THEORIZING THE CONTEMPORARY - POON
Martha Poon, New York University
The world we inhabit is increasingly ruled by financial principles. This new situation, which academics called ‘financialization’, is profoundly uncomfortable for an extraordinary number of people. The trouble with financial value, then, is not that it’s radically fictitious. The trouble is that finance is a lived reality; it’s rapidly becoming a dominant socio-economic system.
Now consider the language that gets hurled around to describe contemporary finance—it’s false, unstable, irrational, abstract. And yet, not one anthropologist I know would be willing to buy into the idea that there exists some truer form of economic value, grounded in more uniform, rational or material principles.
Herein lies the most simplified distinction between anthropology and economics: the first observes and considers the rich diversity of human praxis, while the second single-mindedly pursues a theory of universal action. On what grounds, then, can anthropology accuse contemporary finance of recklessly contravening “real” economic value? And without a definition of real value how can we know that finance is “in crisis”?
Social scientists have argued that value systems are never an expression of neutral principles but are the very mechanisms that structure and sustain inequalities. We have documented how value is wielded as a tool of oppressive differentiation; we have shown that when systems of value get established, value and order become indistinguishable.
Value becomes power when it is able to define reality. Value is not power because it is wrong or faulty. So why do so many anthropologists cheer at the idea that finance perpetuates false value? “We know what you’re up to, you fat cats are fraudsters!”
The charge of fraud is a potent political strategy that attempts to delegitimize its target. But fraud is also an epistemological dispensation from engaging with finance through the classic tools of ethnography. For if a financial system does not generate genuine human value, then it’s internal mechanisms are not worth studying!
I’d like to brainstorm for a moment, what it could mean to treat contemporary finance as a site where value is being negotiated. Let me propose a little thought experiment to whet our collective ethnographic imagination.
Let’s say we enter a room occupied by a sparkling pyramid of stacked champagne glasses. We ask, “Where are we?” We wonder, “What’s happening?” A cork pops and a Master of Ceremonies climbs up a ladder. The bottle smokes from its slender neck as bubbly liquid spills outwards. The top coupe fills and then slowly runs over, champagne trickles eagerly downwards, clinging to the surface of the transparent structure. The spectacle is aesthetically enthralling, and we soon find ourselves enthusiastically applauding!
Now imagine that in this scenario, the Master’s hand shakes, the ladder totters, or the liquid dribbles aimlessly. Some glasses fill to the brim while others remain empty. Champagne is scandalously wasted as it saturates the tablecloth.
Does imperfect execution render this feat an ineffective or illegitimate method of making meaning? To the contrary, the champagne cascade is an act whose technical difficulty defines its status as a practice that generates and marks significance.
I have chosen the champagne cascade for this illustration because it has already been used as a narrative tool for explaining complex financial derivatives: the stack of glasses represents the capital structure of a collateralized debt obligation (CDO) and the liquid represents periodic flows of cash payments.
When there is enough liquid cash to fill a CDO structure to the bottom, all of the investors are making money. But when cash payments run low, the bottom levels dry up. So for bearing the risk of being left empty-handed, investors who buy into the lower part of the security will earn greater returns in moments when the capital flow is stronger.
I am drawing upon this simplistic analogy to rearticulate a separation—between an empirically informed study that explores how a particularly group engages in producing inequalities and a political denunciation which appeals to an authoritative, exogenous principle of value. What are these people trying to do? What is it they’re building? What is the indigenous project in contemporary finance?
Let me slide out here on a bit of a limb—when it comes to the question of studying financial value, anthropology is suffering from a case of methodological xenophobia. When anthropologists immediately dismiss financial activity as a distortion of genuine productivity, they contravene every one of the discipline’s political, intellectual and methodological commitments to acknowledge the fullness of human diversity.
Let me point to one potential source of this tension. It seems to me that anthropologists resist studying what financiers are doing because ethnography has become bound up with a politics of validation. Ethnography is an intensive methodological tool that makes systems of value intelligible and visible. And, perhaps, because doing fieldwork requires an extraordinary personal investment, anthropologists prefer spending time with groups whose worldviews they support or struggles they admire. But, in the face of a formidable system of value-in-the-making, there is a cost to conflating the exercise of method with the act of political endorsement. In my observation, the mainstream discipline’s refusal to take financial value seriously may be hindering its head-on engagement with the global financial system.
My argument here is very simple. The best way to confront contemporary finance is by renewing, not reneging, the core values of anthropological practice. In my opinion, it is only by recording and examining what financial practitioners are doing that we can empirically reveal the precise material mechanisms that enact financialized inequality.
The financial system is real and it demands immediate ethnographic attention, because it increasingly underwrites the terms of wealth and human suffering.