Will the real market please step forward? A conversation with an art-lover
January 17, 2008
This is a text that I prepared originally for an exhibition catalog, but I thought that it can also fit nicely with the eclectic spirit of the blog. So, I include it here.
We hear many different stories about where the market is to be found and, consequently, what the market should be. Many of these stories, though not all of them, are exclusionary. That is, they tell us: ‘my market is the real market’. When asked where the market is, the trader on the busy New York, Frankfurt or Hong Kong trading will spread his arms and say ‘here’. The day trader, in the basement of her suburban house will point to the computer screen and say ‘right here. This is the market’. The economics professor, surrounded by books and papers in his university office will point to a formula on a white board and explain why this is the market. ‘Well’, the sophisticated art aficionado is now saying, ‘this is not so problematic. The market simply has many representations’. Yes, quite right, but a representation of what, exactly? Where is ‘the market’?
The sophisticated art lover may revolt now: ‘why do we need a ‘real market’ that would be represented? Why couldn’t we have plurality without an obligatory original? Isn’t the artists’ re-creation of the market just as valid as that of the traders’ or as that of the securities analysts? Haven’t you heard of Walter Benjamin or Baudrillard?’ Yes. There is a faint smell of postmodernism in the air, but I think that this time the sophisticated art-lover may actually do a little better then state that ‘anything goes’.
When we state that any representation of the market is valid because there is now fundamental original that can be represented we implicitly focus on the outputs of markets. For example, the artist may take the voices of traders, graphs representing price movements or an aural translation of prices and embed these into a work of art. This brings us back, sneakily, to the apologetic position where we have to defend our ‘soft’ representations of the market against the ‘hard’ representations that analysts, accountants of finance professor produce. Isn’t there a way out?
Maybe we could shift our focus from the representation itself to the one using it and to the experience of its use. That is, what do people experience when they interact with representations of the market? An initial answer may be that these representations can help people understand where they are vis-à-vis the market and then, they can use this understanding to develop an idea of where to go next. The immediate example is of a map. You are not sure exactly where you are, but a short look at the map and a comparison with the terrain around you, may help you to estimate your location.
But, the alarm bell on our art-lover’s desk is ringing. ‘How can you look at the terrain if there is nothing ‘original’ outside? Didn’t we just say that there are only competing representations of the market?’ Well, let’s be more subtle about our examples, and maybe we will get closer to what market participants experience. You have a map, but you cannot see the terrain right now, as it’s night and it’s raining heavily. You have to rely on the map. But, the art-lover is asking, ‘is there a terrain (market) out there or isn’t there?’ Let us wait a little bit with this question. Remember, we are focusing on the experience, not the market. Let us find out what participants do with the representations.
The geographical map, like a risk map, a graphical representation of past price changes or a printout of mathematical prediction model, to name but a few, is what cultural anthropologists frequently call a ‘summarizing symbol’. Such symbols capture, in a compact informational package, numerous references to related entities. For example, the French flag may represent to a French person the sound of the French language, the beauty of a Parisian boulevard, the taste of regional food and patriotic pride. All these things, and countless others, are ‘compressed’ into a three-coloured rectangular. ‘Yes’, says our art-lover, ‘but these reminiscences are not in the flag; they are simply evoked by the flag, while the map actually includes new information. The French person is ‘smarter’ than the flag, while the market participant is not smarter than the representation of the market’.
This is true. But, the representation of the market, as smart as it may be, does not know what would be the next step that the market participant may take. Granted, the representation and the trader or analyst work together with their representations of the market, but none of them is a-priori superior cognitively to the other. Representations of the market, in their role as summarizing symbols, operate with us (and sometimes, unfortunately, against us), market participants, in our joint person-machine endeavor to make sense of where we are vis-à-vis the market and help us devise our next step.
‘Hold on’, cries the art-lover, almost dropping his espresso, ‘I am returning to the question you didn’t answer before: is there or isn’t there a market that we represent? Now you really contradict yourself. How can a representation of the market, be it a graph, an annual report or a work of art help us to find the market if there is no original market to be found? How can we position ourselves in relation to something if that something does not really exist?’
‘There is no contradiction there’ we should answer. We do not know if there is or there is not a ‘real’ market out there and neither should we care. The floor trader, the on-screen trader and the economics professor we met earlier may or may not care about the authenticity of the market whose representations they interact with. What they do care about is that the representation works. It provides them concise, compact, summarising information that allows them to make sense and make decisions.
The art-lover is now grinning cynically: ‘I like this agnosticism. It’s all very clever, but what has that got to do with aesthetic representation of the market?’ It is related to aesthetic appreciation just as much as it is related to economic, political or social evaluation and decision-making. In fact, when examined carefully, one can find elements of different realms in each market decision. It is not a coincidence that the brain sites that process emotions and logical decision-making are coupled, as recent research indicates. We think and feel at the same time. The different representations of the elusive market are all valid as long as they provide us with a valid experience. Is it interesting, moving, pleasing and insightful? Does it reverberate with your feelings and your intellect? Does it help you to understand or sense things better? If so, this is it. You found the real market.