Derivatives

Derivatives and Property: Financialisation and the Sovereign Moment

The changing nature of property has been integral to the development of capitalist sovereignty. The shift from private and direct ownership to limited liability and absentee ownership in the nineteenth century is a key case in point. The joint-stock company facilitated the rise of the individuated and competitive subject, ‘freed’ from the moral strictures of stewardship. Capital attained a greater sovereign prerogative through this transformation. Derivatives, we argue, are to be understood as a reformulation, fortification and extension of this prerogative. They reformulate ownership in a way that breaks any vestiges of stewardship, and leaves ownership decreasingly encumbered by underlying materiality. In so doing, the prerogative of capitalist sovereignty is extended. This is evident in the position of the state in the face of derivatives. Though the autonomy of the state may be increasingly limited, finance’s sphere for unimpeded action is markedly enhanced.

Marx, Financialization, and Derivatives: Modern Finance as Discipline and Value-Form Analysis

In this paper we shall deal with the function and the elements of financial markets. We argue that the contemporary neoliberal form of the (global) financial system is not merely a by-product of the collapse of the Bretton Woods agreement. Moreover, it does not provide ‘ by way of derivatives ‘ a monetary anchor (meaning that derivatives are not a new form of commodity money).

We assert that a series of ‘implements’ of the financial system and the functions that they undertake constitute ‘pure’ elements pertaining to production and reproduction of the collective social capital. From a Marxian point of view, their necessity is to be placed both in the sphere of circulation and in the sphere of capitalist production, and reproduction.

In particular, the mode of origin of the multiple financial contracts presupposes and has also as its consequence several processes of control and discipline of the individual capitals (enterprises). In this way, financialization as a generalization of these processes into a complex system comprises a decisive link for the enforcement of the capital domination. This means that our study does not concentrate merely on the ‘productive’ or ‘unproductive’ effects that financialization might have on ‘development’ or ‘consumption’, but on a whole series of other possible and crucial effects which seem marginal at first sight. As a consequence, we regard finance as a complex social function that cannot be isolated from the so-called ‘real’ economy.

Accordingly, such an argumentation, based, of course, on Marxian concepts, provides the terms to rethink contemporary neoliberal form of capitalism, modern crisis as an expression of the contradictions inherent in this organization of capital hegemony, and contemporary form of imperialism, as well. Our analysis also comes up with some conclusions concerning the discussions inside Marxism on whether or not derivatives are commodities or money or even some other representation of capitalist wealth.

Hold the Policy Solutions: Addressing the Problem of Equivalence

The ‘problem of equivalence’, which is precluded within functionalist theories of money, has been prevalent in the contradictions of the global financial system. Yet the predominant analytical responses to the crisis tend to ignore the transformations in the nature of money and the associated new problems of defining equivalence. The paper considers a range of political and policy responses and central bank strategies in the light of this failure.