By José Ossandón

As part of our inter-network collaboration, this entry is co-posted with CharismaEstudios de la Economía and this blog, Socializing Finance.


On June 21 and 22 I participated in the workshop “Understanding the Knitting: new methods for investigating the interactions of low and high finance” supported by The Open and Leicester universities and organized by Joe Deville, Karen D. Ho, Liz McFall, Yuval Millo and Zsuzsanna Vargha. As expected -considering the excellent line-up and the space given by the organizers for open experimental presentations -, this was a very rich, interesting and fun event. In this quite (I am sorry for that) dense text, I draw from what happened in the workshop in order to suggest a series of questions speculating about the knots knitting “low” and “high” finance and our place as finance students there.

  1. 1.     On payment networks, stock exchange and cyber-feudalism

Bill Maurer’s keynote lecture described two types of agents gaining more and more centrality in the current global payment space: “money innovators” and “transaction professionals”. The first refers to a varied group of institutions- including firms such as airlines, retailers and even Starbucks, NGOs and more mysterious organizations such as Bitcoin – that are exploiting the possibilities enabled by current IT infrastructures to develop new types of currencies. The second refers to a heterogeneous array of companies – including couriers, mobile phone or more established transaction mechanisms such as Paypal – that develop alternative types of infrastructures where old and new currencies travel. In Maurer’s view, while the first set of actors focuses on what is exchanged – and its source of value – the second set directs its strategy to becoming unavoidable points of passage – and fees – in the crossings between different payment networks. However, think for instance of M-Pesa mobile money, it is increasingly difficult to distinguish between rail and load – or borrowing from Serres, an author that was mentioned in several papers, message and noise, host and guest- in current transaction networks.

More generally, Maurer argued, both movements – the proliferation of money innovators and of transaction networks – are contesting the character of money as state backed public good. This last point connects nicely with Juan Pablo Pardo-Guerra’s description of two moments in the recent history of stock exchanges in the US. Since the late fifties, financial markets have been reformed in order to increase equitable access to trade, project that was technologically inscribed in the development of centralized clearing house mechanisms. This trend though has been reverted in the last couple of decades with the reorientation of financial markets reforms in order to guarantee investors’ right to choose between different market places. Taken together, Maurer’s and Pardo-Guerra’s stories add a newer (yet another!) element to consider in the ongoing understanding of neo-liberalizing. Neo-liberalization therefore is not only about free trade, lower taxes, or enabling markets to deal with social and environmental issues, but also about two key institutions of modern capitalism, market places and money that are also being privatized. Like old good K. Polanyi on steroids, it is not only about freeing money to be traded in financial markets, but about competing currencies, transaction networks and market places. Of course, as Yuval Millo pointed out in his response to the keynote (and detailed discussed by K. Hart in a recent essay), this is not exactly new, but it is somehow reminiscent of the times before the state monopoly of money. Are we living in some kind of financial (cyber)-feudalism?

  1. 2.     On economics, solidarity and multiple per-formations

Both, the co-authored work by Marc Lenglet & Yuval Millo and Zsuzsanna Vargha’s presentation discussed incentives, conflicts of interest and the scope of contemporary economics of the firm in the current financial world. Lenglet & Millo discussed the limits of the current regulation, greatly influenced by the assumptions of economics agency theory, in trying to steer conflicts of interest as it does not deal with the practical material settings of trading rooms in current investment banks. Vargha showed instead a case where this type of theory seems to work. Drawing from her ethnography in Hungary, she described how retail banking services shifted to a performance based regime oriented at sales, or, in other words: how the potentially conflicting interests of managers and employees were aligned under a new management program. This was reached with a slow, iterative and path dependent process, which was finally inscribed in a – not un-resisted – Customer Relation Manager (CRM) platform. Taken together, these two papers raise an interesting question about the performativity of economics in financial markets. In this context, as it is well known by now, it is not about whether an “incentive based” account of finance is empirically right or wrong, but whether it works (i.e. produces its own world) or not. Should, therefore, financial regulators learn from retail banking that in order to align the heterogeneous set of agents under their regulation they will need to build their own CRM type of platforms? Could it eventually be that the insights given by finance studies end up helping to make orthodox economics more plausible?

