Finance derives prices for new objects from unrelated market prices
Evidence
Financial modelling proposed to extract their value from the market price for the shares (or goods) concerned by the derivatives, and this valuation procedure made it possible to put them on the market by offering prices (MacKenzie 2006; MacKenzie and Millo 2003). The idea of extracting all kinds of values from observation of prices flourished, and finance now broadly proposes to value all types of objects based on the market prices of objects that in some cases bear little relation to the object to be valued. — Ève Chiapello, Financialisation of Valuation, 39
Categorization
- SEED: A promising angle for the financialization article: the logic by which valuations leapfrog from one object to unrelated objects, extending market logic ever further.
- XREF: connects to: Financialised valuations override prior forms of valuation and reshape how people act and identify — Ève Chiapello, Financialisation of Valuation, 16; Accounting’s fair-value shift substitutes financial models for actual market prices — Ève Chiapello, Financialisation of Valuation, 48; Finance creates intangible commodities that exist only through valuation techniques — Ève Chiapello, Financialisation of Valuation, 104 (+1 more)
Related
- Financialised valuation draws on financial economics and mathematical finance. (similarity 0.86)
- Accounting’s fair-value shift substitutes financial models for actual market prices (similarity 0.86)
- Finance creates intangible commodities that exist only through valuation techniques (similarity 0.84)
- Financialisation also colonizes non-economic spheres via valuation techniques. (similarity 0.83)
- Constrained arbitrage allows finance-theory models to diverge from actual prices. (similarity 0.82)
- Financialization treats risk as probabilisable, displacing close knowledge of the object valued (similarity 0.81)
- Some financial metrics resist financialization by ignoring time and capital logic (similarity 0.80)
- Financial pricing formulas actively construct the markets they purport to measure (similarity 0.80)
- Finance theory’s core models assume frictionless markets with no transaction costs or short-selling penalties (similarity 0.80)
- Financial models construct the markets they purport only to describe. (similarity 0.80)
- Financialised reasoning can colonise non-monetary measures like scores and percentages. (similarity 0.80)
- Financial economics actively alters markets rather than merely describing them (similarity 0.79)
- Financial valuation theory legitimizes financiers’ power by claiming they optimize resource allocation. (similarity 0.78)
- Finance theory altered its own empirical object of study (similarity 0.78)
- Financial theories can become true by guiding the practices they describe (similarity 0.78)
Broader Connections
- Accounting’s fair-value shift substitutes financial models for actual market prices
#expands(0.82) — Ève Chiapello, Financialisation of Valuation, 48 - Finance creates intangible commodities that exist only through valuation techniques
#expands(0.80) — Ève Chiapello, Financialisation of Valuation, 104 - Constrained arbitrage allows finance-theory models to diverge from actual prices.
#complicates(0.72) — Donald MacKenzie, An Engine, Not a Camera, 1213