Elie Ayaches and Suhail Malik’s Heterodox Conceptions of Finance: The Delirium of Contingency

The heterodox positions of Elie Ayache and Suhail Malik on contemporary finance are often perceived, if not discussed more broadly, in the vapor circles of accelerationism. Let us first turn to Suhail Malik’s prosition. For us, the contingent price movements of underlying assets/underlyings and the equally contingent derivative pricing itself are to be understood as interdependent processes of capitalization of promises to pay in the context of differential capital accumulation. How does it look in Malik’s case? The contingent price movement of derivatives referring to themselves must first include the factor of finitude, insofar as the pay off of the derivative at the due date means the expiration of the respective derivative contract. (Malik 2014: 410) Maturity, however, at the same time inheres a constitutive shift that is inherent in the differential pricing of derivatives per se, and that is why it is ultimately to be considered from the perspective of the immanent features of the derivative itself, rather than from an exogenous perspective derived from the movement of the underlying assets. It is the contingency that dominates here, which is indicated by the constantly possible revision of the derivative contracts, the finiteness. Finally, the „moments“ of finitude and contingency always remain tied to the price movements and „laws“ of capital, whereby its way of monetizing the economy makes possible the interchangeability of derivatives and their future money flows in the first place, while the chase of capital for profit remains decisive.

The indefinite variability of the price of the derivative depends on the finite nature of the contract, which is also variable (pay off, schedule, duration, etc.), but at the same time it remains inversely related to the indefinite market variability of the derivative price movement. Derivatives shift prices according to a differential logic of temporalization: the market price found at the end of the maturity of a derivative contract (options, futures, etc.) does not coincide with the price fixed in the contract itself, which means nothing else than that without the temporal non-coincidence between market price (spot price) and fixed price (strike price) a derivative cannot exist at all, but only the purchase/sale of ordinary commodities. Whoever buys derivatives on commodities, for example, does not buy the commodities themselves, but trades on a second level a speculative capital that is always fluctuating in price, as a result of which prices refer to prices and not to the underlying commodities. The dual variability of derivatives, which is primarily that of the immanent price movement of the derivatives themselves, is what Malik calls the „plasticity of the derivative contract“ (Ibid.: 406ff.), a term that operationalizes endogenous derivative pricing (in its contingency) in particular. Plasticity here is to be understood as a constitutive condition for the indefinition of derivative price movement. A trader who hedges or speculates in the futures markets can sell or unwind the contract at any time, or at least subject it to revision, by realizing a deal opposite to the original contract during the life of the contract. In doing so, the trader takes a long position and a short position on the deal in question. With this type of positioning, which is called „flat“ and does not require delivery of the underlying, the trader can realize either losses or profits. Here, the trader occupies a recombinant subject-object position, characterized on the one hand by subjective opportunism, which consists in being able to constantly switch from one position to another, and on the other hand by the objective relationality of the derivative pricing itself (with the dominance of the latter). Finally, it is important to bear in mind that the very fact of being able to hold more than one position on the same asset inflates the nominal sizes of turnover in financial markets far beyond their current credit exposures.

According to Malik, four facts can be identified that are important for the economics of differential pricing of derivatives. (Ibid.: 404)

The derivative contract includes terms that relate to the price movements of the external referent (underlying).

2) The constitution of derivatives involves complex modes of intrinisically temporal commitment and splitting of the present, although the uncertainty of the future plays the decisive role, so that it is always necessary to assess the risk with which all pricing decisions are continuously revised.

3) Derivative pricing generates a new mode of optionality by which pricing is intrinsically related to operations in its own markets, by means of contraperformative acts that make explicit the singular conditions of the exogenous reference of the underlying for pricing.

4) Derivative pricing definitely requires the moment of contingency by which the endogeneity of derivative pricing itself is extended to any pricing processes - and this fourth dimension is what Malik calls the "apriori financiality" of capitalization.

