At Public Books, Daniel Fridman reviews three books that seek to understand how high finance harvests, shapes, and imperils the lives of ordinary people who have no ostensible involvement in stock trading or other financial gambles. These books are Ivan Ascher's Portfolio Society: On the Capitalist Mode of Prediction, Annie McClanahan's Dead Pledges: Debt, Crisis, and Twenty-First-Century Culture, and Alex Preda's Noise: Living and Trading in Electronic Finance. As Fridman notes in his review, finance capital, in search of ever more esoteric ways to make a buck, has pervaded almost every aspect of our daily lives in ways that we are largely unaware of. Here's an excerpt from the review:
Ascher, once again borrowing from Marx, explains the interconnections between the systemic and the individual. The exchange value of a commodity in Marx’s Capital was the amount of socially necessary labor time it contained. It wasn’t how long a single worker took to make a product, but rather a measure of the labor time a society needed to put into that product. The individual value of a commodity contained a social, collective measure, reflecting the whole system of commodities. In the same way, risk today is an individually measurable attribute but one that contains, in each security, the whole system of relations between securities. Risk is both individual and social.
Markets seem to mark value in practical and transparent ways; this is one of their most attractive features. Anything is worth as much as someone wants to pay for it. Even personal attributes like credibility are now transparently priced and turned into an asset to be bundled into derivative instruments, reducing the exposure of lenders. Intimate knowledge of the potential borrower is no longer necessary, McClanahan shows, when creditworthiness is scored with points.
Image: UBS trading floor. Via Zero Hedge.