project statement

There is at last no longer any serious pretense that our financial world is capable of monogamous symbolization by the stable period motions of economic equilibrium models, whose analytic analog derives from classical mechanics. It is now conceived as a world of instabilities, intrinsic and extrinsic, if such distinction still holds; deterministic and simultaneously by chance; perpetual fluctuations; permeated through and through with ambiguous anxieties; overdetermined by noise, perturbations, and pathological deviations; but which in turn -we must not overlook- is responsible for rich varieties of fungible properties, forms of assets, and a mobile horizon of institutional structures constantly coming into and out of existence. Do we really understand what all they can do?

New conceptual tools are needed to think finance, to think between and through and along with its being, its logic, its ontology, viz. its logic of being. Speculative materialism is a forum for the study of the materialism and ontology of finance, and so is a site for exploring methods capable of examining its complexity -at the level of economic properties, assets, the markets they populate, and the subsystems comprising the rhizomatic systems of exchange we call ‘finance’.

Now, Lozano is only one speculative materialist. But Lozano reads, and believes he understands, Deleuze. This means that his current heterodox political economic interests involve questions of the possible applications of two fields of scientific inquiry that have been progressively revolutionizing the philosophic disposition of science towards complexity.  {note: thanks to I. Prigogine, Exploring Complexity, for this inspiration}

(i) The first is studies on nonequilibrium -and in particular the peculiar material properties and processes exhibited by far-from-equilibrium conditions (note: when Lozano openly imagines a continuously-recalibrated universal synthetic CDO that nomadically distributes economic space by manner of the ‘infinite leverage’ production-capacities of structured financial technologies, he’s advocating experimentation with operations of far-from-equilibrium -which is why he likes to say: “hey look, I might be wrong, in fact I probably am wrong; but if I’m wrong than I’m wrong for the right reasons.” (ed. note: he’s obviously a bit of a jerk)).

(ii) The second is modern dynamical systems theory -and in particular its investigations of the amplifications of the effects of profound changes to a system from small or slight modifications of initial conditions and/or nonlinear causes.

Lozano believes that when a heterodox political economist successfully scavenges the conceptual resources from these methods, at the very least the result will be a more thorough understanding of our object of analysis -i.e. the ontology and the deep material capacities of finance. And at the very more? -this is for another post.

Pooh_meets_Tigger,_illustration_by_EH_Shepard

Wherever we look in finance today we observe divergent evolution, along with a precarious fleeting set of moments of stability amongst a flux of deviations from equilibrium. The ontological consistency of the world of financial objects is a truly pluralistic world, wherein we find acute determinism (e.g. the prices of bonds and their yields always move inversely) alongside or even within stochastic phenomena (e.g. price series of bonds), and reversible processes (e.g. any given exchange) that give rise by degrees to qualitatively irreversible changes in kind (e.g. a series of exchanges progressively gives rise to new markets and institutions, whose differentiation is irreversible, i.e. its actuality only moves one way).

In some respects perhaps this is no surprise. Many complex systems are marked by this elusive dynamic; moreover, this elusive dynamic even cuts across complex systems themselves. Physicists explain that already the motions of a ‘simple’ frictionless pendulum are wholly reversible, that the pendulum’s past and future can move in either direction of the arrow of time, and that each is equally as capable of playing the same role in the equations describing its dynamics: this truth is absolute. But it is just as much the case that biological evolution, chemical reactions, and diffusion processes -are these not equally absolute, albeit now in their very irreversibility?

Let us then consider. In the (neo)classical political economic paradigm, the political economist is an investigator who is thought to be exogenous to the forces of the system which she observes. She is capable of calculating, rationally, independently, and making autonomous decisions about the phenomena presented to her in the course of her studies therein. Contrarily, it is the system itself that is subject to deterministic laws, while the political economist is the decider, awesome and free. It is the system -even if and when comprised of individuals- who is stupid, pathological, inert, an undead-dead matter that conforms to a predetermined plan. Today, however, already in behavioral finance’s opening salvo, and now in sociological applications of science and technology studies to finance, we are getting progressively further from this aforementioned applied-Cartesian conception of the subject. Not only in the human sciences and even physics, but afortiori in finance and economics as well, we are now expected as subjects, spectators, subjects of the spectacle, but also as actors and activists as well. No longer then, too, must the domain of exchange we call finance necessarily imply a predetermined future predicated on a perpetual present. Rather, our world is rife and open with possibility, for we perpetually inhabit and cohabit the construction of a time and space of which we are active participants.

This is one conviction of a speculative materialist.

This is one wager as we we proceed to examine the materialism and ontology of finance.

This is also why we seek to move beyond critique and off to engineering. But if engineering truly is the benevolent fusion of art and science, of creative aesthetics fused onto physical laws, we must begin with step one -which is a clarification of method -and then commence the process of tinkering with matter.

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