Differential price movement differs from betting insofar as the price movements of derivatives imply endogenous operations with indefinite plasticity (at least until the expiration date of the respective contracts), for which the exogenous referent (the underlying asset) can even be operationalized. (In the case of the bet, by contrast, the exogenous weather event remains independent of the ripple itself). Derivative pricing, after all, not only takes place in an indefinite process, but also shapes it, integrating and even determining the price movements of the underlying assets. What is ultimately priced out in the derivatives markets is the pricing process of the derivatives themselves. According to Malik, this process should be called an immanent process constituted by the „infrawager“ (ibid.. 417f.) and this means that the terms of derivative pricing are primarily just not dependent on externally determined conditions, but on the internal movements of their own parameters, coefficients and variables. According to Malik, the reality of the inframanager manifested in and with derivative pricing exists within a twofold contingency: contingency of abstraction (variability of the derivative contract and general fungibility of the underlying) and contingency of revision (indefinite plasticity of the differential price movement itself, that is, potentially constant shifting of the price). (Ibid.: 420) These contingent conditions of pricing out always remain tied to the institutional-material power practices of financial capital found in derivatives markets and to the monetary architecture of quantitative capitalization.

For Malik, the pricing of derivatives is to be assessed as immanent and as contingent, installing a speculative dimension with respect to the unknown future. From this perspective, the derivative constitutes the third component of contingency, thetic contingency. Thetic contingency performs the de-identification of the price movement not only with respect to the underlying, but within the derivative price formation process it involves the de-identification of the price in itself, that is, any price is possible, but it could ever already be different. The temporal shift of derivative price movements is by no means to be understood as a purely temporal extension of the present (anticipation), but it involves the endogenous splitting of the present itself. At the same time, the price movement is part of the futuristic contingency, which, however, cannot do without the actualization of the derivative. Maturity, in turn, is the point in time when the price of the derivative is convertible with the price of the underlying, or, to put it differently, equivalence requires a common price for the derivative and the underlying asset at that point in time. This equivalence could be called the valuation of the derivative contract, which is always realized qua money. Valuation is the conclusion, exhaustion and conclusion of the derivatives pricing process; it articulates the cancellation of the difference between strike price and spot price at the end of the contract period.

1) Because of its exogenous referentiality, the value, ever already expressed in money, is first of all the determinant term with respect to the derivative price, in order to be able to record at all the facts of the purchase or sale of derivatives. 2) The valuation of the derivative and the underlying is finally made by the derivative pricing, and this is constantly modified in the course of the (implicit) volatility. Ultimately, at least in financial markets, it is the price that virtualizes value at every conceivable point in time, and this becomes manifest in the context of derivative pricing, i.e., the price manifests the reality of derivative pricing (manifest-without-manifestation). Thus, with respect to derivatives, we cannot assume any „anchoring“ of the price by the value. And this further means that precisely because of the endogenous constitution of price qua infrawager, value in financial markets is not primarily determined by external factors such as trade, scarcity, demand, utility, use-value, abstract labor, etc.

Malik refers to the apriority of the derivative price as „arkhéderivative“ (ibid.: 445ff.). And this assumes the presence of triple contingency: variability of the derivative contract (contingency of abstraction), variability of the derivative price (contingency of revision), and absolute volatility of pricing (thetic contingency). According to Malik, today absolute volatility in particular represents capital power.

However, by establishing the apriori of financiality or absolute contingency, Malik precisely does not succeed, although he tries desperately to tie his ontology of price to the theory of capital-power as conceived by Bichler/Nitzan. It would be necessary, on the other hand, to show that the contraperformativity or volatility of the price movement always already remains tied to the material existence of the derivative (and this implies certain presuppositions and conditions, indeed determinations, which are not primarily contingency-based, but are those of the quasi-transcendentality of capital). There is a positivity of positivity, and this proves the unbeatability of the existence of the derivative as an important operator of capitalization. In order for a derivative contract to be realized and to yield profits if possible, it must be written on paper, and this in turn must be surrendered and exchanged. The derivative contract is thus identically one and, in a sense, resists contingency and will not change with respect to future possibilities and states. It at least retains its material identity to be exchanged. And this ever already happens under certain economic conditions. This is what Laruelle and Ayache necessarily object to Malik. (Cf. Ayache 2010a) A derivative contract is thus written and its operation or programming amounts, in the best case, to the payment off of a certain sum of money in the future if precisely a certain economic event specified in the contract occurs. The pay off depends first on the material encoding in the contract, and this, if the event occurs, must be exchanged as paper for the sum of money that will be paid out. However, the conditions that determine the exchange of the derivative for money do not necessarily have to occur. Thus, the derivative does not involve a condition at the time of maturity, although its ex-post movement or its futureness is inscribed in it. And in this respect the contract is again also contingent, but not probable. The real and undivided derivative contract could be exchanged for money in the market today, and it could do so at a different price at maturity. And the spread between the two events cannot be bridged by probability. Finally, one has to summarize that derivatives do not only inherit a technology of time and a technology of power (Malik tries at this point to cement together the triadic contingency (time) and the theory of capital as power, which can certainly be criticized), but are first and foremost a form of money capital.

