Joining the Dots
From the Series: Finance
Shortly after the start of the subprime crisis the Financial Times produced a simple but intriguing interactive map titled ‘Mapping the credit crunch’.
The instruction at the base of the map reads ‘drag slider to see change over time’; doing so reveals how the subprime crisis ‘unfolded’ between July and August 2007. The visualisation invites the viewer to select the sub-prime winners (not many of these), the losers or disrupted deals, or to view them altogether. Colour coded dots emerge contagion-like on the surface of the map as the slider is moved through the weeks of ‘turmoil’ from July to August. As might be expected the final screen reveals mostly losers and disrupted deals congregating in the North East of the USA, Britain and other parts of western Europe but with a few surprising outliers such as MISC, the Malayan based world’s leading owner of liquefied gas tankers, which decided to shelve a bond offering citing market turmoil as the reason, and Basis Capital, an Australian hedge fund over exposed to the US sub-prime market. With hindsight the outcome, understood in terms of the range of market participants, is not that astonishing. The now usual suspects ranged from “risk-hungry hedge funds to safe and boring-looking cash funds for retail investors; from high-street specialist mortgage companies to some of the world’s biggest investment banks; and from ordinary corporate borrowers to highly leveraged private-equity backed buy-out deals” as the brief FT article in which the map is embedded put it.
Ignoring for the present how the movement of the sub-prime crisis was confined (at least in the initial months) to a belt of largely Anglo-American influenced market structures, the few geographical spillovers caught by the map notwithstanding, what is intriguing about this map is how it allows an uncomplicated but striking visualisation of the emergent financial topologies of the crisis. Although from the outset this was a highly spatial crisis, successfully capturing and representing the spatialities of finance, made complex through market interconnectivities and made to appear immaterial through mathematical chicanery and sophisticated technological infrastructure, has proved illusive. Whilst great strides have been made within the social studies of finance, anthropology and economic sociology, to make sense of the making of financial markets, attending importantly to the enabling materialities and socio-technical combinations at the core of modern finance, the focus has more or less exclusively been on the inside as it were of these markets and confined to financial centres. The wider implications of finance, the ability of finance to work through its new materiality, its new components, to code the world and thus draw it into its centres of calculation, to make space and time malleable and thus amenable to calculative practices, and the consequences, all tends to be marginalised in critical accounts of finance, if acknowledged at all.
And it’s not just in the critical accounts of finance that the geographical complexity of contemporary finance, made clear in and through the crisis, has been downplayed. Finance theory itself has ignored ‘geography’ (unsurprisingly - apart from prematurely announcing its death relatively recently) and remains fixated with individual firms, as Andrew Haldane, an Executive Director for Financial Stability at the Bank of England, wrote in a recent Opinion piece in the New Scientist. Haldane, an unusual figure in central banking, is someone refreshingly (although not unproblematically) keen to learn about how risks move through the ‘financial system’; his sources range from complex systems theory, zoology to sociology. For him the mistake of financial economics was and is to think that “the behaviour of the system was just an aggregated version of the behaviour of the individual”. From complex systems theory (and from the geographical play of the crisis one hopes) Haldane has learnt that finance doesn’t work like this; figuring out how to ‘join the dots’ across the network should be the goal.
Which brings me back to the FT’s interactive map and what’s attractive about it: it’s a reminder both of the unexpected geographies, the emergent, innovative financial topologies, that accompany financial market making, and indirectly how the stuff of finance (the mathematical formulae, algorithms, the coding, the visualisation software and so on) combines to join the dots to produce such spatialities that entangle not simply multiple space-times but complex configurations of financialized futures made present through the workings and more often malfunctioning of contemporary finance. As the crisis makes manifest such malfunctioning comes with material consequences as the dots emerge, contagion-like, in unexpected places to cause often significant social and political upheaval. Attending to the geographies that accompany the work of the calculative agencies of finance is thus one reason why finance needs a spatially attuned anthropology. And it’s also why an anthropology of finance should look to ways to join the dots (but question the easy technological fix imagined by the likes of Haldane) by engaging and employing visualisation techniques as another way of writing the spaces and times of contemporary finance into its accounts of how increasingly interlinked markets of contemporary finance make worlds.