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.
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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.
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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.
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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.
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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. 
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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.
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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. 
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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.
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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.
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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.
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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.
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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,
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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.
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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:

by Marina Vishmidt

​This is a sequence of reflections on affirmation and negation, on identification and severance: determinate negation as strategic affirmation, the identification of concrete universals and severance from a defunct relation. These lines will be explored with reference to the current situation of the waged and unwaged working class, most proximately in Britain, as “debt” becomes the ideological white noise and the practical horizon of all social and political imagination. Household indebtedness is confused with the state deficit in the spontaneous ideology of the Conservative austerity agenda, as what remains of the crisis-riddled economy is sacrificed to the “debt” – as poor people to loan sharks, so Britain to the bond investors. The nationalist narrative of “we’re all in this together” eliminates any space for discussion as to who might bear greater responsibility for the crisis, and who should be paying for it. The announced cuts make it all too clear – it’s the bloated public sector and welfare payments which are responsible, and those that have the least shall have even that taken away, as the Biblical parable goes. Yet a fatalistic consensus prevails for now, transfixed by a menace beyond dispute: the “debt.”

Debt has taken on an unprecedented social centrality, almost eclipsing the labour theory of value as both the principle of capital accumulation and the principle behind the structural role of labour in social relations organized through the value-form. The social logic of speculation is also at work [sic] in the premise of human and social capital which, as Jason Read argues, has reformulated every human activity as an investment in a future of potential access to greater social wealth. The notion of “human capital” also serves to eradicate any antagonism between those who own the means of production and those who only have their labour to sell, since both are understood to be investors seeking to maximize a return, which is only natural.1

Debt has of course also been the prime driver of accumulation for the past couple of decades, from deficit spending in the public sector contingent on a finance boom driven by the opulent trade in CDOs (Collateralized Debt Obligations) and other fancifully quantified risk instruments, to the characteristic business of financialization – profiting from the hugely expanded consumption of credit products that its own effect of suppressing wages had created a demand for. In debt-financed accumulation, value was no longer at issue, but wealth; and as workers did not produce wealth, but were a liability on the balance sheet, the only way they could reimburse the wealth creators, the entrepreneurs, was by going into heavily commodified debt. And consumer debt, it need hardly be  added, was the force that inflated the asset values that crashed so impressively two years ago, along with the demand it was able to sustain. It is in this scenario that we must look at what the shift from worker to debtor as the definitive social identity for most people today augurs for political re-composition in a time when unemployment and welfare cuts will leave them with marginal resources to either pay debts or meet more immediate needs. And, as has been plentifully evident around the world, austerity budgets trigger counter-attacks on the terrain of reproduction at once, as in Greece and Spain. This is because “social spending” is the first reduction demanded by the agencies of fiscal discipline, and public services become the stakes of survival when low-paid or nonexistent jobs become the norm, a condition exacerbated by cuts. In times of crisis, when the ratio of waged to unwaged starts to tilt negatively, reproduction becomes the political battleground, if only through sheer force of numbers of people who can’t get access to a wage, as well as the important category of the “working poor” who have to rely on benefits. The very existence of the “working poor” is the clearest demonstration, if required, that it is capital and not the indebted worker who is the parasite on the state, as the state allows employers to pay minuscule wages which it then agrees to supplement. The feasibility of targeting social services with the moralistic rhetoric of personal responsibility – like the received idea of a “dependency culture” – relies absolutely on a common sense which blacks out the systemic forces which are genuinely dependent, if not addicted to, the existence of a super-exploited, unemployed, illegalized and desperate “workforce.” It has to ignore the structural necessity of a low-waged and unwaged reserve army which enables capital (including state and semi-private entities) to suppress wages, since the state ultimately meets the costs of reproduction in fear of worse consequences. It is in this sense that all “welfare,” regardless of its levels of generosity or parsimony, regardless of whom it identifies as “deserving” or “scrounging,” is corporate welfare, since its function is ameliorative to the operations of the market, rather than redistributive. Needless to say, “welfare reform,” like austerity, fails on its own economistic terms. The factors of decreasing demand and the cost of policing welfare by outsourcing it to for-profit organizations that have an incentive to cut the welfare rolls ends up being far more expensive than the portion of state expenditure welfare comprised in the first place. But if private contractors are happy, and the tabloids are appeased, than markets are surely working overtime in the public interest.

No matter how obvious these contradictions seem to be, and how long they’ve been around, it is worth pointing out time and time again that the fight we have on our hands is not one against market rationality, to be countered with a more “social” set of principles for the  economy. There is no rationality, only the looting and cannibalism which set the terms of capitalist accumulation for now. As the likes of David Harvey have exhaustively shown in their work, but which is no less obvious from reading the newspapers, “economic rationality” is a red herring for authoritarian managerial regimes of state power. Neoliberalism is a state project, with state-financed programs of engineering competitiveness across the entirety of social life. Because it is first and last an ideological project, objective circumstances or results have very little standing in it. Thus there’s no relevance to exposing its murderous or hypocritical inequities; it can only be drained of legitimacy ideologically. The argument is easier to make, paradoxically, because the objective conditions themselves have been shaped by the ideology to the point where, as some propose, “the class relationship” is coming to an end and communism is for the first time possible without a prior, “programmatic” affirmation of the working class. Work is no longer available objectively nor desirable subjectively as a political identity, although this lack of content does not prevent the ruling class from continuing to wield it as a disciplinary cudgel.2 Although these ideas have been around since at least the 1970s, with the “Zerowork” strain of post-autonomist thinking, and all the variations of the “refusal of work” stance on the communist and anarchist ultra-left, their re-emergence now comes into the very different political landscape of three decades of neoliberal reaction, globalized capitalism and the destruction of organized labour, not to mention the de-industrialization of Europe, North and South America, the Middle East and Africa and the vast low-grade industrialization of parts of Asia and China. The “communist idea” now has to take into account that the refusal of work is not a political choice, but a prerogative exercised by a stage of capitalism that has much less need of surplus-value production since the discovery that debt is far more profitable.

In the vision of “austerity,” everyone is potentially a parasite on the nation’s solvent body, looking to compound the nation’s interest rate in the global markets. So why not behave like one? What is the outcome of a process, underway for at least two decades in the UK, whereby the majority of the population is positioned as the actual or virtual waste of the system? What could be the (anti-)political subjectivity of human capital turned toxic asset? When finance is universally agreed to be the source of all value, the machine of accumulation is rent, not productive investment. The generation of wealth boils down to trade in the “fictitious capital,” along with rent-seeking and capitalization/enclosure of existing [public] assets. As the only way workers can contribute to that valorization is through debt, debt stands as the point of de-legitimation of the current logic of capital. A refusal of debt must take the place of refusal of work in a situation when work is being refused by capital anyway.

Having said that, it is very ambiguous for now to what extent, if at all, such political implications have been drawn by the campaign groups, unions and grassroots party activists on the British left. It seems difficult to detect a real consideration of debt going on, besides the generic “we won’t pay for your crisis” standpoint; there is no disputing that someone does have to pay, and this by and large consists of making an economic case for one sector at the (implicit) expense of another. Nowhere is the stunted outlook of the mainstream British socialist left more conspicuous than in the “Right to Work” and “Green Jobs” campaigns that have been appearing on its fringes since the “crisis” hit. They seem to be missing something central about how capital operates nowadays (not to mention the simultaneously reactionary and idealist perspective of demanding “good jobs”): wealth is no longer created through productive investment, and workers don’t want jobs, they just want money. Why else would all the most visible instances of workplace militancy in the past couple of years, from factory occupations to “bossnappings” and threats to blow factories up, all center around better remuneration packages for job losses rather than the maintenance of jobs? Neither capital nor labour are interested in jobs: all anyone is interested in these days are assets. Capital has neither the inclination nor the resources to offer workers more exploitation right now, but there has to be recognition that exploitation remains the bedrock of the social contract, and it is achieved most efficiently without jobs in an economy premised on the capitalization of debt. Isn’t the “jobless recovery” appearing as the watchword in economic analysis today built on assumptions that consumption (or “consumer confidence”) can single-handedly drive a return to prosperity, that is, through another credit bubble? It is immaterial that the global economic crisis was triggered by the bursting of a systemic credit bubble; credit bubbles are the only conceivable avenue of a return to normality, much as disastrous neoliberal policies are only intensified in the aftermath of their resounding failure.

It seems evident, from this perspective, that we can only produce wealth (not value) for capital now through our debt repayments. In that case, shouldn’t debt be the pre-eminent focus of resistance and revolt, rather than petitioning imaginary benefactors for imaginary jobs? Further, it needs to be restated time and again that any demand for jobs dovetails all too harmoniously with the government propaganda against the “workshy” who will be forced off welfare if they don’t come to the independent realization that “work sets you free,” as the current Work and Pensions secretary has been quoted as saying. This no doubt inadvertent refrain of the National Socialist slogan throws light on the “obscene” agenda of the “we’re all in it together” mantra providing the rather flimsy legitimation of the announced cuts. On this point at least, there is no departure from earlier historical periods where worsening economic conditions were used to build up a nationalist consensus that paved the way for fascism.

If workers are now “human capital,” then the moment of negation of the social relations that have brought us here can start with affirmation: the affirmation of the sick and deteriorating nature of capital from the side of its “human” variant (what was once known as “variable capital”). As “human capital” is being maximized in or out of work, the terrain of reproduction (social services, health, housing) seems like the most direct arena in which this capital can become collectively dysfunctional, also a necessity in the era of intensified biopolitical surveillance and risk management which social services represent for “dependent” populations in the UK.3 The docility of the service “user,” isolated, managed and humiliated in the absence of an employment allowing her to exist without recourse to state benefits, is what needs to be questioned by the users, as well as by the service workers, at the point of “delivery” and in solidarity. It must be recognized that social benefits are actually a “social wage,” and consist not of charity from the state, but of the value extracted from formerly and currently employed workers, as well as that funnelled from them in taxes and VAT. The position of supplication has to be transformed into a position of “insolence,” of justified and collective appropriation. After all, if there are no more workers, then surely oughtn’t “human capital” assert its own series of claims, as capital has asserted its claims for the past 40 years to the exclusion of all others?

