Chris Muellerleile

Turning financial markets inside out: Polanyi, performativity and disembeddedness

In light of the spread of markets across the globe and deeper into daily life, this paper argues for a more robust analysis and application of Karl Polanyis conception of (dis)embedded markets coupled with the performativity thesis authored mainly by Michel Callon. It suggests that while disembeddedness as a concept is necessary for an analysis of contemporary financial markets that are increasingly self-referential, it is not sufficient. Despite the suggestion of a gulf between Polanyian and Callonian economics, there are important similarities in the two frameworks. The similarities are considered along with the considerable difference, all in an attempt to develop a more robust methodological framework for analyzing financial markets. Performativity, it is argued, can help fill the gaps in Polanyis embeddedness framework, albeit only when that concepts tendency to produce aspatial and apolitical arguments are taken seriously. The paper uses an abbreviated case study of the development of US financial derivative markets in the 1970s and 1980s to argue that markets must be considered in light of both their institutional and geographic entanglements as well as their (dis)embeddedness in systems of calculativeness and mathematical modeling. Specifically the paper analyzes the tension between the derivative origin story authored by Donald MacKenzie, which focuses on neoclassical pricing models like the Black—Scholes—Merton option pricing formula, and my own empirical research, which suggests the urban-economic geography of Chicago played a key role in the development of these instruments.

Economic Geography and the Financial Crisis: Full Steam Ahead?

This article considers whether the growing theoretical and methodological diversity or pluralistic nature of economic geography contributes to its lack of engagement outside the discipline and academy. Although we are enthusiastic about the vibrancy this pluralism brings, we also speculate that it contributes to the disciplines tendency to fall short of significantly impacting key debates in the social sciences. In particular, we consider the disciplinary challenges to influencing mainstream debates over financialization and the recent financial crisis and the recurring lament that economic geography “misses the boat” by failing to significantly impact key scholarly and policy issues. Specifically, we suggest that methodological and theoretical diversity, local contextualization, and relational analysis, all of which we support as vital to the discipline, make it difficult to isolate a disciplinary core. We conclude that pluralism produces a vibrant discipline with unique explanatory power but that it also has important impacts on the design, execution, and influence of geographers’ research outside the discipline.

The moral economy of open access

Digital technologies have made access to and profit from scientific publications hotly contested issues. Debates over open access (OA), however, rarely extend from questions of distribution to questions of how OA is transforming the politics of academic knowledge production. This article argues that the movement towards OA rests on a relatively stable moral episteme that positions different actors involved in the economy of OA (authors, publishers, the general public), and most importantly, knowledge itself. The analysis disentangles the ontological and moral side of these claims, showing how OA changes the meaning of knowledge from a good in the economic, to good in the moral sense. This means OA can be theorized as the moral economy of digital knowledge production. Ultimately, using Boltanski and Thévenot’s work on justification, the article reflects on how this moral economy frames the political subjectivity of actors and institutions involved in academic knowledge production.

Speculative boundaries: Chicago and the regulatory history of US financial derivative markets

This paper considers the history of governance and speculation on US derivative markets from their emergence in the middle of the 19th century through their incursion into finance in the late 20th century. It explores the importance of derivatives’ extended ancestry in agricultural markets before analyzing their entanglement with financial markets, which came much later in the 1970s and 1980s. The paper is particularly concerned with the institutional inheritance of a set of legal–regulatory boundaries that prioritized price making and the speculative trading that was necessary to produce a consistent flow of prices. This governance system for derivatives is set in contrast with the governance of securities markets, which during the 1930s became subject to more strict government oversight, particularly with regard to speculative trading. The legal boundaries between these two markets began to deteriorate in the 1970s when the Chicago derivative exchanges applied the speculative logic of agricultural derivative markets to financial instruments. The implications of this are twofold. First the paper argues that market mechanisms and market regulation are analytically inseparable, and ought to be studied as such. Second, employing this approach, the paper argues that US financial derivative markets are originally ‘derivative’ not of New York and the finance sector, but of Chicago and the agricultural sector.

Calming Speculative Traffic: An Infrastructural Theory of Financial Markets

abstract This article argues that the concept of infrastructure offers geographers a useful framework to understand the resilient influence of financial markets on the socioeconomy. An infrastructural perspective reframes the politics of financial markets by considering them as vital systems that are deeply integrated with the real economy. This helps explain the successful reframing of regulatory debates away from action that might shrink financial markets, and instead toward incremental change and technical fixes that end up supporting the growth of the system. The infrastructural perspective also allows us to consider financial markets as technical systems that are inherently limited in their capacity to process financial transactions, which in turn helps explain their tendency to fail. Comparing the flow of speculative trades through financial markets to the flow of traffic through congested roads, the article employs a case study of the 1987 US stock market crash and its regulatory aftermath. It suggests that in the wake of the 1987 crash, which was caused by an inability to process trades fast enough, US regulators found it politically impossible to impose any significant limits on speculative trading. Wary of market congestion contributing to another financial accident, regulators instead expanded the speculative capacity of the markets. But just as expanded road systems attract more autos and produce an array of externalities, enhanced market capacity only attracts more speculation and related externalities, not least a deepening of speculative financialization.