Against Malik one must further object that ontology in this context tends to philosophically overdetermine the theory of capital. If, for example, Frantz Fanon writes that ontology does not allow one to understand the being of the black man, ontology, even when conceived as deconstruction, similarly does not allow one to understand the „being“ of financial capital. Malik himself repeatedly emphasizes that the ontology of finance (qua contingency, différance, etc.) should be tied to the concept of capital-power as developed by Bichler/Nitzan, however, ontology as currently offered as speculative realism on the theory markets virtually forbids radically posing the question of the deontologization of capital and its practices of power. Malik’s permanently presented point that derivative pricing qua contingency constantly devalues the question of truth should itself have pushed him towards a more precise problematization of ontology. One must point out in this context, however, that Malik clearly distances himself from the accelerationists or speculative realists, whom he accuses of reinstating a universal normativism under the guise of Enlightenment rhetoric that only further obscures the problem of modern finance.

The dubiousness of shifting the weight of economic analysis entirely to the conceptual-discursive side is far from settled with the philosophical deconstruction of certain concepts, as Malik demonstrates. It also avenges the fact that the concept of contingency is not assigned the right „place“ in the analysis – it is „centralized,“ so to speak, instead of being discussed in the context of the actualization-virtualization circuit. Moreover, contingency is also to be treated as an aspect of economic math, and this in turn means that the linguistic hegemony in economic criticism must be radically broken. Thus Malik’s coupling of contingency to the concept of capital-power comes across in Bichler/Nitzan as a curiously arbitrary enterprise. While Malik situates ontology entirely on the „surface“ (price formation), without caring, at this point, however correctly, about essentialisms such as utility or labor, many Hegelian Marxists, from which even Marx was not always free, situate ontology as a conceptual process running under the surface (structure of signs), which is the actual or the signified (abstract labor) and which in turn expresses the phenomena on the surface as a transposition. Thus, in both theories the absolutely necessary analysis of the relation between concept and economic mathem is abolished from the outset, while the philosophical distinction between essence and appearance is still maintained (in Malik’s case as a deconstructive procedure). While Malik constructs, even overemphasizes, the anti-essentialist aspect of economic theory in an almost comical way, because purely conceptual and as a fixed structure of a negative deconstruction, the labor-value Marxists ground their essentialism with categories such as abstract labor, substance, etc.

2) Elie Ayache

The French theorist and trader Elie Ayache also claims that derivatives traded contingency, insofar as the difference produced by their trade, which always remains related to the future, simultaneously marks a difference in the present. The term contingency in the minimal definition (relative contingency) says that something, as it is (was or will be), could be, but is also possible otherwise. (Luhmann) In contrast, Ayache understands the concept of contingency as absolute, unconditional and independent, as unexchangeable, as it were as the thing-in-itself, insofar as things are what they are, but they could just as well always be otherwise. The point for traders in derivatives in financial markets is to determine a tradable price in the face of uncertainty from the many possibilities offered by the price movement of derivatives. When traders write derivative contracts, which Ayache calls contingent claims, they are creating forms of contingency, where the difference that is opened up in the future makes a difference right now, by virtue of the fact that the price itself is a differential.

Derivatives traders observe not only the time series of price movements of the underlying assets of the derivatives, but more importantly the movements of the derivative prices themselves. Thus, in reality, derivatives trading and its price fluctuations deviate greatly from the methods of past-related statistics. Derivatives traders are precisely not primarily interested in the statistics of the underlying assets and their prices; instead, the fluctuating prices of derivatives create a surface called the market on which prices are inscribed and the price movements of derivatives are separated from the underlying movements of the underlying assets.