The dialectic between affirmation and negation needs some clarification. Any practical critique entails both moments, though not a linearity or progressive vector between them. In any social movement, there needs to be an identification of a position (of exclusion, of injustice) in the contradiction, before the place of exclusion is negated by re-organizing the terms of justice or inclusion themselves on another basis. We can see this in the feminist and queer movements, where the structural role of the “woman” or “homosexual” must be accurately identified within the relations of capitalist patriarchy before gender and heteronormativity can be overturned. The same thing with the “classical” class struggle: the social affirmation of workers as a discrete class with interests incompatible with those of bosses and the organization this engenders is a precondition for the political imperative to negate wage-labour and capital. Mobilization around the “wrong” (Rancière) precedes, and persists through, the elimination of the conditions that produce that “wrong,” the conditions which orient the definitions of justice and at the same time, exclude certain kinds of people from making claims via those definitions (like the exclusion of women and many others from the scope of the French Revolution’s “Rights of Man” – which did not prevent the “Rights of Man” being seized by women, by Haitian slaves, as the programme of their fights for liberation.) Using another set of terms, we can look at the “void” or the “point of inconsistency” of the situation (Badiou) as that which is invisible from its point of view, but which is nonetheless primary for it; a moving contradiction. For Marx, it is the co-existence of perfect equality in the sale and exchange of labour power in capitalism with exploitation in production. This is glossed by the Malgré Tout Collective thus:

​It may be that political action that is used to expose this point of inconsistency and to practically refute its terms may not even be recognizable as political action, because it is proposing a new set of identifications – not only of what constitutes injustice or a “wrong,” but of what it means to act politically, and the divisions it introduces are not the familiar ones, since it is no longer seeking to adjust concrete phenomena to an ideal structure, but to question the structure as such, and the subjectivities produced in it, which are at once singular and universal:

​This subtractive moment (strikes, refusals to be monitored, refusals to enter into “workfare” programs, sharing information and resources between claimants rather than between claimants and the state, or even mass and organized “benefit fraud”) can become a constitutive moment in reclaiming the social legitimacy which seems to be the exclusive property of markets for now, provided it can move from a dismissible, “partial” activity to a “universal” one which re-organizes the majority perception of general interest – a perception that is more often than not, more often unconsciously than overtly, on the side of the markets rather than other people (or, rather, refuses the distinction between them). When the legitimacy of the state is grounded in its responsibility to markets – as the true generators of wealth – rather than to the public, who are deemed to just consume this wealth, it has to be workers who break down this apparent reality through their new primary role as indebted consumers, or sources of unproductive wealth accumulation, at the same time as through their role as unproductive workers,6 waged or unwaged, commodity-producing or relationship-managing.
​
An itinerary of the politics of reproduction, leading up to a more precise exposition of what shape the “politics of debt” could assume, is the goal of this text. First, we will revisit the history of the politics of reproduction through the Welfare Rights Movement, Italian Autonomist feminism, the Wages for Housework campaign and “self-reduction” in 1970s Italy, the Claimants’ Unions of the 1980s and the Unemployed Workers unions and initiatives in present-day Britain. In Part Two [included below], we will explore the thesis that the claim of unproductive labour to unproductive capital must be asserted as part of the decomposition of the wage-labour-capital relation discussed by the “communisation” current (Theorie Communiste and Endnotes), which entails the impossibility of asserting a work-based political identity (“only revindicative struggles”), either subjectively (no-one identifies with their jobs) or objectively (workers’ power is broken by law and by globalized re-structuring) and which, as we have already seen, needs to be asserted through the point of inconsistency of the situation – for the politics of debt, we can provisionally name it as “uncapitalized life,” just as “free human activity” came to name human praxis beyond wage labour when wage labour was decisive, both to relations of production and struggles for emancipation. The class relation Marx describes below may be in its historical eclipse:

But the class relation between creditor and debtor flourishes in that vacuum, so long as capitalism in its core lineaments is still with us and so long as most of the populace has to survive within its laws and mediate this survival through the value-form. Again, Marx ensures it doesn’t escape us that, “When viewed, therefore, as a connected whole, and in the constant flux of its incessant renewal, every social process of production is at the same time a process of reproduction.” (p. 711) To the historical (and still current) figures of the housewife and the benefits claimant, we add the figure of the debtor, and try to trace a politics of debt on the ground of the politics of reproduction. What happens to the concept of the “social wage” after the wage?

​To move chronologically, and to take a starting point which in some ways will appear arbitrary – certainly to historians of the working-class, community and women’s movements – the Welfare Rights Movement coming onto the scene in the 1960s in the United States stands as an interesting case, as it shared activists, demands and campaign tactics with the Civil Rights Movement and the second-wave feminist movement, as well as the more radical community-based and nationalist-influenced factions of the movement like the Black Panthers and the Young Lords.7 The Welfare Rights Movement was composed of the single mothers who were the main constituency of U.S. social services of the time. They were among the first, both in the Civil Rights and the women’s liberation movements, to position their struggle squarely on the terrain of social reproduction. They grounded what came to be known as “the personal is political” in the systemic inequities that organized their lives. They were also the first to name and analyze the structural contradiction that drove their demands on the state – the contribution of unpaid domestic labour to the efficiency of the capitalist economy – and were the first to associate their reproductive function with an economic position. They suggested that this reproductive labour be recognized and valued in the same way as paid labour in the workplace, and also turned this into a political practice, claiming a voice and a subject position from the sidelines of marginality and impoverishment: as women, as single mothers, as African-American in many cases, and as social welfare claimants. They claimed a “social wage” as against the patriarchal “family wage” paid to the male worker as the head of the family, the social responsibility of capital for the “externalities” of commodified but unwaged social being – looking after children and the elderly, for example. Dignity and autonomy from harassment, surveillance and corrupt bureaucracy were also emblematic to their struggle. As traced earlier in the dialectic of affirmation and negation, the Welfare Rights Movement affirmed a “wrong” in order to negate the social conditions and the social identifications – patriarchy, capitalism and racism – that made that wrong possible, indeed unquestionable, and rendered them its natural targets. Yet it can be argued that overall, like the mainstream of the Civil Rights and women’s movements (which came a bit later), the ultimate horizon of the movement for most of its members, in praxis and analysis, was that of improving their position within the current state of affairs rather than seriously challenging it, which would have had its tactical as well as its political reasons. The institutionalization of the movement in the National Welfare Rights Organization (1966–1972) lent it negotiating power at a higher level, but the reactionary social climate of the Nixon era, as well as internal splits (over expanding the movement to include the working poor vs. redefining welfare as a feminist issue) ended up destroying the organization. U.S. Government counter-insurgency activities no doubt also played a role, given the overlap of welfare rights activists with Black Panthers and other radical (as well as moderate – the CIA drew no such distinctions amongst its internally colonized) community action groups.
​
In the early 1970s, the currents of Marxist feminism in Italy associated with the Worker’s Power and Autonomia analyses started to put forward the idea that reproduction also constituted a “hidden abode,” as Marx spoke of production in its contrast with the sunlit equality of exchange. They proposed that since unpaid work conducted primarily by women in the home produces, the same as factory workers, the commodity of labour-power, which is then sold on the market for a wage, that they could as well form the “vanguard” of working-class organization and work refusal. Until that point, women at home were (indirectly) producing surplus value.

The desired consequences of this redefinition of women’s work was that unwaged workers would be acknowledged as subjects of working-class politics, and that “women’s issues” could be more broadly addressed as “class issues” and understood as antagonistic to capitalist interests in the same way as the issues of waged workers. Another reason was to actualize reproduction – childcare, health care, prostitution, power relations in the home and community – as a properly political site of contestation, rather than continuing to abide by the “revolutionary logic that established hierarchies of revolutionary subjects patterned on the hierarchies of the capitalist organization of work.”8 Finally, some elements of this position, though not all, came to the conclusion that if housework produced a commodity, maybe even value, i.e., it fulfilled the minimal conditions of capitalist work in general, then it should be paid for by capital like any other work “directly,” “at its value,” rather than through the miserly margins of welfare payments or the “family wage.”

Alongside the number of conceptual, political and practical problems addressed by this analysis, there were a similar number of problems with the analysis itself. On the conceptual side, it could be claimed that no labour in capitalism is ever paid for “at its value,” or else surplus-value extraction would not be the first law of capitalist work. The second objection would follow from this, that for Marx, “being a productive worker is a misfortune,” and that the identification of domestic labour with productive work only made it politically meaningful in the “workerist” context, fixated as it was by the productive/unproductive labour distinction and which saw the factory worker as hegemonic, rather than providing a weapon against the relations of production in its own right. On the political side, as was swiftly pointed out, linking the emancipation of female houseworkers to the wage both reinforced the centrality of the state or “total social capital” to the reproduction of workers and families, and trapped women in the home rather than renegotiating gender roles and radically moving the structure of the family in a more collective and egalitarian direction. Additionally, it faced the paradox of the “transitional demand” that asks to reform capitalist relations in a way which would make them no longer capitalist; a paradox equally confronting the idea of the “basic income” today. Finally, the practical problem of evaluating housework in the same terms as waged work would revolve around problems of measure and withdrawal of labour:

​Wages for Housework could further be discussed as a tension between the prescriptive and descriptive: how does a critical position on the production of value help us overcome value? Proceeding through the moments of affirmation and negation again, the affirmation would go something like: we, too, produce value and are productive workers, so the workers’ movement has to take us into account and expand their concept of value to include unpaid or “social” labour. The negation could then be, if we produce value, then value is so broad as to fall apart; it immediately becomes a political rather than a technical category. This was in fact the position of Silvia Federici, among others, who cautions against the literal interpretation of the Wages for Housework programme, placing emphasis rather on its strategic horizons and its critical character, what she terms “Wages against Housework.” Rather than the productivist agenda of raising all to the same baseline of exploitation, the contribution of the Italian Autonomist feminist perspective was to push for a generalization of the refusal of work by expanding the category of what constituted work, and to ensure that the “hidden realm” of reproduction would never again be forgotten in the analysis of and action against capitalist exploitation. As Federici has recently noted on the legacy of Wages for Housework for today’s anti-systemic movements:

Parenthetically, it should also be added that Italian Marxist feminism took on very disparate forms, although the one chronicled above has perhaps become the most renowned due to the originality and far-reaching impact of its analysis. There were also feminist elements of the armed factions that emerged in Italy towards the end of the 1970s, and their efforts did not transpire in the “hidden realm” alone – they targeted health clinics that refused to provide abortions to users of public healthcare for “reasons of conscience,” but were happy to do so for a steep fee, as well as sweatshops employing mainly young and immigrant women.11 The emphasis on reproduction as a political battlefield most consistently developed by the feminists could also be seen to be key to the prevalence of both organized and informal campaigns of “self-reduction” and “proletarian shopping” in 1970s Italy; groups of tenants would take unilateral and concerted action to lower their rent or utilities, or pay lower prices or nothing for public transport or for groceries (although clearly the workers in these sectors had to be co-operative to some extent for these tactics to succeed).
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The “social factory” of waged, unwaged and informal work did become increasingly central to Autonomist Marxism, as activists “followed the workers out of the factories,” who were leaving for reasons ranging from and between the broadly subjective (mass refusal) and broadly objective (mass unemployment). At the same time, there continued to be a caesura between feminism and class struggle, with divisions between socialist feminists, separatists, bourgeois and social democratic feminists and so forth complicating a situation where the subordination of women seemed so clearly to be attendant on capitalist class relations (and on religious customs) but seemed to flourish equally well in Left milieus among “comrades.” An articulation of the relations between patriarchy and capitalism (as well as the construction and exploitation of race)12 where sexism and racism are seen as both divisions in a global working-class and as relatively autonomous, as phenomena which are both overdetermined and contingent, continues to be one of the most vexed fault lines in Marxian praxis; a thinking-through of the relations between them which is adequate to the present moment of capitalist decomposition, in all its unevenness, is a project of staggering complexity and no less staggering urgency, even with the resources supplied by thirty or more years of Marxist and materialist feminism and queer theory, not to mention historical and actual praxis.

