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Introduction to Abstract Market Theory

Lecturer: Jon Roffe

Originally Taught: Winter School 2013

Lecturer: Dr Jon Roffe
3-5.30pm, June 24 - 27 (NB: Mon - Thurs classes will run long, no class on Fri.)
Room 0104

This course presents an outline of a philosophy of the market. While the discipline of economics was first a sphere of philosophical thought, and while philosophy has since Marx engaged in a complicated engagement with the market, the contemporary situation has outstripped theses reflection on a number of fronts. Important examples would include: the trade in complex synthetic derivatives, which is now a cornerstone of the world market; the advent and increasing ubiquity of high frequency trading undertaken algorithmically, which has withdrawn much direct human agency from the market; and the initiation of a radical form of the virtualization of currency in the wake of the rise of the internet. This course, drawing on work in the philosophy and sociology of finance, along with the work of Gilles Deleuze and Félix Guattari, will present a set of concepts whose aim is to address, at least in nuce, the current lack of an adequate philosophy of the market.

Lecture 1: the market as a pricing process
The first lecture will critically survey existing attempts to think the market (from mediatized punditry to the sociology of finance) and propose the first principles of a philosophy that might be equal to its object, drawn from the work of Elie Ayache. Ayache’s account, according to which the market is privileged contemporary medium of contingency, will then be elaborated, in the context of a brief theoretical and historical account of the financial instruments known as derivatives (specifically the so-called vanillas).

Lecture 2: from a restricted to a general pricing surface
We will begin by considering a second class of derivative, one that played a central role in the financial crisis – the collateralized debt obligation (CDO) – in order to generalize Ayache’s framework. This will lead to a topological definition of the market as a general pricing surface that is one-sided, inscriptive and intensive in character.

Lecture 3: the realization of the market and its topology
With the topological definition of the market in hand, this third lecture will turn from the question of the being of the market to that of the realization of the market. The main point of reference here will be Deleuze and Guattari’s conceptualization of capitalism as a world-wide axiomatic of price and the State as the means of its realization. This will allow us to situate 1) the role of labour in a philosophy of the market, 2) the distinction between the market and markets, and 3) the situation of nation-States with respect to the market. We will see that the realization of the market can be thought topologically with respect to the isomorphy, heteromorphy and polymorphy of the capitalist axiomatic, and will lead to a shift from Deleuze and Guattari’s definition of the State to a more general notion of states of the market.

Lecture 4: Money, banking, credit and debt
The fourth lecture here will extend the previous analysis of the relationship between the market and its states to address two key issues. The first is that of money. We will see, following Deleuze and Guattari on the one hand and Lyotard and Georges Bataille on the other, that there is not a single form of money (not even the famous general equivalent so important to Marx), but three forms of money, what we will call wage- or state-capital, market-capital and (taking us back to the analyses of the first lecture) money qua price. The second issue is that of the nature of debt and credit, which will be discussed in relation to David Graeber’s recent Debt: The First Five Thousand Years, and through the lens of the market-state relationship elaborated in the previous lectures.

Lecture 5: Speed, information and time
The final lecture will begin by considering the recent phenomenon of high frequency algorithmic trading, that is, the prosecution of vast numbers of trades with very small profit-loss ratios through the agency of extremely complex and sensitive mathematical models of the market. This will allow us to consolidate elements from the previous lectures around price, agency and the being of the market. However, it also brings the philosophy of the market into contact with one of its most vociferous proponents in the twentieth century, the Austrian economist Friedrich von Hayek. The second half of the lecture will be devoted to a consideration, no longer of debt and the three forms of money, but the three temporal registers. We will also devote a portion of this final class to discussion around the propositions of abstract market theory elaborated during the course.

Introductory Readings:

  • “13. 7000BC: Apparatus of Capture”
    Gilles Deleuze and Félix Guattari, A Thousand Plateaus, 424-73.
  • “Primordial Debts”
    David Graeber, Debt: The First Five Thousand Years, 43-72.

Level of Difficulty: Intermediate. While the course will presuppose no particular material, it will cover a great deal of ground at a relatively abstract level, not all of it currently illuminated by philosophical texts (hence the raison d’être of this course).