, it has the intrinsic value of an instrument, linking derivatives as parallax, creating a globally fluid market for capital, synchronizing derivatives, and increasing leverage. The derivative is an instrument whose foresight for the future helps to create the future it foresees. This dynamic has a self-referential and relative dimension: the volatility of the derivative can implement the volatility in the underlying, which in turn increases the spread of the derivative. Without volatility no derivative is conceivable, that is, if derivatives do not circulate, then they are just worthless. In circulation, contingent events based on socio-economic conditions are reduced to, and thus naturalized, contextless risks, that is, discrete, independent, and liquid risks.

The derivative is a determinant form that can relate to all the uncertainties and insecurities in the world, it involves a speculative ethos that is constituted between a culture of calculation and the illegibility of opportunity. There is a specific duality between concretion and abstraction here. Because there are a lot of underlyings, there are hardly any limits to the possibilities of writing derivatives.

For LiPuma, the derivative is also a generic design scheme based on a time-related bet on volatility, on the division and recomposition of capital, and on the blending of variable and incommensurate forms of risk, ultimately resulting in an abstract number turn as a social mediation works. (For a derivative driven economy, ratios such as GDP are meaningless.) Derivatives represent economic totality as an in-determined, disparate aggregation of globally-replicating, abstract-risk contracts. (The size and limitlessness of derivatives has enormous consequences for the organization of national labor markets and the conditions of collective reproduction of the economy. Speculation becomes the privileged ethos when the profits that result from it exceed the profits that result from the application of productive labor. Consider the real estate market, where the profits that relate to the home as a financial investment have long exceeded the value of the house home as a material good or commodity, indeed are increasingly decoupled from the cost of the traditional commodity house.)

Similar to the capital movement, there is the inherent need for derivative markets to constantly invent new exotic or synthetic derivatives in order to identify and capitalize global money flows, that is, to subject it to the logic of leverage. The derivatives are not to be understood as a commodity, but LiPuma designates them as non-commodity goods, they refer to the commodity form, insofar as each derivative is particular and realized in money, but they are invariably social meditations of the circulation of the speculative capital.

The derivative is a time-based bet on volatility for LiPuma. Derivatives monetize the risks for a certain period of time. The now (the beginning of the contract) is a virtual and spaceless moment, but what matters is that the contract has a future-related duration. Market participants are not concerned with whether the value at risk is real or fictitious. And derivative contracts are intrinsically performative in establishing the conditions of their own existence, as the saying of the word "promise" produces the promise to its expiration under certain conditions. The utility value of the derivative is its dynamic replication, or to put it another way Derivatives exist in the interval between the beginning and the expiration date and they continuously create a new now and new wealth by opening and closing the gap between a realized price and a possible future. Derivatives fill a period in which wealth is created as a consequence of volatility, as a dispersion or spread of what they represent as the imaginary center of spreads. The design of the derivatives makes the leveraging of this volatility, where convexity here means that the variation of the price of the underlying and the derivative need not be symmetrical. A variation in the price of the underlying may result in a disproportionate variation in the price of the derivative. A small variation in the price of the underlying may therefore result in a huge increase in the price of the derivative, remembering that in the subprime crisis a small number of defaults resulted in large losses for the CMOs. This is called the "Jensen inequality." The derivative can not be reduced to an anticipated income stream or a return, because the size and the speed of its volatility determines the amount of the return. The price thus refers to the expected future volatility of the derivative, measured as the degree of variance between the moment of the transaction and its maturity. The derivative price is thus centered around the relation between the expected volatility and the maturity. In the subprime crisis, a small number of defaults resulted in high losses for the CMOs. This is called the "Jensen inequality." The derivative can not be reduced to an anticipated income stream or a return, because the size and the speed of its volatility determines the amount of the return. The price thus refers to the expected future volatility of the derivative, measured as the degree of variance between the moment of the transaction and its maturity. The derivative price is thus centered around the relation between the expected volatility and the maturity. In the subprime crisis, a small number of defaults resulted in high losses for the CMOs. This is called the "Jensen inequality." The derivative can not be reduced to an anticipated income stream or a return, because the size and the speed of its volatility determines the amount of the return. The price thus refers to the expected future volatility of the derivative, measured as the degree of variance between the moment of the transaction and its maturity. The derivative price is thus centered around the relation between the expected volatility and the maturity. because the size and speed of its volatility determines the amount of the return. The price thus refers to the expected future volatility of the derivative, measured as the degree of variance between the moment of the transaction and its maturity. The derivative price is thus centered around the relation between the expected volatility and the maturity. because the size and speed of its volatility determines the amount of the return. The price thus refers to the expected future volatility of the derivative, measured as the degree of variance between the moment of the transaction and its maturity. The derivative price is thus centered around the relation between the expected volatility and the maturity.