However, the prescient appropriation by the Italian Autonomist feminists of the reproductive field for political action by its “native informants,” by those already defined by their lack of access to social visibility and economic power, can now be used to contextualize the organized struggles against welfare cutbacks that found a resurgence in Thatcher-era Britain and are making a gradual reappearance today. Reproduction as the social mediation of the value-form outside the workplace has clearly always been problematic, as the foregoing has illustrated. Yet it is in times when this particular mediation starts to eclipse the encounter with the value-form in the workplace for increasing numbers of people, i.e., in times of mass unemployment and capitalist restructuring, that the politicization of reproduction starts to have more general repercussions which are no longer limited to those temporarily falling into the category of the unwaged and who decide to organize for mutual aid and advice. From examination of the 1980s groups, the practical consequences of this can be quite disparate. The interstitial and low-level nature of some claimants’ groups can suddenly acquire a degree of visibility for which in some cases the participants are not prepared, or materially cannot sustain. In some cases also, the organization can shuttle between being a campaign group with radical demands and a “service provider,” and can finally end up subcontracted as a service provider for the state – something which is only going to escalate with the present UK government’s ideological commitment to expanding the role of the voluntary sector in what were formerly areas of state provision: ‘The Big Society’.

Such a dialectic between self-activity and support has so far not been able to translate into a broader mobilization which finds a commonality between the interests of the unemployed and the still-employed, even in the current destructive climate of the impending and gratuitous cuts. It has, in other words, not been able to redefine those sociological or factual categories as political ones. Yet such a commonality, in whatever terms it is set out, and whether it’s guided more by expediency than left communist analysis, is indispensable to the de-legitimation of the cuts and a defeat of the political project that is generating them.

The Islington Action Group of the Unwaged (1980–86) along with other claimants’ action groups and benefit workers’ strikes of the 1980s and 1990s, and going into the present with the national and local branches of the Unemployed Workers Union, the Brighton Unemployed Centre, the Edinburgh Claimants Union and the London and Edinburgh CAPs (Coalitions Against Poverty), the Hackney Solidarity Group, Save Our Council Housing and Save Our Nurseries, comprise the most visible historical and present-day actors of the struggle on the terrain of reproduction in the UK. To different degrees, the perspective is about encouraging resistance and collective activity among the ever-more demonized “benefits scroungers” who are uniquely aware of the effects of the state deficit being resolved on their backs but only have the means to confront them in a largely individualized and piecemeal fashion, i.e., from a situation of defeat. It is also sometimes about the principled “refusal of work” position, viewing benefits as a direct appropriation of socially produced wealth otherwise removed from its producers; and then, fundamentally, it is about occupying the “welfare state commons” and all the contradictions of that position. Like the struggles in the universities or the battles against social housing privatization, it is less about upholding the entrenched model of public services than it is about refusing to concede what little remains of non-commodified public goods (although that struggle would seem to be lost in terms of higher education in England, where fees up to £10,000 for a full degree and rocketing student debt is now the norm; universities are still free in Scotland). This reactive, rear-guard orientation, though it might seem to be less descriptive of the 1980s – which had a more recent memory of working-class organization – than of the contemporary groups, confirms that the situation of defeat is fundamental to all the listed formations. Although the political conjuncture demands generalization of struggles, three decades of working-class decomposition, union-hostile laws and public quiescence are preventing this from happening at the moment. But this is not to overdetermine the future, even the immediate future. And couldn’t decomposition find its own specific power? Could we say that the labour of the negative still applies even when it is a question of the negation of labour?

Note: Originally conceived in two instalments, the material referred to but not extensively discussed in this text will appear in an autonomous text for Reartikulacija in 2011.

taken from:

by Achim Szepanski

​The "financial deregulation" since the 1970s has paradoxically in themselves the capacity and increase the demand for regulation, regulatory instruments, and regulatory agencies. The strengthening of market mechanisms at all levels requires a number of public, sub-state, and especially private, companies and institutions whose duplication and dissemination take on the functions of power and government previously reserved for States. 
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National institutions, transnational networks, and corporations, informal groups and organizations have built a diverse fabric of regulations, rules and power systems of varying density and breadth across the globe. Government functions Power technologies and strategies of financial capital interpenetrate and define a specific regulatory and at the same time unstable and crisis-prone financial regime, which can now claim global governance functions. Global governance is by no means the result of an unleashed liberalization of capital markets and the simultaneous downgrading of states to purely executive bodies, but inherent governmental and regulatory conditions of financial capital, with state and sub-sovereign institutions legally securing market-correlating market mechanisms, One can assume a dual governmental rationality here, that of financial capital in conjunction with state and transnational organizations and institutions, but the former dominates. This is indicated by a whole series of factors: take only the private creation of money through banks and the liquidity, management and derivative instruments with which all fields of the economic, social and political are traversed and partly occupied by financial capital. It is not the financial markets, as Vogl assumes, but it is the financial capital that has transformed itself into a judge over governments and virtually into a fourth power and has built a new "enclosure environment" (Vogl 2015: 25) into which companies, states, households, and semi-democratic institutions are integrated. Take only the private creation of money through banks and the liquidity, control and derivative instruments with which today all fields of the economic, the social and the political are traversed by financial capital and sometimes occupied.

In the financial markets, capitalization - the discounting of future earnings streams and the corresponding trade in financial assets - takes place as a process of continuously assessing risks by means of derivatives. Since every future return flow is contingent and unknown, no financial capitalization can take place without the calculation of how the respective specific risk for future generation of returns should be assessed. Capitalization, then, requires a particular mode of identification, calculation, and order of economic entities, of socio-economic events that must first be distinguished and then objectified as risk events. At least in this regard, today every capital must be regarded as fictitious capital. In addition, capitalization requires certain technologies that allow risks to be differentiated, compared and traded, that is, it includes a process of normalization according to statistically identifiable risks. (See Sotiropoulos / Milios / Lapatsioras 2013b: 157ff.)

When examining the pricing of derivatives, it could already be seen that the prices of fictitious capital are neither directly related to the costs of production nor necessarily trigger credit for the production processes, but the prices here have a stringent influence on a future-oriented (monetary) Utilization insofar as it always carries out the translation and transformation of class struggles. If price harbors a very specific, "ideological" representation of capital, then the problem of information efficiency in the financial markets seems to be losing importance, at least for understanding the structures and processes of financial capital. Although informational dispositions certainly play a role when it comes to the competitive determination of the prices of derivatives, information in this case should be understood as "ideological" representations. The representation of economic power relations and their transformation into financial products makes relations appear as objects or events that, in the context of a fabric of discourses, Knowledge formations and mathematical models (from econometrics to dynamic stochastic equilibrium models) are first quantifiable and secondly responsible for the fact that certain actions and behaviors can be addressed to and accessed by market participants. (Ibid .: 225)Quantification here means not only the counting or assignability of methods to numbers, but an algebraic representation produced by standards, which represents a precursor to the algorithmic processing of the representation. The rise of derivatives allows the replication (bundling and separation) of the financial collateral and thus the commodification / capitalization of risks. What gets capitalized has a price. The derivative type of pricing inherent not only time technologies, but in particular also technologies of capital power. And dThe power technologies condense in particular forms of knowledge, semiotypes, mathemas and discourses insofar as they represent the socio-economic reality, i. e. naturalize or even obscure the economic reality in a certain way. In the mainstream of economics, certain economic events are in theory so updated that representation also creates rules for controlling the individual actions of market participants (performance), which participants recognize as the truth of their own lived reality. (Ibid .: 103)

For John Milios, price movements and their corresponding informationalizations remain embedded in the processes of ideologization or, in other words, the mechanisms of financial pricing (economic models), whether efficient or not, are already part of the ideological apparatus. (Ibid .: 149) Milios refers here to Althusser and his theory of ideological state apparatuses, where Althusser understands the problem of ideology in general in the context of the constitution of the ideological subject and its pragmatics, as invocation, indeed as the call, a set of social Behaviors and (discursive) practices, habits, gestures and prohibitions without any objections. In doing so, social actors not only accept the social relations represented by discourses in a specific way, but they also experience ideology as an expression of the truth of their own social life. When individuals are called as subjects, they are given the necessary motivations to identify with the dominant imaginary and symbolic behaviors, discourses, and notions.​

For Marx, one does not "find value" in a thing, nor does it represent an imaginary relation; rather, it appears in two distinct and polarized relations: money and commodity. ( Ibid .: 63) If the derivative - for Milios money as a commodity sui generis - is a "reification" of the capital relation, then its exchange value must also be seen in the context of the representation of specific socio-economic power relations, and that is, economic events on the financial markets are translated "spontaneously" into objective perceptions and quantitative signs. And all these objective perceptions (and signs) shape the dimensions of a concrete and an abstract risk.

Even Deleuze / Guattari emphasize that the economic is not given in itself, but contains a differential virtuality requiring interpretation (see Deleuze 1992a), which can also be masked by discursive forms of updating the economic. However, Deleuze / Guattari reject the concept of ideology. Especially Guattari has often brought against the term a-significant semiotics (algorithms, diagrams, mathematical equations, indices, statistical accounts, etc.) into play; Semiotics, which are not so easily subsumed under the "ideological state apparatuses". Namely, a-significant semiotics are not speech-centered devices for the reproduction of ideology, but rather diagrams, binary or probabilistic codes and algorithms, who operate the financial capital in a future-oriented manner. The financial capitaloperates with signs (of power) that represent nothing, but anticipate, create and shape something. The a-significant signs open up an economy of virtualization and a scope for future optionalities - they serve to calculate the future in terms of capital-compliant exploitation. For Deleuze / Guattari, capital appears less as a linguistic operator than as a semiotic operator.

The team of authors around Milios claims that the mechanisms of financial capital today clearly contribute to the intensification of competition between companies, no matter which sector they are now, by their mobility, the tendency to produce an average rate of profit and at the same time to realize extra profits in wears, improves and at the same time reinforces the control of its efficiency.The operations of financial capitalization are to be understood as attempts to create capital-immanent, effective conditions of recovery (surrender of value), insofar as they help to transform savings of various origins into investments, whereby this function has a causal priority for the monetary utilization of capital. Modern finance generates, especially in its neoliberal version,and aim at maintaining the capitalist power relations altogether.

In this context, the economic fundamentals of corporations can by no means be considered to take precedence over the forms of knowledge, discourses, and representations of the financial industry, but are themselves to be understood as a form of interpretation of capitalist reality, or, to put it another way, they are ever Part of the various ways in which market participants perceive, model and affirm economic structures by practicing certain theoretical practices in the fields of economics. (Ibid .: 152) This non-empiricist view denies the distinction between fundamentals and the information related to them, in that competition between the various actors in the financial sphere implies from the outset that To translate information about the fundamentals of companies into current prices and thus to induce companies to perform certain operations. (Ibid .: 51) It is generally assumed that in the case of sufficient market efficiency of a company, its stock prices correctly express the dynamics of value added taxation according to the fundamentals of the company. However, a company whose fundamentals point to insufficient recovery will quickly become the financial markets" Confidence " of investors / speculators lose, which can lead to a reduction of the market capitalization of the company. For classical finance, this kind of correction has the function of promptly compensating capitalist investors, who are still willing to invest in the company, with higher risk premiums, for the affirmation of an increased risk that corresponds to the deteriorated economic prospects of the company , The company must therefore expect more difficult financing options in the financial markets.

