Derivatives mask the social violence of financialization as neutral risk calculation

Evidence

As Li Puma and Lee (2004, 161–189) illustrate, the signature cultural achievement of the derivative is to render the endemic economic violence of global financialization invisible by articulating volatility as the purely disinterested calculation of risk. So, while Walmart’s derivatives may take the form of currency swaps (allowing them to mitigate the risk of, say, a sudden spike in the value of the Bangladeshi Taka, which would represent an unforeseen increase in the cost of materials produced there), these securities enfold and encrypt the endemic social, political and economic insecurities that are the result of financialization. This is emblematic of the Pyrrhic character of securitization: the hyper-individuated impulse to manage risk tragically produces only greater risk, although that risk may be transferred or, externalized onto others. — Max Haiven, Cultures of Financialization, 277

Categorization

• XREF: Directly supports the connection to deWaard’s cultural argument — the invisible-violence mechanism is exactly the cultural colonization point. — connects to: Financialization creates a bifurcated hierarchy between celebrated risk-takers and racialized at-risk victims — Max Haiven, Cultures of Financialization, 45; Packing risky mortgages into opaque derivatives under weak regulation enabled the financial crisis — Albert Bandura, Moral Disengagement: How People Do Harm…, 1492; Derivatives do not reflect risk but actively produce contingencies and value — Aris Komporozos-Athanasiou, Speculative Communities: Living With…, 390 (+1 more)
• DEFINE: Defines the Pyrrhic character of securitization: risk management produces greater aggregate risk.
• SEED: Could be an essay angle: how abstract financial instruments launder risk-bearing social harm away from perception, using Walmart’s supply chain as the concrete case.
• QUESTION: How exactly does a currency swap ‘encrypt’ social insecurity — is the encryption structural or merely epistemic?

Broader Connections

• Financialization treats risk as probabilisable, displacing close knowledge of the object valued #exemplifies (0.80) — Ève Chiapello, Financialisation of Valuation, 35
• Packing risky mortgages into opaque derivatives under weak regulation enabled the financial crisis #exemplifies (0.78) — Albert Bandura, Moral Disengagement, 1492
• Derivatives do not reflect risk but actively produce contingencies and value #qualifies (0.75) — Aris Komporozos-Athanasiou, Speculative Communities, 390