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The Foundations of Finance: Charisma, Aura, and Uncertainty

Benjamin Lee and Edward LiPuma

The Futures of Finance Conference Arjun Appadurai

The Emerging Context for Social Science Practice

Prabhat Patnaik

What Has the Occupy Movement Done for Scholars?

Robert Meister

Do We Have the Nerve to Know Finance as Class War? An Exchange Robert Meister and Timothy Mitchell

(Edited by Peter Dimock)

Reclaiming the Public: Social Science and the University in an Age of Privatization

Craig Calhoun

Figure and Ground in Multiple Spheres of Exchange: How Do We Interpret

Islamic Finance?Bridget Kustin

The Present Gathering is Our Opportunity: Administered Derivatives

Randy Martin

Capturing Opportunity in the Futures of FinanceRobert Wosnitzer

Editor’s Note: What Publishing Model Do We Need for an Activist Knowledge of Finance?

Peter Dimock

Rethinking Capitalisma publication of the Bruce Initiative on Rethinking Capitalism at the University of California, Santa Cruz and the Institute for Public Knowledge at New York University

Issue 03. April 2012.

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We hope the conference will help all of us better under-stand the role of uncer-tainty in capitalism. Most

of the standard economic and financial models marginalize social uncertainty, but in the hands of such thinkers as Max We-ber, Frank Knight, Clifford Geertz, and Fischer Black, social un-certainty turns out to be constitutive of the very economic practices that such models seek to ex-plain. In addition to strongly seconding what Arjun says in his statement about the conference (see next article), we want to intro-duce social uncertainty as a means of expanding our intellectual horizons. Uncertainty allows us to give a constitutive role to ritual, play, aura, and cha-risma in our analyses and understandings of the rise of speculation and of the emblematic success of companies such as Apple.We share with Arjun an overlapping history at the University of Chicago where we were graduate students in anthropology during the height of the “linguistic turn” in the social sciences and humanities. Anthro-pology was at the forefront of these dis-cussions and at Chicago. Clifford Geertz, David Schneider, Marshall Sahlins, Victor Turner, Stanley Tambiah, and Michael Sil-verstein were developing distinctive “sym-bolic” and “interpretive” approaches to ethnographic research. At the same time, however, unbeknownst to most of us, the economics department was developing the foundations of modern finance: the Black-Scholes equations for pricing deriv-atives and efficient market theory, which

treat the market as a very special type of “information-processor.” The division between formal and substantive econom-ics left the mathematical economics of large-scale societies to the economists (very few anthropology graduate students had any statistical training at all) and the economics of traditional societies to an-

thropologists. Perhaps the most salient ex-ample of this divide was the publication of Clifford Geertz’s article on the bazaar or suq in the American Economic Review in 1978. Despite its use of some of the then cutting-edge work on the economics of information (the four economists Geertz refers to in his footnotes all went on to receive the Nobel Prize in Economics), it fell upon deaf ears in both economics and anthropology. It is our hope that this conference will ex-plore the road not taken between econom-ics, finance, and the interpretive social sci-ences and humanities. The financial crisis and the rise of the Tea Party and Occupy

Wall Street all point to larger forces that are questioning the dominant narratives of capitalism. One of the ironies of the dra-matic rise of finance capitalism is the in-ability of the financial industry to explain its own ascent. How did finance move from producing under ten percent of an-nual U.S. corporate profits to over forty

percent? How did invest-ment banking and con-sulting become the most desirable career choices for Ivy League gradu-ates? The recent revela-tions around Goldman Sachs reveal how a dis-tinctive Wall Street ethos was formed, and raise the question of whether there is an internal connection between the rise of quan-titative finance and the creation of distinct mo-tivational structures that animate the “beast (or bull) within the machine.”The finance internal point of view doesn’t see any connections between its risk-return models and “external” social factors, which become the sources

of social uncertainty that they hope their models can mitigate. On the other hand, approaches that focus on socio-historical factors overlook the role that such models play in the constitution and expansion of contemporary finance capitalism. Com-bining these two perspectives produces an intriguing and seemingly paradoxical ques-tion: to what extent does the expansion of finance capitalism depend upon its use of risk management models that systemati-cally bracket the very social forces of un-certainty that make the models successful? It is at this point that Arjun’s invocation of Frank Knight, Clifford Geertz, and Max Weber becomes especially relevant.

The Foundations of Finance: Charisma, Aura, and Uncertaintyby Benjamin Lee and Edward LiPuma

illustration by Jon Berkeley for The Economist, January 28, 2010

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Each of them explores the implications of incorporating social uncertainty into our standard accounts of economic and social processes. In addition to being one of the founders of the Chicago School of Eco-nomics, Knight was also the first translator of Max Weber into English. He attended Weber’s seminar in Heidelberg, and was a close friend of his fellow We-ber translator, Talcott Parsons. Par-sons was Geertz’s teacher at Har-vard, and Geertz was one of Fisher Black’s favorite professors (along with the psychologist Jerome Bruner and the philosopher Willard Quine, who was his PhD. thesis advisor). Black was one of the founders of modern finance and makes his own distinctive contribution to the ex-ploration of uncertainty by show-ing how trading liquidity depends upon “noise.” Although it’s not clear how much they actually interacted, Knight, Geertz, and Black overlap at the University of Chicago, and each of them will have an abiding interest in markets, information, social inno-vation, risk, and uncertainty. But it is the Weberian connection that helps us to examine the road not taken. For it is Weber who in-troduces the problem of uncertainty into the heart of capitalism, raising the question of what kind of mo-tivational structures are necessary for doing “the work” of capitalism. Financial models don’t directly deal with uncertainty but with calculable risks for risk-averse rational deci-sion makers. But it is the confron-tation with uncertainty that creates the unique motivational structure of Calvinist “decision making” that is at the heart of Weber’s The Protestant Ethic and the Spirit of Capitalism. The uncertainty of salvation produces in Calvinist true believers a deep existential crisis that leads them to develop an ascetic work ethic that be-comes the “spirit of capitalism.” It is the uncertainty of salvation that leads to an inwardly driven compulsive work ethic in which “time is money” and all economic success is for the glory of God; this funda-mental anxiety provides the motivational thrust needed to break with the traditional ritualism of Catholicism and to drive men

to think of their work as an instrumental means to the glorification of God. Is there a counterpart to the Protestant Ethic in the rise of financialism? Perhaps it’s the rise of a speculative ethos, as sug-gested by a host of writers about Wall Street but dramatically highlighted by Greg

Smith’s New York Times broadside against Goldman Sachs. How do the various “dogmas of financialism”—risk-return optimization, efficient markets, sharehold-er value, arbitrage—get embodied in work practices that define success and failure, determine compensation, confirm status, and create identity? Or even more point-edly, does Weberian “decision making

under (existential) uncertainty” call into question the psychological explanations of behavioral finance or “animal spirits” and replace them with cultural frameworks that give a crucial role to ritual, play, status, cha-risma, aura, grace, and luck?If we take uncertainty as not simply some-

thing to be marginalized and man-aged but as creative and constitutive, then The Protestant Ethic can be seen as an example of more gen-eral social processes that Weber de-scribes in his account of charisma and its routinization and that are at the heart of capitalism’s creative destruction. The appeal of prophets like Calvin lies in their instantiation of a higher force that is opposed to purely economic and secular inter-ests. Yet prophecy must face eco-nomic realities if it is to perdure; the “routinization of charisma” creates the path from prophets to profits. Whereas “charisma” applies primar-ily to persons, Walter Benjamin uses the term “aura” to refer to artifacts and “mechanical reproduction” to describe a process akin to their routinization. Weber and Benjamin point to a fundamental tension be-tween social creativity, innovation, and uncertainty, and the economic dimensions of routinization and mechanical reproduction. If creativity and innovation are tied to uncertainty, then the dynamic of capitalism as creative destruction has its sources in the same processes that underlie social movements; the tension between innovation and its routinization is not only the under-lying dynamic for political, artistic, and religious movements, but also capitalism. Take the example of Apple, now the world’s largest com-pany by stock market capitalization (over $500 billion). Its standard fi-nancial metrics include a price to

earnings ratio of 13, a beta of 1.25, a gross profit margin of 45%(!), and earnings of $35/share, leading to a consensus that it is undervalued when compared to other technology companies. Yet the metrics seem to miss that which makes Apple so exceptional: the peculiar aura of Apple products, perhaps best encapsulated by the memorials that appeared in front of

Combining two perspectives�one internal to finance, the other, external to it�produces an intriguing and seemingly paradoxical question: to what extent does the expansion of finance capitalism depend upon its use of risk management models that systematically bracket the very social forces of uncertainty that make the models successful?

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Apple stores when Steve Jobs died or the cover of the Economist that came out just before the first I-Pad showing Steve Jobs as the “prophet of profits”: dressed up as Moses/Christ in robe and halo, holding the new “Jesus tablet.”As a commodity the I-Pad is something that money can buy but money can’t buy what the symbolism hints at: a sense of grace, aura, style, and perhaps member-ship in an “imagined community” of elect consociates. A successful brand name uses the “force” of the latter to motivate the purchase of the former and in so doing draws upon the same social forces as so-cial movements. Examining the “pivot” or bridge between the “things that money can buy” and the “things that money can’t buy” means going beyond traditional eco-nomic approaches and looking at issues such as charisma, aura, uncertainty, risk, flow, ritual, and play and how they relate to social creativity, innovation, and entre-preneurship.But what is special about Apple prod-ucts? First, each of them is simple to use; the user-experience combines a satisfying aesthetic with convenience�as if they were designed to both reduce the anxiet-ies of technophobes and satisfy geeks. Second, if you place your I-Pod next to your I-Phone, I-Pad, MacAir, and I-Mac, their common aesthetic allows them to visually interact with each other, suggest-ing that they are connected to each other, i.e., a “family” of products. At the same time, they all contain I-Tunes, which acts as both a commercial and a community hub, allowing music and apps to be pur-chased, and linking all the products to the ever-evolving “cloud” that represents de-signers’ dreams of connectivity. The app community allows each person to “per-sonalize” her access to Apple and other community members at the same time she makes herself part of the larger commu-nity. Finally, the advent of Siri in the new I-Phone adds a new sense (voice) to touch and vision, recreating a part of that face-to-face dimension so important in Walter Benjamin’s account of ritual aura. It is this face-to-face dimension that activates our deepest motivations, sensibilities, and identities, tapping into what Freud would label the unconscious and Heidegger as “being-in-the-world.” What Apple has done (and there really isn’t