The permanent "control" of companies through financial capital involves their molecular interpretation and valuation at a business level, and this is done systematically through the performative design or use of mathematical and stochastic models, which aim at operations and procedures that occur within the production processes of the company Companies to be evaluated, evaluated and evaluated in order to then develop specific strategies for profit maximization. This type of operationalization is practiced by using a variety of tools (algorithms, mathemes, and models). If a large company depends on the financial markets for its financing, then any suspicion of inadequate recovery increases, even if it is unfounded, the cost of financing reduces the room for economic maneuver, i. e.he lowers the stock and bond prices of the company. The workers of the company are also exposed to such economic restrictions, they may be faced with the dilemma of accepting unfavorable results for them in collective bargaining or, by a militant point of view, forcing the company to insolvency or takeover (Transfer of capital into other investment spheres and / or countries). The latter option almost always involves workers forcibly restructuring their own working and living conditions. So it's exactly for the workers, to accept the "laws" of capital, or to live with a higher degree of insecurity or even a fall into unemployment. This dilemma is inherent in the effect and functioning of the fictitious capital, because its effects affect not only the organization of the companies, but also the specific forms of organization of the collective worker and, last but not least, the distribution of income between labor and capital. Financialization, therefore, permanently promotes the need to restructure capitalist production processes, and as a result longer working hours, increased work intensification, and more layoffs are being recorded while workers' demands for real wage increases are steadily shut down, which of course is also due to the fragmentation of the working class and in general to the phenomenon of a transversal precarization. These developments presuppose, on the one hand, the increasing power of the capitalist class as a whole and, on the other hand, the possibility of exhausting the flexible instruments of modern finance, in order to liquidate all inadequately exploiting capital (closure of enterprises) and at the same time contribute to the more effective economization of constant and variable capital.

Mariana Mazzucato has argued that companies, with their practices such as share buybacks, which serve to increase the company's prices, have blocked rather than promoted research and innovation.In 2011, the pharmaceutical company Pfizer "invested" 90% of its net profit in share buybacks, which represents about 99% of its research and development spending. (Mazzucato: 2013: 41) In addition, such companies would prove to be free-riders, insofar as they consistently tapped the waves of innovation that had ultimately initiated the state through various channels. Although this may apply to individual companies, one must always keep an eye on the role of financial capital or capitalization in terms of capital as a total complexion. Today, financial capital has largely emancipated itself from previous value creation insofar as its systematic calculation and evaluation is aimed at future exploitation, so that even new "innovative growth industries" are financed or even constructed, even if the state still has a not inconsiderable share from sums of money to basic research. Thus, the capital hoped in the run-up to the stock market boom in the 1990s in the then emerging IT sector for decades to achieve above-average profit rates, or think about the so that even new "innovative growth industries" are financed or even constructed, even if the state continues to provide a not inconsiderable share of sums of money for basic research. Thus, the capital hoped in the run-up to the stock market boom in the 1990s in the then emerging IT sector for decades to achieve above-average profit rates, or think about the so that even new "innovative growth industries" are financed or even constructed, even if the state continues to provide a not inconsiderable share of sums of money for basic research. Thus, the capital hoped in the run-up to the stock market boom in the 1990s in the then emerging IT sector for decades to achieve above-average profit rates, or think about the Capitalization of biotechnology and of certain natural resources, of genetic patents, with which parts of the natural heritage of humanity are transferred to private property. Here a free good is capitalized and the resulting capital becomes the reference point for the creation of new fictional capital as soon as biotechnology companies are issuing shares or taking out loans. Another way to realize rising rates of profit is evident in the creation of the real estate boom, driven by the hope of ever-increasing real estate prices. At present, the central banks play an important role in the new production of fictitious capital when they buy government bonds on a large scale and at the same time pump fresh fictitious capital into the money and capital markets with their negative interest rate policy. With the help of the low interest rate policy of the central banks since the financial crisis in 2008, large sums of money have flowed into the real estate sector. However, because the natural resource land is finite, this is reflected, especially in the metropolises, in rapidly rising real estate prices.

The analysis of financialization should not at all be confined to individual capital; rather, it should be transferred to the level of total capital (the tendency to produce an average rate of profit). In addition, all market participants should be included in the analysis, businesses, households and also the states whose evaluation and control modern finance demands to enforce the neo-liberal form of capitalist power and austerity policies. It is ultimately the implementation of the neo-liberal political agenda in the entire social field. If today's sovereign borrowers - states - deviate from the fiscal discipline imposed on them by the neoliberal agenda, then they destabilize their position in the international money and capital markets and they quickly lose the "confidence" of capital and, like Greece at the front, are exposed to the restrictive measures of an institution like the Troika (EU Commission, ECB, IMF) , (Sotiropoulos / Milios / Lapatsioras: 2013a : 168) The call on governments to pursue consistent austerity policies, including: a. Budget cuts, government budget reductions and privatizations imply that financial markets are ready at any time to re-price the respective risks of financing states in order to signal the loss of their confidence, i. e. to increase the borrowing costs for the states in the money and capital markets.

At this point, the team of writers around Milios once again picks up Marx's line of argumentation on fictitious capital in order to further develop it using the example of financialization, without, however, abandoning the essential problems and conceptual constellations of Marx's analyzes themselves.Thus it is shown that in the third volume of capital Marx defined fictitious capital as the most concrete form of capital, which can be described in a formula at a complex level of analysis as follows:

G - [ G - W - G '] - G "or even G - G". (Ibid .: 155)

​For Milios, this formula, which stands for fictional capital, refers to the form of money as capital, and this simply implies commodification, i. e. Money as capital in its most developed concrete form assumes the form of a commodity sui generis, which has a price: W - G. The authors point out in this connection that Marx objected several times against Proudhon, that the form of the interest-bearing or fictitious Capital should always be understood as a commodity. (Ibid.) Not only natural resources such as land, but capital itself can become commodities in the form of self-exploiting money. Here, the money can be sold in a variety of forms, u. a. a money capitalist can swap his money for a title of title against a legally fixed monetary claim which in turn can be traded by him. Thus, in the "trade" of money capital, its use value is transferred as potential capital to the buyer, and at the same time the money capital is used by the seller. This trade takes the form of a contract whereby the money capitalist transfers his capital to the buyer, who uses the money productively and at the same time undertakes to make certain payments to the money capitalist in the future. One has to do here with a doubling of the fictional capital. At this juncture, however, we already report doubts about the determination of the notional capital or derivatives as commodity sui generis, although we certainly agree with Milios that the derivatives are not money, since derivatives have just been exchanged for money and realized. The exchange of the commodity against money is for Marx, apart from the special commodity of labor, an exchange of equivalents. When exchanging derivatives for money, this type of exchange transaction is not exactly the thing, because a profit is to be made with the realization of the derivatives. Daheri is therefore talking about a new form of speculative money in derivatives. But let's look further at the course of reasoning at Milios.

The use of fictitious capital generates the expectation (E1) of future income and profit streams (Dt + 1, Dt + 2, Dt + 3 ...) which are to flow back to the owner of the capital. In the case of Appendix D (for reasons of simplification, it is assumed that there is a reflux of cash flows with a constant interest rate up to (R10) - an interest rate that takes into account all the risks involved) the capitalization or the price increases to estimate expected future income streams according to the following equation: (Ibid .: 140)
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Capitalization includes in the course of fixing the price (Pt) the calculation of the expected value of future yield or income streams. At the same time, the fluctuating liquidity on the financial markets should serve purely to increase the money capital. For the Marxist interpretation of the above formula, however, there are two problems to consider: First, the materiality of price formation always includes the complex articulation of social power relationships that co-organize and reproduce the exploitation of monetary capital. Second, the structure of monetary utilization (capitalization) can not be separated from the "real economy" at all, and it can be assumed today that financial capital, as the dominant form of capital, possesses its most important instrument in the derivatives and exactly with its trade dominates and controls the »real economy«. Here it applies, the mutual translation of the dynamics between capitalistic power relations and the price formation, which in the sizesEt [Dt + i] and (R) is considered to be essential when it comes to the processes of financialization. (Ibid .: 141)

At this point, the team of writers around Milios introduces the notions of "risk" and "governmentality", with whose analysis the derivatives understood not only as a new form of money capital, but also as a technology of power that very efficiently assures the reproduction of capitalist power relations as a whole become. Recalling Foucault's governmentality studies (Foucault: 2004b), Milios's team of authors describes the processes of financialization as technologies of power that enable economic, political, and social power relations to be representationally articulated. ( Sotiropoulos / Milios / Lapatsioras 2013a: 155ff.) Representations that are always connoted in the pricing of financial instruments are to be understood as active entities operating within the power relations. Derivatives are thus not only concerned with the increase of money capital, but also with the representative reproduction of capitalist power relations in relation to the mode of financial operation. This now has to be demonstrated on the basis of the problem of risk production.

Modern finance operationalizes the capitalization of expected future income and income flows condensed into derivatives or synthetic securities, whether these returns or income now come from the extraction of surplus value by private companies, government taxation or the subtraction of salaries. (Ibid .: 179) This type of capitalization also means that the class struggle and the inherent balance of power between classes and class fractions are connected with monetary quantification, which in turn is related to the representation of capitalist reality. (Ibid .: 156) The singular financial events that are present in the socio-economic structures, are on the financial markets with the help of scientific discourses, charts, models, etc. interpreted and then converted into quantitative characters (commodity prices). Once the economic events have been translated into the semiotics / linguistics of the financial markets, they include the specific design of the economic risk. Both the concept of fictional capital, the Marx in the third volume of thecapitalhas developed in fragments, as well as the practices of the current capitalization for Milios formally cry out for a sophisticated analysis of the concept of risk. It must always be remembered that the "value" of a financial investment (the value of money capital) is not subordinate to the capitalist production process, but logically precedes it. I. e. it does not exist because either it has already produced surplus value or realized another kind of income or asset in the markets, but because the financial capital is to some extent confident that the realization of returns in the production / circulation of capital take place in the future and will repeat itself according to the standards of extended reproduction.

The author team around Milios transposes the risk problem in the Marxist discourse. If one considers the risk in the application of statistics or stochastics solely as uncertainty about the development of future volatility (the measure of the fluctuation of parameters such as stock prices, interest rates etc. - commonly, volatility is the standard deviation of the change of the respective parameter considered defined) describesthen we do not take into account what the objective mechanisms of capitalization and their corresponding practices of the different market participants in the financial markets really indicate. There are countless research departments in the various financial institutions that are trying to assess the future trends of global price movements of the derivatives and evaluate by collecting corporate fundamentals and classify the "fit each to their mathematical models," and this is based on the use of Statistics or stochastics, in order to finally be able to predict possible probabilities of the occurrence of economic events.

