Ten years ago, during the last major financial crisis of the economies of the North Atlantic and Europe, the Dow Jones Industrial Average hit a low point of 6,469.95. At the time of this writing the DJIA has swelled to nearly 27,000. Amid the increasing volatility and noise of American political and social life since 2009, financialization has stealthily reemerged.

Countless films, videos, books, podcasts, and art installations produced in the past decade have chronicled the crisis and unpacked the toxic assets and credit default swaps that unleashed the violence of financial capitalism. Today, most of us working in the culture industries are likely increasingly vulnerable to the unpredictability of markets and the treachery of those who instrumentalize the powers of risk. A global recession looms. The fallout of the 2009 financial crisis compelled the late theorist and activist Randy Martin to build on his work documenting the financialization of daily life and to consider the derivative: the unregulated financial product at the root of the temporary collapse of the banking sector. The derivative is a claim on the future performance of an asset. Since the 1970s, the banking industry has preemptively written the terms for actionable futures by simultaneously predicting and hedging against assets and their indexes in an increasingly fragmented, financialized economy.

In bringing his thinking to bear on recent social movements, Martin argues that derivative logic must be removed from the domain of finance alone in order to amplify the features of our political present that we wish to manifest in the future. This is a politics of preemption and it provides the basis for Martin’s final book, Knowledge LTD: Toward a Social Logic of the Derivative (2015). For Martin, the public domain and its goods are no longer things in themselves but rather derivatives of private values: whether this condition reflects a “broken consensus or an expanded capacity for critical deliberation, articulation of needs, or tactics for crafting political interventions remains a matter for careful conceptual appraisal.” [1]1
Randy Martin. Knowledge LTD: Toward a Social Logic of the Derivative (Philadelphia: Temple University Press), 83.
An appraisal of the public as a derivative expression is detailed in The Politics of Preemption, a short film by Greg Elmer that intercuts an interview with Martin with documentary footage and news clips.

Martin’s untimely death left us with only the outlines of the social logic of the derivative and few tools to instrumentalize its dynamism. The derivative is accordingly elusive. It is a puzzle designed to deliver commensurability but it does not store value. It is not a form of money. Contemporary derivatives are contract orders underpinned by computer code in high-frequency algorithmic trading (HFTs). The autonomous functions of HFTs are managed through artificial intelligence responding to the “sense data” of markets. A full picture of the market is incomprehensible to human observers. The domain of HFTs is a black box.

In an excerpt from Making the Black Box Speak, first performed for the event series “The Future of Demonstration,” high-frequency trader turned whistle-blower Haim Bodek warns his live audience that “our edge over things requires that you are kept in the dark.” Bodek’s assertion echoes those of economist Friedrich Hayek. The father of neoliberal economics advanced the idea that human ignorance must defer to the authority of the markets and a self-regulating price system. “In the electronic market there is no transparency nor is transparency desired,” Bodek claims. “Everyone wants to keep the lid on the black box closed.” In her 2008 release “Corporate Cannibal,” Grace Jones delivers a clear reminder that the operating assumption of the black box is “my rules, you fools.”

In 2009, an individual or group known by the pseudonym Satoshi Nakamoto introduced the blockchain protocol to change the rules of banking through decentralized transactions, and by default, challenge the finance industry’s dominance. There has been a great deal of speculation about the role of cryptocurrency as a mechanism for automating consensus but it is too soon to forecast what a blockchain future will look like. In terms of doing good, researcher Jaya Klara Brekke notes that decentralization alone does not guarantee good governance. As the techno-politics of blockchain is deliberated, the blockchain paradigm shift has forced the invisible hand of the financial industry to incorporate aspects of the protocol in its core services. This in turn has only accelerated the desire to render paper currency obsolete. According to finance activist Brett Scott, large financial institutions have waged a systematic war on cash in favor of digital money systems that can fully mediate and trace exchanges of value.

With the ebb of the cash economy, the endangered materiality of the promissory paper note becomes an increasingly beguiling topic for artists. One of the oddest and most committed artistic engagements with the semantic value of paper currency was the drawing and transactional practice of J. S. G. Boggs, in which detailed hand-drawings of bank notes of various denominations served as artwork and cash exchanged at face value. The artist would in turn require a receipt from these transactions, noting the details on the back of his “Boggs notes.” These notes were essentially transfigured into receipt ledgers and later sold to collectors for a much higher price. Boggs managed to capture derivative value accrued through circulation that would otherwise be surrendered in full to art collectors.

We conclude with a lecture by Benjamin Bratton tied to his research project on the reconsideration of technical systems in the age of planetary-scale computation. For Bratton, technical systems are always entangled with the human. Here we might recognize Haim Bodek’s whistle-blowing as counter-agency to the presumed impenetrability of black-boxed algorithms. It might also be conceived as a schematic of the social derivative that conjoins shards of human and nonhuman values. The global financial system offers a dichotomy. It is a medium for the circulation of value and also a platform that produces models of the present that feed into derivative models of the future. These models exist in the world and as a world.

—João Enxuto and Erica Love

João Enxuto and Erica Love work on projects about the techno-politics of work, institutions, and economies connected to contemporary art. Together they were fellows at the Whitney Museum Independent Study Program for 2012–2013. They have given talks, written essays, and exhibited at the Centre Pompidou, Whitney Museum of Art, the New Museum, Anthology Film Archives, Walker Art Center, among other international venues. Enxuto and Love’s writing has appeared in Art in America, Mousse Magazine, Walker Artist Op-Eds, Wired, and X-TRA Contemporary Art Quarterly. They have taught at the Cooper Union, School of Visual Arts, New York University, City College New York, and Maumaus in Lisbon. In 2017 they were awarded a New York Foundation for the Arts (NYFA) Artist Fellowship and a Creative Capital Andy Warhol Foundation Arts Writers Grant.

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