any company comparable to it) is embed the relations of the individual, ritual, and community in an open-ended process of creating what Bert Dreyfus and Sean Kelly describe in their book, All Things Shin-ing, secular epiphanies that ritualize and give meaning to everyday life, not unlike the way Benedict Anderson describes the formation of the imagined communities of nation-states.1 If we are even partially right about Jobs and Apple�the same argument applies to other brand names such as fashion labels (think of Alexander McQueen, who shared Jobs’ perfection-ism and obsession with death)�then what we are trying to do is trace how issues like aura, charisma, ritual, and play are intrinsi-cally connected to the “mechanical repro-duction” and sale of commodities. In fact all of capitalism pivots around this tension, between inspiration and commodification, prophets and profits.As the largest company in the world, Ap-ple uses the processes of globalization as it enacts capitalism’s basic paradoxes. The creative design center of Apple is in its Cu-pertino, California headquarters. Jobs’ last project was designing the new headquar-ters and the major public question about Apple is whether it can maintain its aura of being at the cutting-edge of creative in-novation even as countries like China try to move up the value chain. But the hu-man cost was revealed in a series of New York Times articles exposing forced over-time, overcrowding, rampant labor abuse, and even suicides in Apple’s largest sup-plier, FoxConn in Shenzhen, China. Apple reported that over half of its suppliers had violated its own Code of Conduct. Rig-orous supply chain management means lower profit margins for Apple’s suppliers, often under 2 percent (Foxconn was at 1.5 percent in 2011), which puts huge pres-sure on companies to cut costs, leading to abuses. The global supply chain represents the economic dark side of Apple even as it “routinizes” the creative inspiration of Cupertino by manufacturing products that have among the highest profit mar-gins of any major technology company. Apple seems poised on a fundamental co-nundrum in global capitalism: as it strives to embody and make visible an ethos of creativity and innovation in its products, the realities of operating in a global econ-omy undermine its “user-friendliness” for

workers whom it increasingly depends upon and the destructiveness of whose exploitation it almost renders invisible. Over the last six months, these disparate forces have been changing the public nar-rative around Apple in a way that seems to be enacting Weber’s account of charisma and its routinization. The public outpour-ing over Jobs’ death in October reminded us of how intertwined and mutually rein-forcing Jobs’ charisma and Apple’s aura were. Since then, Apple stock is up sixty percent, it has passed Exxon as the world’s largest company via stock market capital-ization, and it recorded an almost unheard of fiscal first quarter profit of $13 billion on $43 billion revenues. The FoxConn revelations and the announcement of a quarterly dividend and stock buy back, along with the incessant media coverage of Apple’s business model (forty percent of the year-to-date increase in the technology portion of the S&P 500 is due to Apple), have all contributed to a transformation in Apple’s image from one of “cool” design and innovation (its outsider image memo-rialized in its famous “1984” Superbowl commercial, generally considered one of the greatest commercials of all-time) to the growing realization that Apple is now larger than Google, Dell, Hewlett-Packard, and IBM put together. Perhaps the final irony is the FoxConn sto-ry. If one removed Apple from the situ-ation, there would be an eerie enactment of Marx’s falling rate of profit argument in which technological innovation and com-petition drive companies’ profit margins to a crisis point (Dell and Hewlett Pack-ard which are Apple competitors and Fox-Conn clients, have profit margins under ten percent). With a corporate war chest of over $100 billion (to which this year’s profits are expected to add an additional $50 billion) and a net profit margin several times that of its nearest competitors, only Apple has the pricing flexibility to institute fundamental labor reform. Apple’s initial attempts at labor reform were in response to public outcries over its betrayal of its image as “cool and clean,” which was ac-tively cultivated by Jobs’ through his con-stant references to the music and culture of the sixties. But it can bring about effec-tive change in labor practices only because of its status as a global monopolist and not as the “indie” underdog it once was.

1. Hubert Dreyfus and Sean Dorrance Kelly, All Things Shining: Reading the Western Classics to Find Meaning in a Secular Age (Free Press, 2011).

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The Futures of Finance Conference by Arjun Appadurai

The Futures of Finance Conference planned for April 13-15, 2012 is a collaboration between the Bruce Initiative,

based at the University of California at Santa Cruz, and the Cultures of Finance Group, based at the Institute for Public Knowledge at New York University. It is envisaged to move forward on four fronts: 1. To further develop a way of thinking about contemporary capitalism which resists the recent trend to focus on the internal mechanism, tools, and protocols of the financial system without much attention to broader historical and ethical questions; 2. To develop a critical framework for such studies that restores to public debate the somewhat forgotten ideas on the economy of such thinkers as Max Weber, Frank Knight, Joseph Schumpeter, and Clifford Geertz who were the first to examine the emerging epistemologies behind modern capitalism; 3. To establish a forum that allows scholars from a variety of social science fields to interact with actors from the world of finance and public policy who admit to shared puzzlement over the deep causes of the recent financial meltdown; and 4. To create a vehicle for serious dialogue among younger scholars and Ph.D. candidates who are doing some of the most interesting empirical work in this space. This is an ambitious vision and it justifies collaboration across the U.S. and beyond. We are mindful of the fact that we are among a variety of groups in the United States, England, and Europe, as well as in other countries, to address some of these questions. We have therefore taken some time to establish that our approach is primarily cultural, rather than sociological or technological. This is not a result of any special loyalty to anthropology as a discipline. Rather, it is based on the recognition that mainstream economics (as well as its sister fields in the study of finance in business schools) is ridden with exclusions, silences, and extra-explanatory provisions, all of which conspire to make many of the current models self-

fulfilling. The models are self-fulfilling in the sense that they often tend to provide ex post facto ideas about the motivations of financial actors that come close enough to the empirical surface of these behaviors to serve as serviceable insights for the refinement of such behavior, thus creating an uncomfortable and misleading fit between outsider predictions and subsequent insider actions. There are two broad approaches to what might be termed a “cultural” approach to the study of contemporary financialization. The first is primarily ethnographic. Here anthropologists such as Karen Ho, Bill Maurer, Caitlin Zaloom, and a handful of others have made important contributions by looking closely at the meaningful worlds of actors in such site-specific settings as the trading floor, the stock exchange, and the Islamic banking world. These approaches are cultural in the sense that they regard new technologies and strategies as animated by specific organizational and cultural settings in which shared purposes are driven not simply by simple maximization motives but also by a series of localized cultures of work, profit, and compensation. Our interest in developing a cultural approach is highly compatible with this first, ethnographic one, but it is more broadly systemic, comparative, and thus historical in the sense favored by thinkers in the Weberian tradition I mentioned above. For this group of thinkers, inspired to one or another extent by Weber, the problem of meaning in social life cannot be separated from the emergence of large-scale changes in ethos and ethics. Indeed, the Weberian sense of these two key words is itself distinctive and brings together problems of religion and economy in a special manner. Weber’s account of the role of the Calvinist ethic in inspiring Puritan economic behavior is thus not primarily a historical debate with Marx and later Marxists (who saw capitalism primarily as an inexorable set of techno-economic changes) but a methodological debate about the role of moral change in the process of social

change. Weber has often been seen as a systematizer and social theorist concerned with broad structural processes. This is what leads to the Parsonian redaction of Weber that so influenced American sociology. But Weber was primarily concerned with historical specificities, and in particular with identifying the specific conditions of emergence of what he saw as the distinctively Occidental mode of entrepreneurial spirit and ethos. We could even say that the entire edifice of Weber’s theories about the nature of meaning, power, authority, law, and economy in social life, as well as his numerous historical explorations of India, China, ancient Judaism, the Islamic world, and earlier periods in the history of Europe, were a vast series of tool-building efforts to help him with his obsessive interest in the question of the emergence of modern capitalism.One aim of the group of scholars and thinkers who helped to organize this conference is to develop a deep historical account, Weberian in spirit, of the emergence of the special ethical, technical, and social features of global finance after approximately 1970. We recognize that this cannot be done by replicating Weber’s strategy or by relying on Weber alone. Hence our members are engaged in a series of intellectual explorations including: specific conditions of the recent crisis such as the emergence of proprietary trading; the roots of recent financial models in earlier game-theoretic ideas; and the relationship between accounting and accountability in the global crisis. Such issues require cultural frames to be mobilized to account for large-scale changes in compliance and the way risk is envisaged.In sympathy with the spirit of the Occupy Wall Street movement, this conference is based on the idea that any such effort must have a deep scholarly and critical dimension, so that the social sciences can re-occupy spaces left too long to the economists and the financial modelers, undisturbed by considerations of culture, society, and history.

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What I propose to do in this paper is to outline what in my view will constitute certain central so-cial issues in the coming days to which social sci-entists will have to relate. In doing so my empha-sis of course will be on economic issues, but I do believe that because of the crisis of the capitalist world these economic issues will play, even more than is usual, a determining role in shaping the broader social picture.