First of all, risk is to be understood as a socio-economic term that serves to interpret and evaluate the potential of future economic events in order to increase the chances that very specific - profitable events will occur. (Ibid. 157f.) And risk management implies the attempt of financial capital, including its affiliated discourse systems, opinion industries and research departments, to anticipate future economic events and trends; Events which are continuously formulated with the help of models of statistics and probability calculus, which are attributed to economic mathem. (Ibid .: 161) capitalization, a method of calculating fictitious and speculative capital, In other words, it involves a specific mode of representation and identification, regulation and forecasting of future economic events, which must be distinguished from each other in order to then identify and objectify them as risks and finally act as derivatives. There is no capitalization without the specification and comparison of risks, without identifying economic events in the context of specific risks, then objectifying them, that is, addressing and acting as risks (as abstract risk). (Ibid. 175) There is no capitalization without the specification and comparison of risks, without identifying economic events in the context of specific risks, then objectifying them, that is, addressing and acting as risks (as abstract risk). (Ibid. 175) There is no capitalization without the specification and comparison of risks, without identifying economic events in the context of specific risks, then objectifying them, that is, addressing and acting as risks (as abstract risk). (Ibid. 175)The risk sui generis is integrated into the logic of capital.

Economics classifies risk as an opportunity expressed as a measure of confidence in realizing the future price of an income stream, with the statistical variance of price and returns as the measure of confidence. (Ibid .: 157) Securities with a high variance (in terms of yields) are to be classified as more risky than those with a lower variance. If the price of government bond A is only half as volatile compared to the price of stock B, then this can be written as follows: x · VjA = 2 · VjB (V is the variance, j refers to individual, hypothetical estimates). (Ibid.) In this equation, which is usually used by the public finance, it is not considered that the subjectively anticipated variance can by no means express the abstract risk that eventually has to be accepted by all market participants. The subjective expectations of a market participant j can be written using the following formula: x · VjA = y · VjB = z · VjC = ... (ibid.). Obviously, a measure is lacking here which serves to homogenize the different expectations of the market participants, i. e. there is no comparison of the various concrete risks (ie abstract risk) so that the economic objectivity and relationality that capital demands can not necessarily be established. (Ibid .: 158) x · VjA = y · VjB = z · VjC = ... (ibid.). Obviously, a measure is lacking here which serves to homogenize the different expectations of the market participants, i. e.there is no comparison of the various concrete risks (ie abstract risk) so that the economic objectivity and relationality that capital demands can not necessarily be established. (Ibid .: 158) x · VjA = y · VjB = z · VjC = ... (ibid.). Obviously, a measure is lacking here which serves to homogenize the different expectations of the market participants, i. e. there is no comparison of the various concrete risks (ie abstract risk) so that the economic objectivity and relationality that capital demands can not necessarily be established. (Ibid .: 158)

All processes of pricing of derivatives require the sizing of concrete andabstract risks. This requires a specific economic space (financial markets) in which the various market participants, as carriers of risks, are assigned a specific risk profile that enables them to negotiate or price out contingent claims.(Ibid .: 168) These are market fields in which concrete risks are shaped, formed and transformed into abstract risks that inherent in the comparison of specific risks through derivatives. The financial capital "normalizes" the market participants on the basis of risks; the financial machinery enables the distribution and diversification of the various specific risks among market participants (who are in heterogeneous market populations and in competition with each other) and the pooling of specific risks,

However, if all market participants invariably make use of risk management, they are by no means subsumed under identical risk categories (the specific risk events must therefore be compared) and even those in the vicinity of similar risk assessments and risks therefore own not the same opportunities to realize certain risks. (Ibid .: 161) We have to deal with a specific formation of the different risk profiles from the outset: the anticipation, the evaluation and the comparison of possible financial events and the resulting opportunities to realize the desired event in the context of a necessary evaluation of the respective risk carrier. (Ibid.)

The creation of risk profiles can be interpreted as a process of normalization, since the attribution of these profiles to certain market participants distinguishes these from each other and at the same time compares them in order to individualize them in terms of risk. (Ibid .: 157ff.) Consequently, we are dealing with highly flexible processes of normalization, i. H. a very specific type of individualization in the context of socio-economic power relations, within which, without exception, every market participant is considered a risk factor, i. e. each market participant per se is exposed to the risk that characterizes it. (Ibid .: 161) However, the process of risk allocation does not imply the affirmation of an invariant norm, which market participants have to incorporate from the outset, but normalization is to be understood as a game of "differential normalities" (Foucault), which is related to the fluid economic relations in which market participants find themselves competing in financial markets and making profits by trading derivatives , Normalization by statistical models proves to be differential and at the same time homogenizing; It includes the permanent evaluation of information, that is, variable statistical surveys and situational probabilistic calculations used to calculate normalities. if they want to compete in the financial markets and realize profits by trading derivatives. Normalization by statistical models proves to be differential and at the same time homogenizing; It includes the permanent evaluation of information, that is, variable statistical surveys and situational probabilistic calculations used to calculate normalities. if they want to compete in the financial markets and realize profits by trading derivatives. Normalization by statistical models proves to be differential and at the same time homogenizing; It includes the permanent evaluation of information, that is, variable statistical surveys and situational probabilistic calculations used to calculate normalities.

The writing team around Milios brings Foucault's provinciality studies into play again. Foucault raises the question of how a systemic market population characterized by a variety of power relations can be put into a "state" by the classification and regulation mechanisms of financial capital, with which cohesion and continuity become more objective and subjective economic forms of transport is guaranteed. The question remains whether and how the concept of governmentality could help to understand the organization and operationality of financial markets, assuming that in their territories, differential power relations are scattered and distributed in quite hierarchical formations. To answer this question,

It addresses the analysis of heterogeneous market populations, whose normalizing regulation is aimed not only at distinguishing, comparing and individualizing market participants, but above all at producing very specific populations, which are regarded as higher-scale agencies. (Ibid .: 164) Current financial governmentality focuses on controlling these market populations, integrating them into existing economic power relations through very specific power technologies. These are collective phenomena which, to some extent, are to be classified as aleatory, and which at the same time must be investigated serially, that is, over certain periods of time.

So you can assumethat financial machines provide for a flexible normalization on the basis of risks, by assigning risk profiles designed specifically for different market participants. It is therefore important to capture the processes of risk production in those virtual-current dynamics that act within the framework of the differential structures of the financial economy. When companies go to the financial markets to sell bonds or conclude loan agreements or insurance policies, they must be endowed with risk profiles whose structure, scale and taxonomy depend on their ability, in the opinion of the relevant financial firms, in a competitive economic environment are to pursue effective profit strategies. Complementarily, today a capitalist state as a sovereign debtor needs a risk profile produced by rating agencies that articulates its ability to successfully exercise neoliberal hegemony through austerity policies without causing the onset of class disputes so dreaded by ruling capital groups. And the risk profile of a wage earner is based on his complacency in affirming the capital-regulated employment relationships. It should also be assumed that, as part of normalization processes, financial firms not only differentially spread risk profiles on the basis of risk, but also continuously perform stress tests, which demand a very specific pragmatism of market participants in the context of the differential distribution of risk on the basis of monetary capitalization. Normalization as risk production is intrinsic to the mechanisms of financial markets and requires a specific technology of power (financialization) to achieve a reasonably stable organization of capitalist power relations, in the spirit of economic and political efficiency gains by corporations, states and households. (Ibid .: 168) As a technology of power, financialization directly affects the accounting, financing, and crediting of companies. Risks are constantly being re-generated, ie traded, diversified and bundled or packaged. At this point, the capitalization of the two sides of the company balance sheets is recorded: There is both the securitization of debt obligations (liabilities) and the securitization of income (assets). (Ibid .: 227)

If different market participants are integrated into the mechanisms of risk production and thus incorporate certain socio-economic practices that they individualize as bearers of risk profiles, then they will also be forced to engage in specific risk management, which includes insurance or hedging against risks, On the other hand, it leaves open the possibility to take risks offensively, that is, to exercise specific strategies that promote the efficiency of projects in order to pursue the goal of profit maximization, as required by socio-economic power relations and accumulation dynamics at the level of total capital. (Ibid .: 169f.) Together, these two moments of risk management outline a complex technology of power. In general, the risk calculation implies a systemic evaluation of each individual market participant, with regard to the effectiveness of his respective risk management and the objectives implemented in it, i. e. every market participant lives the risk as his own reality and at the same time is caught and caught in his role as a risk taker. This process contains in itself the complex contours and constellations of a technology of power. (Ibid .: 164) And the shaping of power technologies requires an ensemble of different social institutions, knowledge arrangements, analytical discourses and tactics: represented by banks, hedge funds and insurance companies with their highly specialized research departments, rating agencies, magazines, think-thanks etc. with regard to the effectiveness of its respective risk management and the objectives implemented in it, i. e. every market participant lives the risk as his own reality and at the same time is caught and caught in his role as a risk taker. This process contains in itself the complex contours and constellations of a technology of power. (Ibid .: 164) And the shaping of power technologies requires an ensemble of different social institutions, knowledge arrangements, analytical discourses and tactics: represented by banks, hedge funds and insurance companies with their highly specialized research departments, rating agencies, magazines, think-thanks etc. with regard to the effectiveness of its respective risk management and the objectives implemented in it, i. e. every market participant lives the risk as his own reality and at the same time is caught and caught in his role as a risk taker. This process contains in itself the complex contours and constellations of a technology of power. (Ibid .: 164) And the shaping of power technologies requires an ensemble of different social institutions, knowledge arrangements, analytical discourses and tactics: represented by banks, hedge funds and insurance companies with their highly specialized research departments, rating agencies, magazines, think-thanks etc. every market participant lives the risk as his own reality and at the same time is caught and caught in his role as a risk taker. This process contains in itself the complex contours and constellations of a technology of power. (Ibid .: 164) And the shaping of power technologies requires an ensemble of different social institutions, knowledge arrangements, analytical discourses and tactics: represented by banks, hedge funds and insurance companies with their highly specialized research departments, rating agencies, magazines, think-thanks etc. every market participant lives the risk as his own reality and at the same time is caught and caught in his role as a risk taker. This process contains in itself the complex contours and constellations of a technology of power. (Ibid .: 164) And the shaping of power technologies requires an ensemble of different social institutions, knowledge arrangements, analytical discourses and tactics: represented by banks, hedge funds and insurance companies with their highly specialized research departments, rating agencies, magazines, think-thanks etc.

You can implement the fi nanzialisierung in capital accumulation do not understand if you do not examine the structure of commensurability which the differents concrete Risike n'll Ever Meet AuPt only comparable and measurable. The different risk profiles include various concrete risks, with the first being theThe probabilities of realizing these risks must be taken into account, whereby with the use of stochastics the trade of risks seems to be possible today. However, if there was no guarantee that the significantly different types of concrete risks could be compared by means of a highly differential and at the same time general "measure," which supplemented the economic math of money, then financialization would be neither a normalizing power technology nor could their functioning be structurally understood within the framework of capital as a total complexion. In order to conceptualize normalization on the basis of risk in the context of socio-economic power relations, it seems evident that that different types of concrete risk need to be transformed into a singular dimension - an abstract risk through which the derivative is embodied, trading in money. (Ibid. 178)Today, derivatives are definitely an effective solution that ensures the commensurability of specific risks. The derivative instruments with which companies capitalize their risks play a crucial role in the functioning of financialization, both in terms of technology of power and in terms of deepening monetary capitalization. It is only with the help of derivatives that it is possible to compare different types of concrete risk, and thus the derivatives stabilize and reinforce both the processes of capitalization and the control functions of financialization, giving them a homogenizing and differentiating character Assessment of different aspects of the monetary circulation of capital becomes possible.

