DERIVATIVES AND NONKNOWLEDGE

In a textbook for financial professionals, the derivative is defined as ‘a financial instrument whose value depends on (or derives from) the values of other, more basic, underlying variables’. In the realm of finance, derivatives are usually defined as legal contracts used to exchange something (‘the underlying’) at a fixed future date at a fixed price. Through such contracts, the risk of the changing value of the underlying is priced, exchanged as an investment vehicle, and thus theoretically managed and shared. Such instruments appeared in the 1970s and exploded in number in the 1990s before becoming notorious for their role in the genesis of the 2008 global financial crisis. In one of the most important books on derivatives, the anthropologist Randy Martin writes that ‘derivatives are a transmission of some value from a source to something else, an attribute of that original expression that can be combined with like characteristics, a variable factor that can move in harmony or dissonance with others’. Etymologically, the word comes from the Latin derivare, meaning to redirect a stream of water (de rivus). In his gloss on the word's etymology, Martin offers the image of water in a stream exceeding its embankments, allowing us to hear in de-rive not just redirection but also overflow. Within the semantic range of derivative, we might think of the term in mathematical calculus, or the French le derivatif as diversion, distraction, outlet. Beyond the brief history sketched above, derivatives have been around for thousands of years in agriculture and other fields (grammar, music, medicine, and so on). It is thus that the literary theorist Peter Szendy – whose work is discussed below – writes somewhat enigmatically that the history of derivatives ‘began a long time ago; and it is yet to come’. Nonetheless, even if from a deconstructive point of view derivative logics long predate the actual advent of what we commonly understand by financial derivatives today, as we shall see a social or aesthetic logic associated with them appears contemporary with their expansion on financial markets; for Martin, the derivative is today ‘the current edge of capital and the contemporary transformation of the commodity relation’.