An important question for Ayache is how to fix the price of a derivative that conforms to the trader’s particular strategy. According to Ayache, any dynamic trading strategy should be equivalent to pricing out a derivative. (Cf. Ayache 2010a) What complicates the matter is simply that the price of the particular derivative is determined and at the same time shifted by a dynamic chaining of derivatives and their prices – derivatives related to derivatives related to derivatives. The term market denotes the simulative space that enables the translation of the contingent claims, the medium through which the contingent claims move during their life until precisely a value in question is updated and then there is no future. For Ayache, moreover, the market denotes a surface based much more on space than on time. A surface for the inscription of prices that are nothing more than a set of meaningless, quantifiable signs that communicate with each other. The instantaneously generated market prices of synthetic derivatives are thus distributed on a surface that isolates traders from observing the underlying assets.

What is a contingent demand for Ayache? It is something that replaces the coercive transfer between the possible and the real envisioned in stochastics, by means of a written contract that has a real, material status but is also a contingent form that constantly crosses reality. (Ayache: 2010b: 45) Money is used to realize the contingent claim, existing in parallel with the contingent claim; it acts as a material reality against which the liquid contingent claim of the derivative is redeemed; and this can happen during the life of the contract or at maturity. The price of derivatives is produced in the indefinite processes of counteractualization/virtualization; it is the result of the permanent translation performances of contingent claims. (Cf. Ayache 2010) Even the difference between stockprice and strikeprice implies contingency. Although an underlying value is always currently given, the derivative keeps the value de facto unstable because of its permanently changing price. The real of the value is affirmed by the update of the derivative at maturity. The updating of the price remains dependent on the programs of contingent claims under various schedules and time periods. The „last minute“ instability of the value, which is precisely the productive of the price, is what Ayache calls volatility. (Cf. Ayache 2010b) Absolute volatility always remains located beyond the chronological time order. It is purely virtual and does not appear in (chronological) time. For Ayache, the dimension in which continuous virtualization qua price unfolds is equal to the virtual dimension of time, is space. Thereby, absolute volatility remains sewn to the term price insofar as contingency finds in price the translation of its differential character, i.e., as volatility sees its indeterminism confirmed. Consequently, on the one hand, the term price has a virtual component, but on the other hand, it also refers to the empirical aspect of derivative pricing. The price, which indicates anticipations and is thus future-oriented, thus remains at the same time situated in the actuality of the market. (Cf. Ayache 2005:13)

Money is material and it counts, while the probability theory that most traders work with just does not. Money realizes a difference inherent in the synthetic derivative, precisely when an event occurs. Usually, one defines the difference inherent in contingent financial claims in terms of the underlying assets, and thus contingency is integrated into a corset of identifiable probable cases under the rule of one. The one stands for the totality of cases. But if the cases are to be prices in the markets, then the contingent prices of derivatives are also to be understood as cases, and with some independence from the underlying prices. Of course, there are the maturities of derivatives related to their underlying assets, but the creation of a derivative contract occurs before its maturity. And long before the contract expires, the prices of the derivatives are related not only to the underlying assets, but to the volatility of the derivative prices themselves, to the volatility of the volatility, and so on. The rule of price fixing then consists of continuous recalibration of the models of risk assessment with respect to new prices. Instead, however, stochasticity continues to assume that traders move from one day through a passage – with some probability – to the next day. The improbable assumption that today’s probable cases are commensurable with tomorrow’s always captures contingent pricing as backward-looking. At the same time, however, one needs the construction of a number of possible future cases under the aegis of one (probability) to calculate the current value of derivatives as the discounted expectation of future cases/prices. For Ayache, however, this already indicates the limits of the stochastic measure of volatility, whereas one must constantly reinvent and fix the determining parameters of the derivative in the context of a dynamic „replication“. There is no reiteration of prices already known or planned or fixed by risk models, precisely because one refers to a future that will never be present in this way (uncertainty). Thus, there are no constant transitions to report between probability-based cases from today to tomorrow, rather we sleep in the intervals; these intervals are irritating quantities because the connecting intermediary between cases is missing; these intervals are empty intermediary times in which anything could happen. For Ayache, contingent claims on financial markets represent the conversion of debt, insofar as those are future-oriented and debt is past-oriented. Rather than folding back certain instruments to current modeling in current hedging, it would be much more important to upgrade to the next level of hedging by calculating with parameters used in a given stochastic model to create a „hedging ratio“ contrary to the model, while in a second option that differs in price from the first option, a hedge is made according to itself. Third, it should then be considered that each time one finds a deviation of the option price from that which the current model predicts, this should be interpreted as a signal to upgrade the current model to the next stochastic level, using the deviating option price as a hedging instrument against the next stochastic factor.

