Between arbitrage and speculation: an economy of belief and doubt

Abstract

The recent debate concerning the 'sociology of arbitrage' has firmly established arbitrage as a category of theoretical significance in the social studies of finance. In this article, I seek to complicate this debate by drawing attention to a particular kind of ambiguity inherent in the category of arbitrage, as it is put to use in financial markets. I present certain Japanese arbitrageurs' reflections on the difference between arbitrage and speculation and examine the interplay of belief and doubt underlying arbitrage operations. I argue that the resulting ambivalence towards the category of arbitrage is a marker of arbitrageurs' particular epistemological stance, identity and ethical commitment. Finally, I consider the implications of arbitrage's ambiguity for the dominant trope of speculation in the critical study of financial markets more broadly.     

Epistemological practice and the social sciences

The object of this article is to examine the proposals for a new sociology of education set out in the work of M. F. D. Young. In particular it examines his discussion of 'knowledge', 'radicalism' and 'politics' and demonstrates that his project for a sociology of the politics of educational knowledge based on the 'phenomenological' sociology of Alfred Schutz is unsuccessful. It is argued that the 'radical' attack on the political character of contemporary education cannot be sustained. It is demonstrated that the concepts in the work of Freire, Illich, Schutz and others to which Young refers do not provide the guidelines for any theoretical advance in the sociology of education, and further, that this 'new' sociology can provide no rigorous theoretical basis for education policy formulation.     

Fine tuning the Zelizer view

Fine and Lapavitsas accept my critique of neoclassical economics as well as my empirical findings, but too hastily reject the arguments underlyng both of them. Despite their complaints to the contrary, my work provides viable definitions of money and markets, offers a theoretically motivated research program, demonstrates the heterogeneity of money and markets, deals with standard economic processes, and addresses general theoretical issues. Within recent economic sociology, both 'context' and 'alternative' approaches improve on the stark choice between neoclassical economics and conventional Marxist political economy posed by Fine and Lapavitsas.     

Canguilhem and the problem of pathology

This article examines continuities and change in Cangilhem's thought with particular reference to the status of biology and sociology and to the theme of intellectual and social progress. It is suggested that one of the central issues of Cangilhem's writings is an attempt to work through the problems raised by the programme of Comtean positivism. The fact that Canguilhem's reflections were not completely unambigous is dusscussed through an examination of those parts his work which deal directly or indirectly with pathology.     

The Structural Transformation of Sociology

The advent of public sociology over the past decade represents the end of a string of crisis moments in sociology. Since the 1950s and, especially, the 1960s, sociology was argued to be in a crisis because the discipline was thought to be conservative and contributing to sustain the status quo. As a result, the 1970s witnessed a radicalization of sociology, but the 1980s saw a general decline of sociology. Upon a resurgence during the 1990s, the crisis advocates have come back with a vengeance in the form of a renewed commitment to a heavily politicized sociology under the heading of public sociology, a perspective that is now thoroughly institutionalized and widely embraced. In sociology, the effects of the 1960s thus began to be felt in earnest some 40 years late.     

Chinese capital flows and offshore financial centers

Abstract

Why is the British Virgin Islands a bigger source of foreign direct investment into China than the USA, the European Union and Japan combined? Why is there 10 times more investment from China in the Caymans Islands than there is in the USA? This paper argues that these flows represent the efforts of Chinese and foreign investors to reduce governance and measurement transaction costs. Investors avail themselves of efficient institutions in offshore centers that are absent locally. These institutional attractions include the ease of raising capital on foreign stock markets, access to reliable courts, and more flexible and sophisticated financial products. Existing explanations of these capital movements, characterizing them as criminal money or tax arbitrage, are insufficient. Evidence is drawn from government statistics, private legal advice and interviews in offshore financial centers.     

An Obituary for the Third Way: The Financial Crisis and Social Democracy in Europe

Why has the financial crisis not served as an occasion for social democratic revival? It is because, with the ‘Third Way’, European social democracy became imbricated with the financial system in crisis to such an extent that it is in no position to offer an alternative to it. The financial crisis is the crisis of the Third Way. Furthermore, the Third Way was based on the faulty premise that it was possible to replicate USA's apparent success in the 1990s, which, however, was based on very particular conditions. The argument is pursued with reference to inter alia Third Way ideology, transatlantic relations, the political economy of capitalist variety, and the political sociology of mass parties.     