The rise of derivatives markets today means intense exploitation, with the profit maximization strategies of companies being geared not only to increasing absolute profit sums, but above all to increasing profit rates. If capitalist A invests 1000 euros and realizes 200 euros profit, and capitalist B invests 100 euros and realizes 50 euros profit, then it may be capitalist A who disappears from the market, and not capitalist B. Capitalist A would have entered the production process Investing capitalist B and thus possibly realize a profit of 500 euros instead of 200 euros, because the function of finance is just to make such splits, transformations and shifts of investments with a high fluidity, and an uneven increase in profit rates (extra profits at the microeconomic level). It is also about the availability of interest rates, whereby the analysis of the ratio of profit and interest rate indicates why under certain circumstances no investment will be made (also due to the problematic of a declining rate of profit discussed in the Marxist theory formation, see Kliman 2006, Roberts 2015 , Shaikh 1992 etc.). It is important to note once again that dodern Finance neither a threat to the "real capital" is not explicitly a general stukturelle weakness of capital (tendential fall of the rate of profit) symbolizes rather the "sets the finance as a specific technology of power (in addition to their function of recovery of money capital) Laws "capital more effectively by than ever, so they made more flexible to the current capital own Axiomatiken and rules, which derivatives are to be understood as an integral part of the transverse capital accumulation, which differentiate the individual capitals on the basis of risk production, but at the same time the exploitation strategies in terms Make the increase in efficiency comparable and, if possible, more effective. There is a permanent mobilization of the individual capitals,

Milios' writing team discusses the different moments of financialization with an example (ibid .: 170ff.): An actor A buys a security S that contains a number of concrete economic risks that play an important role in the further pricing processes of the security. Here are in this exampleThe specific risks are reduced to two risks: interest rate and default risk. Actor A enters into a relationship with Actor B holding a US Treasury Bond. The two players agree to exchange their securities. Actor A will overwrite the security with all its future claims and payments involved in it, and will receive a long-term bond with the same maturity, within which all payments involved in the US Treasury Bond take place, exposing the B to the default risk Securities S takes over. At the same time, actor A may sell interest rate risk to actor C, who, as the holder of a US Treasury bill, also wishes to sell interest rate risk. Until the 1980s, the majority of financial transactions carried out on the money markets were.

In the course of the incessant global rise of the derivative financial markets, however, derivatives trading has been decoupled from this type of exchange: In order to stay with the above example (Ibid .: 171): The three market participants now succeed in absorbing further risk potential by using the exchange their securities with future income streams. So instead of exchanging the property titles themselves, the actors are taking further risks by exchanging and offsetting the future income streams that these papers anticipate. Actor A now continues to hold Securities S, but exchanges the future cash flows related to them with those cash flows corresponding to a sequence of future Treasury Bonds and Bills payment streams. Actor A is the only one who holds the security S and players B and C carry the respective default and interest rate risk in isolation. While actor B carries the risk in the event of the security defaulting, actor C must expect losses if the short-term interest rate increases. This type of agreement implies the conclusion of a CDS (credit default swap) and an IRS (interest rate swap).

With the derivatives specific risks, in the above example the default and interest rate risk, can be outsourced from the original security and then also cut, bundled, transferred and quasi-autonomously, ie independent of the price movement of the underlying. This "repacking" of specific risks includes pricing processes and the trading of abstract risks. Although interest rate risk and default risk can be considered to be the bundles of various concrete risk components, it seems reasonable to conceive of these risks as a specific derivative form insofar as they are currently tied into a complex set of specific market operations. Thus, CDS and IRS are considered to be a condensation or Bundling spot market transactions into a single financial instrument. (Ibid.)Derivatives can only act as an objectification of an abstract risk when different types of assets / collateral are combined in a single security. (Ibid.) This (virtual) reality as a value enables the comparison of heterogeneous, concrete risks, or to put it another way, the derivative refers to the abstraction of the inequality of the specific risks by reducing them to a singular social attribute : on an abstract risk. In this context, on the financial markets - ie economic spaces sui generis - the valuation of the individual capitals and the promotion of particular forms of financing takes place in the course of the enforcement of profit maximization strategies. And the derivatives have to be considered as necessary multilinear "instruments" of a financial system,

However, traditional Marxist or heterodox economists continue to claim that derivatives are only a fatal detachment from classical capitalist production. In the end, these arguments come to the same conclusion again and again: the development of the derivatives industry is definitely linked to a fall in the rate of profit in classical production, with the industrial sector of the economy in stagnation (tendentious fall in the rate of profit). Milios, on the other hand, argues that modern finance is a particular, yet at the same time highly effective, way of organizing capitalist reality (at the level of individual and total capital), which may even lead to an increase in rates of profit;
The mechanisms of capitalization normalize the various market participants in the financial markets on the basis of risks. Various specific risks are associated with different risk profiles, which in turn indicate different ways of realizing the risks. First of all, the process of normalization by financialization may include as many versions of risk management as there are subjective expectations about the evolution of future income streams. (Ibid .: 174) At this point we should again ask ourselves: Can there be anything like a kind of general measurement of the concrete risks, which are coupled with different (subjective) risk expectations? Is there any comparison of different concrete risks based on objective measurement? Provided there is a relation between the processes of normalization based on the risk and the general organization of socioeconomic exploitation processes and power relations of capital, it seems first necessary to classify different types of risks as singular and monodimensional in order to then present them in an objective way Way to compare.(Ibid .: 174) Precisely because each singular risk strategy pursues a single goal within the framework of the economy of capital (monodimensional maximization of profit),However, if the realization of capitalist efficiency initially takes the form of a mono-dimensional (profit-oriented) process, this can not be said about the market participants' risk assessment on the financial markets: there are different categorizations and subjective aspects of the risks, but that is precisely why the process of Normalization on the basis of risks to the comparability of specific risks, otherwise the financial reproduction process of the total capital would sooner or later break apart.

This is where the derivatives really come into play, because with their help you can compare the different concrete risks and start a kind of objective measurement. Derivatives contribute to the resolution of the multidimensionality and multi-subjectivity of the risks, which are now reduced to an objective level, i. e. A "system" is established that at least tends towards a homogeneous or socially sound measurement of different risks. Suppose that in the framework of theCAPM model of term »beta« involves a quantified assessment of the risk of each individual asset. All assets with a given / identical "Beta" can now be considered as perfect substitutes from the risk point of view. However, this does not apply to every single concrete risk involved in a security, because the comparability of the different assets is not equal to the reasoning of the various concrete risks, as each asset incorporates different types of specific risks. The comparison of the different risks is therefore possible only with the help of the derivatives, which relate to the price movements of the assets. Even if you now assume that the "beta" could express an adequate measurement for every single risk contained in an asset, This would not be enough to compare the individual specific risks, because "beta" involves a calculation that does not have to be accepted by every market participant, while the monetary "value" of derivatives, ie the fact that they are cashed but guarantees something like an "objective" measurement, which is recognized by every market participant in the course of their day-to-day financial transactions. (Ibid .: 243) which is recognized by each market participant in its daily financial transactions. (Ibid .: 243) which is recognized by each market participant in its daily financial transactions. (Ibid .: 243)Only with the help of the derivatives, whose trading in turn is largely independent of the underlying assets, are the processes of pricing on the financial markets now possible. And it is important to note that the trade in derivatives always measures the abstract risk in terms of money. How can this process of capitalization by derivatives now refer to the most important statements of Marx's theory of capital?

The author team around Milios again provides a simple example (Ibid .: 176f): Assuming that the swap has to be considered as a central form for all financial derivatives, one introduces a fixed-for-floating-rate-swap. (Ibid .: 175) In general, the swap is a contract designed to exchange the future cash flows of risk-based assets. It is now assumed that asset A is the sovereign bond of a sovereign, developed capitalist state guaranteeing a fixed income Ra, while B is a loan borrowing from a capitalist enterprise with a floating interest rate Rb. At an abstract level, the fixed-for-floating-rate-swap expresses in itself the comparison between two future cash flows (two different yield streams are swapped):

x · Ra = y · Rb (Ibid .: 176)

This equation by no means indicates the exchange of two different types of commodities, but instead exchanges two different future-oriented income streams. It must be noted that, in contrast to the (simple) value form developed by Marx, neither of the two income streams expresses their value in a different value, because the value expression of the income streams is already established, since the future income streams are basically measured in money and exchanged. Therefore, one can not assume that derivatives similar to an aggregated system, different currencies, interest rates or different assets compare with each other, but this comparison is set by the money ever. This is a completely different kind of commenting:

The future income streams Ra and Rb are therefore commensurable on a monetary level. How should one now understand the socio-economic relations that are necessary in order to arrive at a quantitative comparison of the rate x / y at all? The two streams of income can only be measured and exchanged for money if the socio-economic relations, that of state governance in case A and that of private surplus production in case B, are to some extent uniform, that is, to the satisfaction of financial capital which requires a kind of comparison of the assets (besides their measurement in money). The above equation is based on this fundamental condition: series of class conflicts, which are each already identified as risks, are subjected to comparison, or, To put it another way, the comparison of the two future income streams, which are ever realized in money, additionally requires an objective representation and commensuration of the universe of concrete risks. In this context, the new institutional quality of financial capital, which is signified by the existence of derivatives, is based on a more integrated, normalized and refined manner than economic capital in the context of monetary capital circulation be represented. Concrete, different risks and the associated probabilities tend to be exposed to the valuation and the comparison, i. e. they receive an objective status with the form of the abstract risk and function largely independently of the subjective assessments of the market participants. (Ibid.: 177) Financialization and derivatives markets have made it possible, in unison, that objective assessments of financial assets and assets take place as a generalization of the interpretation and observation of the capitalist reality from a risk point of view. When derivatives integrate specific risks and thus incorporate abstract risks, they can be viewed from the perspective of comparing specific risks as a generalization of the interpretation and observation of capitalist reality from the point of view of risk. When derivatives integrate specific risks and thus incorporate abstract risks, they can be viewed from the perspective of comparing specific risks as a generalization of the interpretation and observation of capitalist reality from the point of view of risk. When derivatives integrate specific risks and thus incorporate abstract risks, they can be viewed from the perspective of comparing specific risksand the capitalization of the abstract risk. Thus, the commensurability of the different, concrete risks first demands an abstraction from their concrete character and their transformation into a single abstract risk. (Ibid.) On the assumption of a fictitious exchange, each particular risk can then be considered equivalent to any other arbitrary risk, and as a result any derivative traded on the derivatives markets can be viewed either from the perspective of the concrete or the Consider view of abstract risk. (Ibid.)