Volatility is thus expressed at intervals, that is to say, time is compressed and contracted in the period between the beginning and the end of the derivative, and it should be noted that the speed of circulation is quite different from that of traditional commodities. From the constant film of time, the derivative cuts out and shapes a certain interval of time, an interval that presents the future, which in turn affects the present, or, to put it another way, it is about the interpolation of the future, which is also expansion the present, but also leads to their destabilization. Traders are doomed to anticipate a future they can not know, following the guidelines of financial theory, which tries to determine the future as a probabilistic distribution. This use and this determination of time distinguish the derivative substantially from the classical commodity. The buyers and sellers of a classic commodity can agree on a price because they attribute different usage values ​​to the commodities they trade. While the seller is trying to make a profit, the buyer wants to satisfy his needs. Unlike derivatives, which are not commodities and have no transparent value in the here and now, the only measure that motivates the transaction is the calculation of its future value. The derivative targets a future, it can only be priced out because the market participants accept a bid-spread,

Derivatives differ not only from traditional commodities but also from other forms of capital. Here, the derivative is similar to those instruments that refer to debt or capital forms that can be continuously valued. However, for example, the derivative differs significantly from a bond in a significant manner. Although the derivative is priced on an underlying, it prizes aspects that the derivative itself can not praise, such as the specific risks of the underlying in terms of the risks that affect the market as a whole. And derivatives can create prices that relate to clearing houses' mistakes, to accelerating inflation, or to a decline in profit curves. Derivatives also do not throw off accumulated profits over time like bonds. While the profits accumulate over time, the value of a derivative decreases with time or expiration date.
​
Furthermore, a dynamic replication between volatility and liquidity for the derivative is necessary. The ability to exploit volatility is necessarily dependent on liquidity on the financial markets. In general, the derivatives follow a difficult path, namely to increase volatility without making it so excessive and uncontrollable that it leads to a loss of liquidity. The collective confidence of market participants in the future liquidity of the market is essential here. Therefore, derivatives inherit the performative power of the ritual in order to set in motion precisely what each individual agent presupposes. But the liquidity in the markets evaporates again and again because they can not remember their past mistakes. There is a spread and difference between risk and uncertainty,

Even hedging includes a speculative moment insofar as it refers to the trajectors of the future volatility of the underlying. The hypostatized correlation in hedging - when y develops upward, then x develops downward - but is understood by the market participants not as a parameter of the model, but as real. The hedge can also mutate into a speculation. It is not about reducing the risks, but they are only hedged to increase the speculative capital, so that the risk counts only quantitatively, as a calculation of a price, which is provided with a number. The risks are separated from the conditions of their realization and this has certain implications: The risk can now be defined in the categories of volatility and measured as the probability of the relative variance of the derivative price. Volatility is itself measured in a logic of production. Derivatives are now capitalizing on the volatility they are actively creating.

The relationship between finance and real economy is for LiPuma a disruptive interdependence. While the real economy relies on avoiding disruption and volatility as far as possible, volatility is the lifeblood of finance, in that it necessarily needs to be capitalized and increased, which often enough serves the real economy, which benefits when financial market volatility is gradual and predictable, while leaps in volatility can in turn advance financial markets if they do not limit liquidity. Derivatives also reconfigure and re-price the values ​​of traditional commodities, not in terms of the intrinsic value of commodities, but in terms of their uncertain future value. And this, in turn, also affects the structures of the labor markets and the capital distributed in production. If a commodity is already sold before it is a worldly thing, then the derivatives infiltrate the circulation into production, just by attributing floating and contingent values ​​to the commodity. Speculation on a commodity driven by the derivative (real estate) means to speculate on the spread between the directionality of prices and the spread that the derivatives markets produce.

Thus, the exchange value of the derivative is by no means a function of abstract work, but rather the expression of a social abstraction (the risk) that is generated in a given time interval. In addition, the value of the derivative is based on information and the conditions codified in the Treaty, not in an abstract work-based commodity, but in the work needed to produce the interconnectivity of capital circulating globally.

