Finance and Society
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Debt for status? Consumer credit, ordinary consumption, and the sense of place
Get PDFThe quest for social status is usually considered one of the main drivers of the demand for consumer credit. This article provides a nuanced take on consumer credit by exploring the interaction between consumption, borrowing, and class identity. To do so I pursue a cultural class analysis inspired by the work of Pierre Bourdieu. Drawing from 26 semi-structured interviews, the article has two main findings. First, it shows that people engage in borrowing not only to gain prestige, but also to assert their belongingness to symbolic groups, which embody the values of imagined communities. Second, against the idea that borrowing is undertaken mainly for conspicuous consumption, the article’s findings show that middle- income families in Chile borrow to consume ‘ordinary’ goods. Through the consumption of these goods, the Chilean middle classes seek to stabilize their class identities through their life trajectories, thereby achieving a sense of place in a changing environment. These findings lead me to focus on the normalization of credit and the process through which borrowing practices turn consumer goods from wants into needs, ratcheting up the demand for credit. The article argues that this is an overlooked way in which competitive dynamics drive the demand for credit, which is a missing link in the explanation for the rise of household debt
Figuring volatility
Get PDFThis article argues that there are parallels between developments in modern science and in art and culture, including the culture of finance, and that these developments can be tracked by a notion of volatility not just as change, but as how change itself has changed. Describing this paradigm shift requires a language that is precise but indeterminate, a language akin to metaphor, understood as figures of volatility. Three such figures are anamorphosis, anachronism, and catachresis. These figures are major instantiations of volatility, though they do not exhaust all the possibilities. What they indicate is not just that our frames of understanding have shifted, but that we are dealing with problematic, multiple, and overlapping frames: anamorphosis problematizes our experience of space, anachronism of time, and catachresis of language. These figures are not all in play at the same time. In literature, catachresis may be the dominant figure; in dance, anamorphosis; in ‘slow cinema’, anachronism. The aim is less to arrive at a set of defining characteristics than to follow a series of transformations across different cultural fields. Almost every field in our time is volatile each in its own way, and this has consequences for methodology. If figures are tools to think with, not to regulate thought, a necessary method would be to allow these figures to emerge from the material, not from a checklist. The question of volatility is arguably the key intellectual challenge of our time because it allows us to see deviation from a norm not just as an aberration, but as an indication that established norms are losing their normative value
Imagining the future in bailout capitalism
Get PDFThe interface of political economy with arts and literature has become dominated by a particular image: capital’s Grinch-like theft of the future. But this image overlooks the peculiar temporal structure of neoliberalism, which renews its broken promises by making up ever more excuses for the past. Contemporary bailout society requires a form of critique that acknowledges these dynamics, that targets the way capital reconstructs our relationship to the past
The money array; or, show me the debtor
Get PDFMoney is neither a thing nor a concept. Rather, as many writers have rightly suggested, money is a relation. But what kind of relation? This articles refuses the now seemingly common-sense notion that money is an ‘institution’ or a ‘public good’. Instead, it insists on specifying money as a concrete relation between creditor and debtor. To grasp money in both its practical and conceptual complexity, we must see it as an array. The money array is comprised of four elements: (1) a token that symbolizes the money relation; (2) a creditor who holds the token; (3) a debtor on whom the token makes a claim; (4) a denomination, i.e., the named quantity of credit/debt. The money array makes clear that no form of the money stuff – as money, i.e., as part of the money relation – ever possesses any positive, intrinsic value. The raison d’être of the money stuff – of any coin, note, bill, check, or digital token – is not to contain, have, or incarnate value. Money has no value. The value element of the money relation never lies in the money stuff, but rather can only be located across the entire money array
A Modest Proposal (in a Black Box)
Get PDFA Modest Proposal (in a Black Box). HD Video, 28’ 7’’, sound and colour, UK and Belgium, 2018. View in full here: <https://vimeo.com/290694804>.