I

The world economy today faces, in an immediate sense, not one but two distinct crises, both of which

have serious implications for third world countries like India. The more commonly discussed one is the world recession that has echoes of the 1930s. The one that has attracted less attention, though it is no less serious, is the world food crisis. Per capita world cereal output, and per capita world foodgrain output in general, was lower for any period during the de-cade 2000-10 than for the corresponding period during the decade of the 1980s. For instance, for the quinquennium 1980-85, the average annual per capita world ce-real output was 335 kilograms; it declined to 310 kilograms for the quinquennium 2000-05. In addition, a significant part of grain output in the recent years was di-verted for use, directly or indirectly, as bio-fuel. As a result, the per capita availability of foodgrains in the world declined even more sharply than output over the last two decades. The world economy in short has been facing an acute food crisis.Since the income elasticity of demand for foodgrains, taking both direct and indirect absorption of foodgrains together (the latter through animal feed and processed food), is positive and the world economy has certainly been growing over this period in per capita terms, there should have been an ex ante excess demand for foodgrains, resulting in an increase in food prices relative to the vector of money wages, and hence, by implication, manufactured goods prices. (This is because manufac-

tured goods prices, with given technolo-gies, are determined as a mark-up over unit prime costs, which in effect mean unit labor costs. With technological progress, they should, if anything, fall relative to money wages.) And yet paradoxically this acute food crisis did not express itself in the form of an inflation in food prices relative to the vector of money wage rates, or to the vector of manufactured goods prices, until very recently, viz. 2008. In fact between 1980 and 2000 the terms of trade between manufacturing and cereals in the world economy actually moved against the latter, and that too by as much as 46 per-cent! This decline in the terms of trade for ce-reals in the face of declining per capita output should not be mistaken for an ab-sence of a food crisis in the world econ-omy over that period. It only shows that the deflation of purchasing power in the hands of the poor over much of the world was even more drastic than the fall in per capita foodgrain availability. The poor are the biggest potential consumers of food at the margin, effected inter alia through the fiscal compression measures that have come into vogue as part of the neo-liberal policy package, owing to the predilections of international finance capital that is in-strumental in shaping this package. This decline in foodgrain availability un-derlies the growing hunger in countries of the third world, including even India which has been experiencing impressive GDP growth rates. For instance, between 1993-94 and 2009-10 the percentage of India’s rural population unable to access 2200 calories per person per day increased from 58.5 to 78 percent while the percent-age of the urban population accessing less than 2100 calories per day (both these norms constitute benchmarks for the defi-nition of poverty) increased from 57 to 73 percent. Since the inability to access the most elemental necessity, food, constitutes the essence of poverty, and has been rec-ognized as such in the Indian official defi-nition of poverty, it follows that even the

period of high growth in the Indian econ-omy has been accompanied by an increase in the incidence of absolute poverty.The recent inflationary upsurge in foodgrain prices all over the world has its roots in this basic fact of a decline in per capita foodgrain production in the world economy. Its proximate cause however has been the diversion of a large and grow-ing share of foodgrain output for use as bio-fuels, which has even counterbalanced the effects of the compression of pur-chasing power in the hands of the poor in third world economies, that was referred to earlier. On top of this of course there has been intense speculative activity. The linking of foodgrain prices to those of oil, which the use of grains as bio-fuel has re-sulted in, implies that bullish sentiments, whether they originate in the foodgrain market or in the oil market, have the ef-fect of increasing foodgrain prices beyond what would otherwise have prevailed.This link also makes the future even bleak-er. Even with the world economic reces-sion persisting, there has of late been a rise in oil prices and a parallel increase in foodgrain prices. A recovery in the world economy will make this inflation even more acute by further fuelling bullish sen-timents in the oil market, to the further detriment of the world’s poor, unless there is a significant increase in world foodgrain output (and the provision of enough pur-chasing power to the poor to enable them to buy adequate food at the prices that would prevail).

II

It is clear from the foregoing that much of the discussion of the world food crisis that one comes across in the

standard literature is erroneous. First, the food crisis is usually identified exclusively with the acute inflation in world food pric-es that began only in 2008. This is errone-ous because the decline in per capita food availability long predates this inflation. Secondly, a view has been widely preva-

The Emerging Context for Social Science Practice by Prabhat Patnaik

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lent that the inflation itself is because of increasing demand for foodgrains, at any rate in the form of animal products and processed food, from the rapidly growing economies of India and China, in the face of an inelastic world food supply that has run into a Ricardian impasse. This expla-nation too is erroneous because in India, as already mentioned earlier, there has been a decline in per capita absorption of foodgrains, taking both direct and indirect absorption together: in fact the annual per capita absorp-tion in 2008, the year inflation be-gan in world foodgrain prices, was the same as the annual average for the quinquennium 1937-41 in “Brit-ish India”; and even in China the per capita absorption in 2008 was less than in 1996! Hence the “Indians-and-the-Chinese-are-suddenly-con-suming-too-much-of-foodgrains” argument does not stand scrutiny.On the supply side likewise, the Ri-cardian explanation is completely off the mark. Indeed the secular movement in the terms of trade against foodgrains, prior to the re-cent inflation, suggests the very opposite, namely a squeeze on the profitability of foodgrain produc-tion that is caused by macroeco-nomic policy measures, rather than being a result of reaching in some sense the limits of production a la Ricardo. So serious has this prof-itability crisis in the agricultural economy, including the foodgrain economy, been over much of the world, that land used for foodgrain production has in many cases even been left fallow. This has been the case even in the midst of the current inflation which should have revived profitability but which has not done so because the benefits of high pric-es have been largely appropriated by those controlling the foodgrain market, viz., a handful of MNCs belong-ing to the advanced countries. This not only underscores the inappositeness of any Ricardian explanation for the food crisis, but points to the substantial scope for expanding foodgrain output that still exists within peasant agriculture, provided appropriate incentives are given to the peasants to reach potential levels of land

productivity. At the same time, no doubt, a major investment effort, which can only be State-sponsored, is needed, including on research and development, which can raise potential land productivity.In India there has been a persistent de-mand to make foodgrains available at low prices through a public distribution system, with universal coverage to guard against possible exclusion. In response to

this demand, legislation for providing food at low prices not to all but to a subset of people, though a sizeable one, has been placed before the parliament and is sup-posed to be enacted soon. But if even this attempt at food security is to succeed, then a step up in foodgrain output remains es-sential. And an essential condition for that is the re-extension of support and protec-

tion to the peasant economy by the State, the withdrawal of which under the neo-liberal regime was a major reason behind the decline in per capita foodgrain output both in India and more generally in the world economy. Such a re-orientation on the part of the State would entail in turn a retreat from a number of measures of “liberalization” (such as for instance “financial liberaliza-

tion” that restricts “directed credit”), and hence a reversal of the attempt to assimilate the economy into a universe of globally mobile finance. Such a reversal will also be neces-sary for enlarging the food subsidy bill that the provision of cheap food to a large number of people will ne-cessitate, which has to be financed either by larger taxation of the rich or a larger fiscal deficit. Unless, in short, the parameters of neo-liberal policy are transcended the food cri-sis will continue to remain an acute one.

III

Much the same can be said about the world re-cessionary crisis, about

which there is a pervasive miscon-ception in my view. The commonest explanation for the crisis is that it is entirely a consequence of the col-lapse of the housing “bubble” in the United States. It is in short an iso-lated, one-off phenomenon, a pre-dicament to which the US economy, and hence the world economy, hap-pens to have fallen because of the collapse of a “bubble”-based boom, which the earlier irresponsible mon-etary policy of the Federal Reserve Board had connived to stimulate.The role of the collapse of the hous-ing “bubble” in precipitating the crisis of course cannot be gainsaid,

but the crisis caused by the collapse of this “bubble” is itself embedded within a fun-damental structural crisis of capitalism. In-deed the “dotcom” and housing “bubbles” had kept this structural crisis hidden; with their collapse we not only have the crisis caused by this collapse itself, but its super-imposition upon the basic structural crisis which now gets revealed as well.

The world economy today faces, in an immediate sense, not one but two distinct crises, both of which have serious implications for third world countries like India. The more commonly discussed one is the world recession that has echoes of the 1930s. The one that has attracted less attention, though it is no less serious, is the world food crisis.

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The roots of this structural crisis lie in the fact that capitalism requires some ex-ogenous stimuli for sustaining its growth. It can sustain growth purely on its own steam, i.e., purely because growth had been occurring, for some time, but if growth peters out for any reason, including the emergence of bottle-necks because of growth itself, then an opposite spiral of lower and low-er investment and declining growth sets in which carries it towards a stationary state, i.e., towards a state of simple reproduction. (This is a proposition that had been demon-strated by Michael Kalecki in 1962). Extricating the system out of sim-ple reproduction and ensuring that growth does not lose steam and collapse back into a state of simple reproduction is something that is ensured by the operation of a set of exogenous stimuli. Historically, two sets of exogenous stimuli have played this role. The first is the entire colonial system that played this role right until the First World War. And the second is State expenditure that played this role after the Second World War. The inter-war period when capital-ism was without an external stimu-lus was one of protracted crisis. And the present period when State expenditure is being restricted be-cause of the pressure for “austerity” exercised by financial interests (and the colonial system neither exists nor can perform exactly the same role as it did earlier) is again one when the system is without an ex-ogenous stimulus. We face therefore not just the collapse of a “bubble,” but a situation of protracted eco-nomic stagnation, marked at best by cyclical fluctuations caused by new “bubbles” that may come into being and their collapse.The structural crisis however goes deeper. Capitalism today not only lacks any exogenous stimuli to extri-cate it from stagnation, but, addition-ally, is subject to a tendency towards what is often referred to as “undercon-sumption.” This is because freer trade in goods and services and freer movement of capital, both as capital-in-production

and as capital-as-finance, has resulted in a significant diffusion of activities from the high-wage metropolitan economies to low-wage third world countries like China and India. This in effect has exposed the

workers in the metropolitan economies to a downward drag exercised by the mas-sive labor reserves in these third world economies, which underlie their low levels

of real wages. At the same time, the real wages in these countries, which are at the receiving end of the diffusion of activities and which have consequently experienced very high growth rates in recent years, are

not moving upwards, because their labor reserves are far from getting exhausted, notwithstanding this high growth. This lack of exhaustion of labor reserves despite high GDP growth in these economies is an extremely significant fact of the contemporary situation. It arises from a combina-tion of factors all of which charac-terize their growth process. There is the basic fact that the activities that are diffused towards them em-body technologies developed in the advanced countries that are not particularly labor-intensive. In ad-dition, the distress of the peasants and petty producers, arising from the withdrawal of support by the State from this sector that was noted earlier, adds to the labor reserves, camouflaged often as growth in “in-formal sector” employment. And finally, the low wages themselves, in the face of growing labor produc-tivity in these economies, increase the share of surplus in GDP; and this surplus, accruing to the afflu-ent sections of society, is used to buy goods and services, which are part of the life-style of the affluent in the advanced countries. There is therefore a particularly rapid and continuous structural change, with products that earlier characterized these economies continuously giv-ing way to products that are part of the life-styles of the affluent in the advanced countries. This structural change becomes a further reason for an increase in overall labor produc-tivity. (The entry of Walmart into India that would displace petty trad-ers, though it has been prevented so far, represents the kind of structural change that is being discussed.)The upshot is that the vector of ab-solute real wages of workers belong-

ing both to the advanced countries and to the third world, tends, if anything, to get lowered, but certainly does not increase. At the same time however labor productiv-

The fact that the period of high

growth had been accompanied

by growing food deprivation and

hence a substantial increase in absolute

poverty does not mean that a collapse

of growth will ipso facto have a

desirable outcome. Growth and its collapse do not

have symmetrical effects. On the contrary, such

collapse will simply worsen the problem

of unemployment, in addition to the already on-going

food crisis.

