Hostname: page-component-586b7cd67f-vdxz6 Total loading time: 0 Render date: 2024-11-22T09:21:50.308Z Has data issue: false hasContentIssue false
  • English
  • Français

Sources of financial synchronism: Arbitrage theory and the promise of risk-free profit

Published online by Cambridge University Press:  09 November 2023

Andreas Langenohl
Andreas Langenohl*
Affiliation:
Justus Liebig University Giessen, Germany
*
Corresponding author: Andreas Langenohl, Department of Sociology, Justus Liebig University Giessen, Karl-Gloeckner-Str 21 E, D-35394 Giessen, Germany. Email: [email protected]
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

This article argues that the temporality of the financial economy ought to be seen as radically synchronistic. ‘Synchronism’ refers to both an epistemological and practical approach that addresses finance neither with a view to the past nor to the future, but is instead focused on the moment that a financial transaction is settled (i.e., the horizon of trading). From this perspective, the article expands the scope of current social theorizing on financial markets, which is characterized by a preoccupation with the futurity of financial markets and products. It suggests that financial synchronism can be traced back to certain developments in economic theory since the so-called ‘marginalist revolution’, which enabled the transfer of a certain optics informing market theories into financial practices. On these terms, financial synchronism is interpreted as a powerful social imaginary that crucially mediates the way contemporary societies face the contingency of the future.

Keywords

Financetradingtemporalitysynchronismarbitragerisk
Type
Article
Information
Finance and Society , Volume 4 , Issue 1: Financial times , 2018 , pp. 26 - 40
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits noncommercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
© 2018 The Author(s)

References

Baecker, D. (1999) Die Preisbildung an der Börse. Soziale Systeme, 50(2): 287–312.Google Scholar
Beckert, J. (2014) Capitalist dynamics: Fictional expectations and the openness of the future. MPIfG Discussion Paper, 14/7. Köln: Max-Planck-Institut für Gesellschaftsforschung.Google Scholar
Beunza, D., Hardie, I., and MacKenzie, D. (2006) A price is a social thing: Towards a material sociology of arbitrage. Organization Studies, 27(5): 721–45.CrossRefGoogle Scholar
Beunza, D., Hardie, I., and MacKenzie, D. (2008) The material sociology of arbitrage. In: MacKenzie, D. (ed.) Material Markets: How Economic Agents are Constructed. Oxford: Oxford University Press, 85–108.Google Scholar
Bockman, J. (2011) Markets in the Name of Socialism: The Left-wing Origins of Neoliberalism. Stanford, CA: Stanford University Press.Google Scholar
Boy, N. (2015) Sovereign safety. Security Dialogue, 46(6): 530–47.CrossRefGoogle Scholar
Callon, M. (2009) Elaborating on the notion of performativity. Le Libellio d'Aegis, 5(1): 18–29.Google Scholar
ern, A. (2009) Mathematical Techniques in Finance: Tools for Incomplete Markets. Second edition. Princeton, NJ: Princeton University Press.Google Scholar
Cooper, M. and Walker, J. (2011) Genealogies of resilience: From systems ecology to the political economy of crisis adaptation. Security Dialogue, 42(2): 143–60.Google Scholar
Crossley, N. and Roberts, J.M. (eds.) (2004) After Habermas: New Perspectives on the Public Sphere. Oxford: Blackwell.Google Scholar
Davies, W. and McGoey, L. (2012) Rationalities of ignorance: On financial crisis and the ambivalence of neo-liberal epistemology. Economy and Society, 41(1): 64–83.CrossRefGoogle Scholar
Dome, T. (1994) History of Economic Theory: A Critical Introduction. Aldershot: Edward Elgar.Google Scholar
Elton, E. J. and Gruber, M.J. (eds.) (1979) Portfolio Theory, 25 Years Later: Essays in Honor of Harry Markowitz. Amsterdam: North-Holland Publishing Company.Google Scholar
Esposito, E. (2010) Die Zukunft der Futures: Die Zeit des Geldes in Finanzwelt und Gesellschaft. Heidelberg: Carl-Auer-Systeme.Google Scholar
Fama, E.F. (1970) Efficient capital markets: A review of theory and empirical work. Journal of Finance, 25(2): 383–417.CrossRefGoogle Scholar
Fama, E.F. and Miller, M.H. (1972) The Theory of Finance. New York, NY: Holt, Rinehart and Winston.Google Scholar
Fenton-O'Creevy, M., Nicholson, N., Soane, E. and Willman, P. (2005) Traders: Risks, Decisions, and Management in Financial Markets. Oxford: Oxford University Press.Google Scholar
Foucault, M. (2004) Die Geburt der Biopolitik: Geschichte der Gouvernementalität II. Frankfurt a.M.: Suhrkamp.Google Scholar
Hardie, I. (2004) The sociology of arbitrage: A comment on MacKenzie. Economy and Society, 33(2): 239–54.CrossRefGoogle Scholar
Harvey, D. (2005) A Brief History of Neoliberalism. Oxford: Oxford University Press.CrossRefGoogle Scholar
von Hayek, F.A. (1984a [1948]) The use of knowledge in society. In: Nishiyama, C. and Leube, K.R. (eds.) The Essence of Hayek. Stanford, CA: Hoover Institution Press, 211–24.Google Scholar
von Hayek, F.A. (1984b [1978]) Competition as a discovery procedure. In: Nishiyama, C. and Leube, K.R. (eds.) The Essence of Hayek. Stanford, CA.: Hoover Institution Press, 254–65.Google Scholar
von Hayek, F.A. (1984c [1978]) The pretence of knowledge. In: Nishiyama, C. and Leube, K.R. (eds.) The Essence of Hayek. Stanford, CA: Hoover Institution Press, 266–77.Google Scholar
Honegger, C., Neckel, S. and Magnin, C. (2010) Strukturierte Verantwortungslosigkeit: Berichte aus der Bankenwelt. Frankfurt a.M.: Suhrkamp.Google Scholar
Hope, W. (2009) Conflicting temporalities: State, nation, economy and democracy under global capitalism. Time & Society, 18(1): 62–85.CrossRefGoogle Scholar
Hope, W. (2011) Crisis of temporalities: Global capitalism after the 2007-08 financial collapse. Time & Society, 20(1): 94–118.CrossRefGoogle Scholar
Jevons, W.S. (2013 [1871]) The Theory of Political Economy. Houndmills: Palgrave.CrossRefGoogle Scholar
Joshi, M. (2003) The Concepts and Practice of Mathematical Finance. Cambridge: Cambridge University Press.Google Scholar
Kessler, O. (2010) Risk. In: Burgess, J. P. (ed.) The Routledge Handbook of New Security Studies. London: Routledge, 17–16.Google Scholar
Kessler, O. (2013) Die Krise als System? Die diskursive Konstruktion von „Risiko” und „Unsicherheit”. In: Maesse, J. (ed.) Ökonomie, Diskurs, Regierung. Interdisziplinäre Perspektiven. Wiesbaden: VS, 57–76.CrossRefGoogle Scholar
Kirchgässner, G. (2008) Homo oeconomicus: Das ökonomische Modell individuellen Verhaltens und seine Anwendung in den Wirtschafts- und Sozialwissenschaften. Tübingen: Mohr/Siebeck.Google Scholar
Langenohl, A. (2007) A critique of organizational capitalism: The enabling fiction of market efficiency in financial professionals’ narratives. In: Bazin, L. et al. (eds.) La mondialisation au risque des travailleurs. Paris: L'Harmattan, 219–42.Google Scholar
Langenohl, A. (2008) ‘In the long run we are all dead’: Imaginary time in financial market narratives. Cultural Critique, 70(10): 3–31.CrossRefGoogle Scholar
Langenohl, A. (2010) Analyzing expectations sociologically: Elements of a formal sociology of the financial markets. Economic Sociology: The European Economic Newsletter, 12(1): 18–27.Google Scholar
Langenohl, A. (2015) Town Twinning, Transnational Connections and Trans-local Citizenship Practices in Europe. Basingstoke: Palgrave Macmillan.CrossRefGoogle Scholar
Langenohl, A. and Schmidt-Beck, K. (2007) Technology and (post-)sociality in the financial market: A re-evaluation. Science, Technology and Innovation Studies, 3(1): 5–22.Google Scholar
Lee, B. and LiPuma, E. (2002) Cultures of circulation: The imaginations of modernity. Public Culture, 14(1): 191–213.CrossRefGoogle Scholar
Lee, B. and LiPuma, E. (2004) Financial Derivatives and the Globalization of Risk. Durham, NC: Duke University Press.Google Scholar
Lépinay, V.-A. (2007) Parasitic formulae: The case of capital guarantee products. In: Callon, M. and Millo, Y. (eds.) Market Devices. Oxford: Blackwell, 261–83.Google Scholar
Levy, H. and Sarnat, M. (1984) Portfolio and Investment Selection: Theory and Practice. Englewood Cliffs, NJ: Prentice-Hall .Google Scholar
Leyshon, A. and Thrift, N. (2007) The capitalization of almost everything: The future of finance and capitalism. Theory, Culture & Society, 24(7-8): 97–115.CrossRefGoogle Scholar
Lounsbury, M. (2002) Institutional transformation and status mobility: The professionalization of the field of finance. Academy of Management Journal, 45(1): 255–66.CrossRefGoogle Scholar
Lounsbury, M. (2007) A tale of two cities: Competing logics and practice variations in the professionalizing of mutual funds. Academy of Management Journal, 50(2): 289–307.CrossRefGoogle Scholar
MacKenzie, D. (2005) Opening the black boxes of global finance. Review of International Political Economy, 12(4): 555–76.CrossRefGoogle Scholar
MacKenzie, D. et al. (eds.) (2007) Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press.Google Scholar
Markowitz, H. (1952) Portfolio selection. The Journal of Finance, 7(1): 77–91.Google Scholar
Markowitz, H. (1991) Portfolio Selection: Efficient Diversification of Investments. Oxford: Basil Blackwell.Google Scholar
Mattick, P. (1973) Die Marxsche Arbeitswertheorie und das Wert-Preis-Problem. In: Eberle, F. (ed.) Aspekte der Marxschen Theorie I. Zur methodischen Bedeutung des 3. Bandes des ‘Kapital’. Frankfurt a.M.: Suhrkamp, 337–62.Google Scholar
Millo, Y. and MacKenzie, D. (2003) Constructing a market, performing theory: The historical sociology of a financial derivatives exchange. American Journal of Sociology, 109(1): 107–45.Google Scholar
Oetsch, W.O. (2013) The deep meaning of ‘market’: Understanding neoliberal market-reasoning. Human Geography, 6(2): 11–25.CrossRefGoogle Scholar
O'Malley, P. (2004) Risk, Uncertainty and Government. Portland, OR: Glasshouse Press.Google Scholar
Park, R. (1924) Sociology and the social sciences. In: Park, R. and Burgess, E. (eds.) Introduction to the Science of Sociology. Chicago, IL: University of Chicago Press, 1–63.Google Scholar
Preda, A. (2009) Framing Finance: The Boundaries of Markets and Modern Capitalism. Chicago, IL: University of Chicago Press.CrossRefGoogle Scholar
Pribram, K. (1998) Geschichte des ökonomischen Denkens. Frankfurt a.M.: Suhrkamp.Google Scholar
Strulik, T. (2006) Introduction. In: Strulik, T. and Wilke, H. (eds.) Towards a Cognitive Mode in Global Finance. Frankfurt: Campus, 9–32.Google Scholar
Strulik, T. and Wilke, H. (eds.) (2006) Towards a Cognitive Mode in Global Finance. Frankfurt: Campus.Google Scholar
Taylor, C. (2002) Modern social imaginaries. Public Culture, 14(1): 91–124.CrossRefGoogle Scholar
Vogl, J. (2010) Das Gespenst des Kapitalismus. Zürich: Diaphanes.Google Scholar
Walras, L. (1954 [1926]) Elements of Pure Economics, or The Theory of Social Wealth, translated by Jaffé, W.. Homewood, IL: Irwin.Google Scholar
von Wieser, F. (1989 [1893]) Natural Value. Fairfield, NJ: Augustus M. Kelley.Google Scholar