Lessons from the malfunctioning of the Eurozone's financial system

The persisting Eurozone's crisis is a combination of a sovereign debt crisis and a banking crisis that have been triggered by the Global Financial Crisis. The sovereign debt crisis is the consequence of a policy laxity for applying the principles and fiscal rules of the monetary union, which led to macroeconomic imbalances and enforced the mispricing of risks by the markets that in turn contributed to escalate the banking crisis. To address the consequences of the Eurozone's crisis, the European Union has implemented a new crisis management framework, which, however, is not immune to trials. The present paper follows a tripartite structure and begins by examining the causes of the Eurozone's crisis and draws its lessons. Second, it examines the reforms of the new crisis management framework and highlights their key challenges. Third, in light of these lessons and challenges, a return to three ‘fundamentals’ is advocated and the case of enhancing the position of the European Union within the area of international financial regulation is built to highlight how this is an optimal policy area for addressing the endemic weaknesses of the Eurozone and how this can contribute to securing a sustainable growth. Copyright © 2014 John Wiley & Sons, Ltd.     

Change in French society: A critical analysis of Crozier's bureaucratic model

The object of this article is to examine critically Michel Crozier's view of the way in which organisational and social change occurs in France. Attention is focused particularly on key concepts such as change, equality and crisis. A clarification of these concepts and the examination of certain logical differences involved in their use leads to the conclusion that the Crozierian account must be rejected. It is suggested finally that an examination of change which would take more account of the particularities of different policy arenas would be more appropriate and more capable of elucidating the true nature of obstacles of change in French society.     

Ambiguous revival: a study of some ‘new civic movements’ in Japan

Japanese democracy and the traditional systems and values of governing Japan are in crisis. Nevertheless, this article argues that this context has also witnessed the consolidation of new democratic practices and new civic movements which prove the vitality of the Japanese citizenry as a political actor. This article examines the reinvigoration of citizens' movements and the impact upon them of the images and concepts of 'alternative' groups and self-managed coops, and various problems associated with them. The third and fourth part shows how alternative ideology also permeates traditional movements in Osaka and Hokkaido, but also how these civic groups have been exploited for inner power struggles by elites in Fukuoka and Kobe. Finally, the last part of the article examines how alternative groups have found their way into the political platform of national political parties, and ponders the future of new civic movements in Japan.     

Crisis and employment: The case of Korea

This paper examines Korea's employment dynamics and analyzes how adverse impacts could be mitigated during the recent economic crisis in comparison with the 1997 to 1998 Asian crisis. A clear lesson is that policies to mitigate adverse impacts of financial crisis on the macroeconomic level should be given priority for preserving employment. In this regard, expansionary monetary and fiscal policies to keep aggregate demand from collapsing need to be emphasized once a crisis breaks out. However, equally crucial is the maintenance of sound pre‐crisis fundamentals to help keep negative impacts from proliferating, even when a crisis is triggered. In addition, flexible labor market structures and temporary employment‐boosting policies appear to be necessary to reduce the negative impacts of a crisis on workers. © 2011 by the Association for Public Policy Analysis and Management.     

From calculation to alienation: disentangling economic abstractions

This article uses a debate between Michel Callon and Daniel Miller to explore tensions within economic sociology and anthropology.The tension is between characterizations of markets and economic rationality that seem to dissolve them into a generalized notion of culture and those which seem to abstract them as specific social forms. The paper argues that markets are best defined in terms of a form of transaction rather than a specific mode of calculation: market transactions involve the alienation of goods in the form of property. Such transactions require the kinds of socio-technical apparatuses that Callon describes, in order to establish both alienability and its limits; on the other hand, and drawing on Callon's own concepts of framing and overflowing, such transactions allow for more diverse, ambiguous and contradictory forms of calculation than Callon seems to allow. The latter point is developed particularly in relation to cultural calculation, typified by marketing and advertising.     

Foam architecture: managing co-isolated associations

Abstract

This article analyses Peter Sloterdijk's grand trilogy on spheres which re-conceptualizes our being-together and its spatial conditions. After a brief outline of the main objectives of sphereology, I analyse the notion of foam which, Sloterdijk argues, should replace the concept of society. I here explore the sociological theories that form the backdrop to Sloterdijk's idea of foam sociality, in particular Gabriel Tarde's monadological sociology of imitation but also the vitalist impulse that is central to the immunology of the foam theory, and which Sloterdijk inherits from Hermann Broch. The following section examines one of the important contributions of the foam theory, namely, its explicit engagement with architecture. In the final part, I offer a foam-theoretical interpretation of environmental crime prevention. This case study brings together foam theory, immunology and the focus on architecture.     

Battles over numbers: the case of the Argentine consumer price index (2007–2015)

An unprecedented crisis of confidence in Argentina's public statistics rendered the declaration of a ‘National Statistical Emergency’ in 2016. This paper examines the battle over the Argentine consumer price index (CPI) between 2007 and 2015. It argues that in this dispute the index became the object of political struggle rather than a methodological controversy. The main characteristics of the Argentine CPI, its trajectory and the country’s inflationary history influenced the type of debate and the dispute that was possible and feasible. The battle was linked to the erosion of confidence in and social support for official statistics and to the emergence of alternative price indices. Both processes seriously undermined the government's ability to control inflation.     

