FINANCIAL ENGINEERING,NOT ECONOMIC PHOTOGRAPHY

In recent years, significant studies of finance have explored, on the one hand, the ways in which a specific financial theory might act as a ‘performative utterance’ which through its use makes itself true and, on the other hand, the ways in which discourses and practices of finance might act as continuous performatives that constitute key categories of finance and the financial subject. On first glance, the idea of self-actualising financial theory might seem closer to J. L. Austin's original conception of the performative utterance. However, in this article, I argue for the need to reclaim the Austinian heritage for the broader and more generic understanding of performative finance as well. In this sense, I suggest, a return to Austin reveals the importance of maintaining a focus not only on the potential performance of financial theory, but also those discourses and practices of finance that make up the deeper layers of performativity. I use questions about the role of financial engineering in the sub-prime crisis to illustrate that it is only through a conception of performative finance as self-actualising theories and as discourses and practices that the often obscured layers of financial engineering in society can be fully understood.     

LOCATING THE DOMAIN OF CALCULATION

Economic science generally takes as its model system the results of uncoerced market transactions, and the application of economic rationality to the state is often understood as an effort to make public institutions behave more like private firms. This requires the explicit formulation of calculations that entrepreneurs are presumed to make implicitly. Yet a formal system of calculation can never be the same as a set of unarticulated practices, and economic projects such as cost-benefit analysis led quickly to the measurement of objects undreamed of by the private economy. Also, the relentless advance of economic quantification has created systems of oversight and regulation that tend to centralize rather than diffuse power. Historically, the methods of economic calculation did not follow from a quantified theory of individual market behavior, but, quite the contrary, were articulated as instruments of economic management and then applied back to individuals. As economics worked out a theory of market behavior, it simultaneously gave new meaning to the very idea of economic rationality.