9

ity in the world economy keeps increasing. (This happens even in conditions of stag-nation of the world economy.) Hence the share of surplus in world output increases over time, and this ceteris paribus gives rise to a tendency towards “underconsump-tion.” (The argument is formally exactly analogous to what was advanced by Baran and Sweezy in 1966 for the United States.) State expenditure in principle could over-come this tendency towards undercon-sumption (much the way that Baran and Sweezy had argued it had done in the U.S.). But in the current context this tendency cannot be overcome through State ex-penditures. For reasons already discussed State expenditures cannot play the role of an exogenous stimulus and hence provide a counteracting tendency against the ten-dency towards “underconsumption.” The only antidote against this tendency in the advanced capitalist world is the occa-sional “bubble-sustained” euphoria, which however brings acute crisis in its wake when it collapses. The antidote against this tendency in third world countries, in addition to their own “bubbles” and the fall-out of developed country “bubbles” on their economies, is the labor-produc-tivity-enhancing structural change that was mentioned earlier, which plays the role of stimulating the consumption of those who directly or indirectly live off the increasing surplus. But this, as already seen, perpetu-ates the very problem of increasing the share of surplus that was at the root of the problem and hence of the tendency towards “underconsumption.”It is this basic structural problem that char-acterizes the contemporary world econo-my. The housing “bubble” and its collapse are specific episodes in the unfolding of this structural denouement; they do not constitute the totality of the denouement itself. It follows that we are likely to experi-ence a fairly protracted crisis of unemploy-ment and stagnation in the world economy reminiscent of, though not necessarily identical to, what occurred in the thirties.

IV

The belief that the crisis of reces-sion and unemployment that is being experienced by the capitalist

world will not afflict the fast-growing third world economies like India and China is

to my mind ill-founded. True, since they are low-wage and hence low-cost coun-tries in their respective spheres (where they have attracted activities from the advanced countries), and since any reduc-tion in demand in any market necessarily has its main impact upon high-cost pro-ducers, hopes that they might escape the crisis are not far-fetched. But some impact of the crisis and the overall slowing down of their advanced countries’ markets, is bound to be felt by them. And if protec-tionism against their exports gains curren-cy, even to a limited extent, of which the recent US decision to penalize companies that outsource activities away from the US is an instance, then the impact on them will be even stronger. This impact will be of two kinds: there will ceteris paribus be a worsening of their cur-rent account deficits because of reduced exports; and there will ceteris paribus also be a reduction in their aggregate demand for the same reason. If they try to main-tain their growth rates by attracting finan-cial inflows to overcome their worsening current account deficits (the problem will be less serious for China which already has a large current surplus whose reduction is unlikely to be worrisome), then they will expose themselves not only to the risk of sudden withdrawal of finance by investors, and hence to the risk of a major financial crisis, but to something else as well. And this is a curtailment of the existing levels of fiscal deficit wherever finance considers such levels to be very high (as in the case of India). This means that there will be an additional fall in aggregate demand over and above the fall on account of the loss of export markets. From the demand side therefore their high growth rates will become un-sustainable, unless they delink themselves from the vortex of globalized finance, through capital controls, and possibly even of trade controls to an extent, and acquire sufficient degrees of freedom to launch a dirigiste strategy of boosting domestic demand, both directly and through “trans-fers” to workers, peasants, and the poor in general. (Here again China appears already to have made some shifts from predomi-nant export-orientation to promotion of domestic consumption.) Within the frame-work of a neo-liberal strategy, that had till now generated significant growth, there

seems to be no escape from a slowdown even for these countries.The fact that the period of high growth had been accompanied by growing food deprivation and hence a substantial in-crease in absolute poverty, defined as it should be in terms of a deficiency in the most elemental necessity, food, does not mean that a collapse of growth will ipso facto have a desirable outcome. Growth and its collapse do not have symmetrical effects; on the contrary, such collapse will simply worsen the problem of unemploy-ment, in addition to the already on-going food crisis.

V

These are the obvious themes that social scientists will be grappling with not just in countries like India

but elsewhere as well is the coming period. It is a mistake to think that these themes are only the pre-occupations of econo-mists. Economists of course will be di-rectly discussing these problems; but other social scientists too will be devoting con-siderable attention in coming days to the fall-out of these problems in other areas. Economists’ attention, at least in India, will necessarily be drawn, apart from the broader themes mentioned above, to a set of specific themes that are bound to be in the forefront of policy debates. We saw above that India’s balance of payments current account would be under strain be-cause of the world crisis and the govern-ment would be trying to attract financial inflows to alleviate this strain. Towards this end it would seek to provide some “posi-tive signals” for international finance: a reduction in the fiscal deficit (as already mentioned), allowing foreign direct invest-ment (FDI) entry into multi-brand retail, carrying further the process of financial “liberalization” even to the point perhaps of opening up nationalized banks to inter-national finance, and introducing “labor market flexibility.” Curtailing the fiscal deficit will entail an effort to curb subsi-dies, and expenditures, including even on programs like the National Rural Employ-ment Guarantee Scheme (NREGS), where peasant discontent at higher agricultural wages on account of NREGS will be met not through a rise in procurement prices but through a possible whittling down of

10

the program itself. Likewise, the objec-tive of curtailing the fiscal deficit may be sought to be achieved through a cut in food subsidy which will run counter to the proposal for providing food security, for which there has been a strong and persis-tent demand (and on which legislation is pending).

Each of these proposed measures there-fore will entail intense public debate, and economists will be called upon to contrib-ute to it, for which they will have to step up research into these areas. The contra-dictions between the maintenance and expansion of public welfare programs on the one hand and the carrying forward of the neo-liberal agenda on the other will intensify in the coming days and have its impact on research.

VI

The intensification of this contradiction in turn, unless the government decides to

effect a major policy shift away from the neo-liberal agenda, is bound to entail its taking decisions that go contrary to its own earlier promis-es (such as on food security or the NREGS), to the will of the major-ity in parliament (which for instance has stalled the entry of FDI into multi-brand retail), and to the pre-vailing public mood. In short, as in several other countries like Greece (where an austerity package, though approved by parliament, was im-posed on the people of the country despite the pervasive awareness, reflected in the cancellation of a referendum an-nounced by the outgoing Prime Minister, that they were overwhelmingly against it), in India too the issue of democracy and its abridgement is bound to come to the forefront.There is an additional and even more pow-erful reason for it, and this consists in the fact that any intensification of economic crisis, especially of unemployment, has the effect of strengthening fascist and semi-fascist tendencies by facilitating divisions among people along communal, regional, linguistic, and ethnic lines. Rising unem-ployment provides fertile soil for argu-

ments of the “outsiders-are-stealing-our-jobs” kind, with “outsiders” being defined in a variety of ways depending upon the specific context. In addition, the trauma of unemployment, especially if it is pervasive, provides fertile soil for the enactment of “a historic process in which resentment against a disenchanted secular world” can find “deliverance in the ecstatic escape of unreason” (to quote German historian Fritz Stern). This “ecstatic escape of un-reason” constitutes the foundation for fas-cism. Thus whether through a process of hardening of “identities” to the exclusion

of “others,” or through a euphoric tran-scendence towards unreason also directed against a specific “other,” there is a loom-ing threat to democratic structures arising from our economy’s being drawn into the vortex of the world capitalist crisis.Indeed over the entire period after the end of the so-called “Golden Age of Capital-ism” in the early seventies, when the aver-age level of unemployment in the advanced countries has been higher than earlier, strong fascist tendencies have emerged in these countries in the form of racist, anti-immigrant movements. From the National Front in Britain, to Joerg Haider in Aus-tria, to Jean-Marie Le Pen in France, to the

more recent Tea Party in the US, a spate of fascist or semi-fascist organizations have mushroomed in the advanced capital-ist countries in the more recent years, and many of these are acquiring even greater prominence after the acute crisis of 2008. (Hungary’s recent march towards fascism illustrates the point.) This phenomenon bodes ill for coun-tries like India where communal-fascist and regional-chauvinist tendencies have a strong presence. Any strengthening of these tendencies, and the correspond-ing weakening of democratic institutions

has particularly adverse conse-quences for the poor, and the vic-tims of gender and caste oppres-sion. “One person one vote”�all the limitations of our democracy notwithstanding�represents an enormous empowerment of the marginalized sections of our society that have been victims for millennia of institutionalized inequality. Any erosion of the democratic structure hurts them the most and represents a serious setback to our social prog-ress. There is a further point to be noted here. Societies like ours tend to get saddled not only with the burdens of the present but also with the deadweight of the past; they get sad-dled with the carryover of the old “community,” with its institutional-ized patriarchy, its caste system, its suppression of the individual, its khap panchayats (caste councils), and its honor killings. Any govern-ment that, for the sake of attracting finance, curtails welfare expenditure

and withdraws support to whatever pro-grams exist for providing economic relief to the people, is likely, in its desperation for garnering social support, to compromise with these inherited social structures and appease their guardians, which in turn has the effect of stifling dissent, choice, and personal freedom. The integration into the most “modern” world of international fi-nance has the consequence paradoxically of effecting a compromise with the most backward social structures that constitute the deadweight carried over from our past. Symptoms of this process are already vis-ible; it is likely to exercise social scientists in the coming days.

The contradictions between the

maintenance and expansion of public

welfare programs on the one hand and the carrying forward

of the neo-liberal agenda on the other will intensify in the

coming days and have its impact on

research.