We can regard the abstract risk as a singular risk insofar as it is considered to be risk from the point of view of the general comparison of specific risks and the measurement of risk, whereby the abstract derivative risk is ever realized in money, and hence the derivative as an important financial relation within the extended reproduction of capital and the structure of capitalist power. The form of the abstract risk or its incorporation as derivative thus contains the risk measured in money. (Ibid .: 178)The conditions for the abstraction of (virtual) risk complexions are given by money, which also means that the distinction between concrete and abstract risks does not mean the existence of two risks, but the presence of two inseparable dimensions of risks inherent in the construction and the circulation of derivatives are implied. In the process, the abstract risk inheres a mediating function and a corresponding dimensioning of the concrete risks, which in the first place can assume a socio-economic dimension. The comparison of contingent, different, concrete risks therefore requires an abstraction from their concrete character and their subsequent modification into a singular and quantitatively comparable abstract risk.The abstract risk is thus considered as a mediating factor, which makes it possible to unify different concrete risks, that is, the plurality of heterogeneous types of risks is reduced to a singular level in the course of their bundling, by exchanging the abstract risk as a derivative.

x · IRS = y · CDS = z · [FXfuture] =. , , (Ibid .: 178)

​It concerns with the synthetic securities always a partially determinate actuality (specific risks) as well as a virtual structure (abstract risk) whose radical determination, however, operates to be the money capital as differential movement. D ie ability to be virtualized abstraction is always already given by the money that is in turn integrated in the form of money capital in virtualization update interconnections. In this context, the abstract risk is sold by derivatives such as the COD or CDS. For example, synthetic synthetic CDO has the potential to aggregate (mix, package and bundle) a heterogeneous set of securities into a single homogeneous pool, acting as a single stream of money and as an abstract risk. As a result, the homogeneous pool can be divided back into different classes of risk and cash flows, which can radically change the quality of both components (the emerging risk classes are called tranches, which vary in liquidity, maturity and cash flow in different ways can arrange again).

Milios understands derivatives as specifically incorporating and "abstracting" a set of known concrete risks as a commodification of risks. HeIn this context, two aspects are essential: on the one hand, derivatives should not be categorized as money, but as (fictitious) goods, because derivatives are always exchanged for money. Derivatives are also to be understood as instruments that serve a specific form of power and the organization of the circulation of capital. However, Marx decides the exchange between money and commodity, apart from the special "commodity" labor force, as an exchange of equivalents. However, the exchange of derivatives for money is not an equivalent exchange, but the objective of the exchange is clearly to make a profit by realizing the derivatives in money. We therefore speak of derivatives as a new form of speculative money capital. 2To speak of speculative money capital means that as a form of capital it takes over the function of implementing the imperatives of capital in general or as a total complexion, namely profit maximization, differential capital accumulation and increasing productivity through innovation. Added to this is the incorporation of a power technology of capital. Detlef Hartmann expresses this in a similar way, even if he assumes a FED-driven credit tsunami. He writes: "For the petty-bourgeois and petty-bourgeois critics of speculation - including the left - usually forget that speculation is not just gambling.

When Milios writes that derivatives within a financial universe of partial representations (those involved in the different types of portfolios) participate in the production of profits as duplicates of the capital relation and complement this relation, then it just seems appropriate to abstain from the derivatives as goods and not as money, but as a specific form of capital.

To clarify this, it is assumed that the collateral A and B include the debts of two capitalist companies.If then a swap on an abstract level in itself the comparisonbetween the future flows of these securities, it is not the exchange values ​​of two commodities that are compared with each other and subjected to monetary exploitation, but rather the comparison or exchange of two future flows of capital. If one is so consistent in subsuming stocks or bonds among fictional capital, then one must be so consistent in qualifying derivatives as fictitious or speculative capital. As a result, derivatives are to be structurally understood as a specific form of money capital, as the currently most profitable form of speculative money capital, and at the same time as an effective mode of operation, with which the conditions.

​1 Speculative money capital, which, as we have seen, has different contingencies, absolutely needs quantification. This concerns the one side of modulation, namely the economic math or the modularization of all processes as normalization, number, algorithm, measurement and rasterization by money. Modularization includes the metrical and rasterizing reterritorialization, think of cellular automata and modules, the existence of standard measures, from the industrial norm to the money. It is also about time and space in all directions becoming increasingly fragmented in order to measure smaller and smaller parts of economic variables (think of the introduction of the decimal system on the stock exchange), i. e. to reduce the scale endlessly - and this interferes with the deterritorialization, the excessive valorization or increase of the money capital and the smoothing of time and space. Modularization thus always remains on the dynamics of Virtualization / Deterritorialization / Differentiation of speculative money. Regarding the latter aspect, Gerald Raunig speaks of modulation, which sets in motion the continuous non-numerical smoothing of all possible retritization attempts and their spatio-temporal realizations. (Raunig 2015: 185f.) As such, non-numerical virtualization is by no means subjugated to quantification - Malik sees this as quite right, while constantly under-emphasizing the problem of quantification and measurement.

But what mediates the discourse of money capital with the quantification (mathem of the economy)? What Raunig calls mediation at this point certainly has nothing to do with the introduction of a mediating third party. By medium is meant always meanness, barre or difference between two sides, and not one side or the other. (See Fuchs 2001: 151) Raunig speaks at this point of the »Einelung «of the difference, of a process or a mode of modulation, both the modularization as a framing, standardizing, quantifying method (mathematician) as well as the modulation as permanent reformulation and smooth, non-numerical variation of forms (not quantifiable processes of re-formation such as de-formation). The stratification of layers and layers and the formation of modules (modularization) interfere with the modulation, the deterritorialization, the machine consumption and the differential price movement. Although modularization and modulation can be separated analytically, they intermesh, as Raunig says, as double modulation. Raunig finally speaks of qualitative alignment as a prerequisite for quantitative grading in terms of the relation between modulation and modularization. The indefinite multiple then tilts into the definitely measurable and this tilting process marks Raunig as a possible interface of social transport, which today becomes a principle of order. (Raunig 2015: 185f.) On the other hand, in laruell terms we would say - and this in fact is much more precise in terms of the unification of difference - modulation and modularization overlap each other, and they are at the same time related to the one modulation of capital as a total complexion in the last instance. The superposition of modulation and modularization thus remains related to the modulation in the last instance. Superposition indicates a non-classical relationship between different possibilities. (See Barad 2015: 87). Being and becoming are indefinite - the superposition can not be measured or counted as such and remains ghostly. In the The post-feminist conception of quantum mechanics by Karen Barad is not only about the questioning of the essence of the two-oneness, but also of unity, and not only that, but even multiplicity and being should be completely deconstructed. Laruelle, on the other hand, attaches the superposition to the one-real (it is not unity, but occasional), which, however, does not over-regulate the relations of the superposition, but under-determines, in the last and not in the first instance. The last reason here is the real, the occasional. However, the real should not be equated with the reality of capital, and this in turn should not be equated with the concept of capital. The relationships between modularization and modulation must definitely be related to the quasi-transcendentality of capital.

Of course, the relationship between modulation and modularization has to be determined more precisely, that is, the modulating contingent processes must be presented as possibilities for quantification and measurement. At the same time, it must be determined how the contingency is produced and controlled by capitalism. Identifying transformations of the potentially diverse into the potential equal here means pressing a fractal rhythm or a polyphony into a comparable transcendence of capital. It therefore remains to be doubted whether a libertarian derivative policy can be constructed and practiced in the sense of Randy Martin's, who demands a hypertrophic intersectionalism, a maximally heterogeneous set of all forms of difference, without necessarily having to consider the specificity and difference of all elements of the set. Perhaps today one should rather start from a minimal heterogeneity in which the communities of alterity are characterized not by radical difference but by radical commonality. This type of non-ontology of difference, if described in terms of radical equality, would be more likely to invoke the axiomatic exploration of the insufficiency of identity than the euphoria of difference.

2 The Randy Martin in his book Knowledge LTD ang esprochene aspect, which states that derivatives various forms of capital and varieties make each other commensurable and provide an extremely flexible measure, supported in some way the thesis of the derivative as a form of money capital. Martin writes: "While the mass production line gathered all its inputs in one place to produce a tightly integrated commodity that was more than the sum of its parts, financial engineering spooledthis process is reversed by disassembling a commodity into its constituent and mutable elements and dispersing these attributes to bundle them together with the elements of other commodities that are of interest to a globally oriented market for risk-controlled exchange. All these moving parts are reassembled with their risk attribute, so that they are worth more than their individual goods as derivatives. "(Martin 2015: 61, translated by Gerald Raunig) And further:" But while goods are a unity of wealth appearing that can abstract parts into a whole, derivatives are still a more complex process in which parts are no longer consistent, but are constantly being decomposed and regrouped when different attributes are bundled and their value exceeds the whole economy, under which they had been summed up. Shifts in size from the concrete to the abstract, or from the local to the global, are no longer external yardsticks of equivalence, but within the circulation of bundled attributes that duplicate and set in motion derivatives transactions. "(Ibid .: 60, translated by Gerald Raunig)

Translated by Dejan Stojkovski

taken from:

by Achim Szepanski

The financial investors, who focus primarily on the realization of short-term profits, are today important players in the financial markets. In their own interest in the markets, they observe all the news that points to better profits for companies, as well as their observation of the attractiveness of nation states, and it is particularly gratifying for governments to announce budgetary cuts, curtail social benefits and to reduce the regulations on the financial markets. The valuation of individual human capital also depends on similar criteria, such as the speculation about future qualifications and the question of flexibility and adaptability of the employees.
​
Just as the working-class movement has always denounced exploitation in wage-bargaining and sought new forms of negotiation and struggle, according to Michel Feher, today's activists fighting in the sphere of circulation should use their opponents' skills and forms of negotiation, In so far as it concerns the manner of speculation, to invent new forms of struggle itself, ie the Investee activism itself should change the conditions of accreditation of capital, even play the game of self-fulfilling prophecy of investors to something to that Feher calls "counter-speculation." It is important to constantly confuse the governance of the states and the investment activity of the companies and at the same time increase the attractiveness of their own practical alternatives,

Today's big companies always create a dominant shareholder / owner relationship with a number of other players, including managers who are not only responsible for increasing dividends over wages and reinvestments, but also constantly worrying about increasing stock market valuation of companies. This "corporative governance" is not geared to the endogenous growth of companies, as was the case with management in Fordism, but is primarily about the valorisation of the financial assets that companies represent in the eyes of investors. Instead of the long-term profits that result from the sale of goods, it's about the methods of short-term capitalization,​

​On the one hand, a certain responsibility towards the stakeholders must be preserved, but without losing sight of the performance for investors for just one second. If it is the role of the managers to focus on the stock market value of the companies, this also very quickly affects the very different interests of different groups of stakeholders. If the social impact of measures that are necessary for investors to gain confidence in a company is generally negative for stakeholders, then they will have to consider whether to formulate their claims on investors together rather than their particular interests to follow. To develop a class consciousness of the stakeholders to share a common antagonism is therefore necessary, but not enough, to achieve joint mobilization. The organizations that represent the various stakeholder interests - trade unions, consumer groups, fair trade propagandists, environmental activists, etc. - must look after the various relationships and "links" between the particular interests of the stakeholders and strive for any kind of subversive cooperation. Stakeholders should also strive to "simulate" the methods of the credit rating agencies, which are important players in the financial markets when it comes to evaluating the short-term projects of financial investors, by creating their own organizations that send signals to investors that point to the social and environmental accountability of companies and the fact that Failure to comply with certain standards can even lead to business losses. This concerns, for example, the "global print" of companies, their influence on the climate, the health of workers, working conditions and the influence on state budgets. Feher calls on stakeholder organizations to develop something like a "common accreditation index" that takes into account labor laws, environmental protection, consumer protection and the fight against tax cuts for corporations.