For LiPuma, the general problem of financial markets is to generate as much volatility as possible without volatility producing liquidity drag. Thus, the intrinsic dynamism of markets lies precisely in the need to arbitrate on volatility through financial transactions and to calculate the amount of risk (through leverage) necessary to generate precisely the same volatility that allows arbitrage to work. The tendency towards crisis processes implies that a decline in volatility, which leads to an increase in stability in the production-related markets, may in particular increase the instability on the derivatives markets. An expected decline in volatility reduces the profitability of arbitrage, which, in turn, motivates traders to compensate for the decline in profits by increasing leverage, making it more difficult to manage outstanding positions and small changes in underlyings leading to high changes in derivatives prices. If the derivative is systematically transformative, it is because it is a self-exploiting and expanding form of money capital, that is, speculative capital.

It should be remembered that the expansion of credit creation by private banks is an important resource of speculative capital, which in turn can boost the derivatives markets and fuel the real economy, but not necessarily. In any case, the growth of financial markets reinforces the financialization of money. Derivatives markets must be volatile enough to attract speculative capital, but they need to know how to prevent the elasticity of volatility from becoming dangerous for themselves: they are producing the kind of disease they need to immunize against. The logic of speculative capital is the constant strengthening of the motive to create possibilities for differential monetization, or, let's say, it must create the capitalization of difference. And this logic is unconditionally to be thought of as a mode of circulation that floats the abstract risk in its derivative form. The new circulatory capital regime does not rely on the power of states to emit legal money, it is culturally diffuse and contains a highly abstract force that culminates in a speculative ethos, namely the abstraction of risk, a monetized subjectivity and a reorganization the relations between production and circulation. While financial circulation can not replace industrial production, it does give it a new shape. The allocation of capital is increasingly dominated by financial and derivative interests. It is not the real economy that drives the financial economy, but, conversely, the financial economy, which structures the real economy. That is, the derivatives organize the flows of capital between different collateral, currencies and cash flows and thus they have necessarily regulatory capacity and thus take over actually state tasks and functions and integrate the policy into the economy. The social, in its contingency that traverses the spacetime of a social formation, remains a significant resource for derivatives markets and for the mosaic of uncertainties that allow the derivatives markets to create a sustainable market. (The social, whether monetary, currency or interest rate, remains the ontological gap between the price and the value of a derivative, as participants must always agree on a derivative price,

There is an interplay between the temporality of the calculation and the illegibility of the opportunity, and there are ways in which this correlates with the leverage of the derivative form. The hedge of the derivative transaction is an attempt to arbitrage the relation "calculation and opportunity" by trying to read the future. This arbitrage is now coded as a mathematical probability, but always based on a retrospective interpretation of the markets, while the existential insecurity persists. There are two ways of measuring the movement of a forward-looking derivative: either measuring historical volatility by tracking how the derivative and its price fluctuate in the past, or by reading the implied volatility, assuming an anticipated price, and tracing it back to the present (discounting). Here one then calculates with the Black-Scholes formula the leverage of a given derivative.
​
The credit, in terms of temporality, has to anticipate the creation of derivatives, which in turn serve as a hedge for loans, but also for the derivatives themselves or for the liquidity of an institution. The symbiotic form between credit and derivatives creates a temporal dynamic that reconfigures the ontology of money for LiPuma, whereby the production of money no longer correlates with the production and circulation of goods and services. For LiPuma, the growth of the dollar, which far exceeds the growth of production, and the fact that the velocity of circulation of money is falling in production, point to a fully circulating capital, often enough largely independent of production.

Speculative capital takes the form of derivatives because they unify various concrete risks in a single instrument, even though they merely mask the uncertainty that appears on the horizon. In this context, market makers design derivatives to liquidate the risks that arise in different concrete situations and to use derivatives as objectification of the abstract risk. This form of monetary circulation differs significantly from credit and fictitious capital. In addition, the financialized risk is separated from its social contexts and relations, ie a given situation is considered risky, the risk must be abstracted from the social, economic and political conditions in order to translate it into an analytical and mathematical space, which is assumed to be independent of the circumstances. Over the past 40 years, generative and classificatory schemes (interest rate risk, credit risk, transaction risk, direct risk, counterparty risk, liquidity risk, etc.) have emerged and, ultimately, any variable that can be identified can become a risk. This nominalization implies that finance sets every type of risk as an ontologically real object. The respective types of risk are translated into an abstract form. The incommensurate and variable forms of risk are transformed into a singular form: abstract risk. direct risks, counter-risks, liquidity risks, etc.), and ultimately any variable that can be identified becomes a risk. This nominalization implies that finance sets every type of risk as an ontologically real object. The respective types of risk are translated into an abstract form. The incommensurate and variable forms of risk are transformed into a singular form: abstract risk. direct risks, counter-risks, liquidity risks, etc.), and ultimately any variable that can be identified becomes a risk. This nominalization implies that finance sets every type of risk as an ontologically real object. The respective types of risk are translated into an abstract form. The incommensurate and variable forms of risk are transformed into a singular form: abstract risk.​