11

What Has the Occupy Movement Done for Scholars?

by Robert Meister

What do I hope will come out of our 2012 conference in col-laboration with the Cultures of

Finance Group at NYU? First, I hope to be surprised and stimulated by the work coming out of the brilliant, and highly international, group of graduate student researchers we have identified as Confer-ence Fellows. I hope that they, too, will be encouraged (and maybe a little surprised) by what comes of a three-day opportunity to engage with each other and with the group of more senior scholars and practitioners whom we have put on the program and/or invited to attend. If all goes as planned, we should all come away with a heightened sense of the im-portance of doing our work now, and of emphasizing its public signifi-cance, not merely how it fits into this or that disciplinary framework.Let me say something just briefly about what I think has changed since the last Bruce Initiative for Rethink-ing Capitalism Conference held in April 2011 in Santa Cruz. It can be summed up in one word: “Occupy.” At the University of California, some of us have been occupying buildings since 2009. But our tactics were be-ing improvised as we went along and even strong supporters of our movement believed that it would only be a matter of time before a disabling backlash occurred. That was before Tahrir Square, before the Euro Crisis, and before there was an oc-cupy movement in which students joined the jobless and the homeless in parks and other places. In other words, it was before we understood that there was the possibil-ity of a “we” who could articulate the fear of proletarianization that had driven stu-dents to take on massive, unpayable debt as stemming from the same sources as the fear of homelessness (living in those parks) that drove workers to take on loans that reached 145% of income in 2008. Who could have imagined, just two years

ago, that we would have the first student movement in memory that has (so far) not produced a serious backlash and that may even have widespread and broadly based political support? When we planned this conference in NYC in order to be closer to financial practitioners, we had no idea that we would also be at an epicenter of a political struggle that understands itself to

be about the financial system. While all of us as intellectuals and academ-ics would benefit from having a critical fi-nance theory network, my main hope is to seize the present moment as an opportuni-ty to conjoin politics and scholarship. The movement that is emerging before our eyes has little to learn from the likes of us at the level of tactics, and may not yet need a particularized set of demands, a Manifesto. But it does need analysis—and much more scholarship—on the working of the financial system, viewed politically in terms of its real vulnerabilities. Without such scholarship, the movement, if there is one, will not be ready for whatever hap-pens next. And without a movement that

can see justice on its horizon, our scholar-ship demonstrating finance’s weakness and contingency will simply make people more afraid it will collapse and more willing to hold on to what they now have at all costs. (In polite, policy language this is called “austerity.”) I believe we need to help this movement get past the point where it be-gins to scare people.

But that’s a big hope for a small conference, so let me close by stating an immediate

question that we might productively address: As critical finance scholars, we need to help the activist political movement respond to the events it creates by becoming more democrat-ic (perhaps even in the ways that old-style demonstrations and mobiliza-tions were). But it is also important to help the movement to become more effective in the way that strikes once were when they could shut down the economy by occupying chokepoints in the flows of raw materials and en-ergy supplies that the capitalist mode of production has already placed in their hands. My question is: What levers of power have the financial system created that could be pulled (or repossessed) by popular collec-

tive action? Are these the same levers of power that “the suicide bombers” who currently control Wall Street threatened to pull if they did not get everything they demanded? Those “leaders” have certainly shown us the way in 2007-2008. But would a movement that threatened to become more effective lose democratic support? Would people fear that the system really could be shut down by activists who are answerable to no one and can sell out ev-eryone but themselves? Have the political elites currently in charge been losing dem-ocratic support for much the same reason? Can we be ready for what happens when the next financial meltdown occurs? I look forward to our discussions.

Without scholarship, the activist movement around finance, if there is one, will not be ready for whatever happens next. And without a movement that can see justice on its horizon, our scholarship will simply make people more afraid finance will collapse and more willing to hold on to what they now have at all costs. . . I believe we need to help this movement get past the point where it begins to scare people.

12

Do We Have the Nerve to Know Finance as Class War?An Exchange Between Robert Meister and Timothy Mitchell Edited by Peter Dimock

This exchange is taken from the transcript of a Cultures of Finance Seminar on Timothy Mitch-ell’s Book, Carbon Democracy: Political Power in the Age of Oil (Verso, 2012), held at NYU’s Institute for Public Knowledge on March 23, 2012.

RM: This book is a gift. It is the most important book yet published on our col-lective topic—rethinking capitalism as a whole through studying the cul-tures of finance. Carbon Democracy is an important gift because it frames our discussion of finance in terms of the socio-technical practices that have produced our overall categories of thought by which we can know finance. It recovers for us the tech-niques of social control and profes-sional, elite expertise immanent in our current leading categories of analysis: “the economy,” “the mar-ket” (as a price system), “the envi-ronment,” “the energy crisis.” Tim shows us that these are ways of pro-ducing forms of a social manipula-tion that turn us into subjects of un-certainty and anxiety who are afraid that whatever we have now is likely to end soon.Tim’s book is likewise indispens-able for uncovering the dominative structures behind such categories as “de-velopment,” “militarism,” and—above all—“democracy.” The latter he brilliantly conceptualizes as a series of socio-techni-cal practices that can include both voting as a machine for manufacturing consent and the general strike as a potential ma-chine of political protest capable of chal-lenging the state itself. I draw from Tim’s book the implicit argu-ment that we can—perhaps must—seize control of the technologies that would otherwise control us. This includes, I would suggest, the technology of finance. His book raises for us who are members

of the Cultures of Finance Group at the Institute for Public Knowledge at NYU and the Bruce Initiative for Rethinking Capitalism at the University of California at Santa Cruz the question of whether we are not, in fact, carrying out the implied logic of Tim’s project in one area of tech-nology.If that is the case (let me be as provoca-

tive as I can be here), an extreme series of questions emerges that I would like to put to Tim as a way of initiating our general discussion. Are the “hacktivists” the coal miners of today whose analogous social position at the end of an era of carbon energy extraction enable them to force the system to respond to democratic social energies and needs? What does it mean that in effectively disrupting the financial system, a single “hacktivist” may be able do just as much individually by generat-ing a billion e-mails as a billion people engaged in coordinated, collective action? If we want to be effective in the Occupy Movement, Tim’s analysis suggests that we

might do things openly and collectively that terrorists do clandestinely and indi-vidually to attack the vulnerabilities of the system with the goal of shutting it down. Is our goal of being democratic potentially at odds with our desire to be effective in a way Tim demonstrates that sometimes only specific political assemblages can be?In other words, could either a “hacktivist”

or a mass movement of debt resis-tance produce the kind of liquidity crisis that leaders on Wall Street (pic-ture them for a moment, in their so-cial effect, as equivalent to saboteurs and suicide bombers) threatened to produce in order to get a bail-out and a government guarantee up to thir-teen trillion dollars? (This amount is not the tax revenue of the United States; it is the entire tax base.) Who has their hands on the levers today? Are we going to say to the traders, “Arise�collude with us�you have nothing to lose but your bonuses?” Is it individual debtors who hold the power over our financial markets if only they would unite? Or is it, as I tend to think, those who physically inhabit sites of collateral that po-tentially they could repossess politi-cally? By so doing, could “occupiers

of collateral” choose to disrupt the liquid-ity of the entire financial system, since it is based on massive cross-collateralization?I want to suggest to Tim, and to propose as a topic for our discussion, alternative nodes of liquidity in today’s financial sys-tem that parallel the nodes of liquidity in Tim’s book that he emphasizes as points of control in the flows of carbon energy that make the system vulnerable and open to democratic pressures. The alternative nodes I am proposing are the popular sei-zure and repossession of what financial markets value as collateral. In the long run this is needed to complement and complete reoccupying the public spaces

“Is it individual debtors who hold the power

over our financial markets if only they

would unite? Or is it, as I tend to think, those

who physically inhabit sites of collateral that potentially they could repossess politically?”

�Robert Meister

13

of parks, which is merely a democratic starting point.But I also want to ask Tim two other questions. The first is: This book poses a radical challenge to develop-ing a radical critical theory of finance. It seems to reject “capitalism” itself as a use-ful category of analysis. It treats capital-ism as a category�like “the market,” “the economy,” “the environmental crisis”—that works to preclude or distract us from practical political analysis of the realities of socio-technical assemblages that we, in fact, inhabit. Could Carbon Democracy’s enormously helpful framework for under-standing the twentieth- and twenty-first century histories of modern democracy be extended to include the question of whether placing our hands on collateral we don’t own but which we might occupy could be mobilized so that the topic of a general strike becomes a live political op-tion? Could there, in other words, be a popularly caused liquidity crisis?My second question is: Does this book imply a model of democratic social strug-gle that is grounded in class war? If it does, does it return Marxism to its origins in class struggle? Is “capitalism” now something we can see in the results of the financial meltdown and the response to that collapse by those in power because it is also the moment at which social justice is returning to our horizon? Would Tim agree that we only now—at long last—have what can be usefully attacked as capi-talism because the financial sector (and not heavy industry or mining) is the emergent site of democratic demands that have the potential for shutting down the system as a whole if they are not addressed?In a world in which we in the U.S. now do not expect growth, Tim’s book asks us to ask ourselves what is the proper attitude giv-en that our oil based energy dependence requires a system inextricably tied to the disabling fiction of limitless growth sup-ported by a limitless supply of cheap en-ergy. The cultural theorist, Lauren Berlant, has suggested that we in the U.S. now have only two options: The first she calls “cruel optimism,” the belief—the disabling be-lief—that things could get better. The sec-ond she calls “slow death,” the desire to postpone things getting worse.I am immensely grateful to Tim for this book because it reanimates a third possi-bility: a form of struggle for democracy

that is class war aimed at the vulnerabili-ties that the banks themselves have shown us when they threatened to bring down the entire financial market by making ev-erything suddenly illiquid. And a serious question arises for all of us in this room from what he has written: Do we have the nerve for that?

TM: I was immensely honored when I heard that Bob had agreed to come and discuss my book with us today. But now I’m having second thoughts. The sense of honor remains but also the feeling of intimidation—of being faced with all the really hard questions that were with me through the writing of the book. You won’t find them answered in it—or in some cases even explicitly addressed—be-cause they all remain, at the end of the day, open ones. I was finishing this book for Verso last winter—I had been writing it in Beirut and Cairo and had just left Egypt when the Tahrir Square protests broke out. As I was writing the last chapter and revising the earlier ones, this extraordinary set of events was unfolding that I couldn’t even take the time to think about properly but which clearly were related to everything I was writing about. This is to say that my own subsequent thinking about the book has been much more directly influenced by Tahrir Square than by Zuccotti Park. This was the context in which I have tried to think through precisely the questions Bob poses so clearly about what present revo-lutionary moments mean for political and social actors�including for “hacktivists.”I was quite dubious about the official fram-ing of the events in Egypt as a “Facebook Revolution.” The main Facebook group, the “April Sixth Youth Movement,” was named after the date of a general strike called by textile workers in 2008. The sei-zure of Tahrir Square came as a result of two, three, four, five—in some accounts, ten—years of increasing labor unrest and of learning to organize direct interven-tions at specific points of vulnerability—at particular points of pressure. And these points corresponded exactly to moments in a continuing long-term and systematic program of neo-liberal restructuring that was both encountering blockages but also fomenting rivalries within the regime be-tween modernizers and the old guard. The

first group to actually form a union and successfully conduct a strike independent-ly from state-controlled unions was the union of real estate tax collectors, set up in 2007. Not income tax collectors, but real estate tax collectors. Although I still don’t understand the details of the tax col-lectors’ movement, this was a response to the neo-liberal reforms. Oil exports and other sources of “rent” were declining and the reformers were now attempting to begin seriously taxing real estate as an alternative mode of generating revenue for the state. This created a specific point of vulnerability. At the same moment, the regime decided to move the restructuring program—the privatization of the state-owned economy—into the industrial sec-tor. The workers in the textile firms there-fore suddenly had a moment of leverage because the regime didn’t want to have tanks parked in the gates of textile facto-ries. So I think about the ability to disrupt the Internet and about other points of vul-nerability in the system in rather different terms than the ones you posed. I think we have been misled also by the idea that the Internet is going to make things much more democratic because we will all be connected horizontally rather than vertically. Again Tahrir Square is instruc-tive. The day the regime realized that the Tahrir Square protests were serious, it cut off the Internet. The regime hacked itself. This did two things: when they couldn’t log into their Facebook accounts, people realized the situation was serious—that this wasn’t just a “Facebook Revolution.” The other thing it did was force people to get out onto the street. There was no other way to communicate. This led to an extraordinary escalation of protest.So I think the points of vulnerability can be analyzed but also that they’re not neces-sarily going to occur in exactly the way one expects. I haven’t thought about the is-sue of provoking a liquidity crisis through forms of reoccupation. I have thought about the enormous benefit of having literally seized the public space of Tahrir Square, but, at the same time, the limits its seizure represented because so much focus had to be placed on maintaining control of that space rather than how to create multi-ple Tahrirs—especially in less symbolically resonant locations.I take the point of your main question