​As financial capitalism became hegemonic, the influence of the tripartite relationship responsible for Fordism - entrepreneurs, workers, and state employees - receded and was overshadowed by the triangular interaction between shareholders, managers, and stakeholders. But even if the influence of the states has declined, they are not disappearing from the scene, but they are in a dual dependency in the developed countries. On the one hand, governments are still dependent on the electorate, but on the other hand, they must constantly defend the interests of the people consider financial investors. While the first aspect concerns democratic legitimacy, the second concerns the size and design of households.

The economic stagnation that hit most industrialized countries following the exhaustion of the Fordist model of capital accumulation, as well as new opportunities for capital owners (made possible by floating currencies, energy liberalization, and deregulation of financial markets), seriously curtailed the autonomy of states. When productivity in mass production stagnated in the 1970s, governments had to adjust wages to prices for fear of further worker and student protests. This kind of inflation, which was supposed to ensure social peace, quickly met with the reluctance of financial asset holders who refused to accept the depreciation of their portfolios.

​The savings moved more into speculative investments than productive investment, due to the collapse of the Bretton Woods system, with its fixed exchange rates, oil price volatility and new financial instruments/derivatives. It was Paul Volcker, the head of the Fed, who in the late 1970s focused the US government's interests on the supply of money and the support of financial investment owners, triggering a dramatic rise in interest rates. In a period of declining growth rates, this shock led to the cessation of the inflationary developments that were part of Keynesian politics. Volcker's monetary asceticism and Reagan's corporate tax credits that speculators from all over the world went to the US capital markets because of the high returns of investment and the favorable fiscal regime. At the same time, while the sudden inflow of foreign money capital led to a rapid fall in interest rates, all developed-country governments made raising their investors' financial attractiveness an absolute priority for investors. The monetary and fiscal policy of Keynesianism came to an end. that all the governments of the developed countries made investing in the financial attractiveness of their territories an absolute priority for investors. The monetary and fiscal policy of Keynesianism came to an end. that all the governments of the developed countries made investing in the financial attractiveness of their territories an absolute priority for investors. The monetary and fiscal policy of Keynesianism came to an end.

It is the power of financial investors to blame for declining wages and the dismantling of the welfare state. The abolition of legal and administrative barriers, facilitating both the circulation of capital at international level and financial activities, and allowing the creation of new financial instruments, was also a prerequisite for financial investors to be competitive both in business and in business States could influence massively. Therefore, the accreditation, the valuation of capital, should be judged regardless of the consequences for distribution and production. If, on the other hand, labor disputes are no longer as important as in Fordism, that does not mean that they have lost all their value, because the experiences which can be drawn from them also remain relevant to today's social movements. But if we live in a time when capital accumulation is driven by finance, then new forms of struggle must necessarily be developed.

translated by Dejan Stojkovski

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by Achim Szepanski

Michel Feher, in his new book Rated Agency, claims that the financialized capitalism that began in the 1970s amounts to a Copernican revolution in that the new regime of capital accumulation no longer focuses on industrial enterprises built on vertical integration and internal growth, but that in this regime both the corporations and the economies of which they are a part would have to refer to the financial markets, which would be dominated by large global banks and institutional investors​ (and by the shadow banking system, one must add).

The financialization of developed economies can be measured by the relative size of the financial sector compared to GDP, the volume of profits that financial institutions realize compared to other firms, and the portfolio incomes of non-financial firms. Beyond such indicators demonstrating the transfer of funds from the real economy to the speculative financial circuits, what characterizes lenders today is their power to seek out those projects that deserve financing, which in turn defeats those that do are dependent on credit, constantly have to prove their attractiveness to investors and thus have to gear their economic activities not only to making a profit, but also to establishing creditworthiness.

Stock corporations in particular must not only strive to maximize the difference between income and production costs in the long term, but also work to increase the stock prices, which are evaluated by the financial markets, in the short term in favor of the shareholders. Thus, the real success of these companies does not result solely from the realization of profits made from the sale of products and services, but is based on the capital gain that can also be obtained from share buybacks.

The hegemony of credit does not only affect the private sector, but also relates to national governments, which must now make their national location more attractive to financial capital. In order to increase the competitiveness of their companies in a global environment where financial capital can circulate freely, states must make their territory as attractive as possible for international investors by protecting property rights. At the same time, governments and parties are being forced to organize their re-election, which according to Feher has contributed since the 1980s to states increasingly financing themselves through the issue of government bonds instead of taxes, i.e. fueling government debt to meet the tax burden not to go too high for the population and not to completely dismantle the welfare state. Thus, states and their governments continually increase their dependence on the financial markets, which are then lauded for promoting the economic discipline of the agents they credit to everyone's satisfaction. To forestall the distrust of the bond markets, which is reflected in rising interest rates on government bonds, governments must increase the flexibility of the labor markets, cut welfare programs, reduce taxes on capital and scale back any serious regulation of the financial markets. In the 1990s, however, the national debt, which was intended to compensate for the loss of tax revenue, assumed such proportions that private lenders worried about the solvency of the states, so that social benefits had to be further cut and parts of the population depended on public services were encouraged to take out loans to compensate for the lack of social benefits.​
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In typical neoliberal fashion, it has been argued that this would encourage citizens to increase discipline in managing their own lives as autonomous and self-responsible businesses. And of course the question of creditworthiness also affects individuals who can no longer rely on long-term jobs and state-guaranteed social benefits, since the companies and states, which are themselves dependent on the evaluation of financial investors, can no longer offer long-term employment contracts and sufficient social benefits, so job-seeking individuals need to make themselves valueable, such as through well-paid subject-related skills, flexibility, and sufficient networking. Their ability to find a job is now more influenced by the credit attributed to human capital than by collective agreements on wages and working conditions.

The material precarization forces the need for large parts of the population to take out loans in order to access houses, continue their studies and meet certain consumer desires or simply to survive. And for borrowing, you have to provide proof of collateral. If this is not the case, then in order to prove solvency, at least prospects (increasing market value of the house) or reputation, which consists in the fact that the loan can be repaid through wages, for example, must be proven. The neoliberal reforms contributed to transforming the individuals, who are obsessed with the utilitarian calculus of maximizing their own utility or income, into the financialized subject, who shifts their own value to the assets to be continuously valued, to the small capital to maximize x.

As a result, the criticism of capitalism, which is directed against the profit-driven nature of companies, has shifted to the financial institutions that are busy allocating credit. While capital's exploitation of wage labor has by no means disappeared, it is the demands of financial investors that have met with widespread public opposition, blaming them for increasing labor market insecurity and precarious working conditions.​
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In his text, Feher once again presents Marx's well-known theory of surplus value in order to then show that today's financial investors do not simply assume the role of classical capitalists. Specific to this type of investor is not soaking up huge dividends, interest payments and other financial income, what matters here is that these investors have the power to select participants who need financial resources. It is not the appropriation of income but the allocation of capital that is constitutive of the role of the financial investor, that is, accreditation is more important than appropriation.​

​For Feher, the increased criticism of the selective power of financial investors over that of the exploiting capitalists does not mean that the exploitation of labor power has declined; on the contrary, in companies that are set up especially for the shareholders, managers must continue to do so very strictly strive to reduce labor costs. But it is not the new forms of corporate management that are largely to blame for the transfer of income from work to capital; on the contrary, the stagnation of real wages and the dismantling of the welfare state is the "rating power" of financial ones hold investors accountable. The disappearance of legal and administrative regulations that freed the circulation of capital across national borders (as well as that of financial activities) and enabled the creation of new forms of assets, derivatives, meant that only traders in financial liquidity were responsible for the competitiveness of the Assess and evaluate companies and the economic attractiveness of national territories. Accreditation as a form of assessment of capital is now to be determined.

From a class identification perspective, there is a fundamental difference between the classical entrepreneur and the financial investor. The functional difference here has to include the aspect of its operation. For the entrepreneur, it is the labor market where a commodity called labor power is offered by its owners. The investors, on the other hand, are on the financial markets, where transactions of all kinds are transformed into assets. Companies try to extract and realize value, while investors determine the allocation of credit and determine the creditworthiness of their customers.​

The entrepreneurs run the business of appropriating the surplus value that the workers have produced, the investors decide what is actually produced. The distinguishing feature of investors, then, is not that, like industrial capitalists, they increase the prices of their products in order to make profits, or that they minimize production costs, to put it simply, but what the investors throw themselves into are projects that are theirs increase own capacity for credit. Such projects relate to states' budgets, corporate business plans, student loans, consumer desires, the fictions of start-ups, and the credit scores of wage earners. For financial institutions, governments, corporations, and households are legal entities that serve as objects that may or may not be credited. The investors constantly evaluate these properties for their creditworthiness, whereby the reversibility between investors and those who receive them, which Feher calls »Investee«, is not guaranteed, at least not like that between entrepreneurs and employees who have a dual function as buyer and seller take in. Even if financial capital in its global, liquid and anonymous forms can be described as the "pure investor", the "investees" must be included as concrete institutions and individuals, but they do not maintain a symmetrical relationship with the investors who own their Use funds and invest in projects that they evaluate themselves. At the same time, investors are also taking out loans.​

In labor markets, the buyers and sellers of labor power negotiate prices. In the capital markets, price determination does not take place through negotiations that exchange something, but through the speculation of investors whose object is the "value" they assign to tradable assets, depending on the attractiveness of the assets, on which other market participants have a say. Therefore, Minsky assumed that financial markets are structurally unstable because operations on them never lead to the determination of an equilibrium price. Rather, price increases in assets, which can be based on rumors and expectations, lead to further price increases, while, conversely, price reductions in phases of distrust lead to further price reductions in assets. Negotiations between traders are not coordinated on the financial markets, rather it is up to them to constantly generate liquidity in order to enable investors to speculate. The optimization of costs, which inspires the transaction on the classic markets, is replaced by the calculation of future expectations of the various market participants.

What has taken place here is the shift in investors' interests and their activities from profit extraction to attribution of credit. The freedom that capitalism affords to both investors and investees (those who borrow to set up projects that may well be profitable) is not that of negotiation, with which both capitalists and investees engage workers faced in industrial capitalism, rather it is the freedom to speculate or to speculate on the speculators of others to shape one's assets. Investors and investees try to influence the selection of what is produced more than the distribution of what is produced. It is less the distribution of income between labor and capital than the conditions of capital allocation that are the decisive moment of operationalization here.​​

translated by Dejan Stojkovski

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