Thus, Ayache’s position on derivatives markets, which is quite questionable at certain points, could be summarized, insofar as one can indeed speak here of a metaphysics of the market as an incorporeal surface effect, which, however, cannot do without materiality. Precisely in the infinite of the synthetic derivatives themselves could now lie a threat to the economic system, because really no properties of the assets (cash flow, risk, time, etc.) can be fixed in a specific period of time anymore (the determinacy of time remains empty), i.e., the corresponding elements of an asset, which are nothing more than those properties, ever already insist in a repeating difference, with which then also the postponement would no longer bring a solution, because finally the difference of fixation and change itself would have disappeared. If différance is connected with a thinking that refuses to decide between the alternatives uncertainty and security (calculus), between opening and closedness, by stopping the gap sui generis, then Ayache’s thinking tilts into total uncertainty or opening. In this context, structure would then be radically functionally subordinated to process, though in this the hyper-fungible framework of variables remains highly problematic because it ultimately borders on infinitely exchangeable simultaneity. The system of capital already sets itself as its own environment, it now mutates in all purity to a self-supposing system, whose only temporary fixations insist contingently and which itself rotates only a crack away from chaos. And hyper-chaos equals absolute space, that means mobility of movable elements, with which it continuously comes to new constellations. The absolute space is an open space, which is about the symbolic designation, namely as designation of the relations of indici and the co-designation of bodies/signs. However, regardless of whether one subsequently assumes ultra-stability or ultra-crisis-proneness of the system that insists in its permanent changeability, it still remains the capitalist system that sets itself as the same reproduction (in time), in which, however, the elements of bourgeois economy and the forces of production are increasingly subtracted from the relations of monetary capital and its power relations. In contrast, pure competition would take place on a surface called the market, without needing the value forms or capital at all anymore. The boundaries of the system would be as fluid as its scales; the principle of pure opportunism would prevail, to which, after all, all reterritorializing considerations are a cross, because they only restrict competition/contingency in the financial markets. If neither properties nor functions, nor functions of functions are fixed, then finally there is only the nth superfunction as absence of any finite or center. (Schwengel 1978: 204) Accordingly, it would now be purely about emptiness or about the empty place of existence, about pure competition without any antagonism, for which finally indeed the ontology of the set in Badiou can be referred to again, with which the multiple is freed from any unity, namely by the empty set, the multiple from the multiple to infinity. Finally, to represent contingency, there would remain the torsion or the Möbius strip as a topological principle to think reversibility and simultaneity, moments indistinguishable from pure process. Deleuze had laid the track here by going back to Nietzsche, who grasped what is really infinite as a process of (creative) repetition, which, however, can also easily turn into a nihilistic process of eternal carrying on, so that then indeed only an optional messianic or technological miracle would help to escape carrying on for the sake of carrying on.

In this context, it remains questionable whether Ayache’s affirmative reference to the event theories of Badiou and Deleuze is so justified without further ado. In Badiou, the empty set appears as the universal deprived of all qualities, which could possibly be identified with value at the most abstract level: Volatility as absolute contingency. Now, the philosophical decision, which consists in turning to set theory, is not contingent; rather, it reflects certain traditions, indeed, in a sense, it reflects the quasi-transcendental of capital at a certain level, here the commodity form or commodification. We had demonstrated this in the discussion of Peter Ruben’s Warenanalye. At this point, let us just briefly come to Deleuze: the conception of the (Nietzschean) throw of the dice put forward by Deleuze consists precisely in the fact that the throw of the dice is singular, as there is only one event, which in turn is the event of the One, the throwing for all throws. The singular throw of the dice consists in the affirmation of chance, and in all throws the same throw recurs, but always somewhat differently. (Cf. Deleuze 1992a: 151f.) This really does not seem to be a case for stochastics, according to which chance consists of a controllable series of throws. Indeed, Deleuze’s conception of the event does not correspond at all to the simulation of a rule already imposed beforehand. But does it correspond, for instance, to the contingency of derivative markets? Let us explore the question in more detail in the next section. According to Ayache, when Deleuze speaks of the empty space over which singular cases are continually redistributed, this is supposed to correspond to the permanent recalibration of contingent demands, whereby the writing of contingent demands entails a direct translation of contracts into prices, without necessarily having to delve into the medium of probabilities and possibilities. Stochasticity would thus always be understood as backward-looking, while contingent price corresponds to a pure future-orientation. And this duality, Ayache argues, has long been familiar to the theory of quanta, which deals with backward- and forward-looking equations.