14

about the liquidities today being not so much the movements of oil but the move-ments of finance. My book tries to con-nect these two things in different moments and in different ways. I am one of those who think that the 2008 financial unravel-ing is inseparable from the story of what happened to the price and the availability and the supply of oil. I agree with you that this is an absolutely central question.As to your other main question—is “capi-talism” useful as a category—this is a theme I have puzzled with for many years. I don’t think there is anything that causes me at this moment to move away from the position I have taken of wanting us to be constantly alert to the ways our easy resort to these big terms stands in the way of certain kinds of analysis and forms of po-litical engagement.I’ve been struck, for example, in looking at the postwar moment of 1945 to 1948—when you have the largest wave of industrial action in U.S. history, Europe beginning to fall apart, and new modes of politi-cal struggle emerging in the Middle East as Europe transforms its trou-blesome coal-based democracy into the easier long-distance politics of oil�by how many key thinkers as-sumed that “capitalism” was no lon-ger a word that accurately described what was happening. I wonder if we have been attentive enough to the ways in which one of the projects of that postwar period was the reas-sembling of history so that the path going forward, despite transforma-tions the book traces in labor, in en-ergy, and in things like the invention of “the economy,” can be seen as the continuing history of capitalism. I have just been reading the reports of the president’s council of economic advisors. This body was set up in the middle of the labor crisis of 1946. It was an educational project intended to teach the UAW on one side and business forces on the other that there was a new set of relationships, dem-onstrated to us by Keynes, that everybody now had to understand. In its reports, the council learned to graph the new measure-ment of the economy that they had for-malized, GDP, using a logarithmic scale. Research showed that the U.S. economy in

recent decades had been growing at a rate of 3.5 percent a year. If you were to graph this on a linear scale, you would quickly see the absurdity of the notion of something growing exponentially into the future, con-tinuing to increase in size by 3.5 percent every year. You reach values close to in-finity very quickly. By using a logarithmic scale, the growth appeared as a straight line. With such techniques they were working on ways of representing growth—and the possibility of limitless growth—as the fu-ture by which we would be governed. This new effect of linear “growth” seems to me

crucial in their ability to recast everything that was happening as the continuing story of capitalism despite the transformations and transitions to a new form of politics that were underway. Whether that’s left us today with “cruel optimism” or “slow death,” I haven’t decided.

RM: I think we may disagree about wheth-er—and to what extent�the period 1971 to 1973 represents a new phase. I think after that we begin to have a new world in which the option form and the pricing of uncertainty as risk become the basis for

a new kind of economy in which purely financial assets are being created without reference to any underlying commodity. This is really part of a longer discussion, better saved perhaps for another time, but, in essence, you get a political system, I think, which is based on producing op-tions that result from natural disasters and political instability because incentive is manufactured through our anxieties that everything is going to end and through our belief that justice would—or will have to be—apocalyptic. This apocalyptic-ization of justice takes social justice off the politi-

cal horizon. I am speaking this way because the really exciting thing your book does, I think, is create a con-ception of democracy as the return of justice on the horizon of poli-tics. Your book suggests that it is within our power to create political machines for doing this. You have shown us one way of connecting the dots, beginning with the fact that oil prices are not determined by supply and demand and that the petrodol-lar glut is an expression of the po-litical factors at work�as are price manipulations by OPEC and the oil companies. I might suggest another way: After 1973 oil reserves become a text-book illustration of how the option not to produce becomes (exponentially) more valuable to its holders as oil prices become more volatile; the dollar stabilizes despite the U.S. dependency on oil imports because of a hugely expanded op-tions market in currencies; and that the ever-increasing circulation of petrodollars provides the virtual fuel for manufacturing financial de-rivatives in all fields under a formula

that presupposes an effectively limitless supply of credit instruments that repre-sent the oxygen-side of Tim’s story of en-ergy combustion. But all this is a topic for another day.

TM: I am very grateful to you for all the connecting of things you have just now done. I take from what you have said the importance of the history of uncertainty and its deployment in the form of finan-cialization and other political forms after 1973. This is enormously helpful.

“My own conceptualizations about my book have been much more directly influenced

by Tahrir Square than by Zuccotti Park. Tahrir

Square was the context in which I have tried to think

through what present revolutionary moments

mean for political and social actors�and for

‘hacktivists.’”

�Timothy Mitchell

15

Reclaiming the Public:Social Science and the University

in an Age of Privatizationby Craig Calhoun

What we do as scholars is not simply a reflection of neces-sity. It is a matter of choice

and commitment. Though our work takes place within a context of historical and in-stitutional conditions and sometimes these are constraints, we need to understand them as changeable. The future is still up to us to a considerable degree. I think it’s not too strong to say that pub-lic higher education is in crisis, but I also think it can be misleading to simply say that. We’re not in a situation in which the university faces a crossroads of extinction or recovery as so much of our language of crisis seems to want to suggest. “Recov-ery” would imply a return to some prior state as though what’s going to happen is that we are going to go back to the years before the current financial crisis or we are going to go back to the earlier years of the post-World War, which many people seem to treat as normal. But there is no sim-ple historical normal. There are phases. There are transformations. The question is how we move forward. The way crises are framed is crucial. One of the key public roles of social scien-tists is our collaboration with partners in policy-making or in social movements or a variety of other arenas to work on the way problems are framed.The public role of social science is not an add-on to core research and professional intellectual agendas. How we do cutting-edge science and how we serve the public interest are integrally related. We get our-selves in trouble when we think of public intervention in terms of a contradiction or a trade-off between the different values of knowledge and action. What we work on, how we frame the problems, what we teach about, what re-search we engage in—these are the core questions. Our research questions go to the heart of rethinking the way in which problems are framed in the world, and therefore how solutions are approached.

Our research questions cannot help but become generative of a knowledge that is produced in partnership with other actors—a knowledge agenda becomes an action agenda influencing profoundly how the world in general is known and acted upon. What should people do when they are working in Africa? When they are working on Wall Street? When they are working in a hospital?Yes, the current forces of privatization pose a grave threat. We must relearn to understand the university as a public good in itself�as a producer of public goods: goods for which there is unimpeded and non-rivalrous access that are not used up by any user. This is what knowledge is: a good not diminished by being known by many people. But knowledge is now being organized in proprietary ways for proprietary advan-tage. Even work that has been sponsored by public funds increasingly winds up con-trolled in proprietary fashion. Even our ability to communicate with each other and with the public is based on financial models that aren’t working very well. The dissemination of knowledge is increasing-ly being “solved” by making it more and more a question of the market’s ability to reorganize communication for commercial profit.It is the case, I think, that public budgets in support of higher education will not re-cover to previous levels. We should articu-late reasons for public funding but should avoid the trap of assuming everything worked fine five years ago or ten years ago or forty years ago. This both weakens our ability to move forward and obscures our thinking about the actual complexities of state funding. Accounting and budgeting are complex social processes that con-struct a reality. As social scientists we can ask where the state money goes, what in-centives does it provide, and how are those incentives organized? What kind of pub-lic discussion should produce the frame

of action for the work in education that is being funded? What is the relationship between that research that is funded by the state and that which is funded outside?We need to recognize that we are part of the problem. As professors in the elite parts of the American education system, we have gone along quietly with academic hierarchies becoming more and more in-tensified. We are part of a systemic trans-formation. The intensification of inequal-ity within the labor process of academia is part of a larger social process. For all our petty grumbling, it’s crucial that we realize that we still have the privilege of setting agendas to a very large extent and that we must use that privilege well. This is the enormous potential power of academic work.If anyone tells you that academic research and theory don’t have practical conse-quences, tell that person to do a little in-vestigation into the Chicago school of economics and the Mont Pelerin Society. It was through their connections and the networks they created that the followers of Friedrich Hayek so successfully waged a decades-long campaign to establish that the private was the natural realm of free-dom while the public was a pernicious ar-tificial zone of bureaucracy and potential oppression. It’s up to us as social scientists to understand and communicate how this framing, that now so powerfully shapes public perceptions, came to prominence and to command the authority it now does.I hope these few general remarks can help provide participants in the Futures of Fi-nance Conference a general context for the work we will be doing in framing fi-nance as an object of knowledge and prac-tice subject to social accountability. An interpretive community and sustainable network among practitioners, established, and emerging scholars through which to make that knowledge useful would be an encouraging example of the kind of public good the university can still create.