Vermeir & Heiremans are an artist duo. Defining their own house as an art work in 2006 became the basis for a long-term artistic practice together. The ‘house as art work’ is a framing device to open up a meta-perspective on their own work, the art world, and daily life in general. In their practice, they explore different scenarios for a redistribution of value and new forms of mutualisation
Beyond market neutrality? Central banks and the problem of climate change
Get PDFStarting with a landmark 2015 speech by Mark Carney on the ‘Tragedy of the Horizon’, climate change entered central banking discourse, causing some of its key convictions to come under new scrutiny. This article traces how initially climate change was firmly embedded in a conventional framework of ‘market completion’ that would allow financial markets to price in the negative externality. Yet, over the course of the last seven years, central banks have repositioned their role regarding this problem, taking on a much more active stance which calls into question the notion of ’market neutrality’. To trace these discursive changes, this article identifies three discursive layers formed around market-based mechanisms, responsible investment and monetary policy. We show that in the unfolding of the debate, the issue of climate change has altered the self-understanding of central bankers and driven them towards a more active stance where they acknowledge that central bankers shape and make, and not only ‘mirror’, market forces
Eros and the nature of ‘interest’
Get PDFIn Greek archaic literature and philosophy, Eros, the god of love and desire, has numerous origin stories, which lead to different understandings of his nature. These extend to both orthodox and heterodox texts within the economic canon, whose definitions of interest rearticulate the mythological subtext of desire. What might have happened if the Western world had not discarded the passions in its quest for material progress
European financial law and the state-finance nexus: Sovereign privileges or market discipline for safe public debt?
Get PDFEuropean financial regulation consistently gives governments privileged access to private investors, reflecting the anchor role assigned to sovereign securities as safe and liquid assets for the financial system. Legislative reforms after the financial crisis of 2008 further expanded the preferential treatment of sovereign securities as zero-risk claims, introduced portfolio requirements in favour of public debt, and constrained market speculation against governments. These sovereign privileges appear counterproductive for fiscal discipline and financial stability: they encourage excessive public debt issuance and make financial institutions holding government bonds – in particular from euro area countries with a variable risk profile – vulnerable to fiscal turbulence. Governments seem to have a conflict of interest. On the one hand, they are prudential regulators of financial risk-taking, on the other hand, they tend to overlook the financial sector’s exposure to sovereign risk. This article considers four theories of the state-finance nexus and their solutions to this conflict of interest. The money view, the franchise view, and the modern financial repression view draw on the state’s monetary and regulatory powers over finance to confirm sovereign safety. Their positions fundamentally contrast with the neoliberal view, which relies on free markets to enforce sustainable public finances. The article concludes that sovereign privileges present a fundamental dilemma for European financial governance with a neoliberal orientation: they oblige private investors to hold public debt, while weakening the role of markets in promoting fiscal discipline as the very foundation of sovereign safety
Financial delusions and the persistence of capital
Get PDFThe dominant view among critics of today’s financial economy is that, at one point in its long history, capitalism took the wrong turn, falling victim to greed and corruption. This view is fundamentally flawed. The elementary but disavowed reason for the current dominance of the financial sector is that the social narrative based on labour exploitation has grown impotent. The law of value is artificially kept alive in spite of its vanishing. But how long can such delusion last
The financialization of remittances in Nepal: Governing through the pedagogy of fear and hope
Get PDFIn the last decade, remittances have become connected to financialization, expanding financial markets and deepening financial logics in what has been termed the financialization of remittances (FOR). In Nepal, where remittances are of key importance, this manifests itself in the country’s development strategy through attempts to formalize remittances and promote financial inclusion, entrepreneurship, and financial infrastructure. This article focuses on the most salient manifestation of the FOR in Nepal: a large-scale financial literacy education (FLE) campaign for transnational families. To examine how this FOR-FLE complex works, we bring together insights on emotional governance with those on the creation of (gendered) financial subjectivities. Based on an analysis of FLE pedagogical material and interviews with FLE experts, we suggest that the FOR-FLE complex in Nepal mobilizes a pedagogy of fear and hope to discipline the financial behavior of transnational families, transforming them into self- governing miniature financial corporations. We also highlight the gender dimensions of this emotional regime, which creates terror and works to patronize, shame, and stigmatize non- migrant women of transnational families, rendering them responsible for development, decreasing out-migration, and reducing the economy’s import dependency