Issues concerning the performativity of economics (the “p word” as Martha Poon called it) were also raised after Jeanne Lazarus and Taylor Nelm’s presentations. Lazarus presented material from her fieldwork following recent attempts to increase financial literacy in France, while Nelms talked about his work with credit associations and multiple financing sources for informal merchants in Ecuador. These works show the existence of parallel – somehow antagonist – attempts to produce financial encounters. On the one hand, financial literacy is based on the idea of equipping a rational, isolated, entrepreneurial financial agent, while in Ecuador informal finance is being developed in the context of a state-academic project of enhancing a stronger “solidary” – based on interpersonal trust and collective support – finance. Of course, the two empirical sites are quite apart of each other and their differences might be exaggerated (actually Lazarus mentioned the existence of something called – excuse my French – “fods de cohesion sociale” that sounds like something branded by Durkheim). However, if seen together, these two works raise an important question: where should finance scholars place themselves in cases where there is not only one single but many contradictory academic theories acting in – or performing – the financial world that is being studied?

In the old good days, answering this type of questions was somehow easier, critical social scientists would either unveil the wider role played by capital, criticize the unrealistic assumptions of rational choice type of social interventions, or – if facing alternatives – join the solidarity option. Today though (as expressed by the unconvinced eyebrows raised after Geoff Lightfoot’s more openly critical account of micro finance in Pakistan) these are not easily accepted options anymore. In the post-performativity landscape, it is not enough to be unconvinced by the assumptions or conclusions of Agency Cost theorists, proponents of financial literacy, or investment banks, but it is an exigency to understand their language and tools, and closely follow their socio-technical knitting. Furthermore, today this dilemma is not only a matter of theoretical options – or sociological styles – but it is as if somehow we cannot be distant social scientists anymore, but we are – whether we like it or not – drawn closer to our objects of study. Interestingly, both Maurer and Lazarus told us about how they have been asked to advise financial actors (Lazarus to evaluate the results of a survey about a financial literacy program, and Maurer to help to think a trans-planetary(!) money platforms). How should we therefore understand the knowledge produced by Finance Studies? To use Gibbons et al. super influential framework: Mode 1 or Mode 2?

  1. 3.     Algorithms, narratives and sociologists in the wild

Joe Deville’s reverse engineering of payday lender Wonga’s consumer screening complicated things further. Wonga does not only analyze his potential customers using econometric models based on data of individuals’ financial history, but situates them in the context of the traces they leave online. With Wonga being interested in data collected by Facebook, and – perhaps like micro lending institutions have been doing for a while– it seems like consumer credit issuers are getting closer to the principles put forward by the new economic sociology visualizing their consumers as embedded in their social networks. What do we do, therefore, when our subjects of research do not only produce knowledge in the style of the social science we are used to criticizing, but are becoming something like economic sociologists in the wild? What type of knowledge should we produce in this context? As John Law pointed out in one of his questions, in a mess of multiple orderings and narratives, what is the narrative provided by finance studies?

Unsurprisingly, considering the passion and clarity she usually mobilizes to defend her arguments, the most emphatic answer was delivered by Martha Poon. In her view, to describe the current financial world, we have to pay more attention to algorithms. This – as Poon’s excellent work on FICO-score’s role in the last financial crisis shows – does not simply imply giving priority to technical infrastructures but to seriously trying to understand the calculative devices (formulae, algorithms) that knit contemporary finance. Like old day phenomenological descriptions, but not of human intentionality but of payment mechanisms and other financial infrastructures.

In my presentation about store credit card lending circuits, I rehearsed a slightly different mode of engagement. Certainly, these circuits would not exist without algorithms and the particular risk management strategy known as “sowing consumers” developed by department stores in Chile. At the same time, though, these are social formations that cannot be reduced or explained away by technical credit infrastructure. This does not mean we should study only those collectives that happen after technical mechanisms, but –borrowing from Serres – we should try to do both, understanding the economies’ parasites (derivatives, payment infrastructures, scorings and more generally debt, credit and money) and the parasites’ parasites. As Deville said, finance studies could be understood as composition, where it is not only necessary to carefully describe the many details, but also to try and knit the heterogeneous elements together. Perhaps, the models for finance studies are not only the old master ethnographers (like the old Chicago School of Sociology, Laboratory Studies or British anthropology) but also the messier narratives put together in the old-fashioned business models, vividly described by Martin Giraudeau in his presentation.