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Figure and Ground in Multiple Spheres of Exchange: How Do We Interpret Islamic Finance?by Bridget Kustin

My hope for the Futures of Finance Conference is the testing and deeper exploration

into the social dimensions at work in the multiple and emergent logics of global finance capitalism. I am particularly interested in how to understand these dimensions vis-à-vis the “boutique” or “specialized” corners of finance capitalism, such as microfinance, social business, ethical investing, and my own area of research—Islamic finance. I suspect the rapid growth of the global Islamic finance industry in the past few decades—including Islamic microfinance—is part of a reorientation and expansion of the way “economics” is understood and engaged with today. From Marx to Polanyi to many contemporary economic anthropologists there persists the idea that something understood as “capitalism” can be identified and distinguished from other distinctive productive worlds designated as “informal” or “local” economies or markets. The question then becomes how to place the separate economic spheres in relation to each other—whether as deterministic, embedded, in some kind of temporal frame of evolution, and so forth.But in their book, Financial Derivatives and the Globalization of Risk (2004), Ben Lee and Ed LiPuma show how the circulation of capital helps shape, in complex and irreducible ways, the financial realities and practices in poor countries and communities far removed from the trading floors of North America, Western Europe, and Japan. To choose to know and analyze these realities and practices as “local,” these authors argue, misses the crucial nature of what is happening in the world today, and how capital circulates between and among multiple spheres of exchange. I took Lee and LiPuma’s work as a call to reassess ideas of distance, complexity, figure and

ground in modern financial structures, institutions, relationships, systems, and objects in deeply textured ethnographic detail. Jane Guyer’s 2011 paper for the National Academy of Sciences, “Soft Currencies, Cash Economies, New Monies: Past and Present” has helped show me how to methodologically proceed with such a task. This paper explores the complex array of conversions, positional rankings, and notions of time, value, and wealth operational in multiple-currency economies. These elaborations create what Guyer calls the “transactional regimes” that allow hard and soft currencies to coexist and set economic processes in motion that come to resonate both in local bazaars and high finance currency markets. As Guyer collapses neat distinctions in time and space by tracing her argument from currencies circulating in Atlantic Africa during the slave trade to monies of the contemporary Nigerian economy, she demonstrates that contemporary analytic (and economic) models cannot capture the logics and currents of the phenomena she studies. The impulse to reorient understandings of economics, finance, and capitalism in light of emergent and creative phenomena that evade capture or comprehension using the usual analytic or theoretic tools of the social sciences animates my research as well. Likewise, I believe that much of the conference Graduate Fellows’ work is inspired by a similar impulse: how might maritime piracy be understood as a subversion of particular velocities and trajectories of the circulation of capital and the legal and security regimes safeguarding its circulation? How is the insurance industry approaching time and risk in the context of climate change and weather? Indian and Paraguayan

microfinance, the political economics of punk rock, Saussure and accounting theory, and Schumpeter’s views on capitalism do not exist in spheres separated from Wall Street. Rather, Graduate Fellows seem to argue, the “future of finance” requires undoing old logics separating different domains or “worlds” of financial activity, and mapping new topographies of complexity, entwinement, folds, pressures, and affects. My research thus far suggests that the Islamic finance industry exists neither neatly “outside” nor “embedded” within classical Western or neo-liberal economic or political frames of analysis and critique. I am exploring how Islamic microfinance is being positioned as a way for the global Islamic finance industry to help Islamic finance realize its potential as an ethical, spiritual, or religious alternative to conventional capitalism, as Islamic microfinance can promote both poverty alleviation and Shari’a-compliant banking among the poor. These conversations are occurring in my primary field site of Bangladesh, a deeply impoverished nation of nearly 160 million with the world’s fourth-largest Muslim population. They are also occurring at elite conferences of Islamic finance professionals in North America, Europe, Asia, and the Middle East, and at the Islamic Development Bank in Jeddah, Saudi Arabia, an institution supported overwhelmingly by wealthy Gulf Cooperation Council countries. To me, the idea that the experience of the rural, poor Bangladeshi Islamic microfinance client has an important role in the future of an industry also concerned with developing an Islamic bond market and robust Islamic insurance products shows that neat distinctions between “local” finance and “high finance” have collapsed.

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The Present Gathering is Our Opportunity: Administered

Derivativesby Randy Martin

The humanities are profoundly caught in the doubling of the term “value.” They are both objects of

exchange (tuition dollars paid to acquire the skills of intellectual and aesthetic cul-tivation) and as a means of orienting what is worth knowing. Derivatives, contrary to popular understanding, share a parallel doubling of meaning. They generate enormous values in circula-tion and at the same time are per-ceived to be ephemeral applications of abstract mathematical models, unattached to the world, used un-fairly by their beneficiaries to con-struct a Ponzi scheme�a house of cards that is unsustainable. The intrinsic value of higher edu-cation as a public good that cannot be readily priced to market has long been an object of derision, most recently and notoriously when Re-publican Presidential candidate Rick Santorum suggested that the very aspiration of universal access to higher education was “elitist.” The humanities would stand then for this predicament of no longer being able to take the value of a special-ized practice as self-evident, just as finance has been positioned as a no longer justifiable accumulation of capital for its own sake. Strange bedfellows these, the humanities and finance share a dilemma of what now seems the impos-sibility of constituting the public as an au-tonomous realm with distinct interests and protocols yet at the same time being the focal point of broadly cast apprehension.Much recent public discourse concerning both finance and the humanities is pre-sented as being structured by the moral-izing Manichean war between truth and falsity embodied in oppositions between the material and symbolic, real and rep-resentational, inside and outside. These oppositions simply do not fit the current

structures of determination we face.Derivatives are deeply implicated in pro-ductive activity (the late housing boom in particular) just as the humanities, far from being an unaffordable luxury, are essential to the casualized labor practices and cross-subsidies that comprise the university’s

revenue flows. More, “culture”�what the arts, design and humanities (now in a larger arc of knowledge-making) are said not only to interrogate but to produce as an array of intangible value (again, not so unlike the popular conception of financial derivatives)—comprises vast fields whose tilling and toiling generates what has been called “the creative economy.” Further, where financial derivatives were to manage risk, they heightened volatility; where they were to abide norms of transparency, they generated opacity; and where sophisticated mathematical models were to master their universes, the chasm between what could

and could not be fit into these models soon became ungovernable. Similarly, academic institutions have not hesitated to position themselves in relation to the collected hot occupations of Finance Insurance Real Estate (FIRE) as the complementary cool counterpoint of Intellectual Cultural Edu-

cational (ICE) contributors to con-temporary urban development. A knowledge economy in its myriad and amorphous definitions has de-stabilized both what counts as labor and what appears as a job, just as it heightens the crisis of value—what knowledge will deliver which out-comes—and does so in a way that continually crosses inside and out-side higher education in terms of intellectual property, forms of labor or training, and an ever more ex-pansive field of knowledge sources that run from laboratories to popu-lar culture, traditional communities, social networks, artistic, alternative and do-it-yourself practices. This mixing, moshing, blending, sorting, appropriating, hiving-off is as much the work of the derivative as it is a condition of interdisciplinarity. De-partments formed in the early twen-tieth century from interdisciplinary combinations and foundations, as

did the programs in ethnic and area studies that emerged at mid-century in response to Cold War mandates. The thematic and project-based centers of the past few de-cades have also sprung from their own in-terdisciplinary impulses.What distinguishes this last wave of inter-disciplinarity from previous ones is that it has emerged in the context of this larger trespass between public and private. What the university can be said to deliver has been de-differentiated. Effaced are its own epistemic divides between a technically regulated private sphere of the laboratory as pure or theoretical and an outside pub-

What distinguishes this last wave of interdisciplinarity from previous ones is that it has emerged in the context of this larger trespass between public and private.

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lic world that takes up what is applicable and practical. Hence, even among humani-ties centers, the interest in what is public, digital, applied, engaged reflects this cir-culation of knowledge-making through various nodes, sites, constituencies, affilia-tions, orientations that transpire when self-administered professions are hybridized with conglomerating industrialization of knowledge practices. If departmental autonomy has gone the way of national sovereignty, it is worth remembering that research universities were modeled as their own kind of league of nations, with architectural separation standing as a metonym for naturalized territorial boundaries. The creation of inter-disciplinary programs in the sixties and seventies, fueling and fueled by an expansive professional manage-rial class, expressed a double geneal-ogy. On the one hand, empire-build-ing government and foundation monies consistent with Cold War schemes of geo-epistemic rule, and, on the other, the de- and anti-colo-nizing movements making demands for space, recognition and resources within universities that were charged with legitimating what would count as human. Along with the more re-cent focus on intellectual property, pluralizing the humanities in a multi-cultural direction, opening access to both the institution and its author-ity, transformed the more tempered conflict of faculties from schools of thought to a far more complex and polarizing mapping of methods and aims of critique. The reaction to these expanded ver-sions of humanization coded as do-mestic culture wars came not simply from those constituencies to whom the public was no longer their pri-vate vehicle of advancement. Re-action came also in response to a post-Cold War but still imperial state that seemed indifferent to knowledge of oth-ers as an instrument of its own global rule. The imperial occupations in Afghanistan and Iraq were undertaken without per-ceived need of area knowledge. Those who could speak to, with, about such popula-tions were coded and tracked as incipient enemies of the state. In this the humanities

may have found itself with a capacity to speak directly to the state with the voicing and even potency of a political party. This was a power of intervention no actual po-litical party was able to administer by itself. Here too a parallelism with a derivative perspective may yet prove useful in seeing how small interventions matter, how vola-tility connects disparate valuations, how risks taken might be trans-valued from the pernicious attentions of homeland se-

curity and other hostile forces to a more capacious criticality, how these epistemic politics proceed as a kind of arbitrage.Beyond the particular circumstances of the humanities and the place in the imagina-tion of the concept of the public they have come to signify, treating finance itself as an object, occasion, and situation for thinking the present across a range of knowledge

addresses is key to the aspirations for what we can make of capitalism’s futures. The expansion of access by means of mass personal credit had been the way in which finance would bring a sense of future pos-sibility into the present, even if this meant increasing the intimacy with measure, as-sessment and risk-management into life’s inner fibers. With the financial debacle and bailout, crushing debt has displaced end-less credit and for many the future based

upon expansive possibility has been cancelled. Finding ways of valuing our debts to one another, our knowl-edge of the world, and our means of inhabiting the future will require a deeper engagement with the wide berth of being and knowing opened by finance. For students of the fu-ture, for an interpretive community bringing into view an object in the making, for those who would find fellowship in remaking what is pos-sible, the present gathering is our opportunity.If the ascent of finance over the past forty years has been bound up with the unmaking of disciplinary authority as we have known it, along with the very capacity to clearly dif-ferentiate public and private goods, interests, and accountabilities, there may still be a gift hiding within this momentous vehicle. Finance now stands as an object of attention that now disciplinary interest cannot ig-nore as indeed it has dazzled studies across the epistemological cosmos of arts and humanities, natural and social sciences. More, financial lit-eracy is said to be the lynchpin of continuing education, its acquisi-tion capable of eliminating poverty in the global north and south alike, while still holding the fates of many governments in its sway. Now that our eyes are transfixed upon this ho-rizon, we should ask what each can

bring to the understanding of others, and of how we might translate our own per-spectives into the dialects that until now may have seemed indecipherable. There is indeed enormous wealth among us. If we can attend to the work of administering our knowledge, then a different logic of how to value our present and future may indeed be to hand.

