Financial Derivatives and the Globalization of Risk

Lee Benjamin Lee, LiPuma Edward LiPuma

Description

The market for financial derivatives is far and away the largest and most powerful market in the world, and it is growing exponentially. In 1970 the yearly valuation of financial derivatives was only a few million dollars. By 1980 the sum had swollen to nearly one hundred million dollars. By 1990 it had climbed to almost one hundred billion dollars, and in 2000 it approached one hundred trillion. Created and sustained by a small number of European and American banks, corporations, and hedge funds, the derivatives market has an enormous impact on the economies of nations-particularly poorer nations-because it controls the price of money. Derivatives bought and sold by means of computer keystrokes in London and New York affect the price of food, clothing, and housing in Johannesburg, Kuala Lumpur, and Buenos Aires. Arguing that social theorists concerned with globalization must familiarize themselves with the mechanisms of a world economy based on the rapid circulation of capital, Edward LiPuma and Benjamin Lee offer a concise introduction to financial derivatives.LiPuma and Lee explain how derivatives are essentially wagers-often on the fluctuations of national currencies-based on models that aggregate and price risk. They describe how these financial instruments are changing the face of capitalism, undermining the power of nations and perpetrating a new and less visible form of domination on postcolonial societies. As they ask: How does one know about, let alone demonstrate against, an unlisted, virtual, offshore corporation that operates in an unregulated electronic space using a secret proprietary trading strategy to buy and sell arcane financial instruments? LiPuma and Lee provide a necessary look at the obscure but consequential role of financial derivatives in the global economy.

Sujets

• Gestion et management
• Risk assessment

Informations

• Publié par: Duke University Press
• Date de parution: 29 septembre 2004
• Nombre de lectures: 0
• EAN13: 9780822386124
• Langue: English

Extrait

Public Planet Books A series edited by Dilip Gaonkar, Jane Kramer, Benjamin Lee, and Michael Warner

Public Planet Books is a series designed by writers in and out- side the academy—writers working on what could be called narratives of public culture—to explore questions that ur- gently concern us all. It is an attempt to open the scholarly discourse on contemporary public culture, both local and international, and to illuminate that discourse with the kinds of narrative that will challenge sophisticated readers, make them think, and especially make them question. It is, most importantly, an experiment in strategies of discourse, com- bining reportage and critical reflection on unfolding issues and events—one, we hope, that will provide a running narra- tive of our societies at this moment. Public Planet Books is part of the Public Works publication project of the Center for Transcultural Studies, which also includes the journalPublic Cultureand the Public Worlds book series.

Financial Derivatives and the Globalization of Risk

p

u

b

l

i

c

p

l

a

n

e

t

b

o

o

k

s

Financial Derivatives

and the

Globalization of Risk

Edward LiPuma and Benjamin Lee

DUKE UNIVERSITY PRESS

Durham & London 

©  Duke University Press

All rights reserved

Printed in the United States of

America on acid-free paper 

Typeset by Tseng Information

Systems, Inc. in Bodoni Book

Library of Congress Cataloging-in-

Publication Data appear on the

last printed page of this book.

Contents

Preface















ix

Global Flows and the Politics of Circulation

Derivatives, Risk, and Speculative Capital

Historical Conjunctures



The Institutional Basis of Derivatives

Deriving the Derivative

The World of Risk







Derivatives and the Stability of the State

Glossary

Notes





Bibliography

Index











Preface

his book is the result of a collaboration that began more than twenty-five years ago, although it was then only th T e conversation could not but foreground two questions that perceived as a conversation among friends wanting to make sense of the incandescent and incipient changes that would eventually be labeled globalization. Increasingly, seemed, quite significantly, to merge into one, or, minimally, to possess a common center of gravity. The first question con- cerned what appeared to be an extraordinary reorganization of the place of developing and transitional economies within a rapidly (if not rabidly) globalizing economic system; the second question concerned the demise or at least the slow dissolve of manufacturing and industrial production in the metropole and the corresponding rise of circulation—what we would call the cultures of circulation. And indeed, every- where we looked there was evidence of the ascension of the culture and sociostructures of financial circulation. Nonetheless, there was very little in the way of theories or methods to deal with these problems. On the one side was the universe of financial analysis, which although sprawling, technologically amplified, and technically intricate had little aptitude for the social issues surrounding the emergence of