Subprime catalyst: Financial regulatory reform and the strengthening of US carbon market governance

The 2008 financial crisis has had an important, but neglected, impact on carbon market governance in the United States. It acted as a catalyst for the emergence of a domestic coalition that drew upon the crisis experience to demand stronger regulation over carbon markets. The influence of this coalition was seen first in the changing content of draft climate change bills between 2008 and 2010. But the coalition's more lasting legacy was its role in shaping the content of, and supporting, the passage of the Wall Street Reform and Consumer Protection Act (the Dodd–Frank bill) in July 2010. Although that bill was aimed primarily at bolstering financial stability, its derivatives provisions strengthened carbon market regulation in significant ways. This policy episode demonstrates new patterns of coalition building in carbon market politics as well as the growing links between climate governance and financial regulatory politics. At the same time, the significance of these developments should not be overstated because of various limitations in the content and implementation of the Dodd–Frank bill, as well as the waning support for carbon markets more generally within the US since the bill's passage.     

Global Governance: Prospects and Problems

The 50th anniversary of the UN in 1995 occasioned a widespread international discussion of 'global governance'. This term is understood to denote not just conventional bodies of international security and economic management but the overlapping and interlocking of institutions found in all issues and regions, and the increasing body of non-state actors, broadly termed 'international civil society'. This article discusses the functions and reform of global governance, and then examines these in the light of five central issues of the 1990s: the role of the great powers, peace-keeping, economic nationalism, a crisis of NGOs, and global values. It argues that advocacy of global governance must be matched by political realism on the one hand, and the recognition of the need for difficult ethical choices on the other.     

Neo-liberalism and polycontextuality: banking crisis and re-regulation in Sweden

This article gives an account of the interpretative conflicts and re-regulative initiatives that followed the Swedish banking crisis in the 1990s. The analysis is based on systems theory and theories of governance conceptualizing steering and self-regulation. It shows the polycontextuality of the conflicts over the crisis, and how the re-regulation articulated central aspects of neo-liberal government, as conceptualized in terms of governance. The conclusion discusses two paradoxes. The first is that the enforced self-regulation of the re-regulative process 'frees' market actors by embedding them in new webs of governance. The second paradox is that every solution to a problematic event of this kind is at the same time seen as a new problem when observed with distinctions other than the one reduced by the solution.     

Can society be commodities all the way down? Post-Polanyian reflections on capitalist crisis

Abstract

In his classic 1944 book, The great transformation, Karl Polanyi traced the roots of capitalist crisis to efforts to create ‘self-regulating markets’ in land, labour and money. The effect was to turn those three fundamental bases of social life into ‘fictitious commodities’. The inevitable result, Polanyi claimed, was to despoil nature, rupture communities and destroy livelihoods. This diagnosis has strong echoes in the twenty-first century: witness the burgeoning markets in carbon emissions and biotechnology; in child-care, schooling and the care of the old; and in financial derivatives. In this situation, Polanyi's idea of fictitious commodification affords a promising basis for an integrated structural analysis that connects three dimensions of the present crisis: the ecological, the social and the financial. This paper explores the strengths and weaknesses of Polanyi's idea.     

The IMF's Rethink of Global Banks: Critical in Theory,Orthodox in Practice

The International Monetary Fund's (IMF) new financial interconnectedness agenda, developed in response to postcrisis calls from G20 to better understand systemic financial institutions, deploys a critical approach that stresses the spatial, political, and institutional dimensions of cross‐border financial networks. It portrays global banks as key nodes in those networks, “super‐spreaders” of systemic risk through complex business models that involve yield search, regulatory and tax arbitrage. Yet this critical view does not translate into its policy advice at country level. In regular surveillance of developing countries, the IMF remains committed to a benign view of transnational banking, even when confronted with growing cross‐border fragilities. During crises of cross‐border banking, the IMF tailors its conditionality to minimize domestic regulatory challenges to cross‐border banking models and to propose crisis measures that create new profit opportunities for transnational banks.     

The Olympics and 'Global Citizenship'

This paper develops a citizenship-based perspective on an important but under-researched global cultural movement, namely, the Olympic Movement. Drawing on recent research into the Olympics and other popular cultural 'mega-event' movements [M. Roche (2000) Mega-events and Modernity: Olympics, Expos and the Growth of Global Culture (London, Routledge)], the paper outlines a conceptual framework for analysing the Olympics in terms 'global citizenship'. 'Global citizenship' is taken to refer on the one hand to 'universal citizenship' (individualized human rights) and on the other hand to 'global corporate citizenship' (corporate action in international civil society). This framework is then applied in a discussion of some of the contemporary Olympic Movement's main problems and one of its main projects, the 'Olympic Truce'.