The imperial occupations in

Afghanistan and Iraq were undertaken

without perceived need of area

knowledge. Those who could speak to,

with, about such populations were

coded and tracked as incipient enemies

of the state. In this the humanities may

have found itself with a capacity to speak

directly to the state with the voicing and

even potency of a political party.

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Capturing Opportunity in the Futures of Finance

by Robert Wosnitzer

The Futures of Finance Conference captures three broad opportunities. First, the conference represents

the culmination of an initial collaboration between the IPK Cultures of Finance Working Group and the UC Santa Cruz Bruce Initiative for Rethinking Capitalism. Second, the conference opened an occasion to create a network of scholars that are explicitly taking up questions of finance and its connection to politics, culture, and social theory. And, third, the conference hopes to better describe our collective research object, finance, as it occurs through a dense grid of registers. The accompanying articles in this special conference volume of Rethinking Capitalism from Bob Meister and Arjun Appadurai astutely describe the contours of our collaboration, and I would only add that this conference marks the first of a continued collaboration that would not be limited to conferences, but might include publishing opportunities, research collaborations, and the development of pedagogical programs. Indeed, the collaboration is as much about creating a broader space for public engagement as it is about bringing these two groups together.The decision to constitute a group of graduate student fellows flows from acknowledging that scholarship in this undefined field of inquiry is occurring across a range of academic departments and disciplinary affinities, making it difficult to identify a ready-made group of scholars. The departmental affiliations of our graduate student represent the variety of disciplines engaged in generating new knowledge about finance, ranging from anthropology, sociology, politics, geography, media studies, and cultural studies. This inter-disciplinarity is not for the sake of inter-disciplinarity itself

(a point expressed well by Randy Martin in his essay for this volume), but rather reflects what is required of scholars in order to study the social permutations of finance. It is also a deep acknowledgment that our work demands a broad network of support, amongst ourselves and our institutional homes. Perhaps most importantly, the conference allows us to bring together, in one setting, questions that have vexed the existing scholarship on finance, creating the possibility for new research imperatives and collaborations.Our initial impulse at constituting the conference panels was to think of finance as a discursive object that comes into being through the registers represented by each panel—a dispositif of sorts that maps the grid which allows ‘finance’ to circulate. The feeling was, and remains, that finance is often “essentialized” as one thing, with a coherent set of actors, ideologies, and practices. Cultures in finance are, more accurately, constituted by a vast array of different institutional arrangements, regulatory coordinates, status hierarchies, and variegated practices. Simultaneously, cultures of finance take finance as their object of intervention, speaking and knowing finance from a range of registers that include politics, journalism, activism, and academic disciplines.Our point of intervention does not to make a case for some apparent, natural division between finance and the world external to it, but to situate finance as a discourse, culture, and ethos with its internal and external logics that circulate in time and across space. This conference provides an opportunity to contemplate and describe this material infrastructure of financialization through the lens of cultural critique?. The panels we’ve constituted begin by locating how finance circulates in

its money forms and through banking institutions, we hope to elaborate on the global cash nexus which brings new (and old) forms of exchange into being. Similarly, describing financial cultures should give us some purchase into the dispositions, attitudes, beliefs and embodied presence of particular financial actors who are located in such close proximity to the levers of financial action. The description and investigation of these sites also includes the structural limits on action, and how actors might understand and act upon them. Our panel on financial literacy and scholarly disciplines confronts the ways in the knowledge economy becomes inflected by finance. As financial logics and practices migrate into bureaucratic and administrative practices, new modes of management appear possible. This is never more present in the academy, where tuition dollars become collateral for securitization schemes, and knowledge workers become subjected to new, opaque metrics that prefer probability over possibility. Beyond this, the epistemological weight that has accrued to [or “has been ascribed to”?] financial models stymies both regulators and users of these quantitative devices, altering conditions for knowing and acting.Of course, we have not even come close to exhausting the multiple registers where finance becomes implicated. This contingent and partial reconstruction, then, simply signals the opening, inaugurating what I hope will become a robust and continued space for understanding. Echoing all of the pieces in this newsletter and anticipating the events of this week’s conference, our collective task must remain rooted in its publicness in its attempt to wrench finance out of its own opacity and murky history.

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Editor’s Note: What Publishing Model Do We Need for an Activist Knowledge of Finance? by Peter Dimock

Recently I found myself telling a friend about my editing work with the scholars at this conference. I

told him of the intellectual excitement I felt being around people who were produc-ing such innovative new ways of interpret-ing the social dimensions of the financial collapse of 2008. I heard myself saying something like the follow-ing: “It feels as if I am watching the emergence of a completely new way of understanding the real his-tory we are now living through that has radical and urgent implications for creating a shared democratic fu-ture. And at exactly the same mo-ment, it feels as if I am witnessing first-hand how the new vision they are creating is not being heard—at least not yet—by most Americans.”Then I heard myself saying some-thing I had not been conscious of thinking before: “Sometimes I feel, in the midst of the elegant, bril-liant complexity of their analyses, as if the scholars themselves don’t see—or can no longer remember—what it is like not to be able to know what they know. Their language too often does not seem to take into account what it is like not to possess already the clarity of their vision—not to be able to think for oneself in the aftermath of release from the intel-lectual coercions perpetrated by prevailing narratives of the necessity of subjection

to financial management by unimaginably self-enriched elites.”The editing challenge is to edit this new work so that its possibilities for a way forward�and the relief the new ideas can bring�reach more people. I feel the need to try to convey to each author from inside

their own writing my experience gained from it as a reader and someone who has worked in book publishing for many years that we may now lack a stable, expansive technology adequate to the knowledge you are creating. The time of the book upon which so much of the best scholarship re-lies cannot be taken for granted. The clas-sically emancipative, protected, bourgeois,

Enlightenment time of meditative, private reading installed by print and book culture at the heart of liberal capitalism has now become disembedded from, and reposi-tioned within, the real-time communica-tive culture of most people’s daily lives. “What we really need to do,” I found

myself finally saying to my friend, “is to create a deliberative space in which the not-for-profit book time of protected, contemplative, individual, intensive, emancipative reading and online, real-time, social connectivity and democratic activ-ism are recombined in new ways.”My friend then reminded me of a story that is told about C. Wright Mills who once rudely confronted a room full of book publishing executives—from both commer-cial houses and scholarly presses. “Gentlemen,” he is said to have said, “you seem to think that ‘pub-lishing’ means printing and selling books, when, in fact, it means ‘mak-ing knowledge public.’”

My hope is that in our discussions during this conference we will make publishing part of our analysis and vision. I urge us to think of it as a technology we ourselves have not yet made fully capable of com-municating the full dimensions of the knowledge about the financialization of sociality over the last thirty years that we are creating.

We may lack a technology of publishing

adequate to the new knowledge

of finance we are creating.

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The Bruce Initiative on Rethinking Capitalism, University of California, Santa CruzInstitute for Public Knowledge, New York University

RETHINKING CAPITALISMIssue No. 3, April 2012Futures of Finance Conference IssueEditor: Peter Dimock

Editorial Board:Samuel CarterBridget KustinRobert MeisterBernie RichterRobert Wosnitzer

Design and Layout: Samuel Carter

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Benjamin Lee and Edward LiPuma (“The Foundations of Finance: Charisma, Aura, and Uncertainty”). Benjamin Lee is University Professor of Anthropology at the New School and co-author of From Primitives to Derivatives (2004); Edward LiPuma is Professor of An-thropology at the University of Miami and co-author, with Benjamin Lee, of Financial Derivatives and the Globalization of Risk (2004).

Arjun Appadurai (“The Futures of Finance Conference”) is Goddard Professor of Media, Culture, and Communication at NYU and author of Fear of Small Numbers: An Essay on the Geography of Anger (2006).

Prabhat Patnaik (“The Emerging Context for Social Science Practice”) is Professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University and the author of The Value of Money (2008) and Re-Envisioning Socialism (2011).

Robert Meister (“What Has the Occupy Movement Done for Scholars?” and “Do We Have the Nerve to Know Finance as Class War?”) is Director of the Bruce Initiative, teaches in the Politics, Anthropology, and History of Consciousness graduate programs at UC – Santa Cruz and is the author of After Evil: A Politics of Human Rights (2010).

Timothy Mitchell (“Do We Have the Nerve to Know Finance as Class War? An Exchange Between Robert Meister and Timothy Mitchell”) is Professor in the Middle Eastern, South Asian, and African Studies Department at Columbia University and the author of Carbon Democracy: Political Power in the Age of Oil (2011).

Craig Calhoun (“Reclaiming the Public: Social Science and the University in an Age of Privatization”) is Director of NYU’s Institute for Public Knowledge and author of The Roots of Radicalism: Tradition, the Public Sphere, and Early Nineteenth-Century Social Movements (2012).

Bridget Kustin (“Figure and Ground in Multiple Spheres of Exchange: How Do We Interpret Islamic Finance?”) is Doctoral Candidate in Anthropology at Johns Hopkins University and studies theologies of money. She writes on Islamic banking and finance in Bangladesh and Saudi Arabia. She has served as South Asia Researcher for the U.S. Commission on International Religious Freedom.

Randy Martin (“The Present Gathering is Our Opportunity: Administered Derivatives”) is Professor of art and public policy and director of the graduate program in arts politics at NYU. He is the author of Under New Management: Universities, Administrative Labor, and the Professional Turn (2011).

Robert Wosnitzer (“Capturing Opportunity in the Futures of Finance”) is Doctoral Candi-date in Media, Culture, and Communication at NYU. He is the coordinator of the Futures of Finance Conference and is writing a social history of proprietary trading at U.S. invest-ment banks.

Peter Dimock (“Editor’s Note: What Publishing Model Do We Need for an Activist Knowledge of Finance?”) is a freelance editor and author of two novels, A Short Rhetoric for Leaving the Family (1998) and George Anderson: Notes for a Love Song in Imperial Time (forth-coming fall 2012).