Without doubt, the dromological production panic in financial markets corresponds to a thinking that breaks with the figure of stubborn predictability of events, even with the schizophrenia inherent, for example, in the paradox of Zeno’s arrow of time (frantic stasis). If the arrow of time itself begins to trundle, complementarily as quanta oscillate in space and time, alternating between waves and particles, so do price movements on the surface of the market begin to oscillate as series of constantly varying exchanges, as interchanges of space and time, which, however, cannot be thought of without their material effects. Networks of variable nodes emerge that serve as reservoirs of time spent and time to come, but they are still reservoirs of capital, which, as an autoreferential system, requires system-maintaining operations that guarantee deterritorialized flows while feeding on the reservoirs. If money was a crucial operator in modernity to produce syntheses in capitalism, synthetic money capital creates operators that move in real time as multidimensional sets of techno-medial prostheses on the surfaces of markets and their fields, which Ayache just constantly reflects on. Undoubtedly, synthetic assets include the translation of the surplus value of code into the surplus value of flows, as mentioned by Deleuze/Guattari, which functions via constantly new, virtualizing price-fixing, in order to finally generate that machine surplus value that requires the actants, but is not the result of their exploitation. The deterritorialized flows, however, remain tied to the integral whose digitality serves to couple the flows to the code profit/non-profit. Indeed, there are intersections between the immanent accelerationism of financial markets and the various regimes of post-Fordist capitalism, though factors such as the techniques of governmentality and reterritorialization are left out of most considerations by contingency-oriented authors. The market is treated as a quasi-neutral social form without recourse to its constituting capitalist conditions and the status of its relative autonomy. It is regarded as a social machinery whose essential characteristic is its ever-already unstable immanence, whereby not only the state but also capital mutate into external parasites, or serve only as a loose corset for the absolutely contingent financial machines that self-referentially accelerate the generation of returns at all levels, and do so with a self-synthesizing potentiality that one is no longer able to distinguish from its intensive materiality. The market as a virtually circulating structure of pure competition, identical with the virtually fixable process (supply and demand), this unity always remains absent as well, insofar as it is still radically determined in the last instance by the reality of capital. If one thereby assumes a homogeneity of capital, the market can be conceived either as an executor or as a deviation of the law of value. In the first case, its constitutional processes would then be organized by naked repetitions, insofar as with regard to the execution only modifications of the laws would take place, which would not produce any qualitative changes, while with the deviation apparently own laws would be set, which, however, would ultimately also only be repetitions of the determinations given by capital. Open whole as capital would mean to conceive of capital neither as a subject nor as a totality, but as a surplus production already endangered in each case, which traverses the void, in order to conceive an all-together as a radical determination of capital instead of Badiou’s ultra-one, which reflects the contingency of the markets, whereby the market always has to produce the unity of the forms of capital, but nevertheless cannot. The market itself is an instance of capital, i.e. the relations of enterprises to each other and to state intervention are controlled, regulated and reproduced in the market and today especially in the financial markets. Thus, in the market we are dealing with a complicated technological hinge between economy and state and, moreover, with an arena of action in which differences are played out, with the legal equality of the actors as a condition preceding the market procedures.5