As noted by the Greek economist John Milios, this is not about two separate forms, but about two inseparable dimensions of the risk involved in the trading of derivatives. Each derivative is qualitative in a particular case, particular in the identification of a particular ensemble of identifiable risks, and it is systemic insofar as abstract risk co-produces the market as mediation. The specific risks are necessary for socially generated volatility to take place while the abstract synthesizes risks so that volatility pricing is possible at all. With abstract risk, connectivity is first established. By abstracting them from all the socio-economic contexts,
​
In a given market, a specific risk (fluctuation of currencies) is particular and is generated by a fluid, heterogeneous circularity, but as an abstract risk, it is an individuated dimension of homogeneous and systemic mediation that aims to reproduce the market as a totality. The abstract risk is aimed precisely at what the agents invariably and unconsciously do, namely to imagine the market as a totality so that it remains liquid, through countless iterations of pricing and under circumstances that are constantly changing, especially those , which allow the recalibration of prices. All the relations included in these relations are priced out on the financial markets, they circulate and they are speculated upon. In these processes, economic agents are constantly misjudging the social dimensions of risk, especially as the market appears to them as an objective and formal construction. To summarize here, the abstract risks subsume the concrete risks and act as a mediator for the liquidity that makes the derivatives market possible in the first place. Without the abstract risk, there is no liquidity and no derivatives market. The risk-driven derivative is the new tool that sorts circulation by objectifying the risks (through abstraction and monetization), creating and trading exactly the kind of connectivity capital requires, so that completely anonymous agents and organizations in markets that need it based on risk-based transactions.

It should be noted in this context that shareholder value is an important means of regulating companies, indicating the shift from commodity production to derivative, namely equating goodwill with its market price, resulting in continuous pricing It is assumed that the market is an objective and non-personal judge of goodwill. By its massive impact on credit, currencies and capital markets, speculative capital infiltrates financing into the real economy and infiltrates the logos of production reproduction. The movement of the stock market value of a company is now the decisive measure, in particular to generate the shareholder value. And this affects the temporal compression of the horizon of investors, whose short-term perspectives now massively influence production, especially as relative divisions occur between the time of allocation of capital and the time of production processes. The period in which a stock is held, usually only from quarter to quarter, is much lower than the cycles of product turnover in industrial production. This is also important inasmuch as financialization has turned homeowners into passive investors who now have to entrust their savings to institutional fund managers. In addition, income from the stock often enough exceeds the profits that result from the sale of products to which they relate. Thus, with the quantity of funds the fund managers manage, their influence and power in the companies increases,

From this point of view, the logic of shareholder value is to enable the abstraction of speculative capital from the industrial body of the company while at the same time radically transforming it, that is, to see in every single aspect of the company a potential from which to extract profits. An army of analysts around the world is searching for hidden sources of recovery day and night, ie aspects of the company that can be monetized in the future, but have not yet been reflected in the file rates. The shareholder value is the logo of the derivative when it relates to the environment of the company. In doing so, the distinction between capital and business is increasingly wiped out as each aspect of the business is geared to monetization, on the transformation of the company as a social organization into a machine for the realization of capital. The company profit is now linked directly to the derivative profit logic of the capital. The logic of shareholder value indicates the logic of the derivative: the directional and quantitative augmentation within a spiraling motion that designs speculative capital itself.

In some ways, the stock price itself can be understood as a derivative related to the underlying "company", with the options that are traded on the stock price to be understood as derivatives on derivatives, so that the financial markets themselves transform into places where about the future of the company is decided. Unlike fundamental analysis, which captures a company's fundamental business, technical analysis generates the business based solely on the trajectories and volatility of its stock price. Especially for tech companies that are not yet manufacturing products, technical analysis is a welcome tool to measure the risks implemented in the business. An important conflict of interest in the 21st.
​
Under the production regime capital appears as money or commodity, depending on its place in the cycles. The rise of the derivative has an additional dynamic effect on capital, in that, in addition to credit as a means of payment, it uses a contract determined by risk, which in turn refers to the loan. This development was latent in capital from the beginning. The self-exploiting value now appears objectified in the material form of a written derivative contract. Each contract and transaction is to be understood as differential replication within a complex circulatory socio-economic structure, with the social increasingly becoming part of the derivative structure.​

translated by Dejan Stojkovski

taken from: