Timothy Johnson's working hypothesis in his review of my latest book, The Medium of Contingency, is that I (as well as the ‘quants’ involved in the derivative pricing industry) do not understand the foundations of abstract probability theory. In this response, I show that this is not the case. On the contrary, rules and protocols which are common in the derivative pricing industry, the result of which can be an extension of abstract probability theory as it now stands, seem to elude Johnson. To address these failings, I provide theoretical reflections on probability theory and its formalisms.

European financial regulation consistently gives governments privileged access to private investors, reflecting the anchor role assigned to sovereign securities as safe and liquid assets for the financial system. Legislative reforms after the financial crisis of 2008 further expanded the preferential treatment of sovereign securities as zero-risk claims, introduced portfolio requirements in favour of public debt, and constrained market speculation against governments. These sovereign privileges appear counterproductive for fiscal discipline and financial stability: they encourage excessive public debt issuance and make financial institutions holding government bonds - in particular from euro area countries with a variable risk profile - vulnerable to fiscal turbulence. Governments seem to have a conflict of interest. On the one hand, they are prudential regulators of financial risk-taking, on the other hand, they tend to overlook the financial sector's exposure to sovereign risk. This article considers four theories of the state-finance nexus and their solutions to this conflict of interest. The money view, the franchise view, and the modern financial repression view draw on the state's monetary and regulatory powers over finance to confirm sovereign safety. Their positions fundamentally contrast with the neoliberal view, which relies on free markets to enforce sustainable public finances. The article concludes that sovereign privileges present a fundamental dilemma for European financial governance with a neoliberal orientation: they oblige private investors to hold public debt, while weakening the role of markets in promoting fiscal discipline as the very foundation of sovereign safety.

This article presents a socio-anthropological analysis of the formation of a business ecosystem around blockchain technology in the Netherlands, within the broader context of the European Union and the digital single market. I argue that while reproducing widespread global models of business group and network formation, the relations created by these networks also reveal particularities of local business and governance cultures. Such particularities emerge from the pragmatics of collaboration and competitive market relationships, as well as legal heterogeneity and plans for legal harmonisation in digital innovation and governance in Europe. They also emerge from the challenges and transformations that current experimentation cultures for digital innovation bring to the interactions between market players, regulators, and government. These challenges and transformations materialise in increasingly informal connections and strategies for experimental legitimisation, which occur in parallel to more formal and traditional forms of regulatory and governmental interaction. The article is based on ethnographic fieldwork in the Netherlands and in online terrains, including observation periods and 32 interviews with entrepreneurial project teams, as well as with individuals involved in financial incumbents’ innovation labs.

Critical macro-finance (CMF) has become an influential avenue of research aimed at shedding light on how the global payments system is governed. In the introduction to this special forum on CMF, we explore three main themes: (1) the intellectual lineage of CMF and its relation to financialisation studies; (2) the policy relevance of CMF; and (3) its ‘critical’ position.

This essay makes the case that current debates about the ‘moneyness’ of Bitcoin and other cryptocurrencies are occurring at the incorrect scale. Rather than being some form of transnational digital money to be used alongside or compete with national fiat currencies, I argue that, instead, each cryptocurrency represents its own self-contained ‘money-world’. Put differently, a cryptocurrency is the uniquely specified unit of account and medium of exchange within the socio-technical bounds of its own blockchain. This new perspective can open new lines of intellectual dialogue and inform better policy choices for regulating cryptocurrencies.

This article develops a basic typological framework for understanding and analyzing financial risk from a political economy perspective. It is motivated by growing awareness of the contemporary significance of financial risk and by the fact that the political-economic literature on such risk currently lacks a workable heuristic. The framework distinguishes between and fleshes out what I refer to as the principal ‘value models’ of finance: fees, gains, premia, and spreads. Its primary aim is to facilitate the identification and conceptualization of: (1) the different risk configurations characterizing the heterogeneous political economy of finance; and (2) the different ways in which key stakeholders — such as finance capital, non-financial capital, and labor — come to be enrolled in such configurations. It also aims to contribute to the wider project of demystifying not just financial risk in particular but modern finance more generally.

Behavioral economics has become a dominant set of theories in explaining economic behavior, yet such behavior remains under the limited purview of psychological, cognitive, or neural approaches. This article draws on and extends Viviana Zelizer's social meaning of money framework in conjunction with new work in ‘relational accounting’ to suggest a sociological counterpoint, focusing in particular on the social and symbolic meaning attached to individual 401(k) retirement accounts. Following a market downturn, neoclassical and behavioral economics predict various types of behavioral responses, in particular loss aversion - where investors seek to increase risk-taking rather than locking in a sure loss (a loss is more painful to bear than an equivalent gain). A sociological theory that understands the shared meaning of retirement saving would predict something different, a behavior I call durable conservatism. In this article, I show how this concept better explains observed risk behavior in Americans’ 401(k) accounts following the 2002 and 2008 bear markets in stocks, and how that response differed from the behavior documented in non-retirement brokerage accounts.

This forum contribution critically rethinks the macro-financial approach to liquidity by focusing more explicitly on its public-private hybrid dimension. To do so, it introduces the notion of a ‘liquidity regime’: a heuristic device aimed at tracking the ensemble of social relations and institutions that govern the coherence of the payments system at any given time. A key insight that emerges from this approach is that the ability to make markets and access liquidity is never neutral or apolitical. What requires closer attention, therefore, is precisely how the interaction between public authorities and private market participants affords some actors greater leverage in shaping the financial system.

The quest for social status is usually considered one of the main drivers of the demand for consumer credit. This article provides a nuanced take on consumer credit by exploring the interaction between consumption, borrowing, and class identity. To do so I pursue a cultural class analysis inspired by the work of Pierre Bourdieu. Drawing from 26 semi-structured interviews, the article has two main findings. First, it shows that people engage in borrowing not only to gain prestige, but also to assert their belongingness to symbolic groups, which embody the values of imagined communities. Second, against the idea that borrowing is undertaken mainly for conspicuous consumption, the article's findings show that middle-income families in Chile borrow to consume ‘ordinary’ goods. Through the consumption of these goods, the Chilean middle classes seek to stabilize their class identities through their life trajectories, thereby achieving a sense of place in a changing environment. These findings lead me to focus on the normalization of credit and the process through which borrowing practices turn consumer goods from wants into needs, ratcheting up the demand for credit. The article argues that this is an overlooked way in which competitive dynamics drive the demand for credit, which is a missing link in the explanation for the rise of household debt.

Starting with a landmark speech by Mark Carney on the ‘Tragedy of the Horizon’ in 2015, climate change entered central banking discourse, causing some of its key convictions to come under new scrutiny. This article traces how initially climate change was firmly embedded in a conventional framework of ‘market completion’ that would allow financial markets to price in negative externality. Yet, over the course of the last seven years, central banks have repositioned their role regarding this problem, taking on a much more active stance, which calls into question the notion of ‘market neutrality’. To trace these discursive changes, this article identifies three discursive layers formed around market-based mechanisms, responsible investment and monetary policy. We show that in the unfolding of the debate, the issue of climate change has altered the self-understanding of central bankers and driven them towards a more active stance where they acknowledge that central bankers shape and make, and not only ‘mirror’, market forces.

At least since the publication of ‘Rules rather than discretion’ by Nobel Prize winners Kydland and Prescott (1977), an undisputed principle in monetary economics is that central bankers should be politically independent. Politicians have an electoral incentive to jack-up the money supply to finance programmes the electorate favours, ignoring the inflation this will result in. Monetary policy is therefore best separated from fiscal policy, leaving the latter to politicians, while entrusting the former to central bankers, whose sole calling is to ensure moderate inflation and financial stability by determining the conditions (i.e., interest rate and collateral) under which private banks can borrow from the central bank. Although central banks’ independence might be undemocratic, it is nonetheless in the long-run interest of the citizenry.

João Enxuto and Erica Love are artists and writers living in New York City. Their writing has appeared in Art in America, Mousse Contemporary Art Magazine, Wired, and X-TRA Contemporary Art Quarterly. They have given talks and exhibited work at the Centre Pompidou, Whitney Museum of Art, the New Museum, Anthology Film Archives, Walker Art Center, Yossi Milo Gallery, Carriage Trade, Louisiana Museum in Denmark, ArtCenter/South Florida, and the Tamayo Museum in Mexico City.

A new form of digital economic circulation has emerged, wherein ideas, knowledge, labour and use rights for otherwise idle assets move between geographically distributed but connected and interactive online communities. Such circulation is apparent across a number of digital economic ecologies, including social media, online marketplaces, crowdsourcing, crowdfunding and other manifestations of the so-called ‘sharing economy’. Prevailing accounts deploy concepts such as ‘co-production’, ‘prosumption’ and ‘peer-to-peer’ to explain digital economic circulation as networked exchange relations characterised by their disintermediated, collaborative and democratising qualities. Building from the neologism of platform capitalism, we place ‘the platform’ — understood as a distinct mode of socio-technical intermediary and business arrangement that is incorporated into wider processes of capitalisation — at the centre of the critical analysis of digital economic circulation. To create multi-sided markets and coordinate network effects, platforms enrol users through a participatory economic culture and mobilise code and data analytics to compose immanent infrastructures. Platform intermediation is also nested in the ex-post construction of a replicable business model. Prioritising rapid up-scaling and extracting revenues from circulations and associated data trails, the model performs the structure of venture capital investment which capitalises on the potential of platforms to realise monopoly rents.

Reflecting on the broad ambitions of macro-finance, I argue that the commitment to placing finance at the centre of our economic conceptions comes with significant risks that speak directly to the politics of financialisation. By redirecting the focus of economic governance towards finance, macro-finance may consolidate rather than challenge the problematic trends of global finance. More specifically, I argue that the focus of the money view on liquidity has contributed to depoliticising financial governance and aligning it further with the demands of financialisation.

This review essay looks at the plurality of research conducted today in the sociology of financial markets by examining a pioneering and little-known study - the PhD thesis of Ira Oscar Glick. It is indeed possible to find in this 1957 thesis some insights that are later solidified by several contemporary lines of research in the sociology of financial markets (new economic sociology, science and technology studies, gender studies, Bourdieusian sociology, ethnomethodology, the economics of conventions). This rediscovery of a key author in the history of the field may lead us to reconsider his legacy and delve into a landmark work that potentially still harbors unexplored insights capable of opening up new avenues for research.

Vogl's new book relates finance to the internet industry and economics to politics. Introducing questions of colonial history and racism would further sharpen his view of the drivers and dynamics of contemporary capitalism.

This essay was originally published in The Routledge Handbook of New Security Studies (Burgess, 2010), and has since become a key reference point in debates on the finance-security nexus. It is reproduced here as a starting point for the present forum, which aims to further advance efforts to conceptualise the relations between finance and security.

This forum contribution addresses two major themes in de Goede's original essay on ‘Financial security’: (1) the relationship between stable markets and the proverbial ‘security dilemma’; and (2) the development of new decision-technologies to address risk in the post-World War II period. Its argument is that the confluence of these two themes through rational choice theory represents a fundamental re-evaluation of the security dilemma and its relationship to the rule of law governing market relations, ushering in an era of perpetual physical and financial insecurity.