  1. 4.     Describing the knitting and the sites of finance studies

When trying to narrate the particular configurations that connect finance, it becomes central to develop tools to grasp these connections. Vincent Lepinay has chosen these types of intersections as his favorite objects of research. In his previous work, he tried to understand the links that connect underlying assets and what he calls parasitic (Serres again) commodities such as derivatives. His presentation in this workshop was about a recent shift in framing financial markets. In his view markets are no longer understood in terms of Fama’s very influential efficient market hypothesis (where it is assumed that trade reduces the distance between the fundamental and market value of equities), but in terms that are closer to authors like Hayek and M. Polanyi that, more than matching different types of values, see market play as a continuous source of innovation. What remains to understand better, Lepinay says, is the “play” (in the sense of a game but also of loosely plugged devices) between investor-firms-and finance.

Daniel Seabra Lopes, Liz McFall and Ismail Erturk described particular inter-plays between low and high finance. Lopes talked about the different stages in the life of Euribor – the European Interbank Offered Rate – from its construction to its use by Portuguese banks to set the conditions for their consumer credit and investment banking services. Along the line of recent work by people like J. Guyer and H. Verran, Lopes analyzes them as modes of productively indexing heterogeneous things. McFall drew on archival material to show the particular play between war bond investment, punch cards, sale strategies, corporative buildings, and class and gender representation in the insurance industry of early 20th century UK. In his discussion about the decision of European banks to not bail out Cyprus’s banks, Erturk suggested that it is not only important to study the inter-connectedness between retail and investment banks, but also their practice of strategic distancing.

In other words, a finance studies that cares for both high and low finance should describe and theorize their particular (dis) connections. In this sense, finance studies has to be necessarily multi-sited, it is about composing, connecting, and narrating together the varied sites where finance is enacted. But here there is another difficulty; social researchers are not the only ones using the ladder that goes from low to high in finance. Pascale Trompette and Bérangère Véron suggested that insurance can be understood as “mandates” that connects in different ways, retailers, insurance, banks and other financial institutions. In their study of the funeral insurance industry in France, they found three such particular inter-organizational agencements. If we connect this with Maurer’s payment networks, a somehow surprising outcome that has emerged from the workshop is the need to rethink how we understand competition in finance. Resembling the type of struggles between different energy sources and networks described by T. Mitchell in his excellent Carbon Democracy, here competition does not seem to be about the singularization of goods in a particular calculative space (like described in the different sides of the qualification affair in recent economic sociology in France) but about different modes of arranging the path from retail to low and high finance.

To finish: should we still talk about low and high finance (studies)?

Something that was not really discussed in the workshop, but treated with a lot of quotation marks, was whether the adjectives “low” and “high” should be kept. No doubt they are simplifications, but we cannot just get rid of them if they are used by the “natives”. But are they used? And if they are, who use them and what is done when they use them? What does “high” mean? Does it reproduce a hierarchy in banks or finance firms? Does it mean more a quantitative or abstract finance? Does it refer to speed of trading and transactions? Is it about glamour? And then, if high and low denote something, what does it mean for researchers to choose either of them? Is finance studies ready to go low?

Blog readers might be interested in a recent thread on anthropology and the financial crisis published in the pages of Anthropology Today. The discussion was initiated in the November 2008 issue with this guest editorial by Keith Hart and Horacio Ortiz (see also relevant excerpts here) and this other piece by Stephen Gudeman. Comments followed by Kalman Applbaum (here) and by Julia Elyachar and Bill Maurer (here) in the February 2009 issue, and by Gustav Peebles (here) Gudeman (his reaction here) and myself (here) in the April 2009 issue — I reacted to Hart and Ortiz’s truly excellent piece with a somewhat rhetoric objection to their use of quotation marks to refer to the “force” of “objects”.