And as for the Kant complex in Ayache, we are interested here in the peculiar emphasis regarding the transcendental efficacy of synthesis, which, however, is no longer understood as the synthesis of empirical data or of objects of possible experience that a constituent subject synthesizes; rather, the self-synthesizing potentialities of the contingent material machines of the financial are ultimately indistinguishable from the virtual-real, the continuous variation of dimensions, properties, and prices of assets that sets in motion that transversal „ontology“ of the virtual that is the financial market itself. At the same time, the virtual is part of the real object market, insofar as the latter retains a part in the virtual and remains embedded in it as in an objective dimension, which is the absolute contingency. And between the actualizations at the markets and the virtual (both are real) there is no analogy at all, there is no ethereal medium of transition, with which the separating interval is to be thought as discontinuous jump and at the same time as continuous, so that one never knows where the virtual begins and the actual ends, except that in a single real world the heterogenesis of becoming from what has become and vice versa takes place. And finally, matter would be to be understood as an intensive machinic production of self-differentiation, or as a body without organs, whereby it can only be posed as absolute indifference by death itself, the moment of absolute indifference. That kind of materialization would then also actually be one with the zero-time of capital that has become real, in which the virtual of capital is so compressed that it disappears at some point in its own black hole. But it is always also about material processes tied to hardware, it is about real processes in time that remain coupled to framings (see footnote on Kittler), to the quasi-transcendentality of capital as a total complexion. Ayache, however, apparently presupposes that the respective product of production is of interest primarily as a depotentiated effect of the primary production of contingency, which constantly dissolves the binary difference between representation/structure and process to the extent that simultaneity is finally achieved in markets, an acceleration and intensification of the materially contingent processes to degree-zero, as Nick Land says, or at least yet an infinitesimal approximation to the zero-time of capital. But why subjects are still needed for this, although the process is contingent in one way or another, is the question that would have to be addressed to Ayache here. At the very least, in these permanently performative processes of desubjectivation, the Hegelian automatic subject called capital is dispersed, although there is always the danger that as a contingency theorist one becomes the victim of quite different strategies that suddenly command one’s own tactics, for example those of a cynical neoliberal capitalism.

Here, the trader’s subjectivity would indeed consist in writing the derivative as creatio ex nihilo – a trader who is probably uncannily fascinated by the image of a presuppositionless tabula rasa and yet at the same time remains trapped in it, to ultimately beam himself into the most open of futures with his restless writing. If there were indeed a future of absolute contingency, the „Blank Swan“ would always remain in search of what is not. Against the concept of absolute contingency, reference should be made at this point to Elena Espositio’s conception of modal-theoretical contingency, which describes the presence of contingent optionality under certain conditions. Conditions which in the last instance are to be shown as those of capital as a total complexion (which again the systems theorist Esposito cannot think). The „markets“ constitute a double mechanism, a mechanism for disciplining and regulating the states and corporations that obey the neoliberal imperatives regarding production and reproduction at the level of organization, and a global mechanism that represents the fluctuation of profit rates. It is also a mechanism that produces the knowledge to maintain the conditions for capital accumulation and extended reproduction, for the organization of financial funds. These are the fundamental functions of the markets, which can by no means be reduced to mere speculation.

It is only on the basis of the existence of several alternatives in the (split) present, which are by no means without presuppositions but always remain involved in the context of capital, that derivative pricing is possible, which under certain conditions is also possible otherwise. Over all the praise of contingencies, contingency theorists have finally forgotten that derivatives – capitalization of future promises to pay or income streams – represent a specific type of monetizable market risk and their value as capital is the result of differential price movements in the context of capitalization. Derivatives are used to carve risk out of the underlying and package it into a new form of capital that now has a price. Thus, derivatives transfer and price out risks, whose quantities are thus always measured in money. Because of the „mediation“ of the speculative exchange of derivatives with money, any particular, concrete and case-specific risk can be considered interchangeable with any other. This opens up the dimension of abstract risk. The abstract risk measured in money serves as the mediating factor that allows different concrete risks to become interchangeable with each other.


Ayache, Elie (2005): The „non-Greek“ non-foundation of derivative pricing.

In: http://www.ito33.com/sites/default/files/articles/0509_ayache.pdf

  • (2008): The French Theory of Speculation. Part I: Necessity of Contingency. In: http://www.ito33.com/sites/default/files/articles/0803_nail.pdf
  • (2010a): The Blank Swan: The End of probability. London.
  • (2010b): The Turning. In:http://www.ito33.com/sites/default/files/articles/1007_ayache.pdf
  • (2010c): The End of Probability. In: http://www.ito33.com/sites/default/files/articles/1011_ayache_0.pdf

Malik, Suhail (2014): Ontology of Finance. Price, Power and the Arkhéderivative. In: Collapse Vol.VIII: Casino Real. Ed. MacKay, Robin. Falmouth.303-480.

Sotiropoulos, Dimitris P./ Milios, John/ Lapatsioras, Spyros (2013a): A political economy of contemporary capitalism and its crisis. New York.

  • (2013b): Marxist theory, financial system and crisis of 2008. In: http://www.iippe.org/wiki/images/5/5f/CONF_CRISIS_Lapatsioras.pdf

Photo: Bernhard Weber

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