When we use cash do we ever really stop to think about how it is made? 


After reading The Story of the American Bank Note Company by William H. Griffiths (1958), I inspected my paper money.  I happen to have several types of five unit currency in my wallet – euros, CND and US dollars.  There are two common anti-counterfeiting devices that are common to all three bills which become visible when they are held up to the light.  Embedded in each is a thin band running vertically and off center with the currency amount written on it.  Secondly, they have shadow images that repeat the picture featured on the face of the bill: in the Canadian and US bills these are people (Sir Wilfred Laurier and Abraham Lincoln); in the case of the Euro it is a repetition of the architectural form.[1]


A fascinating aspect of money is its material history – the ways in which it was physically confectioned and by whom, to resist counterfeiting and ‘raising’ (adding value through alteration).  The American Bank Note Company was once responsible for printing the paper currency in the United States.  It started as an association of private engraving firms in 1858.  In 1879, it became a single consolidated company following an act of Congress in the wake of the Civil War stating that “not more than one printing on a National Currency Note could be executed by a private organization, and that the final printing must be done by the Treasure Department” (p 48).  The company went public in 1916.


Methods of security printing have developed incrementally out of a kind of a technique called ‘intaglio’ where lines impressed into a surface are filled with ink and run through a steel-plate printing press.  Uniformity has been key since the comparison of a bill against one known to be genuine is a simple way of revealing forgery.  As Griffiths points out however, “while the general tendency of industry is to eliminate the personal characteristics of individual craftsmen, bank note engraving carefully continues them, even stresses them, because, despite all technological advances, the counterfeiter’s most baffling problem in the unique personality of the artist which the engraving process transmits directly to the document.” (p 11)  Thus the artistry and innovation of master engravers has mattered enormously to defeating unauthorized duplication.  One such technique is the ‘geometric lathe’ a machine that engraves a unique repetitive pattern according to particular settings use to make the distinctive figured borders on U.S. notes.  These early techniques have been supplemented by more ‘scientific’ ones, such as printing serial numbers in private formulas of contrasting inks.


The same techniques used for printing paper money (also used for postage stamps) were an important part of issuing stock and bond certificates.  In 1874, following numerous cases of fraud, Edwards Barndon, then Chairman of the New York Stock Exchange’s Committee on Securities, announced that it would require “all future applications to place Securities on the List, that they shall be carefully engraved by some responsible Bank Note Engraving Company”.  He further recommended “that Certificates of Stock of One-hundred Shares should have the denomination conspicuously engraved thereon, and that Certificates of lesser denominations should be of a different style and color” (p 46),  It follows that ‘bond paper’, invented and named by Zenas Crane, refers to paper impregnated with parallel silk threads for printing bonds and currency.  And it was engraver Asher Durand who popularized the convention of placing “Greek gods and goddesses in vignettes on documents of value” (p 29).

The techniques of security printing have a specific history.  Although notes, stocks and bonds are different ‘dispositifs of value’, it is interesting to consider how they were once literally, visually and physically assembled by the same producers.  Moreover, many of these production techniques – in and of themselves a distinct means of ‘making value’ – seem to have circulated out of this precise commercial location of invention, into government agencies and throughout the rest of the world.  It is indeed noteworthy that The American Bank Note Company printed bills for Greece and Columbia as early as 1862; in 1912, the newly formed Chinese Republic put in an order for notes; during WWI it was hired by the U.S. treasury to reorganize the Bureau of Engraving and Printing as well as to assist in the issuance of savings bonds and stamps; and in 1952 it began printing United Nations postage stamps – just to name a few of the company’s important customers.


That we no longer inspect each bill as we receive it may be a sign of our trust in money; but it is a trust that has been empirically established out of the widespread success of its material production as a ‘thing of value’.




Griffiths, William H. The Story of the American Bank Note Company: American Bank Note Company, 1958.


[1] There are other security features that are not shared by all the bills.  When held up to the light, a five appears in the middle of the Canadian bill, while the incomplete 5 in the top left hand corner of the Euro bill completes itself.  Moreover, the Canadian and Euro money has a shiny holograph bearing silver band running down each side.